Singleton v. N.C. Dep't of Health & Hum. Servs.

Opinions

Opinion

IN THE COURT OF APPEALS OF NORTH CAROLINA

2022-NCCOA-412

No. COA21-558

Filed 21 June 2022

Wake County, No. 20 CVS 05150

JAY SINGLETON, D.O., and SINGLETON VISION CENTER, P.A., Plaintiffs,

v.

NORTH CAROLINA DEPARTMENT OF HEALTH AND HUMAN SERVICES; ROY COOPER, Governor of the State of North Carolina, in his official capacity; MANDY COHEN, North Carolina Secretary of Health and Human Services, in her official capacity; PHIL BERGER, President Pro Tempore of the North Carolina Senate, in his official capacity; and TIM MOORE, Speaker of the North Carolina House of Representatives, in his official capacity, Defendants.

Appeal by plaintiffs from order entered 11 June 2021 by Judge Michael

O’Foghludha in Wake County Superior Court. Heard in the Court of Appeals 22

March 2022.

Institute for Justice, by Joshua A. Windham and Renée D. Flaherty, admitted pro hac vice, and Narron Wenzel, P.A., by Benton Sawrey, for plaintiffsappellants .

Attorney General Joshua H. Stein, by Solicitor General Ryan Y. Park, Assistant Solicitor General Nicholas S. Brod, Assistant Attorney General Derek L. Hunter and Assistant Attorney General John H. Schaeffer, for defendants-appellees.

K&L Gates LLP, by Gary S. Qualls, Susan K. Hackney and Anderson M. Shackelford, for amici curiae Charlotte-Mecklenburg Hospital Authority d/b/a Atrium Health, University Health Systems of Eastern Carolina, Inc. d/b/a Vidant Health, and Cumberland County Hospital System, Inc. d/b/a Cape Fear Valley Health System.

Fox Rothschild, by Marcus C. Hewitt and Troy D. Shelton, for amicus curiae Bio-Medical Applications of North Carolina, Inc.

Opinion of the Court

Law Office of B. Tyler Brooks, PLLC, by B. Tyler Brooks and Lusby Law, PA, by Christopher R. Lusby for amicus curiae Certificate of Need Scholars.

Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, by Kenneth L. Burgess, Matthew F. Fisher, and Iain M. Stauffer for amici curiae NCHA, Inc. d/b/a North Carolina Healthcare Association, North Carolina Healthcare Facilities Association, North Carolina Chapter of the American College of Radiology, Inc., and North Carolina Senior Living Association.

Parker, Poe, Adams, & Bernstein LLP, by Robert A. Leandro for amici curiae Association for Home and Hospice Care of North Carolina and North Carolina Ambulatory Surgical Center.

John Locke Foundation, by Jonathan D. Guze, for amicus intervenor John Locke Foundation.

TYSON, Judge.

¶1 Jay Singleton, D.O. and Singleton Vision Center, P.A. (collectively “Plaintiffs”)

appeal from an order entered, which granted the motion to dismiss by the North

Carolina Department of Health and Human Services (“DHHS”); Roy Cooper, in his

capacity as Governor of the State of North Carolina; Mandy H. Cohen, in her capacity

as Secretary of the North Carolina Department of Health and Human Services;

Phillip E. Berger, in his capacity as President Pro Tempore of the North Carolina

Senate; and, Timothy K. Moore, in his capacity as Speaker of the North Carolina

House of Representatives (collectively “Defendants”). We dismiss in part and affirm

in part.

I. Background

¶2 Jay Singleton, D.O. (“Dr. Singleton”) is a board-certified ophthalmologist,

licensed as a medical doctor by the North Carolina Medical Board, and practices in

New Bern. Dr. Singleton founded Singleton Vision Center, P.A. (the “Center”) in 2014

and serves as its President and Principal. The Center is a full-service ophthalmology

clinic, which provides routine vision checkups, treatments for infections, and surgery.

¶3 Dr. Singleton provides all non-operative patient care and treatments at the

Center. Dr. Singleton performs the majority of his outpatient surgeries at Carolina

East Medical Center (“Carolina East”) in New Bern. Carolina East is the only

licensed provider with an operating room certificate of need located in the tri-county

planning area of Craven, Jones, and Pamlico Counties. This current single need

determination has not been revised for over ten years since 2012.

¶4 To perform surgeries at the Center, Dr. Singleton must obtain both a facility

license under the Ambulatory Surgical Facility Licensure Act, N.C. Gen. Stat. § 131E-

145 et seq. (2021) and a Certificate of Need (“CON”) under N.C. Gen. Stat. § 131E-

175 et seq. (2021). DHHS makes determinations of operating room needs each year

in the State Medical Facilities Plan to become effective two years later.

¶5 The 2021 State Medical Facilities Plan states there is “no need” for new

operating room capacity in the Craven, Jones, and Pamlico Counties planning area.

The tri-county planning area encompasses an area of approximately 1,814 square

miles. Representatives of Carolina East informed Plaintiffs they will oppose any

application they submit for an additional operating room CON within the tri-county

area.

¶6 Plaintiffs filed suit on 22 April 2020, alleging the CON law as applied to them

violates the North Carolina Constitution. Plaintiffs sought an injunction preventing

Defendants from enforcing the CON law, a declaration the CON law is

unconstitutional as applied to them, and to recover nominal damages.

¶7 Defendants filed motions to dismiss pursuant to North Carolina Rules of Civil

Procedure 12(b)(1) and 12(b)(6) on 29 June 2020 and 31 July 2020. Following a

hearing, the trial court denied Defendants’ Rule 12(b)(1) motion and allowed

Defendants’ Rule 12(b)(6) motion on 11 June 2021. Plaintiffs appeal the trial court’s

order granting Defendants’ Rule 12(b)(6) motion. Defendants failed to cross-appeal

the denial of their 12(b)(1) motion.

II. Jurisdiction

¶8 This Court possesses jurisdiction pursuant to N.C. Gen. Stat. § 7A-27(b)(1)

(2021). “[T]he issue of subject matter jurisdiction may be raised at any time, even on

appeal.” Huntley v. Howard Lisk Co., Inc., 154 N.C. App. 698, 700, 573 S.E.2d 233,

235 (2002).

A. Failure to Appeal

¶9 Defendants argue the trial court lacked subject matter jurisdiction because

Plaintiffs failed to exhaust or even attempt to invoke statutory and administrative

remedies available to them. This argument was incorporated into Defendants’ Rule

12(b)(1) motion to dismiss, which the trial court denied. Defendants were not

required to take a cross-appeal of the trial court’s order dismissing the case under

Rule 12(b)(6) in order to raise arguments under Rule 12(b)(1). Defendants’ subject

matter jurisdiction arguments fall under N.C. R. App. P. 28(c): “Without taking an

appeal, an appellee may present issues on appeal based on any action or omission of

the trial court that deprived the appellee of an alternative basis in law for supporting

the judgment . . . from which appeal has been taken.” N.C. R. App. P. 28(c) (2021).

¶ 10 In addition to Rule 28(c), “there are two types of rules governing the manner

in which legal claims are pursued in court: jurisdictional rules, which affect a court’s

power to hear the dispute, and procedural rules, which ensure that the legal system

adjudicates the claim in an orderly way.” Tillet v. Town of Kill Devil Hills, 257 N.C.

App. 223, 225, 809 S.E.2d 145, 147 (2017) (citation omitted). This Court further held:

“jurisdictional requirements cannot be waived or excused by the court.” Id. (citation

omitted).

¶ 11 “Jurisdiction rests upon the law and the law alone. It is never dependent upon

the conduct of the parties.” Feldman v. Feldman 236 N.C. 731, 734, 73 S.E.2d 865,

867 (1953). Our Supreme Court has long held: “A defect in jurisdiction over the

subject matter cannot be cured by waiver, consent, amendment, or otherwise.”

Anderson v. Atkinson, 235 N.C. 300, 301, 69 S.E.2d 603, 604 (1952).

¶ 12 Our Supreme Court further stated: “A lack of jurisdiction or power in the court

entering a judgment always avoids the judgment, and a void judgment may be

attacked whenever and wherever it is asserted.” State ex rel. Hanson v. Yandle, 235

N.C. 532, 535, 70 S.E.2d 565, 568 (1952) (citations omitted). “Where a plaintiff has

failed to exhaust its administrative remedies, its action brought in the trial court may

be dismissed for lack of subject matter jurisdiction.” Vanwijk v. Prof’l Nursing Servs.,

213 N.C. App. 407, 410, 713 S.E.2d 766, 768 (2011) (citation omitted).

¶ 13 “So long as the statutory procedures provide effective judicial review of an

agency action, courts will require a party to exhaust those remedies.” Flowers v.

Blackbeard Sailing Club, 115 N.C. App. 349, 352, 444 S.E.2d 636, 638 (1994).

¶ 14 Our Supreme Court has also held:

As a general rule, where the legislature has provided by statute an effective administrative remedy, that remedy is exclusive and its relief must be exhausted before recourse may be had to the courts. This is especially true where a statute establishes, as here, a procedure whereby matters of regulation and control are first addressed by commissions or agencies particularly qualified for the purpose. In such a case, the legislature has expressed an intention to give the administrative entity most concerned with a particular matter the first chance to discover and rectify error. Only after the appropriate agency has developed its own record and factual background upon which its decision must rest should the courts be available to review the sufficiency of its process. An earlier intercession may be both wasteful and unwarranted. To permit the interruption and cessation of

proceedings before a commission by untimely and premature intervention by the courts would completely destroy the efficiency, effectiveness, and purpose of the administrative agencies.

Presnell v. Pell, 298 N.C. 715, 721-22, 260 S.E.2d 611, 615 (1979) (internal citations

and quotation marks omitted) (emphasis supplied).

¶ 15 Plaintiffs acknowledge they could have applied for a CON and have sought and

challenged any administrative review to invoke or ripen their constitutional

procedural due process claims. See N.C. Gen. Stat. § 131E-175 et seq. Plaintiffs failed

to file an application for a CON or to seek or exhaust any administrative remedy from

DHHS prior to filing the action at bar. Id. Plaintiff has not shown the inadequacy of

statutorily available administrative remedies to review and adjudicate his claims to

sustain a deprivation of procedural due process. Id.; see Good Hope Hosp., Inc. v. N.C.

Dep’t of Health & Human Servs., 174 N.C. App. 266, 272, 620 S.E.2d 873, 879 (2005).

¶ 16 The procedural due process violation:

is not complete when the deprivation occurs; it is not complete unless and until the State fails to provide due process. Therefore, to determine whether a constitutional violation has occurred, it is necessary to ask what process the State provided, and whether it was constitutionally adequate. This inquiry would examine the procedural safeguards built into the statutory or administrative procedure of effecting the deprivation, and any remedies for erroneous deprivations provided by the statute[.]

Edward Valves, Inc. v. Wake Cty., 343 N.C. 426, 434, 471 S.E.2d 342, 347 (1996)

(citing Zinermon v. Burch, 494 U.S. 113, 125-26, 108 L. Ed. 2d 100, 114 (1990)).

¶ 17 Plaintiffs seek to excuse their failure to seek any administrative review and

remedy and assert, “a party who seeks to challenge the constitutionality of [the CON

law] must bring an action pursuant to . . . the Declaratory Judgment Act” citing

Hospital Group of Western N.C. v. N.C. Dep’t of Human Resources, 76 N.C. App. 265,

268, 332 S.E.2d 748, 751 (1985). However, Plaintiffs omit the sentence preceding the

quoted language, which qualifies: “By amending G.S. 131E-188(b), the Legislature

has opted to bypass the superior court in a contested certificate of need case, and

review of a final agency decision is properly in this Court.” Id. (emphasis supplied).

No “contested certificate of need case” was ever brought before DHHS, and no “final

agency decision” has been entered. Id.

¶ 18 Plaintiffs further baldly assert they are not required to seek and exhaust

administrative remedies because the statutory and administrative remedies are

inadequate, and the administrative agencies do not have jurisdiction to hear their

constitutional claims, nor to grant declaratory or injunctive relief. The focus of

Plaintiffs’ complaint sought a permanent injunction, preventing enforcement of the

CON law against Plaintiffs. See id.

¶ 19 The remedy Plaintiffs admittedly and essentially seek is for a fact-finding

administrative record and decision thereon to be cast aside and a CON to be

summarily issued to them by the Court. This we cannot do. Presnell, 298 N.C. at

721, 260 S.E.2d at 615 (“where the legislature has provided by statute an effective

administrative remedy, that remedy is exclusive and its relief must be exhausted

before recourse may be had to the courts”). “Only after the appropriate agency has

developed its own record and factual background upon which its decision must rest

should the courts be available to review the sufficiency of its [procedural due] process.

An earlier intercession may be both wasteful and unwarranted.” Id. at 721-22, 260

S.E.2d at 615. Had Plaintiffs sought any administrative review or the procedures

were shown to be inadequate, their claim would be ripe for the superior court to

exercise jurisdiction over their procedural claims.

¶ 20 Plaintiffs’ procedural due process constitutional challenges under both Article

I, Section 32 (“No person or set of persons is entitled to exclusive or separate

emoluments or privileges from the community but in consideration of public

services.”) and Article I, Section 34 (“Perpetuities and monopolies are contrary to the

genius of a free state and shall not be allowed.”) of the North Carolina Constitution

are properly dismissed under Rule 12(b)(1). N.C. Const. art I, §§ 32, 34.

B. Article I, Section 19

¶ 21 Plaintiffs also asserted a substantive due process claim under Article I, Section

19 of the North Carolina Constitution. Contrary to the State’s adamant assertions

otherwise, Plaintiffs correctly assert this substantive violation may be brought in a

declaratory judgment claim in superior court, “regardless of whether administrative

remedies have been exhausted.” Good Hope Hosp., 174 N.C. App. at 272, 620 S.E.2d

at 879 (Holding a “[v]iolation of a substantive constitutional right may be the subject

of a § 1983 claim, regardless of whether administrative remedies have been exhausted,

because the violation is complete when the prohibited action is taken.”) (citation

omitted) (emphasis supplied).

¶ 22 This Court possesses jurisdiction to review the superior court’s ruling over

Plaintiffs’ substantive due process as applied claims under Article I, Section 19 of the

North Carolina Constitution. See id.

III. Issues

¶ 23 Plaintiffs argue the trial court erred by granting Defendants’ Rule 12(b)(6)

motion.

IV. Defendants’ Rule 12(b)(6) Motion

¶ 24 Plaintiffs assert the CON statutes, N.C. Gen. Stat. § 131E-175 et seq., violates

Article I, § 19 of the North Carolina Constitution. Plaintiffs’ allegations properly

assert an as-applied challenge to N.C. Gen. Stat. § 131E-175 et seq. “An as-applied

challenge represents a party’s “protest against how a statute was applied in the

particular context in which [the party] acted or proposed to act.” Town of Beech

Mountain v. Genesis Wildlife Sanctuary, Inc., 247 N.C. App. 444, 460, 786 S.E.2d 335,

347 (2016) (citation omitted), aff’d, 369 N.C. 722, 799 S.E.2d 611 (2017). “An as-

applied challenge contests whether the statute can be constitutionally applied to a

particular defendant, even if the statute is otherwise generally enforceable.” State v.

Packingham, 368 N.C. 380, 383, 777 S.E.2d 738, 743 (2015) (citation omitted), rev’d

and remanded on other grounds, ____U.S. ____, 198 L. Ed. 2d 273 (2017).

A. Standard of Review

¶ 25 This Court’s standard of review of a Rule 12(b)(6) motion and ruling is well

established. “A Rule 12(b)(6) motion tests the legal sufficiency of the pleading.” Kemp

v. Spivey, 166 N.C. App. 456, 461, 602 S.E.2d 686, 690 (2004) (citation and quotation

marks omitted). “When considering a [Rule] 12(b)(6) motion to dismiss, the trial court

need only look to the face of the complaint to determine whether it reveals an

insurmountable bar to plaintiff’s recovery.” Carlisle v. Keith, 169 N.C. App. 674, 681,

614 S.E.2d 542, 547 (2005) (citation and quotation marks omitted).

¶ 26 “On appeal from a motion to dismiss under Rule 12(b)(6), this Court reviews

de novo whether, as a matter of law, the allegations of the complaint . . . are sufficient

to state a claim upon which relief may be granted[.]” Christmas v. Cabarrus Cty., 192

N.C. App. 227, 231, 664 S.E.2d 649, 652 (2008) (citation and internal quotation marks

omitted) (ellipses in original).

¶ 27 This Court “consider[s] the allegations in the complaint [as] true, construe[s]

the complaint liberally, and only reverse[s] the trial court’s denial of a motion to

dismiss if [the] plaintiff is entitled to no relief under any set of facts which could be

proven in support of the claim.” Id. (citation omitted).

B. Article I, Section 19

¶ 28 The North Carolina Constitution’s Law of the Land Clause, provides, inter alia:

“No person shall be taken, imprisoned, or disseized of his freehold, liberties, or

privileges, or outlawed, or exiled, or in any manner deprived of his life, liberty, or

property, but by the law of the land.” N.C. Const. art I, § 19. The Law of the Land

Clause has been held to be the equivalent of the Fourteenth Amendment’s Due

Process Clause in the Constitution of the United States. See State v. Collins, 169

N.C. 323, 324, 84 S.E. 1049, 1050 (1915).

¶ 29 “[A] decision of the United States Supreme Court interpreting the Due Process

Clause is persuasive, though not controlling, authority for interpretation of the Law

of the Land Clause.” Evans v. Cowan, 132 N.C. App. 1, 6, 510 S.E.2d 170, 174 (1999)

(citation omitted). Our Supreme Court has expressly “reserved the right to grant

Section 19 relief against unreasonable and arbitrary state statutes in circumstances

where relief might not be attainable under the Fourteenth Amendment to the United

States Constitution.” In re Meads, 349 N.C. 656, 671, 509 S.E.2d 165, 175 (1998)

(citation omitted).

¶ 30 Our Supreme Court held: “The law of the land, like due process of law, serves

to limit the state’s police power to actions which have a real or substantial relation to

the public health, morals, order, safety or general welfare.” Poor Richard’s Inc. v.

Stone, 322 N.C. 61, 64, 366 S.E.2d 697, 699 (1988) (internal quotation marks omitted).

Contrary to Plaintiffs’ counsel’s adamant assertions, for almost twenty years, this

Court has held “economic rules and regulations do not affect a fundamental right for

purposes of due process[.]” Affordable Care, Inc. v. N.C. State Bd. of Dental Exam’rs,

153 N.C. App. 527, 537, 571 S.E.2d 52, 60 (2002) (citations omitted).

¶ 31 In Hope—A Women’s Cancer Ctr., P.A. v. State of N.C., 203 N.C. App. 593, 603,

693 S.E.2d 673, 680 (2010), this Court articulated a “rational basis” analysis when

examining due process challenges to the CON law, which are claimed to be an invalid

exercise of the State’s police power. Our Court held: “(1) whether there exists a

legitimate governmental purpose for the creation of the CON law[;] and[,] (2) whether

the means undertaken in the CON law are reasonable in relation to this purpose.”

Id. (citations omitted).

¶ 32 Our Supreme Court held the protections under Article I, Section 19 “have been

consistently interpreted to permit the state, through the exercise of its police power,

to regulate economic enterprises provided the regulation is rationally related to a

proper governmental purpose.” Poor Richard’s, 322 N.C. at 64, 366 S.E.2d at 699.

¶ 33 In enacting the CON law, the General Assembly made voluminous findings of

fact, including: “[T]he general welfare and protection of lives, health, and property of

the people of this State require that new institutional health services to be offered

within this State be subject to review and evaluation as to need, cost of service,

accessibility to services, quality of care, feasibility, and other criteria.” N.C. Gen.

Stat. § 131E-183(a) (2021). This Court previously held this legislative finding is “a

legitimate government purpose.” See Hope—A Women’s Cancer Ctr., P.A., 203 N.C.

App. at 603, 693 S.E.2d at 680 (citation omitted).

¶ 34 In Hope—A Women’s Cancer Ctr., P.A., this Court examined a facial challenge

to the CON law under Article I, Section 19 and held:

the General Assembly determined that approving the creation or use of new institutional health care services based in part on the need of such service was necessary in order to ensure that all citizens throughout the State had equal access to health care services at a reasonable price, a situation that would not occur if such regulation were not in place.

Id. at 604, 693 S.E.2d at 681.

¶ 35 This Court reasoned that affordable access to necessary health care by North

Carolinians “is a legitimate goal, and it is a reasonable belief that this goal would be

achieved by allowing approval of new institutional health services only when a need

for such services had been determined.” Id. at 605, 693 S.E.2d at 681. This Court

held the CON law prohibiting a provider from expanding services in their practice

did not facially violate a provider’s due process rights under Article I, Section 19. Id.

at 606, 693 S.E.2d at 682.

¶ 36 Defendants assert this Court’s analysis here is controlled by Hope—A Women’s

Cancer Ctr., P.A. While Hope is instructive, contrary to the State’s and Defendants’

assertions, this Court’s prior holding foreclosing a facial challenge does not foreclose

a future as-applied challenge, nor does that decision control our analysis of Plaintiffs’

claims in the complaint.

¶ 37 “A facial challenge is an attack on a statute itself as opposed to a particular

application” to an individual litigant. City of Los Angeles v. Patel, 576 U.S. 409, 414,

192 L. Ed. 2d 435, 443 (2015). “In a facial challenge, the presumption is that the law

is constitutional, and a court may not strike it down if it may be upheld on any

reasonable ground.” Affordable Care, Inc. v. N.C. State Bd. Of Dental Exam’rs, 153

N.C. App. 527, 539, 571 S.E.2d 52, 61 (2002).

¶ 38 Facial challenges are “the most difficult challenge to mount” successfully.

United States v. Salerno, 481 U.S. 739, 745, 95 L. Ed. 2d 697, 707 (1987). To mount

a successful facial challenge, “a plaintiff must establish that a law is unconstitutional

in all of its applications.” Patel, 576 U.S. at 418, 192 L. Ed. 2d at 445 (citation and

internal quotation marks omitted) (emphasis supplied).

¶ 39 In contrast, an as-applied challenge attacks “only the decision that applied the

ordinance to his or her property, not the ordinance in general.” Town of Beech

Mountain, 247 N.C. App. at 475, 786 S.E.2d at 356. Contrary to the State’s assertions

at oral argument, a future as-applied challenge to a statute is not foreclosed and a

litigant is not bound by the Court’s holding in a prior facial challenge. See In re Civil

Penalty, 324 N.C. 373, 384, 379 S.E.2d 30, 37 (1989). An as-applied challenge asserts

that a law, which is otherwise constitutional and enforceable, may be

unconstitutional in its application to a particular challenger on a particular set of

facts. Id.

¶ 40 Plaintiffs and amicus assert our Supreme Court’s analysis from In re

Certificate of Need for Aston Park Hospital, Inc., 282 N.C. 542, 551, 193 S.E.2d 729,

735 (1973) is controlling instead of Hope—A Women’s Cancer Ctr., P.A., 203 N.C. App.

593, 693 S.E.2d 673. In Aston Park, our Supreme Court invalidated a prior

codification of the CON law because it violated the plaintiff-provider’s substantive

due process rights. Aston Park, 282 N.C. at 551, 193 S.E.2d at 735. The prior CON

statute prohibited the issuance of a CON unless it was “necessary to provide new or

additional impatient facilities in the area to be served.” Id. at 545, 193 S.E.2d at 732

(internal quotation marks omitted).

¶ 41 The General Assembly had made limited findings of fact at that time

concerning how this prohibition promoted the public welfare. Id. at 544, 193 S.E.2d

at 731. This Court held no evidence tended to show or suggest market forces and

competition would not “lower prices, [create] better service and more efficient

management” for healthcare to sustain the prohibition. Id. at 549, 193 S.E.2d at 734.

¶ 42 This earlier codification has been amended, enlarged and re-codified to include

additional legislative findings to show how the CON law affects the public welfare.

The General Assembly has specifically found and emphasized “[t]hat if left to the

marketplace to allocate health service facilities and health care services, geographical

maldistribution of these facilities and services would occur.” N.C. Gen. Stat. § 131E-

175(3).

¶ 43 Plaintiffs’ asserted deficiencies, which were identified by this Court in Aston

Park, are no longer present in the current CON law. Hope—A Women’s Cancer Ctr.,

P.A., 203 N.C. App. at 607, 693 S.E.2d at 682 (internal citations and quotation marks

omitted). These additional legislative findings do not mean triable issues and

challenges are foreclosed, as they may arise and continue to exist in a future

plaintiff’s as-applied challenge to the CON statute.

¶ 44 While counsel for Defendants clearly and correctly admitted the CON statutes

are restrictive, anti-competitive, and create monopolistic policies and powers to the

holder, and Plaintiffs correctly assert the CON process is costly and fraught with

gross delays, and service needs are not kept current, those challenges can also be

asserted before the General Assembly, Commissions, and against the agency where

a factual record can be built.

¶ 45 At least twelve sister states, including New Hampshire, California, Utah,

Pennsylvania, and Texas, have re-examined the anti-competitive, monopolistic, and

bureaucratic burdens of their CON statutes’ health care allocations, and the scarcity

created by and delays inherit in that system, and have abolished the entire CON

system within their states. National Conference of State Legislatures, Certificate of

Need (CON) State Laws, https://www.ncsl.org/research/health/con-certificate-of-

need-state-laws.aspx (last visited May 15, 2022).

¶ 46 Plaintiffs’ complaint has also not asserted a violation of North Carolina’s unfair

and deceptive trade practices or right to work statutes located in Chapter 75 or

Chapter 95 of our General Statutes. See N.C. Gen. Stat. § 75.1.1 et seq.; N.C. Gen.

Stat. § 95-78 (2021) (“The right to live includes the right to work. The exercise of the

right to work must be protected and maintained free from undue restraints and

coercion.”).

¶ 47 Plaintiffs also failed to assert it had sought re-classification of certain surgical

and treatment procedures under its medical or other licenses and certifications,

which can be safely done at its Center and clinic, without the need for a CON

operating room. See North Carolina State Bd. of Dental Exam’rs v. FTC 574 U. S.

494, 514, 191 L. Ed. 2d 35, 54 (2015) (State dental board cannot confine teeth

whitening to licensed dental offices.).

¶ 48 Advances in lesser and non-invasive procedures and technological treatments

develop rapidly and have reduced or eliminated the need for a traditional operating

theater and allowed for ambulatory clinical environments for patients. Yael

Kopleman, MD, Raymond J. Lanzafame, MD, MBA & Doron Kopelman, MD, Trends

in Evolving Technologies in the Operating Room of the Future, Journal of the Society

of Laparoendoscopic Surgeons vol. 17,2 (2013).

¶ 49 We express no opinion on the potential viability, if any, of claims not alleged

in this complaint. The trial court correctly held Plaintiffs’ substantive due process

allegations, even taken as true and in the light most favorable to them, failed to state

a claim upon which relief can be granted. See N.C. Gen. Stat. § 1A-1, Rule 12(b)(6)

(2021). Plaintiffs’ argument is overruled.

V. Conclusion

¶ 50 Absence of subject matter jurisdiction may be raised at any time, this Court

possesses no jurisdiction over Plaintiffs’ procedural challenges, as alleged and

analyzed above. Plaintiffs’ appeal is dismissed in part.

¶ 51 Plaintiffs’ as-applied challenges in their complaint, taken as true and in the

light most favorable to them, fail to state any legally valid cause of action. The trial

court did not err in granting Defendants’ Rule 12(b)(6) motion to dismiss.

¶ 52 Considering the allegations in the complaint, as applied to Plaintiffs, the CON

law does not violate Plaintiffs’ rights under the Law of the Land Clause. N.C. Const.

art I, § 19. The order of the trial court is affirmed, without prejudice for Plaintiffs to

assert claims before DHHS, or otherwise. It is so ordered.

DISMISSED IN PART AND AFFIRMED IN PART.

Judges HAMPSON and CARPENTER concur.