Case Title: Marion Hospital Corp. v. Illinois Health Facilities Planning Board

Citation: 

Docket Number: 91426, 91479

State: illinois

Court: Illinois Supreme Court

Date: 2002-09-19T00:00:00Z

Document:
1The Planning Act is repealed effective July 1, 2003 (Pub. Act\
91–782, eff. June 9, 2000). See 20 ILCS 3960/19.6 (West 2000). See\
also L. Wolfson, State Regulation of Health Facility Planning: The\
Economic Theory and Political Realities of Certificates of Need, 4\
DePaul J. Health Care L. 261, 314 (2001).
Docket Nos. 91426, 91479 cons.–Agenda 20–January 2002.
MARION HOSPITAL CORPORATION, Appellee, v. THE 

ILLINOIS HEALTH FACILITIES PLANNING BOARD et al., 

Appellants–MARION HOSPITAL CORPORATION, Appellee, 

v. SOUTHERN ILLINOIS HOSPITAL SERVICES et al., 
Appellants.
Opinion filed September 19, 2002.
 
      CHIEF JUSTICE McMORROW delivered the opinion of the  
court:
      At issue in this appeal is whether the Illinois Health Facilities 
Planning Board properly granted a permit to defendant Southern 
Illinois Orthopedic Center, L.L.C., to construct an ambulatory 
surgical treatment center.
 
BACKGROUND
      Pursuant to the Illinois Health Facilities Planning Act 
(Planning Act) (20 ILCS 3960/1 et seq. (West 1998)), 
 
 
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 any person 
wishing to “construct, modify or establish a health care facility”
(20 ILCS 3960/5 (West 1998)) must first obtain a permit from the
Health Facilities Planning Board (the Board) (see 20 ILCS 3960/3
(West 1998) (establishing the Board)). A permit is to be granted
by the Board if it finds:
“(1) that the applicant is fit, willing, and able to provide
a proper standard of health care service for the community
with particular regard to the qualification, background and
character of the applicant, (2) that economic feasibility is
demonstrated in terms of effect on the existing and
projected operating budget of the applicant and of the
health care facility; in terms of the applicant’s ability to
establish and operate such facility in accordance with
licensure regulations promulgated under pertinent state
laws; and in terms of the projected impact on the total
health care expenditures in the facility and community,
(3) that safeguards are provided which assure that the
establishment, construction or modification of the health
care facility or acquisition of major medical equipment is
consistent with the public interest, and (4) that the
proposed project is consistent with the orderly and
economic development of such facilities and equipment
and is in accord with standards, criteria, or plans of need
adopted and approved pursuant to the provisions of
Section 12 of this Act.” 20 ILCS 3960/6 (West 1998).
In accordance with section 12 of the Planning Act, the Board has
adopted administrative regulations which contain standards and
criteria for it to consider when reviewing permit applications. The
pertinent regulations for this case are set forth in parts 1110 and
1120 of title 77 of the Illinois Administrative Code (title 77). 77
Ill. Adm. Code pts. 1110, 1120 (1996).
      The Board is aided in the permit application process by the
Illinois Department of Public Health (Department). Under section
12.2 of the Planning Act (20 ILCS 3960/12.2 (West 1998)), the
Department conducts the initial review of permit applications that
are submitted to the Board. The Department makes findings
regarding the application’s compliance with the criteria established
by the Board and submits these findings to the Board. See 20 ILCS
3960/12.2 (West 1998). The ultimate decision regarding the permit
application, however, remains with the Board. See 20 ILCS
3960/6 (West 1998).
      On November 13, 1998, defendant Southern Illinois
Orthopedic Center, L.L.C. (SOIC), filed an application with the
Board for a permit to construct a “limited specialty orthopedic
ambulatory surgical treatment center” (ASTC) in Herrin, Illinois.
SOIC is a joint venture between Southern Illinois Orthopedic
Associates, L.L.C. (the Associates), which is comprised of six
orthopedic surgeons, and Southern Illinois Hospital Services
(SIHS), a not-for-profit corporation that operates several hospitals
in southern Illinois. The project which was proposed by SOIC in
its application included the construction of a building to house the
ASTC and a medical office building to house the office practice of
the orthopedic surgeons.
      On January 28, 1999, as part of its initial review process, the
Department held a public hearing on SOIC’s permit application.
At that time, the Department accepted 38 written statements and
heard oral testimony from 17 witnesses. Only three parties
opposed the project. Among them was the plaintiff in this case,
Marion Hospital Corporation (Marion). Marion operates Marion
Memorial Hospital, an institution located approximately 10 miles
from the site of the proposed ASTC.
      In a written statement submitted subsequent to the hearing,
Marion argued against SOIC’s project. Marion claimed that, if the
ASTC were constructed, Marion’s hours of surgery would be
reduced by 1,500 hours per year. Marion also noted that it had an
application on file to build a new hospital with a new surgery suite
and that SOIC “should work with Marion Memorial to avoid
unnecessary duplication of services.” Finally, Marion contended
that SOIC’s application did not satisfy the criteria for the
establishment of a new facility that are set forth in section
1110.1540(g) of title 77.
      On May 21, 1999, the Board approved SOIC’s application and
on June 1, 1999, a permit letter was issued to SOIC. On July 6,
1999, Marion, as a party adversely affected by the Board’s final
decision (see 77 Ill. Adm. Code §1180.40(e) (1996)), sought
judicial review in the circuit court of Cook County, as provided for
in section 11 of the Planning Act (20 ILCS 3960/11 (West 1998)).
Marion’s complaint named as defendants SOIC, the Associates
and SIHS (collectively SOIC), as well as the Board, its
chairperson, Pam Taylor, and the Department (collectively the
state defendants). Subsequent to the filing of Marion’s complaint,
the state defendants filed a motion to dismiss in which they
contended that the circuit court lacked jurisdiction over the case
because Marion’s complaint was untimely filed. The circuit court
denied the motion to dismiss. Thereafter, the circuit court
confirmed the Board’s decision to issue the permit.
      Marion appealed the circuit court’s decision. On March 5,
2001, after briefing in the appellate court had been completed,
SOIC filed a motion which sought to dismiss the appeal as moot.
In that motion, SOIC explained that the permit which it had been
granted by the Board had an expiration date of November 21,
2000. Under the Board’s rules, this meant that SOIC had to
“obligate” the permit, i.e., execute contracts and commit funding
to the project, by November 21, 2000, or the permit would expire.
SOIC noted that Marion had not sought a stay of the Board’s
decision from the trial court (see 735 ILCS 5/3–111 (West 1998)),
nor had it sought a stay of the circuit court’s judgment at either the
trial or appellate levels (see 155 Ill. 2d R. 305(d)). SOIC stated
that, because Marion had not sought a stay, and because SOIC
risked expiration of its permit if it did not move forward with the
project, SOIC had in fact begun and completed construction of the
ASTC. SOIC noted in its motion that the ASTC had been
completed on February 9, 2001, and that SOIC had spent over $6.6
million towards its completion. In a subsequent filing, SOIC also
noted that the Department had granted SOIC an operating license
for the ASTC in accordance with the Ambulatory Surgical
Treatment Center Act (210 ILCS 5/1 et seq. (West 1998)) on
March 7, 2001. Based on the above, SOIC argued to the appellate
court that “[a]ny order reversing the Board’s decision at this late
juncture would not be able to undo what has already been done:
the capital expenditure has already been made. Accordingly, this
appeal should be dismissed as moot.”
      In its opinion filed March 29, 2001, the appellate court denied
SOIC’s motion to dismiss, finding that the appeal was not moot.
321 Ill. App. 3d 115, 122-23. In addition, the appellate court
rejected the state defendant’s argument that Marion’s complaint
was untimely filed in the circuit court. 321 Ill. App. 3d at 124-25.
Finally, the appellate court reversed the circuit court’s order, set
aside the Board’s decision to grant the permit, and remanded the
cause to the Board with directions. The appellate court held that
section 1110.1540(g) of title 77 was “a mandatory prerequisite to
the issuance of a permit” (321 Ill. App. 3d at 128) and, although
the Planning Act and related regulations did not require the Board
to issue findings of fact unless the permit application was denied,
the Board’s failure to make specific findings of fact regarding
compliance with section 1110.1540(g) made judicial review
impossible. Thus, the appellate court remanded the matter to the
Board for findings of fact regarding SOIC’s compliance with the
requirements of section 1110.1540(g). 321 Ill. App. 3d at 126-31.
      The state defendants and SOIC filed separate petitions for
leave to appeal. The state defendant’s petition principally
contested the appellate court’s conclusion that Marion’s complaint
was timely filed in the circuit court. 177 Ill. 2d R. 315. The
petition was allowed and the cause was docketed in this court as
No. 91426. SOIC’s petition for leave to appeal contested the
appellate court’s holding that reversed the circuit court and
remanded the cause to the Board for findings of fact. That petition
was also allowed and the cause was docketed as No. 91479. The
two causes were consolidated for review.
 
ANALYSIS
      The initial issue we must address in this case is whether the
appellate court erred in denying SOIC’s motion to dismiss
Marion’s appeal in the appellate court as moot. SOIC contends
that the completion of construction of the ASTC, and the fact that
the Department granted SOIC an operating license, rendered any
question regarding the propriety of the planning permit moot at the
time the appellate court issued its opinion. Thus, SOIC argues that
the appellate court should never have reached the merits of the
case but, instead, should have dismissed the appeal as moot. We
agree.
      As acknowledged by the appellate court in this case, when the
resolution of a question of law cannot affect the result of a case as
to the parties, or when events have occurred which make it
impossible for the reviewing court to render effectual relief, a case
is rendered moot. See, e.g., In re Adoption of Walgreen, 186 Ill. 2d 362, 364 (1999); Berlin v. Sarah Bush Lincoln Health Center, 179 Ill. 2d 1, 8 (1997). Both these principles are applicable in the case
at bar.
      The permit application in the case at bar was submitted to the
Board by SOIC in accordance with the Planning Act. 20 ILCS
3960/1 et seq. (West 1998). The stated purpose of the Planning
Act is “to establish a procedure designed to reverse the trends of
increasing costs of health care resulting from unnecessary
construction or modification of health care facilities” so that an
“orderly and comprehensive health care delivery system” will be
established. 20 ILCS 3960/2 (West 1998). See also L. Wolfson,
State Regulation of Health Facility Planning: The Economic
Theory and Political Realities of Certificates of Need, 4 DePaul J.
Health Care L. 261, 274 (2001) (discussing the history of the
Planning Act and noting that its purpose “is to address
uncontrolled health care costs by limiting unnecessary growth”).
      As SOIC points out, the Planning Act creates a procedure by
which the Board can review proposed expenditures of money on
health care facilities and services before that money is spent. The
Planning Act grants the Board the authority to prohibit the
construction or modification of health care facilities that it deems
unnecessary or duplicative. 20 ILCS 3960/2 (West 1998).
Importantly, however, the Board does not have any oversight of
the operations of a medical facility once it is built. See, e.g., 20
ILCS 3960/5 (West 1998) (noting that the permit issued by the
Board is only valid until such time as the project is completed).
Hence, once a capital expenditure is approved by the Board and
made by the permit holder, any question concerning the propriety
of that expenditure–which is the issue addressed by the permit
application process–is moot. The capital expenditure has been
made and cannot be undone. That was the case here. At the time
the appellate court issued its opinion, the ASTC had been built and
the capital which SOIC had earmarked for the project had been
spent. Thus, when the appellate court issued its opinion, it was a
moot question as to whether SOIC’s expenditure of funds to
construct the facility was duplicative or otherwise unnecessary.
      Despite the foregoing, Marion maintains, and the appellate
court below held, that Marion’s appeal before the appellate court
was not moot because a decision holding that the permit was
improperly granted could have affected SOIC’s operating license.
The appellate court reasoned as follows. Licensing of ambulatory
surgical treatment centers is governed by the Ambulatory Surgical
Treatment Center Act (Treatment Center Act) (210 ILCS 5/1 et
seq. (West 1998)). Once an ASTC is constructed, a license is
required to open, conduct or maintain the center. 210 ILCS 5/4
(West 1998). Section 10f of the Treatment Center Act states that
the Department may issue an order of revocation or refuse to
renew a license “[w]hen the Director determines that there is or
has been a substantial or continued failure to comply with this Act
or any rule promulgated hereunder.” 210 ILCS 5/10f (West 1998).
One of the administrative rules promulgated by the Department,
section 205.120 of title 77 (77 Ill. Adm. Code §205.120 (1996)),
provides that an initial application for licensure must include
“[d]ocumentation of a permit as required by the Illinois Health
Facilities Planning Act.” From this, the appellate court reasoned
that “the operating license issued by the Department could
potentially be revoked if SIOC were to lose the permit issued by
the Board pursuant to the Planning Act.” 321 Ill. App. 3d at 123.
Therefore, the appellate court concluded that the appeal was not
moot and denied SIOC’s motion to dismiss. 321 Ill. App. 3d at
123.
      The appellate court’s conclusion that SOIC’s operating
license could “potentially” be revoked by the Department is
incorrect. As noted, section 205.120 of title 77 requires an
applicant for an ASTC operating license to have “documentation
of a permit” issued by the Board in order to receive an initial
operating license. At the time SOIC applied for its initial operating
license, it possessed such documentation. Prior to the issuance of
the appellate court opinion, the permit granted to SOIC by the
Board had, at no time, been stayed, reversed or otherwise legally
invalidated. Accordingly, SOIC possessed documentation of a
legally valid permit and was in compliance with section 205.120
of title 77 when it applied for and received its initial operating
license. Indeed, nothing in section 205.210 or elsewhere in the
administrative regulations indicates that the Department could
have properly refused to grant SOIC an operating license when
SOIC possessed a legally valid permit issued by the Board. Thus,
contrary to the appellate court’s determination, section 205.120
provided no basis for the Department to “potentially” revoke
SOIC’s operating license.
      Marion also points to section 13.1 of the Planning Act in
support of its contention that the appellate court did not err in
denying SOIC’s motion to dismiss. Section 13.1 provides:
“Any person establishing, constructing, or modifying a
health care facility or portion thereof without obtaining a
required permit, or in violation of the terms of the
required permit, shall not be eligible to apply for any
necessary operating licenses or be eligible for payment by
any State agency for services rendered in that facility until
the required permit is obtained.” 20 ILCS 3960/13.1
(West 1998).
      Marion contends that, under section 13.1, SOIC would not be
eligible to renew its operating license without a valid planning
permit. Marion maintains, therefore, that if it had ultimately
prevailed in the appellate court, and established that SOIC’s
permit was improperly granted, SOIC would have been forced to
lose its operating license. Thus, Marion contends that it could have
been granted effective relief by the appellate court’s decision and,
therefore, that its appeal before the appellate court was not moot.
      Section 13.1 offers no support for Marion. Section 13.1
pertains to applicants “establishing, constructing, or modifying” a
medical facility. As such, its scope is limited to applicants
applying for an initial operating license for a new, or a newly
added, facility. As noted above, SOIC obtained and possessed a
legally valid permit at the time it applied for and received its initial
operating license. Furthermore, we note that section 205.125 of
title 77 (77 Ill. Adm. Code §205.125 (1996)), the administrative
regulation that governs applications for license renewal before the
Department, does not require, and makes no mention of, a permit
issued by the Board.
      As stated, when the resolution of a question of law cannot
affect the result of a case as to the parties, or when events have
occurred which make it impossible for the reviewing court to
render effectual relief, an appeal is rendered moot. See, e.g., In re
Adoption of Walgreen, 186 Ill. 2d  at 364; Berlin, 179 Ill. 2d  at 8.
That was the situation here when the appellate court issued its
opinion. No statute or regulation had been cited which would have
authorized the Department to suspend or revoke SOIC’s operating
license or otherwise limit its medical functions based on an
improperly granted planning permit. Thus, the resolution of the
question of law presented in Marion’s appeal could have had no
effect on the result of the case as to the parties and the appellate
court could not have rendered Marion effectual relief. Before this
court, Marion has not argued that any exception to the mootness
doctrine would have permitted the appellate court to consider
Marion’s appeal. Accordingly, the issue raised in Marion’s appeal
before the appellate court, i.e., whether SOIC’s planning permit
was properly granted by the Board, was moot and the appeal
should have been dismissed.
      Because Marion’s appeal was moot, the appellate court’s
opinion was wholly advisory. Advisory opinions are to be avoided.
Oliveira v. Amoco Oil Co., Nos. 89497, 89511 cons., slip op. at 18
(June 20, 2002), citing Barth v. Reagan, 139 Ill. 2d 399, 419
(1990). For this reason, we vacate the judgment of the appellate
court. See Oliveira, slip op. at 18. In light of our disposition of this
case, we do not reach any of the other issues raised by the parties
in the instant appeals.
 
CONCLUSION
      For the foregoing reasons, the judgment of the appellate court
is vacated.
 
Appellate court judgment vacated.
 
      JUSTICES GARMAN and RARICK took no part in the
consideration or decision of this case.