Documente Academic
Documente Profesional
Documente Cultură
No. 12-2272
Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria.
Claude M. Hilton, Senior
District Judge. (1:12-cv-00615-CMH-TCB)
Argued:
Decided:
affirm
the
dismissal
of
their
Fourteenth
Amendment
I.
A.
In order to launch a medical enterprise in the state of
Virginia, a firm is required to obtain a certificate of public
need. Va. Code Ann. 32.1-102.1 et. seq.; 12 Va. Admin. Code
5-220-10
governs
state,
most
et
seq.
Virginias
medical
including
the
capital
certificate-of-need
expenditures
construction
of
new
undertaken
facilities
program
in
the
and
the
does
not,
however,
apply
to
the
replacement
of
existing
primary
purposes
of
the
requirement
are
to
preclude
the
of
medical
facilities,
to
protect
the
economic
determining
whether
particular
applicant
has
factors.
factor
is
instance,
facility
Va.
Code
Ann.
dispositive.
[t]he
The
extent
fosters
32.1-102.3(B)(1)-(8).
Commissioner
to
which
institutional
the
must
single
consider,
proposed
competition
No
that
for
service
benefits
or
the
including
the
utilization
and
efficiency
of
existing
that
to
unpredictable
desire
navigate
to
obtain
potentially
application
process.
certificate
The
lengthy,
cost
of
of
need
are
costly,
and
applying
is
grouped
into
subcategories
for
simultaneous
review
in
health
planning
agency
must
complete
its
initial
hearing
in
proximity
to
the
site
of
the
proposed
its
recommendation
regarding
the
disposition
of
the
application.
The Department is then required to determine whether an
informal fact-finding conference is warranted. Such a conference
will be held if the Department independently determines that it
is necessary or if an intervening party demonstrates that good
cause exists to hold such a hearing. Good cause exists if (i)
there
is
presented
significant
at
and
not
relevant
available
information
at
the
time
not
of
previously
the
public
relating
to
the
application
subsequent
to
the
fact
or
law
in
the
Department
staffs
report
on
the
an
application
informal
is
fact-finding
deemed
approved
conference
if
the
is
conducted.
Commissioner
fails
An
to
allege
that
[w]ithout
an
informal
fact-finding
that
the
process
can
take
literally
years.
imposed
by
the
certificate
application
process.
Each
Colon
Health
combines
the
advantages
of
the
two
colon-cancer
screening
involves
an
invasive
Health
captured
circumvents
via
this
virtual
problem
colonoscopy
by
exporting
to
the
team
of
their
conclusions
within
an
hour
to
an
on-site
recalling
streamlined
the
approach
colonoscopy,
thus
patient
reduces
for
the
encouraging
cost
higher
second
and
visit.
This
inconvenience
percentage
of
of
at-risk
potential
competitors
intervened
to
oppose
its
absence
of
the
certificate
requirement
(which
covers
CT
Radiology
specializes
in
using
magnetic
Id.
75-76.
Progressive
7
currently
maintains
formerly
operated
radiology
business
in
Virginia,
but
Colon
Health,
Progressive
alleges
that
the
certificate
specialized
services
in
the
Commonwealth.
Progressive
of
facilities
funding.
would
It
be
also
financed
makes
no
entirely
by
private
attempt
to
contest
and
would
be
performed
by
state-licensed
challenged
the
certificate
program
in
the
in
addition
to
the
Fourteenth
Amendments
Equal
court
Clause,
concluded,
that
the
with
respect
to
the
certificate-of-need
dormant
Commerce
program
was
negligible
respect
burdens
to
on
interstate
appellants
commerce.
Fourteenth
J.A.
Amendment
142-47.
challenges,
With
the
at
131-42.
In
an
opinion
that
reproduced,
almost
II.
Appellants most serious challenge to the certificate-ofneed
requirement
is
predicated
on
the
dormant
aspect
of
the
[t]o
regulate
Commerce
among
the
several
by
burdening
out-of-state
competitors.
Dept
of
marks
omitted).
By
invalidating
unlawfully
impede
interstate
commerce,
courts
statutes
that
effectuate
the
under
the
Articles
of
Confederation.
Id.
at
338
the
Courts
concern
with
economic
protectionism
are
statutes
that
discriminate
against
interstate
(emphasis
differential
interests
added).
treatment
that
benefits
of
[D]iscrimination
in-state
the
former
simply
means
and
out-of-state
economic
and
burdens
latter.
the
Oregon Waste Sys., Inc. v. Dept of Envtl. Quality, 511 U.S. 93,
99
(1994).
statute
may
discriminate
facially,
in
its
Sierra Club, 98 F.3d 774, 785 (4th Cir. 1996) (citing Wyoming v.
Oklahoma, 502 U.S. 437, 454-55 (1992)).
The discrimination test thus has an empirical as well as a
formal dimension: merely noting a laws facial neutrality is
insufficient
under
this
analysis.
The
principal
focus
of
27,
37
(1980);
see
also
Yamaha
Motor
Corp.
v.
Jims
Motorcycle, Inc., 401 F.3d 560, 568 (4th Cir. 2005). In order to
prove
discriminatory
demonstrate
that
the
effect,
for
challenged
instance,
statute,
if
plaintiffs
must
enforced,
would
on
discrimination
against
interstate
commerce
--
not
that
the
Commerce
Clause
protects
the
interstate
interstate
commerce
in
part
11
because
appellants
are
two
relatively
small
discrimination
businesses).
against
individual
Focusing
firms,
exclusively
however,
on
improperly
narrows the scope of the judicial inquiry and has the baneful
effect of precluding certain meritorious claims. For while the
burden on a single firm may have but a negligible impact on
interstate commerce, the effect of the law as a whole and in the
aggregate may be substantial.
B.
State laws that discriminate against interstate commerce in
any of the three ways identified by this court -- facially, in
practical effect, or in purpose -- are subject to a virtually
per
se
rule
(internal
of
invalidity.
quotation
marks
Wyoming,
omitted).
502
Under
U.S.
this
at
454-55
variant
of
court
must
invalidate
the
challenged
law
unless
the
appellants
concede
that
Virginias
certificate-of-
do,
however,
allege
discrimination
in
both
they
point
to
an
implementing
regulation
which
the
ability
of
essential
community
providers
to
Code
5-230-30).
Under
this
theory,
since
current
noted,
authorizing
the
relevant
individuals
to
code
sections
request
an
include
informal
proviso
fact-finding
requires between six and seven months to complete, but that the
addition of an informal fact-finding conference can result in
the process taking significantly longer. Compl. 136. Such a
prolonged
delay
may
occur
in
part
because,
[d]espite
the
informal label, [fact-finding conferences] can resemble fullblown litigation, involving attorneys, adversarial parties, and
expert witnesses. Id. 134. Appellants further allege that,
[u]pon
almost
information
exclusively
and
belief,
requested
by
fact-finding
entities
conferences
that
would
be
are
in
conferences,
established
interests
can
dramatically
the
substantive
outcome
of
the
process
through
an
entirely
possible
that
in-state
interests
frequently
commandeer the process to derail the applications of out-ofstate firms, but whether this outcome actually obtains cannot be
resolved without examining the functioning of the statute in
practice. Similarly, it may be that the Commissioner, although
charged
with
considering
variety
of
factors,
focuses
Rullan,
405
discriminates
F.3d
against
50,
55
(1st
interstate
Cir.
commerce
2005)
by
([T]he
Act
permitting
the
actually
occurs,
however,
cannot
be
ascertained
in
the
determining
discriminates
requires
looking
in
whether
either
behind
the
Virginias
purpose
statutory
or
certificate-of-need
effect
text
to
necessarily
the
actual
statute,
[courts
are]
not
bound
by
[t]he
name,
the courts of the State, but will determine for [themselves] the
practical impact of the law. Hughes, 441 U.S. at 336 (internal
quotation
marks
consciously
omitted).
eschewed
In
this
formalism
for
respect,
a
the
sensitive,
Court
has
case-by-case
fact-intensive
quality
of
the
substantive
inquiry
(2007)).
Rule
12(b)(6)
does
not
countenance
[their]
right
to
relief
above
the
speculative
level.
if
Virginias
certificate-of-need
requirement
401
F.3d
at
567.
Where
[a]
statute
regulates
even-
does
contend
not
that
actually
Virginias
achieve
any
certificate-of-need
legitimate
local
invalidated
certificate-of-need
program
because
provided
Furthermore,
at
with
reasonable
respect
to
prices.
burdens
985
on
F.2d
interstate
at
167.
commerce,
similarly
onerous
certificate
requirements
for
low-value
respect
to
Virginias
statute
18
--
the
states
political
process
cannot
be
relied
upon
to
rectify
legislative
abuse.
If
legitimate
local
purpose
is
found,
then
the
noted
above,
in
order
to
survive
motion
to
dismiss,
to
relief
above
the
speculative
level,
on
the
case,
appellants
have
succeeded
in
nudg[ing]
their
claims
should
focus
primarily
19
on
the
discriminatory
discriminatory
effects
test
represents
the
superior
super-legislative
role.
See,
e.g.,
Davis,
553
U.S.
at
353
would
be
necessary
for
[plaintiffs]
to
satisfy
Pike
to
the
effect
of
the
constitutes
the
discrimination
challenged
principal
test.
statute
focus.
20
In
on
both
inquiries,
out-of-state
Discovery
on
the
the
firms
issue
of
discrimination
should
therefore
substantially
suffice
with
that
outcomes.
the
requirement
First,
the
certificate
program
interstate
commerce.
produces
district
has
court
significant,
The
one
may
of
three
discover
deleterious
bureaucratic
red
tape
possible
that
effects
foisted
the
on
upon
matter,
and
it
imposes
discourages
major
out-of-state
burden
on
firms
from
interstate
offering
business
and
referral
relationships,
and
generally
essence,
the
certificate
requirement
theoretically
grants
21
Finally,
commerce
may
the
certificate
be
entirely
programs
neutral,
or
effect
at
on
least
interstate
sufficiently
of
these
potential
outcomes
actually
obtains
without
III.
Appellants
also
assert
battery
of
claims
under
the
Clause,
the
Fourteenth
Amendment
is
not
primarily
interests,
and
its
general
provisions
provide
reasons
that
follow,
we
affirm
the
district
courts
appellants
the
This
Equal
argue
that
Protection
particular
claim
22
the
certificate
Clause
centers
of
on
the
the
requirement
Fourteenth
statutes
requirement.
Compl.
110.
Appellants
by
the
principle
that
equal
protection
is
not
Virginia
has
articulated
sufficient
justifications
scrutiny.
State
legislators
could
reasonably
have
no
general
context
or
perspective
to
support
their
equal
courts
dismissal
of
appellants
equal
protection
claim.
B.
Second, appellants argue that the certificate requirement
violates
the
Fourteenth
Appellants
specific
substantive
rights
rests
the
on
irrationally
fails
to
Amendments
claim,
into
which
advance
whose
that
the
appellants
any
seeks
clause
contention
burdens
Due
state
right
purpose
Process
to
focus
import
is
Clause.
further
procedural,
certificate
to
earn
other
than
bald
does
not
program
living
and
economic
certificate-of-need
fundamental
rational
or
basis
enumerated
review
program
right
under
and
the
is
Due
infringe
therefore
Process
subject
Clause.
any
to
See
state,
both
articulates
in
a
its
brief
variety
and
of
its
implementing
legitimate
purposes
regulations,
served
by
the
for
Appellees
Br.
Virginia
at
49-50.
residents
at
Appellants
reasonable
cursory,
cost.
unsubstantiated
case
with
their
equal
protection
claim,
appellants
have
appellants
contravenes
the
contend
right
that
to
the
earn
certificate-of-need
an
honest
living
the
United
States.
They
concede,
however,
that
this
does
occupation.
not
This
include
court
the
right
lacks
the
to
pursue
authority
a
to
particular
disturb
an
recognition
of
an
unenumerated
substantive
right
would
regulation
dismissal
of
of
appellants
every
sort.
privileges
The
or
district
immunities
courts
claim
is
therefore affirmed.
IV.
In
sum,
appellants
closer
scrutiny
court,
but
the
and
Commerce
further
Fourteenth
Clause
proceedings
Amendment
challenges
before
claims
require
the
district
were
properly
case
for
further
proceedings
in
accordance
with
this
decision.
AFFIRMED IN PART,
REVERSED IN PART,
AND REMANDED
26
with
would
like
equipment
to
they
render
cannot
medical
utilize
services
without
in
first
In
it
enacted
the
National
Health
Planning
and
Resource
diverging
NHPRDA
had
certificate
scrutiny.
availability
the
incidental
of
need
of
effect
regimens
health
of
from
care
services.
protecting
dormant
the
The
states
commerce
clause
Pub. L. 99-60, 100 Stat. 3743 (1986), after its failures had
become
well
past
certificate
of
scrutiny.
Yet,
throughout
much
obvious.
needs
shield
twenty-seven
of
the
The
NHPRDAs
from
years
country,
repeal
dormant
later,
state
removed
commerce
in
clause
Virginia,
certificate
the
of
and
need
of
the
national
economy.
The
Virginia
regimen
explicitly
the
ability
of
essential
community
providers
to
(2013).
Stripped
Commonwealths
providers
purpose
(i.e.,
of
is
to
its
protect
established
effects of competition.
linguistic
pretense,
established
in-state
interests)
the
community
from
the
(noting
legitimate
the
goal,
court
only
to
has
often
find
that
examined
the
State
presumably
attempted
to
28