306 P.3d 140
Haw.2013Background
- SHPDA granted Rainbow Dialysis a conditional CON to operate two Maui outpatient dialysis facilities; Liberty opposed.
- Liberty sought reconsideration; a five-member Reconsideration Committee (including SHPDA Administrator Terry) unanimously approved Rainbow’s CON after hearings.
- Liberty challenged Terry’s participation and Trygstad’s disqualification, arguing HAR rules required recusal; circuit court found Terry should have been disqualified but harmless error.
- This appeal presents whether HAR § 11-1-25(a)(4) or SHPDA-specific HAR § 11-185-32 governs disqualification of Reconsideration Committee members, and whether any error was harmless.
- Majority holds Terry and Trygstad were not disqualified; HAR § 11-1-25(a)(4) conflicts with the CON statute; SHPDA-specific HAR § 11-185-32 applies to hearings officers, not to Trygstad’s role as a committee member.
- Court affirms the circuit court’s final judgment, addressing only the disqualification issues and declining to reach other asserted errors.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether HAR § 11-1-25(a)(4) applies to SHPDA reconsideration | Liberty: HAR § 11-1-25(a)(4) disqualifies Terry for substantial participation. | Rainbow: statute HRS § 323D-47 requires administrator to participate in initial and reconsideration decisions; HAR § 11-1-25(a)(4) conflicts with 323D-47. | HAR § 11-1-25(a)(4) conflicts with 323D-47; inapplicable. |
| Whether Trygstad should be disqualified under HAR § 11-1-25(a)(2) or HAR § 11-185-32 | Liberty: Trygstad related within third degree to Kaiser/Rainbow; should be disqualified under HAR § 11-1-25(a)(2) and/or bias grounds. | Rainbow: SHPDA rules apply; HAR § 11-185-32 governs hearings officers, not Trygstad; 11-1-25 does apply to members via HAR § 11-1-3 and 11-1-1. | HAR § 11-185-32 applies to hearings officers; Trygstad’s status as a committee member falls under SHPDA rules and she was not disqualified. |
| Whether the disqualification error was harmless | Liberty contends failure to disqualify Terry (and Trygstad) may have affected the outcome. | Rainbow argues Waikiki Resort Hotel supports harmless error given majority still approved Rainbow. | Error deemed harmless under Waikiki Resort Hotel. |
Key Cases Cited
- Waikiki Resort Hotel, Inc. v. City and County of Honolulu, 63 Haw. 222, 624 P.2d 1353 (Haw. 1981) (harmless-error framework for disqualification affecting majority voting)
- State v. Ross, 89 Haw. 371, 974 P.2d 11 (Haw. 1998) (due process requires disqualification when appearance of impropriety exists)
- Griswold v. City of Homer, 925 P.2d 1015 (Alaska 1996) (three Griswold factors for substantial impact of a conflicted member)
- Kaleikini v. Yoshioka, 283 P.3d 60 (Haw. 2012) (statutory interpretation; deference to agency interpretations only when not plainly erroneous)