South Carolina              
Administrative Law Court
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SC Administrative Law Court Decisions

CAPTION:
Oncology and Hematology Associates of South Carolina, LLC vs. SCHDEC, et al

AGENCY:
South Carolina Department of Health and Environmental Control

PARTIES:
Petitioner:
Oncology and Hematology Associates of South Carolina, LLC, d/b/a Cancer Centers of the Carolinas

Respondents:
South Carolina Department of Health and Environmental Control and Bon Secours-St. Francis Health System, Inc., St. Francis Hospital, Inc.
 
DOCKET NUMBER:
05-ALJ-07-0158-CC

APPEARANCES:
Raymon E. Lark, Jr., Esquire
For Petitioner

Nancy S. Layman, Esquire
Ashley C. Biggers, Esquire
For Respondent South Carolina Department of Health and Environmental Control

James G. Long, III, Esquire
For Respondent St. Francis Hospital, Inc.
 

ORDERS:

ORDER OF DISMISSAL AND REMAND

In the above-captioned matter, on May 5, 2005, Petitioner Oncology and Hematology Associates of South Carolina, LLC, d/b/a Cancer Centers of the Carolinas (CCC), requested a contested case before this tribunal to challenge the decision of Respondent South Carolina Department of Health and Environmental Control (DHEC or Department) to issue a Certificate of Need (CON) to Respondent Bon Secours-St. Francis Health System, Inc. (St. Francis) for the purchase and installation of a Cyberknife Stereotactic Radiosurgery System at its St. Francis Hospital in Greenville, South Carolina. In addition to its request for a contested case, Petitioner CCC also moved for a stay, writ of mandamus, injunction, remand, and other appropriate relief by motions filed on May 6 and May 9, 2005, and amended on May 18, May 26, and June 16, 2005. On May 19, 2005, the Department filed both a response to Petitioner’s motions and a motion to dismiss. In its motion to dismiss, the Department contends that Petitioner failed to timely file its request for a contested case to challenge the Department’s decision on St. Francis’ CON application and thus failed to properly invoke this Court’s jurisdiction. Respondent St. Francis joined in DHEC’s motion to dismiss.

A conference call on Petitioner’s requests for injunctive relief was conducted between the Court and the parties on May 26, 2005, and a motions hearing on DHEC’s motion to dismiss was held before this Court on June 22, 2005. Based upon the motions and attached exhibits filed by the parties, upon the arguments of counsel presented to this tribunal, and upon the applicable law, I find that DHEC’s motion to dismiss must be denied and this matter should be remanded to the Department for it to reissue its decision on St. Francis’ CON application with proper notice to affected persons.

BACKGROUND

In late 2004, Respondent St. Francis filed an application with the Department for a CON authorizing the purchase and installation of a Cyberknife Stereotactic Radiosurgery System at its St. Francis Hospital in Greenville, South Carolina. Petitioner CCC opposed St. Francis’ CON application and participated in the Department’s review of the application through written correspondence and by appearing at a project review meeting regarding the application. See Mem. in Supp. of DHEC’s Mot. to Dismiss, Exhibits E through H. Most of this correspondence was signed by W. Larry Gluck, M.D., the president of CCC, and was submitted on CCC letterhead that lists addresses for CCC’s nine offices in Upstate South Carolina. Id. During this process, Petitioner CCC, through Dawn Smith, its senior marketing specialist, submitted a letter to DHEC on January 19, 2005, in which it requested, as a party affected by St. Francis’ proposed project, to be notified of the decision regarding St. Francis’ CON application, and specifically asked that all documentation regarding the CON be sent to its business office. Id., Exhibit L. The body of this letter, in its entirety, read as follows:

As an affected party of the Certificate of Need (CON) for Cyberknife technology in Greenville, SC, CancerCenters of the Carolinas requests to be notified of the decision regarding this CON.

 

Please submit any documentation to the following address:

 

CancerCenters of the Carolinas

Attn: Dawn Smith, Senior Marketing Specialist

3 Butternut Drive, Suite B

Greenville, SC 29605

 

Id. (bold typeface in original). However, when the Department issued its decision to grant St. Francis’ CON application, it did not mail or otherwise deliver notice of that decision to Petitioner at its business office on Butternut Drive, as requested by Ms. Smith in the January 19 letter, but instead mailed notice of the decision to Dr. Gluck at Petitioner’s West Faris Road medical office at Greenville Memorial Hospital. Id., Exhibits C and D.

The Department’s notice to Petitioner CCC of the decision regarding St. Francis’ CON application was flawed in a number of respects. Most importantly, the notice was not sent to the address to which Petitioner specifically and explicitly requested that “any documentation” regarding the CON be sent, but rather was mailed to another one of Petitioner’s medical offices. Further, while it was not unreasonable for the Department to address the letter to Dr. Gluck, the president of CCC and CCC’s primary representative during the CON review process, there is no indication in the exhibits or affidavits submitted in this matter that Dr. Gluck or any other CCC physicians received business correspondence at the medical office on West Faris Road at Greenville Memorial Hospital. Finally, DHEC’s notice letter to Dr. Gluck incorrectly stated the address for CCC’s West Faris Road office as “900 Faris Road,” rather than “900 West Faris Road,” and was not postmarked and placed in the mail until April 22, 2005, one day after the decision was officially issued and one day after a representative from St. Francis had picked up a copy of the decision from DHEC.

Because of the delay caused by the flaws in the notice, Petitioner CCC did not file a request for a contested case or a request for staff reconsideration of the CON decision within ten days of St. Francis’ receipt of the Department’s decision. Accordingly, by a letter dated May 3, 2005, the Department issued the Certificate of Need to St. Francis.

 

 

DISCUSSION

Basic principles of due process require that persons affected by a decision of an administrative agency be given proper and adequate notice of the decision, so that such persons may be heard regarding the decision before it becomes final. See S.C. Const. art. I, § 22 (“No person shall be finally bound by a judicial or quasi-judicial decision of an administrative agency affecting private rights except on due notice and an opportunity to be heard . . . .”) (emphasis added); Ross v. Med. Univ. of S.C., 328 S.C. 51, 492 S.E.2d 62 (1997) (recognizing that the South Carolina Constitution guarantees the right to notice and an opportunity to be heard by an administrative agency before a final decision is rendered). Generally, this notice must be “reasonably calculated under all circumstances to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.” Blanton v. Stathos, 351 S.C. 534, 542, 570 S.E.2d 565, 569 (Ct. App. 2002) (paraphrasing Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950)). In the case at hand, such notice is captured in the CON statutes and regulations, which require that, once the Department reaches a proposed decision on a CON application, “[n]otice of the proposed decision must be sent to the applicant and affected persons who have asked to be notified.” S.C. Code Ann. § 44-7-210(D) (2002); 24A S.C. Code Ann. Regs. 61-15, § 401 (Supp. 2004) (same). Thus, while an affected person’s time period for filing a request for a contested case regarding a decision on a CON application runs from the time the decision is received by the applicant, not by the affected person, see S.C. Code Ann. § 44-7-210(D), both constitutional due process guarantees and statutory and regulatory mandates require the Department to provide legally sufficient notice of its decision on the application to affected persons to afford them a full opportunity to be heard on the matter.

In the instant case, the Department did not provide Petitioner CCC with adequate notice of its proposed decision on St. Francis’ CON application prior to issuing the CON. As discussed above, the notice mailed by DHEC to Petitioner was deficient in a number of respects. Most critically, the Department failed to mail Petitioner’s notice to the business office to which it had specifically requested that such correspondence be sent, but instead sent the notice to a separate medical office.[1] Therefore, while some of the Department’s technical errors in mailing the notice may have been excusable in isolation, when all of the deficiencies in the notice are taken together, it is plain that the Department failed to provide Petitioner CCC with notice reasonably calculated, under all of the circumstances, to apprise Petitioner of the Department’s proposed decision on St. Francis’ CON application prior to issuing the CON to St. Francis. And, because the Department failed to comply with constitutional, statutory, and regulatory notice requirements prior to issuing the CON to St. Francis, this matter must be remanded to the Department for it to void the CON and reissue its proposed decision on St. Francis’ CON application with proper notice to Petitioner CCC and any other affected persons.

ORDER

For the reasons set forth above,

IT IS HEREBY ORDERED that DHEC’s motion to dismiss this matter for lack of jurisdiction is DENIED.

IT IS FURTHER ORDERED that this matter is hereby REMANDED to the Department for it to void the CON issued to St. Francis on May 3, 2005, vacate its prior notification letter dated April 21, 2005, and issue a new notification letter to St. Francis, CCC, and all other affected persons in compliance with the provisions of S.C. Code Ann. § 44-7-210(D) and the accompanying regulations. Further, all other alternative relief sought by Petitioner CCC is denied in light of the remand ordered herein, and this case is DISMISSED.

AND IT IS SO ORDERED.

______________________________

JOHN D. GEATHERS

Administrative Law Judge

 

June 28, 2005

Columbia, South Carolina


Brown Bldg.

 

 

 

 

 

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