District of Columbia Hospital Ass'n v. Barry

498 A.2d 216, 1985 D.C. App. LEXIS 484

• Court: District of Columbia Court of Appeals
• Decided: September 16, 1985
• Docket: 83-1148, 83-1149
• Status: Published

Opinions

NEWMAN, Associate Judge:

These are interlocutory cross-appeals from an order of the Superior Court. Marion S. Barry, Jr., et al. (District of Columbia) seeks review of that portion of the order declaring that it violated the rule-making provisions of the District of Columbia Administrative Procedure Act (DCA-PA), D.C.Code § 1-1506 et seq. (1981 & Supp.1984), by failing to file a statement of basis and purposes considered in formulating certain regulations. The order enjoined the District of Columbia from enforcing the criminal sanctions in the regulations until the District of Columbia submitted such a statement of basis and purpose to the court. The District of Columbia Hospital Association and 13 hospitals (Hospital Association) appeal the denial of their request for relief, based on their contention that the regulations are invalid since no statement of basis and purpose was issued contemporaneously with the regulations. We hold that DCAPA does not require a statement of basis and purpose, and that the trial court erred in holding to the contrary.

Under the National Health Planning and Resources Development Act, 42 U.S.C. § 300K et seq. (1982), state and local governments are eligible to receive federal funds to help defray the costs of health care planning when certain criteria are met.¹ One such requirement is that states enact Certificate of Need laws to establish capital expenditure review programs conforming to minimum federal requirements. The District of Columbia Certificate of Need [CON] Act was enacted to bring the District of Columbia’s CON program into compliance with the federal guidelines.² The federal program also directs that states must establish a State Health Planning and Development Agency [SHPDA] to administer, among other things, the CON program. 42 U.S.C. § 300m-2 (1982). The District of Columbia’s CON law grants discretion to the District of Columbia’s SHPDA to “adopt and revise regulations according to the District of Columbia Administrative Procedure Act (D.C.Code, § 1-1501 et seq.), governing review procedures and criteria which at a minimum meet the requirements of the National Health Planning Act....” D.C.Code § 32-304 (1981).

On September 3, 1982, SHPDA published a set of proposed rules. After the notice and comment period, new proposed rules were published on October 20, 1982. On December 17, 1982, these rules were, adopted as final. On September 3, 1982, SHPDA also issued proposed regulations establishing filing fees for CON applications. On January 7, 1983, these regulations were published in final form. In both cases, publication of the proposed rules occurred 30 days prior to their effective date, as required by DCAPA, D.C.Code § 1-1506(a) (1981).³

The Hospital Association contends, and the trial court ruled, that although DCAPA contains no express requirement that agencies adopt a general statement of the basis and purpose of regulations promulgated pursuant to informal rulemaking procedures, the United States Court of Appeals for the District of Columbia Circuit has recognized that such statements are nonetheless required. Citizens Association of Georgetown, Inc. v. Zoning Commission of the District of Columbia, 155 U.S.App. D.C. 233, 477 F.2d 402 (1973) (“Citizens Association I”).

The District of Columbia Administrative Procedure Act (DC-APA) expressly imposes such a requirement in “contested cases”. That, of course, does not bar imposing a requirement of stated reasons in the present context. On the contrary, the legislative history of the DC-APA indicates Congress assumed that we would construct such a requirement or believed that the courts already had. That act was meant only to prescribe minimum procedures.

Citizens Association I, supra, 155 U.S. App.D.C. at 240, 477 F.2d at 409 (footnotes omitted). (In Citizens Association I, supra, the District of Columbia Circuit ordered the District of Columbia Zoning Commission to provide a statement of reasons for its refusal to adopt a specific proposed zoning amendment.)⁴ Relying on the language above cited, the Hospital Association argues that a contemporaneous statement of reasons requirement has been imposed on SHPDA, and that the trial court should have invalidated the disputed regulations due to improper promulgation.

The Hospital Association’s reliance on Citizens Association I, supra, is misplaced. Because it was decided after February 1, 1971, its holding is not a binding precedent for this court. M.A.P. v. Ryan, 285 A.2d 310, 312 (D.C.1971). In any event, the major concern of Citizens Association I was that a reviewing court be able to discern “some basis in fact and law to justify the action as consistent with reasonableness.” Citizens Association I, supra, 155 U.S.App.D.C. at 238, 477 A.2d at 407 (quoting Shenk v. Zoning Commission of the District of Columbia, 142 U.S.App. D.C. 267, 269-70, 440 F.2d 295, 297-98 (1971)). We recognize that where no statement of basis and purpose is statutorily required or voluntarily submitted, the agency’s record of rulemaking proceedings must indicate a rational basis for the action. Williams v. Robinson, 139 U.S.App. D.C. 204, 209-10, 432 F.2d 637, 642-45 (1970). Such a concern does not arise in the instant case because there is no showing that the record of SHPDA’s rulemaking proceedings along with the statement of purpose in the District of Columbia’s CON Act, D.C.Code § 32-301 (1981), does not set forth a sufficient basis for the agency action to allow for informed judicial review. Contrary to appellee’s assertions, judicial review of agency action can be conducted in a meaningful manner without a separate statement of reasons from the agency. Pacific States Box & Basket Co. v. White, 296 U.S. 176, 186, 56 S.Ct. 159, 163, 82 L.Ed. 138 (1935) (There is a “presumption of the existence of facts justifying” the adoption of regulations which are within the scope of the authority of the administrative agency. This is particularly so where the regulations have been adopted after notice and hearing.)⁵

More importantly, the absence of any provision requiring District of Columbia agencies to provide a statement of basis and purpose for regulations being promulgated under the rulemaking provisions of the DCAPA, D.C.Code § l-1506(a) (1981),⁶ is a clear indication that neither Congress nor the City Council intended such statements to be required of District of Columbia agencies. The rulemaking provisions of the federal Administrative Procedure Act, 5 U.S.C. § 553 (1977), and the Revised Model State Administrative Procedure Act, § 3(a)(2), which served as models for the DCAPA, contain such statement of reasons requirements. The absence of such a requirement from the DCAPA rulemaking provisions is reflective of a deliberate policy choice by the Congress and the City Council.

We have previously held in rejecting the rationale of Citizens Association I, supra:

[0]nce a reviewing court has determined whether the agency complied with the procedures required by the relevant statutes: “The [appellate] court should ... not stray beyond the judicial province to explore the procedural format or to impose upon the agency its own notion of which procedures are ‘best’ or most likely to further some vague, undefined public good.”

Citizens Association of Georgetown v. Zoning Commission of the District of Columbia, 392 A.2d 1027, 1041 (D.C.1978) (en banc) (quoting Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc., et al., 435 U.S. 519, 549, 98 S.Ct. 1197, 1214, 55 L.Ed.2d 460 (1978)). In Vermont Yankee, supra, the Supreme Court held that the federal APA establishes the maximum procedural requirements that Congress was willing to impose on federal ageneies, and that while agencies are free to impose additional procedures, there are only rare circumstances in which the courts would be justified “in overturning agency action because of a failure to employ procedures beyond those required by statute.” Vermont Yankee, supra, 435 U.S. at 524, 98 S.Ct. at 1202.

We conclude that because the regulations were promulgated in accordance with DCAPA, the trial court erred in granting the Hospital Association’s motion to enjoin their criminal enforcement based on the absence of a statement of basis and purpose. We reverse so much of the order as is appealed by the District of Columbia. We affirm the trial court’s ruling that is the basis of the Hospital Association’s cross-appeal.

So Ordered.

1 . The term "state" includes the District of Columbia. 42 U.S.C. § 300n(l) (1982).

2 . Codified at D.C.Code § 32-301, et seq. (1981 & Supp.1984), the District’s CON law requires health care facilities to seek CON approval for proposed new institutional health services with operating costs of $250,000 or more and for proposed capital expenditures of $600,000 or more. It outlines the application process for a CON, and the specific procedures for the modification, sale or transfer of such certificates. Health care facilities with Hill-Burton Act obligations must demonstrate fulfillment of these requirements. Those facilities without such obligations must provide a certain volume of free health care and make their services available to the community.

3 . The regulations delineate, and the Hospital Association challenges, recordkeeping and other reporting requirements related to the implementation of the hospital’s obligations under D.C. Code § 32-305(a) (1981).

4 . In discussing its order the court stated:

The case for requiring a statement of reasons from an administrative agency is a persuasive one. Those reasons may be crucial in order for the court to know what the agency has really determined, hence what to review. Courts ought not to have to speculate as to the basis for an administrative agency’s conclusions; nor can a court “assume without explanation that proper standards are implicit in every act of agency discretion”. And, when faced with a complex problem, having widespread ramifications, ... a court should surely have the benefit of the agency’s expertise.

Citizens Association, supra, 155 U.S.App.D.C. at 239, 477 F.2d at 408 (footnotes omitted). The court did not invalidate the ruling in issue, but instead declined to express any position on the merits of the case until a statement of reasons was filed.

5 . More recent Supreme Court decisions which hold that an articulation of the reasons underlying agency action is necessary for judicial review involve, unlike the instant case, adjudicatory determinations whose purpose cannot be discerned, Atchison, T. & S.F.R. Co. v. Wichita Bd. of Trade, 412 U.S. 800, 806-07, 93 S.Ct. 2367, 2374, 37 L.Ed.2d 350 (1973); Burlington Truck Lines v. United States, 371 U.S. 156, 168, 83 S.Ct. 239, 245, 9 L.Ed.2d 207 (1962), or rulemaking under the federal APA which alters a previously established position, Motor Vehicles Mfrs. Ass'n v. State Farm Mutual, 463 U.S. 29, 103 S.Ct. 2856, 2866-67, 77 L.Ed.2d 443 (1983).

6 . D.C.Code § l-1506(a) states:

The Mayor and each independent agency shall, prior to the adoption of any rule ..., publish in the District of Columbia Register ... notice of the intended action so as to afford interested persons opportunity to submit data and views either orally or in writ-ing_ The publication or services required ... shall be made not less than 30 days prior to the effective date of the proposed adoption. ...