COBB HOSPITAL, INC. D/B/A WELLSTAR COBB HOSPITAL v. GEORGIA DEPARTMENT OF COMMUNITY HEALTH

• Court: Court of Appeals of Georgia
• Decided: October 26, 2020
• Docket: A18A2009
• Status: Published

Opinion

THIRD DIVISION GOBEIL, J., COOMER and HODGES , JJ.

NOTICE: Motions for reconsideration must be physically received in our clerk’s office within ten days of the date of decision to be deemed timely filed. https://www.gaappeals.us/rules

DEADLINES ARE NO LONGER TOLLED IN THIS COURT. ALL FILINGS MUST BE SUBMITTED WITHIN THE TIMES SET BY OUR COURT RULES.

October 26, 2020

In the Court of Appeals of Georgia A18A2009. COBB HOSPITAL, INC. d/b/a WELLSTAR COBB HOSPITAL et al. v. GEORGIA DEPARTMENT OF COMMUNITY HEALTH et al.

HODGES, Judge.

In the original appearance of this case in this Court, we affirmed the Superior

Court of Cobb County’s denial of Cobb Hospital, Inc. d/b/a Wellstar Cobb Hospital

and Kennestone Hospital, Inc. d/b/a Wellstar Kennestone Hospital’s (collectively,

“Wellstar”) petition for judicial review of a decision by the Georgia Department of

Community Health (“the DCH”) to award a new certificate of need to Emory

University d/b/a Emory University Hospital Smyrna (“EUHS”), allowing EUHS to

pursue improvements and renovations at the former Emory-Adventist Hospital. Cobb

Hosp. v. Dept. of Community Health, 349 Ga. App. 452 (825 SE2d 886) (2019). In

Division 2 of our opinion, we concluded that Wellstar failed to preserve an argument that a Certificate of Need Appeal Panel hearing officer’s decision was “made upon

unlawful procedures” and that the decision violated Wellstar’s due process rights

under the United States and Georgia constitutions. Id. at 465 (2). The Supreme Court

of Georgia granted Wellstar’s petition for certiorari in part, reversed Division 2 of our

opinion, and remanded the case to this Court for further consideration of Wellstar’s

constitutional due process claim. Cobb Hosp. v. Dept. of Community Health, 307 Ga.

578 (837 SE2d 371) (2019). Although we now conclude that Wellstar preserved its

due process argument by raising it in its appeal from the Certificate of Need (“CON”)

Appeal Panel, we further conclude that the argument is without merit. Thus, we

affirm again the superior court’s judgment denying Wellstar’s petition for judicial

review.1

In summary,2 EUHS filed an application with the DCH for a new certificate of

need to undertake improvements and renovations totaling approximately $33.8

1 We have circulated this decision among all nondisqualified judges of the Court to consider whether this case should be passed upon by all members of the Court. Fewer than the required number of judges, however, voted in favor of a hearing en banc on the question of disapproving Ga. Dept. of Community Health v. Fulton DeKalb Hosp. Auth., 294 Ga. App. 431, 436 (1) (669 SE2d 233) (2008).

2 For a more detailed review of the facts, see Cobb Hosp., 349 Ga. App. at 453- 456.

2 million at the former Emory-Adventist Hospital. Wellstar objected to EUHS’s

application, arguing that EUHS intended to develop a new hospital rather than

reopening and renovating the former Emory-Adventist Hospital. The DCH granted

EUHS’ application over Wellstar’s objection and awarded EUHS a new CON for the

proposed improvements and renovations. Wellstar appealed to the CON Appeal Panel

(OCGA § 31-6-44), and a panel hearing officer affirmed the DCH’s decision.

Wellstar objected to the panel hearing officer’s judgment and appealed to the DCH

commissioner, arguing, in part, that the panel hearing officer erroneously concluded

that “[i]t is not the function of the CON Appeal Panel to consider questions of CON

and licensure status. . . .” The DCH commissioner affirmed the panel hearing officer’s

decision, and the superior court denied Wellstar’s petition for judicial review.

We affirmed the superior court’s judgment. In Division 2 of our opinion, we

concluded that Wellstar failed to preserve its argument that the CON Appeal Panel

hearing officer’s decision was “made upon unlawful procedures” and that the decision

violated Wellstar’s due process rights under the United States and Georgia

constitutions. To that end, we held that

[p]retermitting whether Wellstar properly raised this issue before the CON Appeal Panel, a review of the decisions by the panel hearing

3 officer and the DCH commissioner reveals that neither official ruled on that distinct issue. “Constitutional issues must be raised at the earliest opportunity in the trial court and ruled upon to be preserved.” (Citations omitted.) Singleton v. Dept. of Human Resources, 263 Ga. App. 653, 654 (1) (a) (588 SE2d 757) (2003).

Id. at 465 (2). Wellstar petitioned for certiorari to the Supreme Court of Georgia,

which granted Wellstar’s petition in part, reversed Division 2 of our opinion, and

remanded the case to this Court for further consideration of Wellstar’s constitutional

claim. See Cobb Hosp., 307 Ga. at 578.3 Of note, our Supreme Court observed that

[d]uring an ongoing administrative proceeding, a party generally must raise its constitutional claims in order to exhaust administrative remedies and preserve the claims for judicial review, even though administrative agencies generally have no authority to rule on those claims. So long as the party properly raises its constitutional claims during the administrative process, the claims may later be raised in and reviewed by the trial court. To then preserve constitutional claims for review by an appellate court, the party must raise the claims before the trial court and the trial court must distinctly rule on the claims.

(Citations omitted.) Id. at 579-580 (2).

3 The Supreme Court denied Wellstar’s petition for certiorari in all other respects. Cobb Hosp., 307 Ga. at 578, n. 1.

4 In the sole issue now before us on remand, we must decide whether Wellstar

properly raised its constitutional due process argument and, if so, whether the hearing

officer’s decision was “made upon unlawful procedures” or violated Wellstar’s due

process rights under the United States and Georgia constitutions. Wellstar argues that

the CON Appeal Panel hearing officer prevented it from presenting evidence

“demonstrating that [EUHS] does not possess [Emory-Adventist’s] CON authority

to operate a hospital in Smyrna, and . . . that Emory’s application proposes to

establish a new hospital[,]” for which a more stringent review would be necessary.

As a result, Wellstar contends that the hearing officer deprived it “of a meaningful

opportunity to be heard in violation of OCGA § 31-6-44.1 (a) (1), (3) and the due

process clauses of the Georgia and United States Constitutions.” Although we

conclude that Wellstar preserved this argument by raising it in its initial

administrative appeal to the DCH commissioner, we nevertheless hold that Wellstar’s

argument is without merit in view of our prior conclusions concerning the limited role

of the CON Appeal Panel.

“[A] party aggrieved by a state agency’s decision must raise all issues before

that agency and exhaust available administrative remedies before seeking any judicial

review of the agency’s decision.” (Citation and punctuation omitted.) Excelsior Elec.

5 Membership Corp. v. Ga. Public Svc. Comm., 322 Ga. App. 687, 692 (3) (745 SE2d

870) (2013). Accordingly, “[t]he scope of judicial review is limited to those

objections which were presented to the agency.” (Citation and punctuation omitted.)

Id.; see also Dept. of Comm. Health v. Ga. Society of Ambulatory Surgery Centers,

290 Ga. 628, 629 (724 SE2d 386) (2012) (finding that purpose of exhaustion

requirement is that “resort to the administrative process will permit the agency to

apply its expertise, protect the agency’s autonomy, allow a more efficient resolution,

and result in the uniform application of matters within the agency’s jurisdiction”)

(citation omitted). As a result, “[d]uring an ongoing administrative proceeding, a

party generally must raise its constitutional claims in order to exhaust administrative

remedies and preserve the claims for judicial review, even though administrative

agencies generally have no authority to rule on those claims.”4 Cobb Hosp., 307 Ga.

at 579-580 (2).

Relevant to this case, following a decision by a CON Appeal Panel hearing

officer,

4 Administrative exhaustion would not have been required had Wellstar pursued a facial constitutional attack against any regulatory or statutory provision of the Certificate of Need Act. See Dept. of Human Service v. Addison, 304 Ga. 425, 432 (3) (819 SE2d 20) (2018).

6 [a]ny party, including the department, which disputes any finding of fact or conclusion of law rendered by the hearing officer in such hearing officer’s decision and which wishes to appeal that decision may appeal to the commissioner and shall file its specific objections with the commissioner or his or her designee within 30 days of the date of the hearing officer’s decision pursuant to rules adopted by the department.

OCGA § 31-6-44 (i); see also Ga. Comp. R. & Regs. r. 274-1-.12 (2) (same). To that

end,

[a]ny objections filed in accordance with this Rule shall specify in detail the errors allegedly committed by the hearing officer in the hearing officer’s decision. Failure to specify such alleged errors in detail shall constitute a waiver of all available objections.

(Emphasis supplied.) Ga. Comp. R. & Regs. r. 274-1-.12 (3).

(a) Preservation of Wellstar’s Due Process Argument. In this case, the CON

Appeal Panel hearing officer determined that “[i]t is not the function of the CON

Appeal Panel to consider questions of CON and licensure status” and precluded any

evidence on such questions. Following the hearing officer’s decision affirming the

DCH’s award of a new CON to EUHS, Wellstar appealed to the DCH commissioner.

In its objections to the hearing officer’s decision, Wellstar argued that the hearing

officer’s decision was partially “based on proceedings that excluded one party from

7 presenting evidence” and that “if a hearing is held to reach a conclusion as to an

issue, a party to that hearing should not be precluded from presenting the admissible

evidence that is most relevant to that issue.” In support of this statement, Wellstar

included a single citation:

See Cousins v. Macedonia Baptist Church of Atlanta, 283 Ga. 570, 573- 74 (2008) (explaining that integral to the constitutional right to due process is “the ability to present witnesses and other lawful evidence”).[5]

In view of the foregoing, we conclude that Wellstar’s statement in its appeal

to the DCH commissioner, while not extensive, was sufficient to preserve its due

process argument. See Dept. of Human Svcs. v. Addison, 304 Ga. 425, 432 (3) (819

SE2d 20) (2018) (finding that trial court should have dismissed as-applied

constitutional challenges for failure to exhaust administrative remedies); Ambulatory

Surgery Centers, 290 Ga. at 629; State Health Planning Agency v. Coastal Empire

Rehabilitation Hosp., 261 Ga. 832 (412 SE2d 532) (1992); Excelsior, 322 Ga. App.

5 The DCH commissioner affirmed the panel hearing officer’s judgment, but did not address Wellstar’s due process argument.

8 at 692 (3).6 Moreover, the regulatory and statutory schemes governing certificates of

need do not require a different result. OCGA § 31-6-44 (i) merely requires that an

aggrieved party file “specific objections” to the hearing officer’s order with the DCH

commissioner, while Ga. Comp. R. & Regs. r. 274-1-.12 (3) states that any such

objections “shall specify in detail the errors allegedly committed by the hearing

officer. . . .” (Emphasis supplied.) Ga. Comp. R. & Regs. r. 274-1-.12 (3). In the

present case, Wellstar specifically cited the hearing officer’s refusal to allow evidence

concerning EUHS’s existing CON status and cited to case law concerning due

process rights. Under our law, that was all that was necessary to preserve Wellstar’s

due process argument in an appeal from an administrative hearing. See Addison, 304

Ga. at 432 (3); Coastal Empire, 261 Ga. at 832.

6 We caution that our holding should not be read broadly as a blanket statement that cursory statements are sufficient to preserve due process arguments in any context. See generally Matthews v. State, 159 Ga. App. 118, 119 (5) (282 SE2d 741) (1981) (“Nebulous allegations of denial of due process without a modicum of specificity cannot be sustained.”). Rather, we simply hold that, in an aggrieved party’s appeal from a decision by an agency administrative hearing officer to the commissioner of the agency, to the extent such an appellate avenue is available, it is satisfactory to state the existence and nature of a due process argument with sufficient detail to allow the commissioner of the agency to “take account of constitutional considerations in deciding whether and how to enforce challenged statutes and rules and what the parties’ rights are under them. . . .” Addison, 304 Ga. at 433 (4).

9 (b) Merit of Wellstar’s Due Process Argument. However, even though Wellstar

preserved its argument, we do not find the argument persuasive.

In evaluating a procedural due process challenge in a non-criminal proceeding, we engage in a two-step analysis: first, we must determine whether a constitutionally protectable liberty or property interest exists; if so, we determine the nature and extent of the procedural protections required. In determining what process is due, we employ [a] three-factor balancing test . . . to weigh the competing interests involved. Those factors include the private interest affected by the state action; the risk of an erroneous deprivation of the interest under the existing scheme along with the probable value, if any, of additional or substitute procedural safeguards; and finally, the interest of the government.

(Citations and footnote omitted.) Dept. of Human Svcs. v. Steiner, 303 Ga. 890, 895

(II) (815 SE2d 883) (2018).

At the outset, Wellstar has not identified “a constitutionally protectable liberty

or property interest” to which it is entitled. Steiner, 303 Ga. at 895 (II). Presumably,

Wellstar claims an unfettered right to introduce evidence before the CON Appeal

Panel hearing officer, but its rights under the Certificate of Need Act are not limitless.

In the first appearance of this case, we held that “neither OCGA § 31-6-44 nor Ga.

Comp. R. & Regs. r. 274-1-.09 provide the CON Appeal Panel with authority to

review the existing CON status of a health care facility in an appeal from the DCH’s

10 decision on an application for a new certificate of need.”7 Cobb Hosp., 349 Ga. App.

at 465 (2). Stated differently, we concluded that the CON Appeal Panel lacked

jurisdiction to consider an applicant’s existing CON status. Our Supreme Court

denied Wellstar’s petition as to this portion of our prior opinion. It follows, then, that

Wellstar had no protectable interest to introduce irrelevant testimony on a subject

over which the CON Appeal Panel had no jurisdiction. See Steiner, 303 Ga. at 895

(II). Accordingly, we conclude that Wellstar failed to demonstrate a due process

violation and that the superior court did not err in denying Wellstar’s petition for

judicial review.8

(c) Wellstar’s Additional Due Process Arguments. Finally, on remand, Wellstar

contends that the hearing officer violated its due process rights because the officer

declined to hear evidence as to Emory’s “evasion of the Hospital Acquisition Act” or

7 For a more complete discussion of the hearing officer’s decision, see Cobb Hosp., 349 Ga. App. at 454-455. 8 Read properly, Wellstar’s current argument more directly challenges the regulatory and statutory procedures governing the CON Appeal Panel itself, which limit the role of the panel to considering new applications for certificates of need rather than the applicant’s existing CON status. That is a separate argument that Wellstar has not pursued previously. To the contrary, Wellstar initially challenged the hearing officer’s actions, rather than raising a facial constitutional challenge to Certificate of Need Act itself.

11 evidence challenging Emory’s “sterling reputation” and the “belief that Emory would

keep its word.” These arguments are unrelated to Wellstar’s claim that the officer

violated its due process rights for precluding evidence as to EUHS’s existing CON

status. In fact, this argument was not presented in Wellstar’s appeal to the DCH

commissioner — in any form or in any other filing — and, therefore, has not been

preserved. See Excelsior, 322 Ga. App. at 692 (3).

Wellstar is not rescued by Ga. Dept. of Community Health v. Fulton DeKalb

Hosp. Auth., 294 Ga. App. 431, 436 (1) (669 SE2d 233) (2008). In that case, we noted

that the hospital authority challenged a decision by the DCH “on nonconstitutional

grounds in the administrative proceeding and on constitutional grounds in court. . . .”

Id. We approved such a practice, observing that the authority “challenged retroactive

application of [a] manual in the administrative proceeding on grounds within the

expertise of the administrative agency and then challenged retroactive application of

it on constitutional grounds within the jurisdiction of the court.” Id. However, this

holding was error. See Coastal Empire, 261 Ga. at 832 (“A superior court reviewing

the decision of an administrative agency may decide a constitutional challenge to the

agency’s rules raised during the administrative process.”) (emphasis supplied).

Therefore, we disapprove Fulton DeKalb Hosp. Auth. to the extent it may be read to

12 relieve a party from the requirement to “raise its [as-applied] constitutional claims in

order to exhaust administrative remedies and preserve the claims for judicial

review. . . .”9 Cobb Hosp., 307 Ga. at 579 (2); see also Addison, 304 Ga. at 432 (3);

Coastal Empire, 261 Ga. at 832; Excelsior, 322 Ga. App. at 692 (3).

In sum, we conclude that Wellstar preserved its original due process argument

by raising the argument in its appeal from the CON Appeal Panel to the DCH

commissioner. Nevertheless, we further conclude that Wellstar’s argument is without

merit. Finally, we conclude that Wellstar’s additional arguments, raised for the first

time in its supplemental brief on remand, are not preserved for review. Accordingly,

we affirm the superior court’s judgment denying Wellstar’s petition for judicial

review.

Judgment affirmed. Gobeil and Coomer, JJ., concur.

9 As noted in footnote 4, supra, there is no concomitant obligation to raise facial constitutional challenges before an administrative body. See Addision, 304 Ga. at 432 (3) (“There is no exhaustion requirement when the plaintiff challenges the constitutionality of a statute on its face.”) (citation and punctuation omitted).