In re Certificate of Need Application for Project "Livingston Villa," Cuyahoga Cty.
2017 Ohio 196
| Ohio Ct. App. | 2017Background
- Livingston Villa applied for a certificate of need (CON) to build a new 100‑bed long‑term care facility in Cuyahoga County; it proposed to acquire beds from five existing facilities (including Hillside Plaza and Franklin Plaza).
- ODH granted the Livingston Villa CON on December 10, 2014; objectors (Rea‑Ann entities, the Lutheran Home, Concord Reserve) requested a hearing and appealed after the hearing examiner recommended withdrawal of the CON.
- The hearing examiner found the transfer of Hillside Plaza’s 47 beds would effectively close Hillside Plaza and violate R.C. 3702.53(C); he also questioned the Franklin Plaza/14‑bed transfer timing.
- The ODH director rejected the hearing examiner’s recommendation, concluding (1) the Franklin Plaza transfer was separately approved and resulted in Franklin Plaza beds being Cuyahoga County beds, (2) a decrease (even total) in bed capacity does not alone render a facility out of substantial accordance with its CON under R.C. 3702.52(E), and (3) Livingston Villa’s application met CON criteria.
- The court reviewed whether the director’s order was supported by reliable, probative, and substantial evidence and whether the director correctly interpreted R.C. 3702.52/3702.53 and applicable administrative criteria.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Livingston Villa evaded CON rules by "passing" Summit County beds through Franklin Plaza (R.C. 3702.53(B)) | Livingston Villa split transfers to circumvent inter‑county transfer limits and separated proposal parts to evade the statute | Franklin Plaza’s CON was separately granted before Livingston Villa’s CON; once granted the beds were Cuyahoga beds and Livingston Villa complied with intra‑county rules and disclosed the pending transfer | Court upheld director: no violation of R.C. 3702.53(B); Franklin Plaza beds were Cuyahoga beds once its CON issued and Livingston Villa’s disclosures and filings were proper |
| Whether transferring 47 beds from Hillside Plaza makes Hillside Plaza out of substantial accordance with its CON (R.C. 3702.53(C) and 3702.52(E)) | The transfer would close Hillside Plaza and thus prevent it from carrying out the reviewable activity in its CON, violating R.C. 3702.53(C) | R.C. 3702.52(E) forbids deeming an entity out of substantial accordance solely because of a decrease in bed capacity; Hillside Plaza’s CON is separate and changes in capacity do not alone show nonconformance | Court deferred to director’s reasonable statutory interpretation: decrease (even total) in beds does not alone show non‑substantial accordance; no reversible error |
| Whether Livingston Villa failed to satisfy CON review criteria regarding impact on other providers (Ohio Adm.Code 3701‑12‑20(E)) | Livingston Villa would unduly harm utilization, market share, finances (esp. Medicare dilution) of existing providers | Projected utilization and Medicare mix were within reasonable ranges given plan to offer high‑skilled/rehab services; competing facilities had survived prior new entrants | Court found substantial, probative, reliable evidence supporting director’s conclusion that impact was not so severe as to deny the CON |
| Whether Livingston Villa would unduly harm staffing resources (Ohio Adm.Code 3701‑12‑20(J)) | The project would worsen chronic staffing shortages in an area with high housing costs and limited transit, causing serious staffing harms to objectors | Staffing shortages are endemic; evidence showed objectors have competitive hiring/training advantages and staff churn often corrects; director considered staffing and found impact not prohibitive | Court held record supports director: evidence did not show staffing impact sufficient to deny the CON |
Key Cases Cited
- Univ. of Cincinnati v. Conrad, 63 Ohio St.2d 108 (1980) (administrative fact‑finding and deference to agency credibility determinations)
- In re 138 Mazal Health Care, 117 Ohio App.3d 679 (10th Dist. 1997) (deference to agency interpretation where agency has expertise)
- Columbia Gas Transmission Corp. v. Levin, 117 Ohio St.3d 122 (2008) (courts may not add or delete statutory language; apply clear statutory text)
- Hubbell v. Xenia, 115 Ohio St.3d 77 (2007) (statutory interpretation ends where meaning is clear)
- Our Place, Inc. v. Ohio Liquor Control Comm., 63 Ohio St.3d 570 (1992) (definitions of reliable, probative, and substantial evidence)