South Carolina              
Administrative Law Court
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SC Administrative Law Court Decisions

CAPTION:
MRI at Belfair, LLC vs. SCDHEC, et al

AGENCY:
South Carolina Department of Health and Environmental Control

PARTIES:
Petitioners:
MRI at Belfair, LLC

Respondents:
South Carolina Department of Health and Environmental Control and Coastal Carolina Medical Center
 
DOCKET NUMBER:
06-ALJ-07-0714-CC

APPEARANCES:
 

ORDERS:

ORDER OF REMAND

This matter comes before me as a result of Petitioner MRI at Belfair, LLC’s (Belfair) request for a contested case hearing and a motion that the automatic stay provision of Section 4(G)(2) of Act 387 be enforced against Respondent Coastal Carolina Medical Center (CCMC). See S.C. Code Ann. §1-23-600 (G)(2) (1976, as amended by 2006 Act No. 387, effective July 1, 2006). Specifically, Belfair seeks an order prohibiting CCMC from continuing to provide mobile magnetic resonance imaging (MRI) services during contested case review of the Department of Health and Environmental Control’s (DHEC or Department) decision approving the provision of those services by the CCMC. During a conference call on September 19, 2006, regarding Belfair’s September 15, 2006 letter, CCMC and the Department raised several issues regarding the proper filing of this contested case. In light of the issues raised by the parties, a hearing was held on September 28, 2006 to determine if jurisdiction was properly before this Court. Because I conclude that this matter must be remanded to the Board of Health and Environmental Control, I deny Belfair’s motion concerning the automatic stay as moot, as set forth below.

FACTS/BACKGROUND

The parties in this case were originally before this Court in 2005 on Belfair’s request for contested case review of the Department’s decision to approve the CCMC’s Certificate of Need (CON) application for the addition of a fixed 1.5 Tesla MRI unit for use in diagnosing and treating CCMC’s patients. On November 10, 2005, after a contested case hearing, this Court issued a Final Order and Decision affirming the CON determination. Afterwards, Belfair appealed to the Board of Health and Environmental Control. On May 25, 2006, the Board issued an order affirming the Court’s Final Order and Decision.

On July 3, 2006, Belfair appealed the Board’s decision to the Court of Appeals following the procedures established in 2006 by Act No. 387, which became effective on July 1, 2006. CCMC then filed a Motion to Dismiss Belfair’s appeal to the Court of Appeals challenging the applicability of the Act to Belfair’s case. The Court is advised by the parties that the Court of Appeals has ordered Belfair’s appeal held in abeyance until the Court of Appeals rules on the CCMC’s Motion to Dismiss.

Nevertheless, after its appeal Belfair did not seek a stay of the Board’s decision approving CCMC’s application to add a fixed 1.5 Tesla MRI unit. Therefore, CCMC requested the Department issue the MRI CON and on August 3, 2006, the Department granted that request and issued the MRI CON authorizing CCMC to acquire and install the fixed unit. On August 4, 2006, CCMC further requested “authorization to utilize a mobile MRI at Coastal Carolina Medical Center until construction and installation of its fixed MRI, granted in the above-referenced CON application, is completed.” (emphasis added).[1] The Departmen,t without notice to Belfair, issued a letter approving “temporary full-time use of a mobile MRI unit during the interim period of the fixed MRI construction and installation for temporary full-time use of a mobile MRI unit during the interim period of the fixed MRI construction and installation” of the Fixed MRI Project that same day.

On August 9, 2006, an article appeared in the local newspaper, The Island Packet, announcing CCMC’s intent to provide mobile MRI services pending establishment of permanent services. In response to that article, Belfair’s counsel e-mailed the Department on August 22, 2006, to determine what regulatory approval, if any, DHEC had issued to CCMC for it to initiate mobile MRI services. On August 24, 2006, Ms. Tori Tibshrany replied with a facsimile copy of the CCMC Mobile MRI Request, the Alliance Imaging MRI Services Proposal, and the DHEC Staff Decision to Belfair’s counsel. Belfair then filed its request for contested case review of this matter with the Administrative Law Court on September 8, 2006.

On September 15, 2006, Belfair by letter moved that the Court apply the automatic stay provisions of Act 387 to the Department’s approval of CCMC’s mobile MRI services and requested that the Court “require CCMC to cease and desist providing mobile MRI services.” CCMC and the Department responded to Belfair’s motion contending, in the alternative, that (1) the Court lacks subject matter jurisdiction over this matter because the provision of mobile MRI services by CCMC is subsumed in the hospital’s Certificate of Need for the fixed MRI unit and that matter is on appeal to the Court of Appeals; or that (2) the Court lacks authority[2] to hear this matter because Belfair failed to follow the procedures set forth in S.C. Code Ann. § 44-1-60 (as added by 2006 Act No. 387), which provides for Board review of Department staff actions prior to contested case review by the Administrative Law Court.

DISCUSSION

Act No. 387 amended numerous statutes pertaining to agency proceedings to harmonize those laws with the new contested case and appeals procedures created in the Act. Of particular relevance to this matter, Act 387 established new procedures for requesting review of decisions by the Department of Health and Environmental Control. Section 48 of the Act added S.C. Code Ann. § 44-1-60 to the existing law in relevant part as follows:

(A) All department decisions involving the issuance, denial, renewal, suspension, or revocations of permits, license or other actions of the department which may give rise to a contested case shall be made using the procedures set forth in this section.

* * *

(C) The initial decision involving the issuance, denial, renewal, suspension, or revocations of permits, license or other action of the department shall be a staff decision.

* * *

(E) Notice of the department decision must be sent to the applicant, permittee, licensee, and affected persons who have asked to be notified by certified mail, return receipt requested. The department decision becomes the final agency decision fifteen days after notice of the department decision has been mailed to the applicant, unless a written request for final review is filed with the department by the applicant, permittee, licensee, or affected person.

(F) No later than sixty days after the date of receipt of a request for final review, a final review conference must be conducted by the board, its designee, or a committee of three members of the board appointed by the chair. If a final review conference is not conducted within sixty days, the department decision becomes the final agency decision and an applicant, permittee, licensee, or affected person may request a contested case hearing before the Administrative Law Court, in accordance with the Administrative Procedures Act, within thirty days after the deadline for the final review conference.

* * *

(2) After the administrative review, the board, its designee, or a committee of three members of the board appointed by the chair shall issue a written final agency decision based upon the evidence presented. …The written decision must be mailed to the parties no later than thirty days after the date of the administrative review. Within thirty days after the receipt of the decision an applicant, permittee, licensee, or affected person desiring to contest the final agency decision may request a contested case hearing before the Administrative Law Court, in accordance with the Administrative Procedures Act.

(Emphasis added).

South Carolina Constitution Article I, § 22

It is undisputed that Belfair did not seek a “final review conference” before the Board prior to filing this contested case with the ALC. The Department and CCMC argue that a request for a “final review conference” is a prerequisite for contested case review by this Court and thus the Court lacks the authority to hear Belfair’s case.[3] Belfair contends that it did not have to seek Board review in this case because Section 44-1-60 by its terms applies only to Department decisions “which may give rise to a contested case.” In other words, Belfair argues that since it was not given notice of the Department’s decision as required by Section 44-1-60(E), its right of review in this matter is grounded in Article I, § 22 of the South Carolina Constitution rather than as a “contested case” under the Department’s statutes.

The South Carolina Constitution provides that “[n]o 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.” S.C. Const. art. I, § 22. However, “[o]ne cannot complain of a due process violation if he has recourse to a constitutionally sufficient administrative procedure but merely declines or fails to take advantage of it.” Zaman v. S.C. State Bd. of Medical Examiners, 305 S.C. 281, 408 S.E.2d 213, 215 (1991). Therefore, assuming that Belfair’s case does arise under Article I, § 22, it is not entitled to seek review of the Department’s decision pursuant to Section 22 if a sufficient procedure is afforded by the statutes and regulations. Here, the CON Act provides an affected person a constitutionally sufficient procedure to pursue their due process rights in a hearing. In other words, though Belfair seeks to present its claim pursuant to Section 22, it nonetheless must follow the hearing procedure set forth in the statute and regulations unless declared unconstitutional by a court of law. S.C. Tax Comm’n v. S.C. Tax Bd. of Review, 278 S.C. 556, 299 S.E.2d 489 (1983).

Moreover, this case should not be viewed as a Section 22 case simply because the Department failed to give Belfair proper notice. Rather, Section 44-1-60 (A) provides that: “All . . . other actions of the department which may give rise to a contested case shall be made using the procedures set forth in this section.” (Emphasis added). Belfair’s request for review in this matter concerns an “action of the department which may give rise to a contested case.” Thus, since Belfair had an avenue of review as an “affected person” in this case, there is no need to seek review by the ALC under the general principle of Article I, § 22. It therefore appears that in this case, even if Belfair failed to receive notice under Section 44-1-60 (E), it must follow the proper procedures upon receiving notice.[4]

Appeal to the ALC

Belfair’s argues that even if this case is reviewed under the procedures set forth in Section 44-1-60, Board review is not a prerequisite to contested case review by this Court. Belfair contends that Section 44-1-60(E), which provides that “the department decision becomes the final agency decision fifteen days after notice of the department decision has been mailed to the applicant, unless a written request for final review is filed with the department,” must be interpreted to mean that, once fifteen days passes with no request for Board review, the staff decision becomes the final agency decision upon which ALC contested case review can be had.

The cardinal rule of statutory construction is to ascertain and effectuate the intent of the legislature. Charleston County School Dist. v. State Budget and Control Bd., 313 S.C. 1, 437 S.E.2d 6 (1993). Furthermore, “[i]n construing statutory language, the statute must be read as a whole and sections which are a part of the same general statutory law must be construed together and each one given effect. A statute should not be construed by concentrating on an isolated phrase.” S.C. State Ports Auth. v. Jasper County, 368 S.C. 388, 398, 629 S.E.2d 624, 629 (2006) (Citations omitted). Here, Section 44-1-60 (F) provides that when a request for a “final review conference” is filed, the Board must act on the request within sixty days or “the department decision becomes the final agency decision and an applicant, permittee, licensee, or affected person may request a contested case hearing before the Administrative Law Court . . . within thirty days after the deadline for the final review conference.” (Emphasis added). Subparagraph (F)(2) also provides that, if the Board actually conducts a review, then “the written decision must be mailed to the parties no later than thirty days after the date of the administrative review” and “within thirty days after the receipt of the decision an applicant, permittee, licensee, or affected person desiring to contest the final agency decision may request a contested case hearing before the Administrative Law Court, in accordance with the Administrative Procedures Act.” The only use of the term “contested case hearing” in Section 44-1-60 occurs in reference to the above filings made after a request for Board review. Since there is no language in Section 44-1-60 that provides for the ALC to review cases in which no request for final review has been filed, presuming that the legislature held such an intention would be errant. See, e.g., Hodges v. Rainey, 341 S.C. 79, 533 S.E.2d 578 (2000)(“The canon of constructionexpressio unius est exclusio alteriu’ or ‘inclusio unius est exclusio alterius’ holds that ‘to express or include one thing implies the exclusion of another, or of the alternative’.”). In that light, a reasonable interpretation of the language that “the staff decision becomes the final agency decision” is that if the decision is not challenged, it becomes the final decision. However, if challenged the decision will not be final until the ALC reaches a decision or the Board’s decision is unchallenged for the requisite period of time.[5]

Therefore, because I find that Board review is a mandatory prerequisite to any review by this Court, I hold that this matter must be remanded to the Board of Health and Environmental Control for its consideration of Belfair’s request in accordance with Section 44-1-60.

Timeliness of Filing

The parties briefed and argued the issue of whether Belfair timely filed its request for review of this decision.[6] Section 44-1-60 (E) sets forth that a request for review must be filed within fifteen days of the date the staff decision was mailed to the applicant. In this case the Department does not question that it failed to mail Belfair notice of its August 4, 2006 decision. The Department nevertheless contends that even though Belfair failed to receive contemporaneous notice, the statutory mailing deadline should be enforced against it because the law must be followed as written.

In Hamm v. S.C. Public Service Comm'n, 287 S.C. 180, 336 S.E.2d 470 (1985), the Supreme Court interpreted a similar notice provision of the APA codified at S.C. Code Ann. Section 1-23-380 (b) (Supp.1984). At that time, Section 1-23-380 (b) provided that:

Proceedings for review are instituted by filing a petition in the circuit court within thirty days after the final decision of the agency or, if a rehearing is requested, within thirty days after the decision thereon. Copies of the petition shall be served upon the agency and all parties of record.

The Court held “[w]hile a literal reading of Section 1-23-380 (b) suggests the thirty days to appeal runs from the time the decision is made, we believe the statute must be read to allow a party thirty days after notice of a decision to bring an appeal.” 336 S.E.2d at 471. Any other interpretation could lead to an absurd result that “an agency could preclude judicial review in all

cases simply by concealing its decision until the thirty days had run.” Id. Moreover, “there is a basic presumption that the legislature has knowledge of previous legislation as well as of judicial decisions construing that legislation when later statutes are enacted concerning related subjects.” Whitner v. State, 328 S.C. 1, 6, 492 S.E.2d 777, 779 (1997). Accordingly, the legislature is presumed to be aware of the Courts interpretation in Hamm in enacting this related statute.

Here, a literal reading could equally lead to an absurd result. For instance, under a literal reading of Section 44-1-60 (E) an affected person who asked to be notified but who never received notice of the Department’s determination would not have a right to contest the Department’s decision if that person did not file a request for final review 15 days after notice of the department decision was mailed to the applicant. Likewise, Belfair contends that its interest in the provision of MRI services at CCMC was known to both the Department and CCMC through Belfair’s participation in the underlying Certificate of Need process for the fixed MRI unit and that, as an affected person, Belfair should have been given contemporaneous notice of the decision to allow temporary mobile MRI services during the CON implementation process.

Therefore, I find that in instances in which a person participated in the review process, a request for final review must be received by the Department 15 days after notice to the applicant, permittee, licensee, or affected person receives notice. Furthermore, in instances as in this case where the Department makes a determination without any formal review process and with no notice to an “affected person,” I find that the affected person has fifteen days from the date it received actual or constructive notice of the decision. See also, ALC Rule 11 (C).[7] Thus, Belfair had fifteen days from the date it received actual or constructive notice of the August 4, 2006 decision of the Department to file its request for review. Nevertheless, as there is no record developing the facts upon this issue, I make no finding as to whether or not Belfair’s filing was timely or as to the date Belfair received constructive notice.

Conclusion

All other issues raised by Belfair in its motion for a cease and desist order and in the Department and CCMC’s responses thereto are moot in light of remand of this matter to the Board. Therefore, Belfair’s motion for application of the automatic stay and for a cease and desist order is denied.

ORDER

IT IS THEREFORE ORDERED that Belfair’s September 15, 2006 motion for cease and desist order is denied and this matter is remanded to the Board of Health and Environmental Control for a determination of all issues raised by the parties.

IT IS ALSO ORDERED that, for purposes of remand, Belfair is deemed to have filed its request for Board review under § 44-1-60(E) on September 8, 2006.

IT IS FURTHER ORDERED that, for purposes of determining whether Belfair’s request for review was timely, the Board shall utilize a deadline of fifteen days from the date Belfair received actual or constructive notice of the August 4, 2006 decision of the Board, such deadline to be determined by the Board based on the evidence presented to it.

AND IT IS SO ORDERED.

________________________________

Ralph King Anderson, III

Administrative Law Judge

October 18, 2006

Columbia, South Carolina



[1] Attached to the request was copy of a proposed MRI Services Proposal/Agreement between Alliance Imaging, Inc. and Coastal Carolina Medical Center for the utilization of a mobile MRI.

[2] In Eagle Container v. County of Newberry, 366 S.C. 611, 622 S.E.2d 735 (Ct. App. 2005), the Court of Appeals discussed the distinction between lack of jurisdiction and a litigant’s failure to perfect its appeal. The Court held that:

[T]he concepts of subject matter jurisdiction and ripeness are separate and distinct. “Subject matter jurisdiction is the power to hear and determine cases of the general class to which the proceedings in question belong.Dove v. Gold Kist, Inc., 314 S.C. 235, 237, 442 S.E.2d 598, 600 (1994) (citations omitted). In comparison, “[t]he basic rationale of the doctrine of ripeness is to prevent courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements over administrative policies, and also to protect the agencies from judicial interference until an administrative decision has been formalized and its effects felt in a concrete way by challenging parties.” 2 Am. Jur. 2d Administrative Law § 485 (citations omitted). The concepts of subject matter jurisdiction and ripeness are often discussed simultaneously as they both involve threshold requirements; however, we find the concepts are distinguishable and should be considered separate and distinct issues.

622 S.E.2d at 744-745.

[3] Obviously, if the ALC lacks the authority to hear Belfair’s case, the automatic stay provisions do not apply.

[4] Though I find that Belfair should have first sought review of this case before the Board, I find that the day that Belfair filed with the ALC should be construed as the date it filed with the Department. Accordingly, I find for purposes of remand, that Belfair is deemed to have filed its request for review conference with the Board on the date its request for contested review was filed with this Court, that is, on September 8, 2006. To hold otherwise would preclude the Department’s review of this matter. In this instance, that result would be excessively harsh. As noted above, Act 387 recently substantially amended the review procedures in cases involving the Department. Furthermore, neither the ALC nor any other court has interpreted the time frame for filing under Section 44-1-60 (E) or the implication of the language of Section 1-23-600 (B) providing for review of cases before the ALC under Article I, § 22. Thus, I find that in this instance Belfair should be given greater latitude in filing its claim before the Department. See Ogburn‑Matthews v. Loblolly Partners, 332 S.C. 551, 561, 505 S.E.2d 598, 603 (Ct.App.1998) (“Due process is flexible and calls for such procedural protections as the particular situation demands.”) quoting Stono River Envtl. Protection Ass'n v. S.C. Dep't of Health and Envtl. Control, 305 S.C. 90, 94, 406 S.E.2d 340, 341 (1991).

[5] In most states the function of the administrative law judge and the agency’s decision are diametric from South Carolina. In those states, the administrative law judge makes an initial decision as a hearing officer for the agency. The agency then conducts the contested case hearing. The decision of the agency is not final until the agency issues a decision after the contested case hearing. In South Carolina, the ALC conducts the contested case hearing. Therefore, a decision of an agency that is challenged by a party is not final until the ALC issues its determination.

[6] It appears that this issue will be a threshold issue on remand. I have therefore addressed the issue.

[7] In permitting cases, there nevertheless needs to be some point in which an applicant for a permit can presume that the permitting process has concluded. For instance, ALC Rule 11 (C) further provides that: “However, no request shall be filed more than ninety (90) days after the date of the issuance of the order or determination unless the administrative law judge assigned to the case finds that substantial cause exists for allowing the filing beyond the ninety (90) day period.” That issue, however, is not before me in this instance.


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