COURT OF APPEALS OF VIRGINIA 

Present: Chief Judge Moon, Judges Willis and Fitzpatrick 

Argued at Alexandria, Virginia 

RALPH L. GORDON, STATE HEALTH COMMISSIONER, 

 DEPARTMENT OF HEALTH 

 OPINION BY 

v. Record No. 1394-96-4 JUDGE JERE M. H. WILLIS, JR. 

 MARCH 4, 1997 

DR. HAROLD H. ALLEN, JR., d/b/a 

 PHYSICIANS SURGICAL ALLIANCE, P.C. 

FROM THE CIRCUIT COURT OF LOUDOUN COUNTY 

Paul F. Sheridan, Judge Designate 

 Carol S. Nance, Assistant Attorney General 

(James S. Gilmore, III, Attorney General; 

William H. Hurd, Deputy Attorney General; 

Jane D. Hickey, Senior Assistant Attorney 

General, on briefs), for appellant. 

 Wyatt B. Durrette, Jr. (John T. Brennan, Jr.; 

Thomas A. Guidoboni; Bronson F. Byrd; 

Durrette, Irvin & Bradshaw; Michaels, Wishner 

& Bonner, on brief), for appellee. 

 Amicus Curiae: Virginia Hospital & 

Healthcare Association (Julia Krebs-Markrich; 

H. Lane Kneedler; D. Patrick Lacy; Hazel & 

Thomas, on brief), for appellant. 

 The State Health Commissioner appeals from a final judgment 

of the trial court reversing the commissioner's denial of Dr. 

Harold H. Allen, Jr.'s request for a determination of 

nonreviewability under the certificate of public need (COPN) 

statute, Code § 32.1-102.1 et seq.,1 and holding that statute to 

 

 1 Following the circuit court's ruling, the General 

Assembly amended Code § 32.1-102.1, modifying the definition of a 

"medical care facility," and the provisions regarding the 

application of review to said facilities. 1996 Va. Acts ch. 

1050. For purposes of this opinion, we refer to the statute as 

it was written in 1994. 
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be unconstitutionally vague. For the reasons set forth below, we 

reverse the judgment of the trial court. 

 I. 

 On January 28, 1994, Dr. Allen, d/b/a Physicians Surgical 

Alliance, notified the commissioner that he intended to establish 

an "outpatient surgical hospital" in Sterling, Virginia. He 

requested a determination by the commissioner that the COPN 

statute did not apply to "outpatient surgical hospitals" and that 

COPN review and approval of his project was unnecessary. He 

contended that the COPN statute defined a universe of "medical 

care facilities," and strictly limited to that universe the 

facilities requiring COPN review. See Code § 32.1-102.1. He 

contended that although licensure law recognizes an "outpatient 

surgical hospital" as a type of medical care facility, Code 

§ 32.1-123 et seq., "outpatient surgical hospitals" are not 

included specifically in the list of medical facilities requiring 

COPN review under Code § 32.1-102.1. He contended that, 

therefore, the COPN statute did not apply to his proposed 

facility. 

 By letter dated February 16, 1994, the Department of Health 

(Department) rejected Dr. Allen's argument. The Department 

concluded that Dr. Allen's proposed medical care facility was a 

specialized center developed for the provision of outpatient or 

ambulatory surgery. It recommended that COPN review and approval 
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of his facility be required for certification.2

 In issuing its 

recommendation, the Department stated that: 

 This categorization of a type of medical care 

facility in the COPN law is neither subtle 

nor ambiguous. A plain reading of this term 

does not allow for any reasonable suggestion 

that facilities such as those developed by 

Dr. Allen would not fall within its ambit 

simply because they are specialized centers 

for outpatient or ambulatory surgery that 

require licensure in Virginia as outpatient 

surgical hospitals. 

 As you know, the authors of Virginia's 

 2 Code § 32.1-102.1 provides in pertinent part that: 

 "Medical care facility," as used in this 

title, means any institution, place, building 

or agency, whether licensed or required to be 

licensed . . . whether operated for profit or 

nonprofit and whether privately owned or 

privately operated or owned or operated by a 

local governmental unit, (i) by or in which 

health services are furnished, conducted, 

operated or offered for the prevention, 

diagnosis or treatment of human disease, 

pain, injury, deformity or physical 

condition, whether medical or surgical, of 

two or more nonrelated mentally or physically 

sick or injured persons, or for the care of 

two or more nonrelated persons requiring or 

receiving medical, surgical or nursing 

attention or services as acute, chronic, 

convalescent, aged, physically disabled or 

crippled, or (ii) which is the recipient of 

reimbursements from third-party health 

insurance programs or prepaid medical service 

plans. For purposes of this article, only 

the following medical care facilities shall 

be subject to review: 

* * * * * * * 

 9. Specialized centers or clinics or that 

portion of a physician's office developed for 

the provision of outpatient or ambulatory 

surgery . . . . 
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COPN law did not establish the list of 

medical care facilities subject to COPN 

review as a subset of the medical care 

facilities subject to licensure in Virginia. 

 There are categories of "medical care 

facility" subject to COPN review which are 

not licensed by the Department of Health or 

any other state agency as medical care 

facilities. Likewise, the Department 

requires licensure of certain types of 

facilities and services that are not 

regulated under the COPN law. Therefore the 

fact that you have been able to detect some 

congruence in the nomenclature used to 

describe medical care facilities subject to 

COPN review and medical care facilities 

subject to licensure in Virginia is 

irrelevant. 

 Upon Dr. Allen's request for reconsideration of the 

Department's recommendation, the commission conducted an informal 

fact-finding conference. Dr. Allen argued that the phrase 

"[s]pecialized centers or clinics or that portion of a 

physician's office developed for the provision of outpatient or 

ambulatory surgery," as applied to him, was unconstitutionally 

vague. On November 17, 1994, the commissioner rejected Dr. 

Allen's argument and held that he was required to undergo COPN 

review to obtain approval of his proposed outpatient surgical 

hospital. 

 Pursuant to the provisions of the Virginia Administrative 

Process Act (VAPA), Code §§ 9-6.14:15 to 9-6.14:21, Dr. Allen 

appealed the commissioner's case decision to the trial court, 

which, after hearing argument on August 31, 1995, issued a letter 

opinion reversing the commissioner's decision and ruling that the 

COPN statute and regulations were unconstitutionally vague. The 
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trial court denied the commissioner's motion for reconsideration. 

 II. 

 On August 8, 1996, we made a preliminary determination that 

the transcript of the August 31, 1995 hearing had not been filed 

timely. See Rule 5A:8. We ordered the commissioner to show 

cause why this appeal should not be dismissed. We directed that 

the parties' briefs contain argument concerning: (1) whether the 

transcript of the August 31, 1995 hearing was properly made a 

part of the record on appeal; and (2) if not, whether that 

transcript is indispensable to a determination of the issues. 

 We conclude that the transcript was not properly made a part 

of the record on appeal. However, we further find that the 

transcript is not indispensable to a determination of the issues. 

See Turner v. Commonwealth, 2 Va. App. 96, 99, 341 S.E.2d 400, 

401-02 (1986). 

 "Under the VAPA, the circuit court's role in an appeal from 

an agency decision is equivalent to an appellate court's role in 

an appeal from a trial court. In this sense, the General 

Assembly has provided that a circuit court acts as an appellate 

tribunal." School Board v. Nicely, 12 Va. App. 1051, 1062, 408 

S.E.2d 545, 551 (1991). 

 The July 7, 1994 informal fact-finding conference and the 

Department's accumulation of the agency record performed a trial 

court's traditional fact-finding function. See Code 

§§ 9-6.14:16, 9-6.14:17. The agency record was filed timely in 
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the trial court. The August 31, 1995 hearing before the trial 

court was an appellate proceeding. The trial court's function 

was limited to considering the parties' legal arguments based 

upon the agency record. While our consideration of the issues 

might have been aided by a review of the August 31, 1995 

transcript, the written record, encompassing the parties' 

pre-hearing briefs, the trial court's letter opinion, and the 

agency record, along with transcripts of the Department's 

informal fact-finding conference and argument before the trial 

court to reconsider its decision, provides a sufficient record 

for our consideration of this appeal. 

 III. 

 In his petition for appeal to the trial court, Dr. Allen 

asserted that the commissioner's decision was illegal because: 

 [I]t is based upon a portion of the 

Certificate of Public Need statute which 

itself is unconstitutionally vague under both 

the United States and Virginia Constitutions. 

 Specifically, the determination of the 

Acting Commissioner that Petitioner's project 

required prior Certificate of Public Need 

approval was based on his conclusion that the 

outpatient surgical hospital Petitioner 

proposed to establish comprised a 

"specialized center or clinic", which term or 

terms are undefined in statute or regulation. 

 In argument before the trial court, Dr. Allen contended that 

an amendment to the definition of "medical care facility" limited 

COPN review to entities that are licensed or required to be 

licensed. He argued that the COPN regulations were inconsistent 

with this statutory amendment, and that, therefore, the COPN 
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statute and regulations were unconstitutionally vague. The 

commissioner argues that this contention was not embraced within 

Dr. Allen's petition for review in the trial court and that the 

trial court erred in considering it. For purposes of this 

appeal, we give Dr. Allen's petition a broad reading and, for 

purposes of decision, we accept without deciding that his 

petition was broad enough to encompass the questioned argument. 

 IV. 

 The trial court held: 

 The second issue considered is the 

relationship of the COPN statutory definition 

of "medical care facility", [] and the State 

Medical Facilities Plan (SMFP). Petitioner 

says that the new statutory language made 

licensure a prerequisite to the necessity for 

COPN review. . . . 

 The Court finds that the SMFP, read in 

conjunction with COPN statute, ignores 

significant statutory changes. The Court 

must follow the statute when such a conflict 

exists. The statutory language changed from 

"whether or not [licensed or] required to be 

licensed" to "whether licensed or required to 

be licensed." The effect of the revision is 

a substantive one that must be reflected in 

the regulations. The effect is that the 

question "What facility needs licensure?", is 

difficult to clearly answer. This equivocal 

result means the statute and regulations are 

fatally vague, facially and in application.3

 3 The circuit court referred mistakenly to the State 

Medical Facilities Plan. See 32.1-102.3(A); 12 VAC §§ 5-230-10 

to 5-350-60. The appropriate reference is to the Virginia 

Medical Care Facilities Certificate of Public Need Rules and 

Regulations (COPN regulations), which establish the required 

procedures for the administrative application of COPN review. 

Code § 32.1-102.2; 12 VAC §§ 5-220-10 to 5-220-400. 
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 If we accept the trial court's reading of Code § 32.1-102.1, 

that statute provides a two-step predicate for the requirement of 

COPN review: (1) the proposed facility must require licensure, 

and (2) the proposed facility must fall within one of the 

classifications set forth in Code § 32.1-102.1. Dr. Allen has 

never disputed that his proposed facility requires licensure. 

Therefore, "what facility needs licensure" is not an issue in 

this case. 

 The commissioner determined that Dr. Allen's proposed 

facility would be a specialized center or clinic developed for 

the provision of out-patient or ambulatory surgery, thus bringing 

it within the scope of Code § 32.1-102.1 "medical care facility 

(9)." While this determination may leave room for argument, it 

does not pose an issue of classification that is 

unconstitutionally vague. 

 The judgment of the trial court is reversed, and this case 

is remanded for review on the question whether the record 

developed before the commission supports the commissioner's 

determination. 

 Reversed and remanded.