Women's Surgical Center, LLC v. Berry
302 Ga. 349
Ga.
2017

Background

  • Women’s Surgical Center (the Center) operates an outpatient surgery center in Cartersville and planned to add a second operating room, which would require a certificate of need (CON) under OCGA § 31-6-40(a)(7)(C).
  • The Center had previously been denied a CON for the same expansion in 2014 but filed a facial constitutional challenge to OCGA § 31-6-40(a)(7)(C) on June 30, 2015 seeking declaratory and injunctive relief against the Georgia Department of Community Health (the Department).
  • The Department moved to dismiss, arguing lack of jurisdiction because the Center failed to exhaust administrative remedies and lacked standing; the trial court denied that motion.
  • The trial court later granted summary judgment to the Department, rejecting the Center’s constitutional challenges; the Center appealed (Case No. S17A1317) and the Department cross-appealed the denial of its dismissal motion (Case No. S17X1318).
  • The Georgia Supreme Court heard (1) whether the Center had standing and whether exhaustion of administrative remedies was required for its facial challenge, and (2) whether OCGA § 31-6-40(a)(7)(C) violated the Georgia Anti-Competitive Contracts Clause or substantive due process.
  • The Court affirmed both judgments: it held the Center had standing and need not exhaust administrative remedies for a facial challenge, and it rejected both the Anti-Competitive Contracts Clause and due process claims.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Standing / exhaustion of administrative remedies for declaratory relief Center: imminent injury from requirement to obtain CON for the planned OR expansion gives standing; facial challenge obviates exhaustion Dept: Center lacked standing and should have exhausted administrative remedies before suing Court: Center has standing; no exhaustion required for a facial constitutional challenge; denial of dismissal affirmed
Violation of Anti-Competitive Contracts Clause (Ga. Const. Art. III, Sec. VI, Par. V(c)(1)) Center: CON requirement prevents effective competition and expansion without Dept approval Dept: Clause applies only to contracts/agreements that restrain trade, not to a statutory regulatory scheme like CON Court: Clause applies only to contracts; statute does not authorize anti-competitive contracts, so claim fails
Substantive due process (state and federal) — rational basis Center: CON statute unlawfully restricts competition among healthcare providers; contends statute is arbitrary and burdensome Dept: CON laws further legitimate state interests in orderly, cost‑effective, quality healthcare planning and access; statute rationally relates to those aims Court: Applied rational-basis review; OCGA § 31-6-40(a)(7)(C) furthers legitimate objectives in OCGA § 31-6-1 and is not shown to be arbitrary or discriminatory; claim fails
Scope of judicial review / remedy sought Center: facial invalidation of statute needed so it may expand without CON Dept: regulatory scheme is constitutional and enforcement should proceed administratively Court: Facial challenge is available and properly before court, but Center failed to meet burden to show statute invalid in all applications; statute upheld

Key Cases Cited

  • Jenkins v. Manry, 216 Ga. 538 (declaratory relief can test law’s validity to allow one to know whether to proceed in vocation)
  • Summers v. Earth Island Inst., 555 U.S. 488 (standing requires injury that is actual and imminent)
  • GeorgiaCarry.Org., Inc. v. Atlanta Botanical Garden, Inc., 299 Ga. 26 (standing principles)
  • King v. City of Bainbridge, 272 Ga. 427 (no exhaustion requirement for facial constitutional challenges)
  • United States v. Salerno, 481 U.S. 739 (facial challenge is difficult; must show statute invalid in all applications)
  • Executive Town & Country Svcs. v. Young, 258 Ga. 860 (Anti-Competitive Contracts Clause limited to contracts/agreements restraining trade)
  • JIG Real Estate, LLC v. Countrywide Home Loans, Inc., 289 Ga. 488 (presumption of constitutionality; challenger bears burden)
  • Gliemmo v. Cousineau, 287 Ga. 7 (availability of quality health care is legitimate legislative purpose)
  • Colon Health Centers of America, LLC v. Hazel, 733 F.3d 535 (CON laws serve legitimate interests in access and cost control)
  • Planned Parenthood of Greater Iowa, Inc. v. Atchison, 126 F.3d 1042 (CON laws recognized as valid means to further state interests)
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