ST. JOSEPH‘S HILL INFIRMARY, INC., Plaintiff-Respondent, v. Rabbi Herbert J. MANDL, et al., as members of the Missouri Health Facilities Review Committee, Non-appealing Defendants, and Pacific Care Center, Inc., Defendant-Appellant.
No. 47685
Missouri Court of Appeals, Eastern District, Division Four
May 22, 1984
Motion for Rehearing and/or Transfer to Supreme Court Denied July 10, 1984.
682 S.W.2d 821
SMITH, Judge.
Case Transferred to Supreme Court Sept. 11, 1984. Case Retransferred to Court of Appeals Jan. 23, 1985. Original Opinion Reinstated Jan. 29, 1985.
David M. Harris of Greensfelder, Hemker, Weise, Gale & Chappelow, P.C., St. Louis, for plaintiff-respondent.
Louren R. Wood, Asst. Atty. Gen., Jefferson City, Mo., for Rabbi Mandl, et al., The Missouri Health Facilities Review Committee.
SMITH, Judge.
Pacific Care Center, Inc. (defendant) appeals from the judgment of the trial court
The trial court determined that (1) St. Joseph‘s had standing to bring this action, (2) the certificate of need was void because the Committee failed to prepare findings of fact and conclusions of law, and (3) the time for review mandated by
The Missouri Certificate of Need Law (hereinafter CON) was enacted in 1979, in response to the National Health Planning and Development Act,
“The essence of the certificate-of-need program is the requirement that any proposed construction of or significant capital expenditure for health facilities in a state be certified to be necessary by the State Agency before it is offered. The program is intended to reduce unnecessary duplication in health care facilities and thereby, it is hoped, reduce the cost of health care to consumers.” Greater St. Louis Health Systems Agency v. Teasdale, 506 F.Supp. 23 (E.D.Mo.1980) [1] l.c. 28.
The Committee is the designated state agency to administer the CON program. Also in the picture are health systems agencies (HSA) which are regional health planning organizations designated directly by the Secretary of Health and Human Services.
With this background we return to the state statute. When a new facility for health care is planned the person proposing to develop or offer the new institutional health service must submit a letter of intent to the Committee and a “request” to both the HSA and the Committee thirty days prior to filing the application for a certificate of need.
“Within thirty days of the decision of the committee, the applicant or the health systems agency within whose area the new institutional health service is to be offered may file an appeal in accordance with the provisions of sections 161.252 to 161.342, and Chapter 536, RSMo, provided, that venue of any appeal to the circuit court shall be in the county within which such health care service or facility is proposed to be developed.”
The question of the standing of a competitor to appeal from the issuance of a certificate-of-need is one of first impression in this state. There are, however, cases dealing with other administrative decisions which provide guidance. Plaintiff here is clearly an “affected person” under the statute. As an “affected person” it is entitled
“Not every person who files a protest and is given an opportunity to be heard by the adminstrative agency has a right to appeal from an order of the agency, but whether a particular person has the right to contest administrative action is largely a question of law, dependent on a number of variable factors, including the nature and extent of his interest, the character of the administrative act and the terms of the statute.”
The terms of the statute before us give the right of appeal solely to the applicant and the HSA for the area where the new service is to be offered. It does not grant such right to all “affected persons” which would include members of the public. It has consistently been recognized that while the public welfare is intended to be the controlling factor in administrative agency decisions, it was not intended that every citizen may participate in any case. If such participation, including rights of appeal, were allowed, it would prevent the agency from functioning efficiently. State ex rel. Rouveyrol, supra, [11]; City of Richmond Heights v. Board of Equalization of St. Louis County, 586 S.W.2d 338 (Mo. banc 1979) [5]. The statutory framework of the CON statute provides for an appeal by the applicant, which has a private interest, or by the area HSA, which exists to protect the public interest. We find no express authority under the statute for an appeal by plaintiff.
Plaintiff contends, however, that its right to appeal is guaranteed by
“All final decisions, findings, rules and orders on [sic] any administrative officer or body existing under the constitution or by law, which are judicial or quasi-judicial and affect private rights, shall be subject to direct review by the courts as provided by law; ...”
That constitutional provision has in turn been implemented by
“Any person who has exhausted all administrative remedies provided by law and who is aggrieved by a final decision in a contested case ... shall be entitled to judicial review thereof....”
A party is aggrieved when the judgment operates prejudicially and directly upon his personal or property rights or interests. Such operation must be immediate and not merely a possible remote consequence. The Hertz Corporation v. State Tax Commission, 528 S.W.2d 952 (Mo. banc 1975) [2]. The right or interest involved must be one the law protects. It must also act directly on an interest of the person who claims the right of review in a manner distinct from the effect on the general public. State ex rel. Schneider v. Stewart, 575 S.W.2d 904 (Mo.App.1978) [16, 17]. The definition of “aggrieved” found in these cases serves to define the “private rights” which must be affected to trigger the constitutional provision.
Generally speaking the “right” to be free from legitimate competition is not a right at all and is certainly not one protected by law. State ex rel. Rouveyrol v. Donnelly, supra, [1-4]; City of Eureka v. Litz, 658 S.W.2d 519 (Mo.App.1983) [12]; Herman Glick Realty Co. v. St. Louis County, 545 S.W.2d 320 (Mo.App.1976) [4]; Schmitt v. City of Hazelwood, 487 S.W.2d 882 (Mo.App.1972) [13]. We did recognize in City of Eureka v. Litz, supra, that a competitor may achieve the status of an “aggrieved person” based upon the legislative policy of the particular statute establishing the administrative review. This recognition was expressed in Bank of Belton v. State Banking Board, 554 S.W.2d 451 (Mo.App.1977) and Farmer‘s Bank of Antonia v. Kostman, 577 S.W.2d 915 (Mo.App.1979) [1-3]. Those cases arose under the licensing provisions of the banking statutes and because of certain parallels to the statutes now before us and the language of the Belton case, in particular, some review of the banking cases is warranted.
The Supreme Court addressed the standing of a competitor to appeal the granting of a banking license in State ex rel. Rouveyrol v. Donnelly, supra. The statutes then in force provided for review pursuant to the statutes pertaining to the Public Service Commission. Those statutes in turn limited those allowed to participate in appellate review to the commission and “each party to the action or proceeding before the commission.”
The predecessor of
State ex rel. Rouveyrol v. Donnelly recognizes two distinct concepts in determining standing in appeals from administrative decisions. The Constitutional right to such an appeal is based upon the fact that the decision affects the “private rights” of the person appealing. If such rights are affected the legislature cannot restrict the right of appeal although it may provide for the method of review. State ex rel. State Highway Commission v. Weinstein, 322 S.W.2d 778 (Mo. banc 1959) [7, 8] [16]. The general assembly is free, however, to expand the right of appeal if it chooses to do so. State ex rel. State Highway Commission v. Weinstein, supra. [7, 8] [17]. If it determines that the public welfare is best served by permitting those interested in the decision to participate, albeit no “private rights” of theirs are affected for Constitutional purposes, it may do so. It may through its legislative enactments allow interested persons to become parties, or allow them appeal privileges. If it does so such persons may become “aggrieved” for purposes of that administrative procedure or tribunal. That does not mean that similarly situated persons are “aggrieved” by the action of a different administrative body under a different statute.
The matter considered in State ex rel. Rouveyrol v. Donnelly was subsequently addressed in Bank of Belton v. State Banking Board, supra. In the interim the banking statutes had been amended to provide for intervention by competitor banks (
“The law favors free competition among banks but within a system of regulation ... That principle is best served by the grant of standing to a competitor adversely affected by new competition authorized by administrative decision.” [2].
The court did not analyze the nature of the private right or interest affected by the administrative decision. As we have pointed out heretofore, there is no right to be free of competition nor a private interest in preventing competition. There is no question that regulation of banks, and of medical facilities under the CON statutes, is premised upon maintaining the business in healthy condition by reducing competition
Whether the system of regulation is best served by allowing competitors to participate in the administrative procedure is a legislative determination. In the case of banking, that determination has been made in the affirmative. In the case before us, it has been made in the negative. As originally proposed, House Bill No. 222, 80th General Assembly, provided for appeal only by the applicant or the HSA.2 As perfected in the House, the bill contained amendments made in committee which provided that “any affected person participating as a party in the formal review may appeal the decision to the circuit court ...” The Conference Committee Substitute for House Bill 222 which was enacted and signed by the governor deleted the quoted language and reinstated the language of the original bill, thereby restricting the right of appeal to the applicant and the area HSA. This is strong, persuasive evidence of the legislative intent to restrict the right of appeal. Supportive also of this legislative intention is the rigid time schedule imposed by the statute and the automatic approval provision signifying that final action on the application is to be concluded expeditiously. Only if the action of the Committee is such as to trigger the appellate opposition of the HSA, representing the public interest, is final determination of necessity to be delayed for an appellate review. The competitive considerations in the medical care field and the banking field are similar but not identical. The impact on the individual from the bankruptcy of a medical facility is far different than the impact from a bank failure. A major purpose in reducing or stabilizing competition in the medical facility field is to effect economies of operation resulting in lower health care cost.
We conclude therefore that plaintiff has no constitutional right to review under
Plaintiff also points to the federal law and opines that it was the legislative intent to provide in the Missouri law whatever was required by the federal act. We note in passing that the Missouri law differs from the federal act in several respects. See Greater St. Louis Health Systems Agency v. Teasdale, supra. In addition the review criteria of the federal act
Plaintiff had no standing to appeal the finding of the Committee and the trial court lacked jurisdiction over plaintiff‘s petition.
Judgment reversed and plaintiff‘s petition is ordered dismissed.
GAERTNER, P.J., and STEPHAN, J., concur.
ON MOTION FOR REHEARING
PER CURIAM.
Plaintiff in its motion for rehearing has called to the court‘s attention the fact that regional health service agencies (HSA‘s) were abolished by executive order of the Missouri governor in 1982. Their functions were assumed by the State Health Planning and Development Agency (SHPDA). Plaintiff contends this fact, not previously addressed in the briefs, was overlooked by the court in arriving at its decision and that the reliance of the Court upon HSA‘s to protect the public interest is misplaced.
Our references to HSA‘s as protectors of the public interest were made in connection with our analysis of the legislative scheme found in the certificate of need law. We concluded that the general assembly elected to provide appeal status from the granting of a certificate of need only to the regional HSA, and elected to deny such status to other persons. Subsequent abolition of the HSA‘s by executive order in no way changes the legislative enactment which does not grant to plaintiff a right of appeal. Our decision was not premised upon a determination that if HSA‘s could not appeal plaintiff could. The appeal rights of HSA‘s were simply a rationale for a legislative determination that no need existed for appeal by persons such as plaintiff. The general public interest is represented by the Committee itself and SHPDA. State ex rel. Rouveyrol v. Donnelly, 285 S.W.2d 669 (Mo. banc 1956). There is no requirement of law of which we are aware that requires appellate review of the Committee grant of a certificate of need except when “private rights” are affected. We have already held that no “private rights” of plaintiff are affected. The absence of HSA‘s does not warrant or mandate a judicial substitution of competitors for HSA‘s as a source of appellate review. If such review is advisable the legislature is free to so provide. To date it has not done so.
Motions for rehearing and for transfer to the Supreme Court denied.
GAERTNER, P.J.
STEPHAN, J.