Colon Health Centers of America, LLC v. Hazel
733 F.3d 535
| 4th Cir. | 2013Background
- Virginia requires a certificate of public need for most medical capital projects, with a process that can entail lengthy, costly review and a 190-day batching timeline.
- The program considers multiple factors (e.g., competition impact, relationship to the local health system) and includes a potential informal fact-finding conference that can delay decisions.
- Colon Health Centers and Progressive Radiology, out-of-state providers, seek to enter Virginia with novel services (virtual/ CT-based colonoscopy and MRI-based radiology) funded privately.
- Virginia’s COI does not dispute applicants’ qualifications or funding but argues the program serves local health system goals and cost containment.
- The district court dismissed the suit, and the Fourth Circuit reversed in part on dormant Commerce Clause claims, affirmed the Fourteenth Amendment claims, and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Dormant Commerce Clause discrimination | Virginia’s COI unlawfully burdens interstate commerce to favor in-state interests. | COI is facially neutral and serves legitimate local purposes with no discriminatory effect. | Remanded for fact-finding on discriminatory effects. |
| Equal protection regarding nuclear imaging exemption | Exemption for nuclear cardiac imaging irrationally privileges some services. | Rational basis for exemptions exists and is credited by regulation and context. | Affirmed district court on Equal Protection claim. |
| Due Process and right to earn living | COI burdens economic rights without advancing state purposes. | COI rationally advances health access and cost-control objectives. | Affirmed district court on Due Process claim. |
| Privileges or Immunities challenge | Right to pursue occupation protected byPrivileges or Immunities Clause. | Slaughter-House precedent forecloses such right against economic regulation. | Affirmed district court on Privileges or Immunities claim. |
Key Cases Cited
- Yamaha Motor Corp. v. Jim's Motorcycle, Inc., 401 F.3d 560 (4th Cir. 2005) (less strict Pike scrutiny for unduly burdensome state regulation)
- Medigen of Ky., Inc. v. Pub. Serv. Comm’n, 985 F.2d 164 (4th Cir. 1993) (pike scrutiny when burdens on interstate commerce are implicated)
- Pike v. Bruce Church, Inc., 397 U.S. 137 (U.S. 1970) (undue burden test for nondiscriminatory local regulation)
- Exxon Corp. v. Governor of Md., 437 U.S. 117 (U.S. 1978) (commerce clause protects interstate market, not individual firms)
- Hughes v. Oklahoma, 441 U.S. 322 (U.S. 1979) (economic protectionism concerns and dormant commerce analysis)
- West Lynn Creamery, Inc. v. Healy, 512 U.S. 186 (U.S. 1994) (case on economic regulation and protective intrastate interests)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plausibility pleading standard)
- Twombly v. Bell Atlantic Corp., 550 U.S. 544 (U.S. 2007) (plausibility standard for surviving Rule 12(b)(6) dismissal)