I N T H E SUPR EM E C O UR T O F M I SS I SS I PPI NO. 2 0 1 0 - CC- 0 1 0 7 7 - S CT Q U EEN C I T Y N U R S I N G C EN T ER , I N C ., C O M M U N IT Y L IV IN G C EN T ER S , L L C d /b /a M ER I DI AN COM M UNI T Y L I VI

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HEA L T H AND REH AB, LLC
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. DE W AYNE T HOMAS COURT F ROM W HI CH APP EAL ED: HI NDS COUNTY CHANCERY COURT A T T O R N E Y S F O R A P P E L L A N T S : T H O M A S L . K IR K L A N D , J R
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B E F O R E D I C K I N SO N , P . J. , L A M A R A N D K I T C H E N S, JJ. LAM AR, J UST I CE, FOR TH E COU RT: ¶1. M eadow br ook H eal th and R ehab, L L C , f i l ed an appl i cat i on f

or a cert i f

i cat e of need (“ C O N ” ) w ith th e M iss iss ip p i D e p a rtm e n t o f H e a lth (“ D O H ” ) to b u ild a n u rsin g h o m e in

### Mississip pi C od e Sectio n 4 1-7 -19 1 states, inpertin ent p art: 1 

### “( 1) No pe rsonsh all engagein any of the f oll owing a ctivi ti es without obtaining there quired c erti fi cateof ne ed:

. . . (b) The re loc ation of a hea lt h care fa ci li ty or portion t her eof , or ma jor me dic alequipme nt, unle ss suc h rel ocati on of a hea lt h carefa ci li ty or

portion the re of .
. . is within f

ivethousand two hundred e ight y (5, 280) f

ee t f rom the main entrance o f the h ealth care fac ility . . . . ” Mis s. Code Ann. § 41-7- 191 (Re v. 2009)
. In Nove mbe r 2005, theDOH Divi si on of Li ce nsureand Cer ti f i c ati on had de te rm ine d 2 

### that th e Kemp er Ho mep la ce r es id ents w ere in “immed iate jeop ardy .” All o f the resid ents wer e r el ocate d, and Kem per Homepla cecl ose d in J anuary 2006. The owne r of Kem per Homepla cesol d thebeds to Bruc e Kel ly – the owner of Mea dowbrook and Poplar Springs Nursing Ho me. In M arch 2 00 7, K elly p laced th e bed s in“ab eyan ce.” Kellysub sequ ently formedMead owbro ok

as the rep lacement entity fo r Kemp er Ho meplace.

2 L auder dal e C ount y. The D O H s t af f r ecomm ended thatthe appl i cat i on be a ppr oved. Sever al
s urr oundi ng nur s i ng homes cont es t ed the appl i cat i on a nd r eques t ed a hear i ng. A ft er thre e days of t es t i m ony, the hea r i ng of f i cerr ecomm ended thatthe appl i cat i on be de ni ed. But the S tate H e a lth O ffic e r (“ S H O ” ) d isa g re e d an d g ra n ted th e C O N . T h e c o n tes tan ts a p p e a led to the H i nds C ount y C hance r y C our t , w hi ch af f i r m ed t he SH O ’ s deci s i on. T he cont es t ant s now appea l t o thi s C our t , ar gui ng thatthe SH O ’ s deci s i on i s arbi tr ary and capr i ci ous and thatt he C O N vi ol at es the s t atut ory m or at or i um on new nur s i ng home cons truct i on. W e af f i r m t he H in d s C o u n ty C h a n c e ry C o u rt .

F ACT S AND P ROCE DURAL HI S TORY ¶2. I n J anuary 2009, M eadow br ook appl i ed t o the D O H f or a C O N t o cons truct a s i xt y-

1 bed nur s i ng hom e f

aci l i ty i n L auder dal e C ounty. T he f aci l i t y w as t o be a “r epl ace m ent f aci l i ty” f ora K emperC ount y nur s i ng hom e – K emperH om epl ace – w hi ch had c ont ai ned tw enty- one beds bef

ore i tw as cl os ed. B ruce K el l y – the ow nerof M eadow br ook and 2

### Sec ti on 106.01 of th e M issis sippi St at e He alth Pl an s tate s, in pe rtine nt part : “ The 3 

### [DO H] shall n ot ap pro ve co nstru ctionof a n ew o r replacement nursing ho me care facility for less th an 6 0 b eds.” M iss. State H ealth P lan, C h. 8 , § 1 0 6 .0 1 (6 ) (20 09 ), avai lable at htt p:/ /m sdh. ms .gov/ms dhsi te/index. cf m/ 19,2945, 18 4,455,pdf/ State Hea lt hPlan2009Compl et e. pdf ( la st

vis it ed Nov. 10, 2011)
. Kellyinten dedto n ame the n ew facility“No rthp ointe Health& R ehab .” 4 

### 3 anotherL auder dal e C ounty nurs i ng hom e, P opl arS pr i ngs – al s o pl anned t o r el ocat e thi r tyni ne beds fr om P opl arS pr i ngs t o M eadow br ook t o ful f i l l t he D O H ’ s r equi r ementthatno new
nu rs i ng ho m e faci l i ty b e op ened w i th few er than si xty beds. 3 ¶3
. T he D O H s t af

f conduct ed a r evi ew and i n A pr i l 20 09 r e c omm e nd e d t hat t he
a p p lica tio n b e a p p ro v e d . S p e c ifica lly , the sta ff re v iew c o n c lu d e d th a t: T he pr oj ecti s i n s ubs t ant i al compl i ance w i th the over al l obj ect i ves as cont ai ned i n the FY 2009 St at e H eal th Pl an; the M i s s i s s i ppi C ert i f i cat e of N eed Revi ew M anual , r evi sed 2008; and al l adopt ed rul es , pr ocedur es , and p lan s o f th e M iss iss ip p i S tate D e p a rtm e n t o f H e a lth . T h e D iv isio n o f H e a lth Pl a nn i ng a nd Resour ce D evel opm entr ecomm ends appr oval of thi s appl i cat i on s ub mi t t e d b y M e a do w br oo k Hea l th a nd Reha b, LLC f orr e pl a c e mentof

the K emperC ount y N ur s i ng H om e and Rel ocat i on of 39 N ur s i ng Faci l i ty B eds f r om [ Popl ar ] Spr i ng s N ur s i ng and R ehab t o [ the] N or thpoi nt e H eal th & R e h a b [ ] p roje c t in L a u d e rd a le C o u n ty .

4 S ev era l surrou n d ing L au d erd ale C o u n ty n u rsi n g h o m es – Q u ee n C ity N u rsi n g C en ter, M er i di an C om m uni ty Li vi ng Cent era nd G ol den L i vi ng Cent er( “cont es t ant s ”) – o ppos ed t he a pp l i c a t i on a nd t i mel y r e qu e s t e d a he a r i ng , a s “ a f f e c t e d p e r s on s ” un de rthe go ver ni ng
s ta tu te . See M is s . C o d e A n n . 

### § 41-7- 197 (Re v. 2009)
. ¶4. A t a three- day heari ng i n S eptem ber 2009 , the d esig n ated h ea ri n g o ffi ce r h ea rd evi dence pr es ent ed by the D O H , M eadow br ook, and the cont es t ant s . A f t err evi ew , t he hear i ng of

f i c e ri s s ue d h e rf

i nd i ng s , di s a gr e e i ng w i th the D O H s t a f f a na l ys i s a nd
r ecomm endi ng thatM eadow br ook’ s C O N appl i cat i on be deni ed. T he hea r i ng of f i cerf ound

### Sectio n4 1 -7 -1 9 7(2 ) of th e Missis sipp i Co de g ives th e SH O th e sole autho rity to 5 

### grant or d enyCO Ns fo llow ing the h earing andstates, in p ertinent part: Th e com pleted reco rd sha ll b e certified

to the State H

ealth Officer, w ho sha ll cons ide r onl

y there cor

d in mak ing hi s de ci si on, and s hall

not c onsider

any eviden ce or mate rial which i s not inc lude d the re in. All

final de ci

si ons rega rding th e issu a n ce of a certificate o f need sha ll be m ad

e by th e Sta te Hea lth O fficer. The Stat e Health Off ic er shal l make his writte n findings and is suehis orde r a ft er

re vie wing s ai d re cord. Mis s. Code Ann. § 41-7- 197 (2) (Re v. 2009) (e mpha si s a dded)
. 4 thatthe appl i cat i on w as “noti n subs t ant i al com pl i ance ” w i th t he r el evantrul es , r egul at i ons and s t atut es , thatthe D O H s t af f anal ys i s w as “i ncorr ecti n it s f i ndi ngs , ” and thatt he appl i cat i on s houl d be di s appr oved by t he S H O
. B utthe SH O di s agr eed w i th the hea r i ng of f i cera nd i s s ued a f

i nal or dera ppr ovi ng M eadow br ook’ s a ppl i cat i on. T he SH O f ound t hat 5 the appl i cat i on w as “i n s ubs t ant i al compl i ance w i th the St at e H eal th Pl an and G ener al R evi ew C ri t eri a foun d i n the C ert i f i cat e of N eed Revi ew M anual , ” and s he s t at ed thats he

“ c o n c u r[ re d ] w ith a n d a d o p t[e d ] th e [D O H ] st a ff’s fi n d in g s a n d re c o m m e n d a tio n .” ¶5. T he cont es t ant s t i m el y a ppeal ed t o the H i nds C ounty C hance ry C our t , w hi ch af f i r m ed the SH O ’ s deci s i on. T he cha ncel l orf ound thatthe SH O ’ s deci si on “w as suppor t ed by
s u b s tan tial e v id e n c e , w a s n o t co n tra ry to th e m a n ife st w e ig h t o f th e e v id e n c e , w a s n o t in
exce s s of the s t atut ory a uthor i ty orj ur i s di ct i on of the [ D O H ] , and di d notvi ol at e any ve s t ed
c o n stitu tio n a l rig h ts o f a n y p a rty in v o lv e d in th e a p p e a l.” T h e co n tes tan ts n o w a p p e a l to th is C o u rt, arg u in g th a t:

( 1) thi s C our ts houl d appl y a hei ght ened s t andar d of r evi ew beca us e the S H O m e re ly “ a d o p ted a sta ff a n a ly sis ” w ith n o e x p lan a tio n a n d n o se p a ra te o p in io n ; an d th a t th is C o u rt sh o u ld g ra n t th e D O H n o d e fe re n c e in its

### We address the contestants’ stand ard-o f-reviewarguments inthe relev ant sectio ns. 6 

### See Miss. Co de Ann. § 41 -7-1 91 (2) (Rev . 20 09 ): “Th e State D epartment of H ealth 7 

### sha llnot grant

approvalfor

or iss ue a

ce rtif ic at e of nee d to any per son proposing thenew cons tr uction of , a ddition t o, or

expansi on of any hea lt

h carefa ci li ty . . . . ” 5 i nterpret at i on of the m orat ori um on new nu rs i ng ho m e con struct i on becau se i t“f arm ed out ” t he i nt erpr et at i on of thatl aw t o t he A t t orney G ener al ’ s O f f i ce; 6 ( 2) i tw as a rbi tr ary a nd c apr i ci ous f orthe SH O t o gr antthe C O N w hen ther e w as “no evi dence thatthe [ D O H ’ s ] need pol i cy w as m et ”; ( 3) i tw as a rbi tr ary a nd c apr i ci ous f orthe SH O t o gr antthe C O N w hen there w as no ev i den ce t hat M eado w brook con si dered av ai l able al t ernat ives, m etthe St at e H eal th Pl an’ s obj ect i ves , orpr oved ec onom i c vi abi l i ty; and ( 4) the appl i cat i on does notf al l w i thi n one of

the exc ept i ons t o the m or at or i um on n ew nur s i ng hom e cons truct i on enumer at ed by the A t t orney G ener al ; or , i n the al t ernat i ve, the A t t orney G ener al ’ s i nt erpr et at i on of the m or at or i um vi ol at es the pl ai n l anguage of the s t atut e. W e d isag ree w ith the c o n test an ts an d find tha t th e ch an ce ll o r co rrectl y ru led th at th e S H O ’s d ec isi o n to g ran t th e C O N w as su p p o rt ed b y su b stan ti al e v iden ce an d thu s w as n o t arbitrary
an d ca p ri ciou s. A n d alth o u g h n eith er the staff an alys is n o r th e S H O d iscu ssed the s tatu tory
m or at or i um on new nurs i ng hom e cons truct i on, w e f i nd t hatthe D O H ’ s i nt erpr et at i on of t he 7
m o ra to riu m is n o t “r e p u g n a n t” to th e p lain m e a n in g o f th e sta tu te, a n d w e a g re e w ith its in te rp re ta tio n . A N A L Y S IS I . T he SH O ’s deci

s i on that ther e w as a need f

orthe Meadow br ook P r oject w as not a rb itr a r y a n d c a p r ic io u s . A . Standard of

R eview ¶6
. Sect i on 41- 7- 20 1( 2) ( f ) o f the M i s s i s s i pp i Code s e t s f orth the s t a nd a r d of j udi ci al
r evi ew f ora f i nal or derof

the D O H and provi des t hati tshal l be vac at ed onl y upon an err orT he con t est ants urge this C ou rtt o app l y a hei gh t ened s t and ard of r eview , b ecause 8 the SH O “r ej ect ed” the hea r i ng of f i cer ’ s r ecomm endat i on “ w i thoutmaki ng any i ndepende nt f i ndi ngs orexpl anat i on of he row n. ” But w e f

i nd thatthei ra r gum enti s c ontr adi ct ed by t he p lain lan g u a g e o f S e c tio n 4 1 -7 -1 9 7 (2 ), w h ich sta tes , in p e rtin e n t p a rt: T h e co m p lete d rec o rd sh a ll b e c e rtified to th e S tate H e a lth O ffic e r, w h o sh a ll cons i deronl y t he recor d i n m aki ng hi s deci s i on, and s hal l notcons i derany evi dence orm at er i al w hi ch i s notincl uded ther ei n. A l l f i nal deci s i ons re g a rd in g th e iss u a n c e o f a c e rtifica te o f n e e d sh a ll b e m a d e b y th e S tate H eal t h O f

f i cer . T he St at e H eal th O f f i cers hal l m ake hi s w r i t t en f i ndi ngs and is s u e h is o rd e r a ft e r r e v ie w in g s a id re c o rd
. M iss . C o d e A n n . § 4 1 -7 -1 9 7 (2 ) (R e v . 2 0 0 9 ). N o w h e re in th e sta tu te is th e S H O re q u ire d to def ert o the fi ndi ngs of

the hea r i ng of

f i cer , nori s s he r equi r ed t o “expl ai n” herr eas ons f or di s agr eei ng w i th the hea r i ng of f i cer . She i s re qui r ed onl y t o re vi ew t he ent i r e r ecor d, i s s ue an or der , and make herw r i t t en f i ndi ngs , al l of

w hi ch s he di d i n thi s cas e. 

### 6 of l aw , or i f the order “i s no tsup po rt ed by sub st anti al evidence, i s contr ary t o the m anif est
w ei ghtof

t he evi dence , i s i n exce s s of the s t atut ory author i ty orj ur i s di ct i on . . . orvi ol at es
a n y v e s te d c o n s titu tio n a l r ig h ts o f a n y p a rt y in v o lv e d in th e a p p e a l.” 8 ¶ 7
. “ If a n ad m in istra tiv e ag e n c y ’s d e c is io n is n o t b a s e d o n s u b s ta n tia l e v id e n c e , it
nece s s ar i l y f

ol l ow s thatt he dec i s i on i s arbi tr ary and capr i ci ous . ” Mis s . S tate D ep’ t of Heal t h v. N atchezCm t

y. Hos p. , 7 4 3 S o . 2 d 9 7 3 , 9 7 7 (M iss. 1 9 9 9 ). “ A n a dmi ni s tr a t i ve agenc y’ s de ci s i on i s a rbi tr ary w hen i ti s notdone a ccor di ng t o r eas on a nd j udgm ent , but dep end i ng on t he w i l l al one. ” I d . “ A n a c t i on i s c a pr i c i ou s i f d on e wi tho utr eas on, i n a
w hi m s i cal m anner , i m pl yi ng ei thera l ack of under s t andi ng of

ordi s r egar d f

ort he
s urr oundi ng f

act s and s ett l ed contr ol l i ng pr i nci pl es . ” I d . ¶8. A s admi ni s tr at i ve age nci es ar e gi ven much def er ence , “the bur den of

pr oof r es t s on the cha l l engi ng party t o pr ove thatthe depa r t m enterr ed. ” G reenw oo d L eflore Hosp. v. Miss. S ta te D e p ’t o f He a lth , 980 So. 2d 931, 934 ( M i s s . 2008)
. A nd “the sa m e def er ence due the

### One of thegene ra l c ri te ri a us ed t o evaluat e a CON appl ic ation i s “Nee d for the 9 

### Pro jec t. ” Unde r t

hat crit erion, se veralit em s “ may be c onsi der ed”to de te rm inewhether a needfor th e pro

ject exists. P ertinent here is item (a), whichstates: The ne ed th at th e populati on se rve d or t o be s er ved ha s f or the s er

vic es propos ed t o be off

er ed or e xpande d and the e xte nt t o whic h al l res ide nts of the ar ea – in partic ular l ow inc omepe rs ons, rac ia l and ethnic minori ti es , wom en, handi ca pped pe rs ons and othe r unde rserved groups, and the e lde rly – ar e likelyto h ave access to tho se services. 15 -99 1 -8 M is s. Co de R . § 1 0 0.0 1(5 )(a) (Weil 2 01 1), avai labl e at htt p:/ /m sdh. ms .gov/ms dhsi te/_s tati c/ re source s/ 3346.pdf

(La st vis it ed Nov. 30, 2011)
. 7 d e p a rtm e n t’s fin d in g m u st a lso b e g iv e n to th e c h a n c e llo r w h o , o n a p p e a l, af firm s a n d a d o p ts the depa r t m ent ’ s f

i ndi ng. ” I

d . ¶9. I n s um , w e w i l l ne i therr ew ei gh the evi den ce no r condu cta de n ov o revi ew of
c o n tes ted fa c ts. R a th e r, o u r re v iew is lim ited to w h e th e r su b s ta n tial e v id e n c e e x iste d to
s u p p o rt th e S H O ’s d e c is io n . B . A n a lys is ¶1 0. K el l y’ s propos al w oul d est abl i s h a si xt y- bed f a c i l i ty i n La ud e r da l e County by
r el ocat i ng t hi r ty- ni ne beds fr om P opl arSpr i ngs ( a Lauder dal e C ounty f aci l i ty) and r epl aci ng the tw enty- one beds f

r om the cl os ed K emperC ounty f aci l i ty. I n otherw or ds , no new beds
w o u ld b e e stab li sh ed , b u t th e tw en ty-o n e b ed s tha t ha d b ee n h eld in a b ey an ce fo r tw o y ea rs
w oul d be r ees t abl i s hed. T he cont es t ant s ar gue thatthe SH O ’ s de ci s i on t o gr antthe C O N w as
arbi tr ary and capr i ci ous beca us e ther e w as no s ubs t ant i al evi dence of G ener al R evi ew C r i t er i on 5 – N eed f

orthe Pr oj ect . W e ther ef or e exa m i ne the r ecor d t o det erm i ne w hether 9
s ubs t ant i al evi dence exi s t s t o s uppor tthe SH O ’ s concl usi on t hatther e w as a nee d f ort he M e a d o w b ro o k p roje c t.

### Eich er’s figures were b ased o n th e 20 09 State H ealth Plan , wh ich w as the p lan in 10 

### effect at the time M eado wb roo k’s C ONapp licationwas filed
. Su llivanw as r ef

erring to M ississipp i Co de S ection41 -7-1 91 wh ich states, in 11 

### pertin ent p art: (1) No per son s hal l enga ge in any of thefoll owing a ctivi ti es without obt aining there quired c erti fi cateof ne ed: (a) Theconstruction, deve lopm ent or other es ta bli shm ent of a new healthcare fac il ity, wh ich esta blish men t sha ll inclu de th e reop ening o f a health care fac ilit

y that has ceas ed to operatefor a period of si xt y ( 60) months or more . . . . Mis s. Code Ann. § 41-7- 191(1) (a) ( Rev. 2009). 8 ¶ 1 1
. Do n E i c h e r , th e Di r e c t o r o f th e Of f i c e o f He a l t h P o l i c y a n d P l a n n i n g a t th e DOH, t es t i f i ed thatther e w as a nee d f or738 beds i n L ong- T erm Pl anni ng D i s tr i ctI V , w hi ch inc lud es b o th L au d erd ale a n d K em p er C o u n ti es. H e testi fi ed that L au d erd ale C o u n ty 10
con t ai ned 57 2 li ce n sed b eds, bu thad a need for59 1, fora t otal of ni neteen need ed b eds. E ich e r te stifie d th a t: T h e o th e r p a rt a n d p rin c ip le is th a t th e re ’s a g re a ter b e d n e e d in th e c o u n ty w her e i t ’ s bei ng m oved t o . . . K emperC ounty, the 20 09 S t at e H eal th Pl an s how s a nee d f

ortw o beds, as o pposed t o L auder dal e havi ng a nee d of 19. A nd, ther ef

or e, you’ r e movi ng f

r om havi ng l es s need t o a coun ty thathas gr eat erneed. So t hat ’ s our otherpri nci pl e t hatw e w oul dn’ tal l ow you t o m ove the otherd i rect i on. I f

you w er e movi ng f

r om L auder dal e t o K emper , you wo u l d n o tb e r e c o mme n d e d f o ra p p r o v a l b e c a u s e y o u a r e mov i n g f r o m a c o u n ty w ith a h ig h e r n e e d to o n e th a t h a s a le s s e r n e e d
. ¶12. M eadow br ook al s o pr es ent ed t es t i m ony f r om D an Sul l i van, w ho w as acc ept ed as an
e x p e rt in “ h e a lth c a re p la n n in g , h e a lth c a re f in a n c ia l p roje c tio n s a n d C O N p re p a ra tio n s .” Sul l i van t es t i f

i ed thati f the tw enty- one K emperC ounty beds hel d i n abeya nce w er e notus ed
w i thi n f i ve yea r s , they w oul d be “l os tt o t he sys t em” becaus e of t he mora t or i um , and that 11

### Su llivanwas referringto the thirty-n ine P op lar Sp ring s bed s that K elly p lann ed to 12 

### re loc at e. 9 “f r om a hea l th pl anni ng per s pect i ve, ” that“w oul d be s om ethi ng w e don’ tw antt o s ee happen. ” A nd, bas ed on hi s cal cul at i ons , “ther e oughtt o be s i gni f i cant l y m or e demand over the nextf

i ve year s fornurs i ng hom e beds i n L auder dal e C ounty and havi ng thataddi t i onal tw enty- on e bed capac i ty av ai l able s ho uld be be nefi ci al , ” an d that“i tw ou l d take us al m ost 20 year s t o gener at e enough i ncr ement al need t o s upport3 9 add i t i onal beds i n K emper 12 C o u n ty .” ¶ 1 3
. S u lli v a n a ls o g a v e h is o p in io n a b o u t w h e th e r th e tw e n ty -o n e b e d s s h o u ld sta y in K emperC ounty orbe r el ocat ed t o L auder dal e C ounty: S o c l e a r l y , th e n , l o o k i n g a tth i s , i n t e r ms o f whe r e yo u ’ d e n d u p , f r o m a county- by- county per s pect i ve, you w oul d cr eat e a m or e di s pr opor t i onat e nee d in L a u d e rd a le C o u n ty if y o u m o v e d 3 9 b e d s to K e m p e r th a n y o u w o u ld – in K emperC ounty, i f

you m oved 21 beds t o L auder dal e . . . . If t he pr oj ecti s not a p p ro v e d , w e ’re still g o in g to h a v e a n e e d fo r 2 3 b e d s in K e m p e r C o u n ty beca us e thos e beds ar e goi ng t o go outof exi s t ence . So i t ’ s al m os ta gi ven that w e’ r e goi ng t o end up w i th a bed ne ed of 23 i n K emperC ounty. A nd then the ques t i on i s : D o w e tr y t o sol ve t hatby m ovi ng 39 beds over , ordo w e move th o s e b e d s in to L a u d e rd a le C o u n ty ?
. . . So, w hetheryou ar e us i ng 572 beds or602 beds , you’ r e s t i l lbet t erof f f r om a net

bed nee d s tandpoi nti n m ovi ng th e b e d s to L a u d e rd a le C o u n ty . ( E m phas i s added. ) Sul l i van t es t i f i ed thatt he need cr i t er i a i s bas ed on dis tr i ct - w i de pl anni ng, notcounty- w i de pl anni ng, and thatthe di s tr i ctencom pas s i ng L auder dal e and K emper C ount i es neede d m or e than 700 beds. A ddi t i onal l y, t he adm i ni s tr at or s of the thr ee c ont es t i ng
nur s i ng hom es t es t i f

i ed t hat , duri ng the l as tcoupl e of year s , thei roccupa ncy r at es had bee n
a t nin e ty -fiv e p e rc e n t or ab o v e . A n d fin a lly , a s d isc u ss e d ab o v e , w h ile th e sta ff a n a ly sis concede d t hatm ovi ng the tw enty- one beds i nt o L auder dal e C ounty w oul d l eave K emper

### Gen eral Criterio n 3 is th e “A vailab ility o f Altern atives: T he av ailabilityof less 13 

### cos tly or m oree ff ec tive alte rnative me thods of providing the se rvi cet o be of fe re d, e xpande d or relo cated.” 1 5-9 91 -8 M iss. Co de R . § 1 00 .01 (3) (2 0 1 1 ), avai lable at htt p:/ /m sdh. ms .gov/ms dhsi te/_s tati c/ re source s/ 3346.pdf

(l as t vi si te d Nov. 30, 2011). 10 C ou nty und erbedd ed b y tw enty- three and L aud erdal e C ou nty overbed ded by tw o, i tal so not ed thatthe al t ernat i ve – l eavi ng the tw enty- one i n K empe r C ount y and r el ocat i ng t he thi rty- nine Po plarS pri ng s beds t here – w ou l d leave L aud er dal e C ounty underbedded by f i f tye ig h t. ¶14. A f

t er r evi ew i ng the r ecor d, and w i thout f ur ther bel abor i ng thi s opi ni on, w e f i nd t hat
s ubs t ant i al evidenc e exi s t s t o s uppor tthe SH O ’ s f i ndi ng thatther e i s a nee d f orthe M eado w brook proj ect . S o itcann ot be sai d thather decis i on w as arbitrary an d cap ri ci ou s,
as i tw as notre ache d on “w i l l al one, ” ort hr ough “a l ack of under s t andi ng of

ordi s r egar d f

or the s urr oundi ng f

act s . ” N atchezCm t

y. Hos p. , 743 So. 2d at977. I I . T he SH O ’s decis i on that the Meadow br ook P r oject m et otherrel

evant cr iter ia w as n ot arbitrary an d ca

pri ci ou s. ¶1 5. The c on t e s t a nt s ne xt a r gu e tha t M e a do w br oo k a l s o f a i l e d t o s a t i s f

y othe r c r i t er i a – sp e c ifica lly , tha t it f

a ile d to c o n sid e r a v a ila b le a ltern a tiv e s, fa iled to c o n fo rm to th e S tate H eal th Pl an’ s goal s , and f ai l ed t o pr ove f

i nanci al f

eas abi l i ty. A . A vailabilit

y of A lternati ves ¶ 1 6
. T h e c o n tes tan ts a rg u e th a t M e a d o w b ro o k d id n o t p ro v id e e v id e n c e o f G e n e ra l C r i t er i on 3– A vai l abil i ty of A l t ernat i ves . T hey poi ntoutthatB ruce K el l y, the ow nerof 13 M eadow br ook and Popl arS pr i ngs , t es t i f i ed t hathe boughtt he K emperC ounty beds w i thout
e v e r c o n sid e rin g p lac in g th e m a t P o p lar S p rin g s. K e lly a lso tes tified tha t he d id n o t o b tain

### Kel ly pl ans for his new f

ac il it y to have s ixt

y pri vat e rooms . And aft er thethirty- 14 

### nin e bed s are relocatedfrom P op lar Sp ring s, Po plar S prin gs w ill hav e sixty -nin e priv ate roo ms andelevensemi-priv ate roo ms. 11 any ar chi t ectur al es t i m at es f oraddi ng the tw enty- one beds t o hi s exi s t i ng Popl arSpr i ngs f aci l i ty. So, t he cont es t ant s ar gue, t her e w as “no subs t ant i al evi dence thataddi ng the tw entyo n e b ed s at P o p lar S p ri n g s w o u ld n o t be ‘less c o stl y . ’” ¶17. A l though K el l y did st at e at on e poi ntthathe di d notcons i derpl aci ng the beds at Popl arSpr i ngs , hi s t es t i m ony as a w hol e s how s thathe di d cons i derthatopt i on, butt hen
re jec ted it: A nd the thoug ht neve r r eal l y enter ed m y m i nd to pu tthem at Pop l ar Spri ng s. A tthe ti m e, I di d notow n the pr operty adj ace ntt o [ Popl arSpr i ngs ]
. Si nce then, I’ ve acqui r ed about34 acr es ar ound t he f aci l i ty. B ut , i ni t i al l y, I di d not ow n t hatl and .
. . . I real l y don’ tl i ke t o do thi ngs hal f w ay, and i t ’ s been a p a s s io n o f m in e a s a n o w n e r to p ro v id e p ri v a te ro o m s [ ] fo r o u r p a tie n ts . . . 14

. So, w i th thati n m i nd, m y w hol e i nt entw as t o neverre al l y putthem at[ the] Popl arSpr i ngs l ocat i on beca us e w e have a huge f aci l i ty n ow , an d i tm i ght w oul d [ s i c] ha ve acc om m odat ed, you know thes e peopl e w i th s om e bui l di ng, you know , al t er at i ons . W e r eal l y di dn’ ts pend a l otof t i m e l ooki ng atthatdue t o t he f a c ttha tI b e l i e ve o urp a t i e nt [ s ] , M e di c a r e , the p oo r , a r e e nt i t l ed t o a pr i vat e r oom , j us tl i ke the ones that can pay thei rw ay. So t hat ’ s j us tbeen a p a s s i o n o f

mi n e . . . I h a v e d o n e r e n o v a t i o n s , a n d we h a v e a r e n o v a t i o n n o w. A nd, you now , i t ’ s very tr aumat i c f orthe pat i ent s . . . I t ’ s j us ttr aumat i c on the re s id e n ts if

th e irro u tin e is u p s e tte d [s ic ] . . . . K el l y al s o t es t i f

i ed thathe dec i ded nott o s i m pl y r epl ace K emperH om epl ace i n K emper C ounty beca us e “[ a] f

t ert al ki ng t o the s t at e age ncy p eop l e, itw as nota doabl e pr oj ect b e c a u s e y o u h a v e t o b u i l d 6 0 b e d s o rr e p l a c e t we n ty - o n e , wh i c h i s n o tv i a b l e . . . [ y ] o u k n o w, tw enty- on e bed s i s not, yo u n ow , go i ng t o survi ve econ om i cal l y. ” T he C O N app l i cat i on al so
r ef l ect s thatthes e opt i ons w er e cons i der ed and r ej ect ed.

### 12

¶1 8. D an Su l l i va n t e s t i f i e d tha th e a l s o ha d c ons i der ed al t er nat i ves i n hi s r evi ew of M eadow br ook’ s appl i cat i on. T he f i r s topt i on w as si m pl y t o do nothi ng – Sul l i van di s m i s s ed t hati de a , s t a t i ng “ [ w ] i th the de mogr a ph i c c ha ng e s tha ta r e oc c urr i ng i n the po pu l a t i on, ther e’ s goi ng t o be m or e dem and f ornurs i ng hom e beds i n t he f utur e, ” and “ [ i ] tw oul d be a
s h a me t o l o s e a n y b e d c a p a c i ty wh e n th e r e ’ s n o a b i l i ty t o r e c a p tu r e th a tb e d c a p a c i ty d o wn the r oad. ” Sul l i van al s o cons i der ed addi ng the tw enty- one beds t o Popl arSpr i ngs , but di s m i s s ed thatopt i on as w el l , s t at i ng: [ I ] tdoes n’ tacc om pl i s h s om e of the othergoa l s thatthe pr oj ectc oul d do i n a f r ees t andi ng bui l di ng . . . . W hatyou w oul d be doi ng i s decr eas i ng the number o f p riv a te r o o m s b e c a u se y o u w o u ld h a v e to b a sic a lly sh o e h o rn th e se b e d s in to an ex ist ing 1 3 0 -be d fac il ity an d cre ate a 1 5 1 -be d facil ity . A n d so w h at yo u ’d b e d o in g is d im in is h in g th e q u a lity o f l if e a t th e e x is tin g fa c ility
. . . . W e find that su b stan ti al ev iden ce e x ist s to s u p p o rta find ing that n o b ett er a lt ern ati v es w ere avail able. A l tho ug h ad ding t he b ed s t o P op l ar Spri ng s m i gh tult i m at el y h ave b een “less
cos t l y, ” t es t i m on y w as pr es ent ed thatthi s opt i on w as nota “ m or e ef f ect i ve al t ernat i ve
m ethod. ” B . Co n fo rm ity to th e S ta te He a lth P la n G o a ls ¶19. G ener al C r i t er i on 1 cons i der s “the r el at i ons hi p of the heal th s ervi ces bei ng r evi ew ed t o the appl i cabl e St at e H eal th Pl an. ” The H eal th Pl an s t at es thatM i s s i s s i ppi ’ s pl anni ng and health regulat ory act i vit i es have four purposes: 1. T o im prove the health o f M i ssi ssi pp i res i den t s; 2 . T o inc re a se th e a c c e ss ib ili ty , ac c e p tab ili ty , co n tin u ity a n d q u a lity o f h e a lth services ; 3. T o pr eventunnece s s ary dupl i cat i on of heal th r es our ces ; and 4 . T o p ro v id e so m e c o st c o n tain m e n t.

### We d iscuss th ese two c o n si deratio ns to geth er becau se theyare so clo sely 15 

### intertw ined
. 13 M i s s . S t a t e H e a lth P l a n , C h . 1 , § 1 0 2 (2 0 0 9 ), a v a i l abl e at ht tp: // m s dh. m s . gov/ m s dhs i t e/ i ndex. cf m / 19, 2945, 184, 45 5, pd f / St a t e H e a l thPl a n2 00 9Com pl ete.pd f (la st v isited N o v . 3 0 , 2 0 1 1 ). T h e c o n tes tan ts a rg u e tha t M e a d o w b ro o k h a s fa iled to demonstr at e how i t s appl i cat i on ad vances thes e goal s , beca us e the new f aci l i ty w as an
unnece s s ary dupl i cat i on, t he D i vi s i on of M edi cai d oppos ed the pr oj ect , and movi ng beds out
o f u n d e rb e d d e d K e m p e r C o u n ty d o e s n o t im p ro v e a c c e s s fo r K e m p e r C o u n ty c itiz e n s .

1. I m pr ove H eal th and I

ncr eas e Acces s i bi l i t

y to Heal th Ser vi ces 15 ¶20. M eadow br ook’ s appl i cat i on s t at es thati t s new f aci l i ty w oul d “al l ow thos e i n need of
n u rsin g h o m e c a re to re sid e in a s p lea sa n t an d h o m e lik e a se tti n g a s p o ss ib le w ith p riv a te
r oom s and l ar ge spa ci ous ar eas f ordayt i m e ac t i vi t i es . ” B oth B ruce K el l y and D an Sul l i van tes tified th a t th e tren d in th e n u rsin g h o m e ind u stry w a s to p ro v id e n u rsin g h o m e re sid e n ts
w ith p riv a c y a n d d ig n ity . T h e re a lso w a s te stim o n y th a t re lo c a tin g K e m p e r H o m e p lac e to L a u d e rd a le C o u n ty w o u ld g re a tly im p ro v e th e re s id e n ts ’ a c c e s s to a c u te -c a re h o s p ita ls
.

2. P r eve ntU

nnece s s ar

y D upl i cat i on ¶21. M ea d o w b roo k n o ted in it s ap p li ca ti o n that it s p rojec t f u rth ers this g o al be ca u se “the re
ar e no new nur s i ng hom e beds thatar e bei ng added t o the St at e. ” A nd w hen as ked w hether the pr oj ectw oul d unnece s s ar i l y dupl i cat e exi s t i ng s ervi ces , D an Sul l i van t es t i f i ed: Itd o es n o t. F ir st of all , it ’s no t i n cre asin g the b ed ca p ac ity . A n d y o u ’re p r o b a b l y t i r e d o f

me [ s i c ] h e a r i n g me s a y th a t. . . . You k n o w, we k n o w we h a v e to re p lac e th e tw e n ty -o n e b e d s o r lo se th e m . A n d w e k n o w w e h a v e to bui l d a 60- bed f

aci l i ty i n or dert o acc om m odat e thos e beds or , a s I s ai d bef or e, putthem i n anotherfaci l i ty and make a l ar geri ns t i tut i on- type f aci l i ty. So I d o n ’tb eli ev e it ’s un n ec essa ry d u p li ca ti o n w h en y o u cre ate a fac il ity that’s

### 14

m o re d e sira b le f

ro m a p a tien t c a re s tan d p o in t, fro m a q u a lity o f life sta n d p o in t, a n d d o e s n ’t re s u lt in a n y in c re a s e in b e d s . 3 . P ro v ide So m e C o st-C o n ta in m e n t ¶2 2. M eadow br ook n ot e d i n i t s a pp l i c a t i on tha tthe r e l oc a t i on o f t he t w ent y- one beds f ur t her s thi s goal beca us e “s uch r epl ace m entof a tw enty- one- bed f

aci l i ty w i th a 60- bed f aci l i ty al l ow s economi es of s cal e i n oper at i on. ” A nd the s t af f anal ysi s not ed that M eadow br ook’ s pr oj ect ed cons truct i on cos t s w er e w i thi n the medi an r ange f orcons truct i on of a nur s i ng hom e. D on Ei chert es t i f i ed thatthe al t ernat i ve chos en by the appl i cantdoes not hav e t o b e t he ch eapest . A nd D an S ull i van t est i fi ed thatthe p roj ectprovided som e cost
c o n ta in m e n t, n o tin g th a t “ c o s t c o n ta in m e n t d o e s n ’t m e a n c h o o s in g th e c h e a p e s t a lte rn a tiv e ,” and thatcos tcont ai nm ent“means pr ovi di ng an expe ndi tur e thatachi eves s t at ed goal s , and it’ s s till i n th e m o s t e c o n o m ic a l m a n n e r.” ¶2 3
. M e d ica id d id o p p o se th e p rojec t, claim ing th at th e n ew fa c ili ty w o u ld c o st it $1, 157 , 85 0 a nn ua l l y. ButM e a do w br oo k p r e s e nt e d e vi de nc e a tthe he a r i ng tha tthe a c tual
c o st to M e d ica id w o u ld b e m u c h lo w e r. S h a n e H a rie l, w h o w a s a c c e p ted a s a n e x p e rt in h e a lth c a re a n d n u rsin g h o m e fin a n c e , tes tified th a t th e “ lio n ’s s h a re o f th a t am o u n t is sim p ly d u e to th e tw en ty-o n e b ed s re-en teri n g serv ice.” H ariel al so test if ied th at, if

all fac tors w ere t aken i nt o acc ount , s uch as pat i entr es pons i bi l i ty payment s , be d t axes , and mat chi ng f eder al f unds , the ac tual cos tt o M edi cai d w oul d be $189, 877. ¶24. W e f

i nd that s ubs t ant i al evi dence exi s t s i n the r ecor d f r om w hi ch the SH O coul d f i nd that M eado w brook ’s app l i cat i on subst anti al l y co m pli ed w i th the Stat e H eal th P l an’s goals
.

### “Ec onomi c Vi abi li ty: The i mm edi at e and long- te rm finan cial f

ea sa bil it y of the 16 

### propos al , a s we llas theprobabl e ef fe ct of thepropos alon thecos ts and c harges for provi ding health s er vic es by theinstit

uti on or s er vic e. ” 15- 991-8 Mis s. CodeR. § 100.01 (4) (W eil 20 11 ), avai labl

e at htt p:/ /m sdh .ms.go v/msdhsite/_s ta ti c/ re source s/3346.pdf

(l as t vi site d Nov. 30 , 20 11 ). ShaneHari eltes ti fi ed that both t he Ce rtif ic at e of Nee d Revi ew Manualand the s ta ff 17 

### analy sis state that th e cost o f landis to be exclud ed whencalculatin g th e con structio n co st. Dr. John Hyde , the c onte st ant s’ expe rt , t es ti fi ed that a debt-ratio of l es s than one 18 

### me ans that “ you’r e not

making e nough inc ometo pay your debt. ”

15 C . Fin a n c ia l Fe a sa b ility ¶25. T he cont es t ant s cl ai m l ast l y t hat M eado w brook p rovi ded no evi dence of G ener al C r i t er i on 4 – E conomi c V i abi l i ty. T he cont est ant s ar gue thatM eadow br ook never 16 pr oduced a cas h- f

l ow s t at ement , di d noti ncl ude the cos tof the t w enty- one beds or the l and
o n w h ich th e fa c ili ty w o u ld b e b u iltin its c a p ital-e x p e n d itu re c a lcu latio n , a n d th a t it s d e b t- 17
s ervi ce r at i o w as l es s than one. 18 ¶26. T he cont es t ant s ’ expert , D r . J ohn H yde, t es t i f i ed t hat the new f

aci l i ty w ou l d no tbe f i nanci al l y f

eas i bl e, w hi l e tw o of

M eadow br ook’ s expert s t es t i f i ed thati tw oul d be. W hen
as ked hi s opi ni on a boutw hetherthe new f aci l i ty w oul d be f

i nanci al l y vi abl e, Shane H ar i el
s t at ed, “[ b] as ed on the as s um pt i ons t hatw e ut i l i zed and thatI’ m comfort abl e w i th, I have no
r eas on t o bel i eve thati tw oul d notbe f eas i bl e. ” A nd w hen as ked i f the f aci l i ty w oul d be pr of i t abl e, H ar i el t es t i f

i ed: Y es . . . I g o ba ck t o th ese are assu m p ti o n s m ad e. N o b o d y can p red ictw h at’s actuall y g oing t o h app en in the future, bu tthey are r ea sonab l e assum pti on s, bas ed on my w or k w i th otherf aci l i t i es . A nd as s um i ng thatthes e as s um pt i ons d o c o m e to fr u itio n , th e re ’s n o re a s o n th a t th e y c a n ’t b e q u ite p ro fi ta b le
.

### Section 41 -7- 17 3(h)( i v) def i nes “ski l l ed nu rs i ng f

aci l i ty” as “an i nst i tuti on o r a 19 dis t i nctpartof

an i ns t i tut i on w hi ch i s pr i m ar i l y engage d i n pr ovi di ng t o i npat i ent s s ki l l ed nur s i ng car e and r el at ed s ervi ces f orpat i ent s w ho r equi r e medi cal ornur s i ng car e or re h a b ilita tio n s e rv ic e s fo r t h e re h a b ilita tio n o f i n ju re d , d is a b le d o r s ic k p e rs o n s .” 

### The Legi sl at

ureha s sincea

uthoriz ed many e xcepti ons to t he m oratorium , but

none 20 

### is at issue inthis case. See Mis s. Code Ann. § 41-7- 191(2) (a)- (t) ( Rev. 2009). 16 Sul l i van al s o t es t i f

i ed t hatt he pr oj ectw oul d be fi nanci al l y fe as i bl e, and t hatnot hi ng he had hear d f r om t he cont es t ant s ’ exper t , D r . H yde, “change d [ hi s ] opi ni on aboutthat
. ” W e f i nd thats ubs t ant i al evi dence exi s t s i n the r ecord fr om w hi ch the SH O coul d f i nd t hat M eadow br ook’ s pr oj ectdemonstr at ed f i nanci al f

eas i bi l i ty. I I I . T he pr oject

does not violate Secti on 41- 7- 191( 2) of the Mis s is s i

ppiCode. ¶ 2 7
. T h e c o n tes tan ts a rg u e a ltern a tiv e ly th a t t h e S H O ’s d e c is io n to g ra n t a C O N to M e a d o w b ro o k v io la te s M is s is s ip p i C o d e S e c tio n 4 1 -7 -1 9 1 (2 ), w h ic h sta tes , in p e rtin e n t p a rt: T he St at e D epart m entof H eal th s hal l notgr antappr oval f orori s s ue a cert i f i cat e of need t o any per s on pr opos i ng the new c onst ruct i on of , addi t i on t o, or expans i on of

any hea l th car e f

aci l i ty def

i ned i n s ubpar agr aphs ( i v) (s k ille d n u rs in g fa c ility )[ ] . . . e x c e p t a s h e re in a ft e r a u th o ri z e d [ ] . . . 19 20 M iss . C o d e A n n § 4 1 -7 -1 9 1 (2 ) (R e v . 2 0 0 9 ) (e m p h a sis a d d e d ). T h e p a rtie s re fe r to th is sta tu te a s th e “ m o ra to riu m ,” a n d th e D O H h a s, sin c e its p a ss a g e in 1 9 9 0 , inte rp re ted it t o p re c lu d e o n ly “ n e w a u th o ri z e d b e d s a n d n e w f a c iliti e s w h e re n o n e h a d p re v io u s ly e x is te d .” T he D O H h as “al w ays vi ew ed the r el ocat i on of exi s t i ng beds orf

aci l i t i es and/ ort he rep lace m en t of su ch ex ist ing fac il it ies w ith m o re m o d ern am en it ies as o u tsi d e the p ara m eters
o f th e m o ra to riu m .” T h e D O H “ d o e s n o t in terp re t th e m o ra to riu m to p ro h ib it a n y a n d a ll
cons truct i on w hen s uch cons truct i on i s r el at ed t o a s ki l l ed nur s i ng f aci l i ty. ” ¶28
. T his C ou rthas:T h e D O H p re v io u sly re q u e ste d a n o p in io n fr o m th e A tto rn e y G e n e ra l, as k in g h im 21 t o opi ne on i t s i nt erpr et at i on of the mora t or i um . T he cont es t ant s urge t hi s C our tt o gra ntno def er ence t o t hati nt erpr et at i on, beca us e the D O H “punt ed the dec i s i on t o the A t t or ney G ener al ’ s O f

f i ce. ” Fi r s t , w e di s agr ee thatthe D O H has “punt ed” the int erpr et at i on t o t he A G ’ s O f f i ce, a s the D O H s t at es c l ear l y i n i t s br i ef thati thad been i nt erpr et i ng the s t atut e the s ame w ay thatthe A G ul t i m at el y i nt erpr et ed i tbef or e i tr eques t ed the opi ni on, and the c o n te s ta n ts d o n o t d is p u te th a t a s s e rt io n . 

### Seco nd , andmore imp ortantly, th is po int is me ri tl es s in li ght of

our di sc uss ion c larifyin g the cons ide rati on we gi ve an age ncy’ s int er pre tati on. 17 gener al l y acc or ded gr eatde f er ence t o an admi ni s tr at i ve age ncy’ s cons truct i on o f i ts o w n ru le s a n d re g u la tio n s a n d th e s ta tu te s u n d e r w h ic h it o p e ra te s . . . . “ a n a g e n c y ’s in terp re tation o f a reg u lat ion it h a s b e e n a u th o riz e d to p ro m u lg a te is e n tit led to g re a t d e fe re n c e a n d m u st b e u p h e ld u n les s it is s o p lain ly err oneous ors o i ncons i s t entw i th e i therthe under l yi ng r egul at i on ors t atut e as to b e a rb itrar y , ca p ric io u s, a n a b u se o f d isc re tio n o r o th e rw is e n o t in a c c o r d a n c e wi th l a w. Mis s . State D ep’t

of Heal th v. B aptis t

Mem ’l Hos p. , 984 So. 2d 967, 981 ( M i s s. 20 08) (cit ati o n s o m itted) (em p h asis ad d ed ). A n d “u n less the D ep artm en t’ s interpre tat ion [of a
s t a tut e ] i s r e pugna nt to the p lai n m ea n ing there o f, the c o u rtis t o d efe r t o the a g en cy ’s i nt erpr et at i on. ” R ick s v . Miss . S ta te D e p ’t o f He a lth , 719 S o. 2 d 173, 179 ( M i s s . 1998) ( ci t at i ons om i t t ed) ( emphasi s added)
. W e al s o have rul ed that“w her e an a dm i ni s tr at i ve ag en cy ’s i n terpretati o n is co n tr ary to th e u n a m b igu o u s term s o r be st r ea d ing o f a statutory pr ovi s i on, the age ncy i s notent i t l ed t o def er ence . ” S ier ra Clu b v. Miss . E n v tl. Q u a lit y P erm i t B d. , 9 4 3 S o . 2 d 6 7 3 , 6 7 9 (M iss. 2 0 0 6 ) (cit ati o n s o m itted) (em p h asis ad d ed ). 21 H ow ever , w e thi nk i ti m por t antt o cl ar i f y w hatw e mean by “ def er ence ” and “de f

er ” as us ed in the se ca se s, an d in n u m e ro u s o th e r ca se s, d isc u ss in g an ag e n c y ’s in terp re ta tio n o f its governi ng s t atut es . T he ul t i m at e author i ty and r es pons i bi l i ty t o i nt erpr etthe l aw , i ncl udi ng sta tu tes , res ts w ith th is C o u rt. B u t i n d e te rm in in g th e m o st re a so n a b le a n d a p p ro p ria te

### 18

in terp re tatio n o f a sta tu te , th e a g e n c y ’s in terp re tatio n is a n im p o rta n t fa c to r th a t u su a lly
w a rra n ts s tro n g c o n sid e ra tio n . H o w e v e r, w e d o n o t d e fe r to th e a g e n c y ’s in terp re tatio n in the s ens e thatw e yi el d j udgm entoropi ni on. ¶29. M eadow br ook ar gues that , i f the L egi s l atur e had “i nt ended t o appl y the mora t or i um t o th e c o n s tru c t i o n o f

r e p l a c e me n tn u r s i n g h o me s a n d th e r e l o c a t i o n o f e x i s t i n g n u r s i n g h o me beds , i tw oul d ha ve i ncl uded s uch l anguage i n the s t atut e. ” M eadow br ook not es that , s i nce 1 9 9 0 , the L e g isla tu re h a s p a ss e d n u m e ro u s e x c e p tio n s to th e m o ra to riu m , e a c h d e a lin g w ith ei thert he “cr eat i on of new never - bef or e- author i zed nur s i ng hom e beds orthe cr eat i on of new
never - bef

or e author i zed nur s i ng hom es . ” ¶3 0. T he D O H agr ees w i t h M eadow br oo k a nd a r gu e s tha ti t s pr oj e c ti s no tthe “new
c o n stru c tio n ” th a t th e m o ra to riu m sta tu te is d e sig n e d to p ro h ib it: A l though t he br i cks and mort arM eado w brook w i l l us e t o cons tructthe bui l di ng w i l l be new , t he ac tual nur s i ng home i t s el f w i l l notbe cons i der ed new fo r h e a lth p la n n in g p u rp o se s in th e S tate . It w ill r eplace a p re v io u sly oper at i ng buts t i l l exi s t i ng nurs i ng hom e – K emper . T he beds w hi ch w i l l be u s e d f o rth e p r o v i s i o n o f

s k i l l e d n u r s i n g c a r e a tMe a d o wb r o o k wi l l n o tb e n e w, they w i l l be curr ent l y exi s t i ng beds – t w enty- one pr evi ous l y author i zed Ke mp e rb e d s a n d 3 9 p r e v i o u s l y a u th o r i z e d P o p l a rS p r i n g s b e d s . T h i s CO N appl i ca t i on d oe s n oti nv ol ve the c r e a t i on o f n e w b e ds o rthe c r e a t i on of any a d d itio n a l s k ille d n u rs in g fa c ility a n d th u s th e m o ra to ri u m d o e s n o t a p p ly
. ¶3 1. A nd w e not e t he chanc el l or ’ s or de r , i n whi c h h e s t a t e d tha tthe “ M e a dow br ook A ppl i cat i on di d notpr opos e the ‘ new construct i on of, addi t i on t o orexpans i on of’ a s ki l l ed
nur s i ng f aci l i ty; i ns t ead, the A ppl i cat i on r eques t ed t o repl ace t he ol d, di l api dat ed bui l di ng th a t fo rm e rly h o u se d tw e n ty -o n e e x istin g b e d s c o m p risin g K e m p e r H o m e p lac e a n d to rel ocat e the K emperbeds and 39 Popl arSpr i ngs ’ beds t o a new bui l di ng . . . . ”

### “( 1) No pe rs on sha llenga ge in any of thefoll owing a ctivi ti es without obt aining t he 22 

### re quired c erti fi cateof ne ed: (a) Theconstruc ti on, deve lopm ent or other est abl is hme nt of a new health c ar e facility, wh ich esta blish men t sha ll inclu d e th e reo pen ing of a hea lth ca re facility th at h as cea sed to op eratefor a perio d o f sixty (60) mo nth s or m ore [.]” Mis s. Code Ann. § 41-7- 191 (1) (a) ( Rev. 2009). 19 ¶32. A fte r re v iew , w e fin d th a t th e D O H ’s in te rp re tatio n is n o t “ re p u g n a n t” to th e p lain
m e a n in g o f th e sta tu te, n o r is it“c o n tra ry ” to its u n a m b ig u o u s te rm s, so w e th e re fo re fin d it to b e a rea so n ab le an d ap p rop ri ate i n terpretati o n . W e n o w turn to w h ethe r M ea d o w b roo k ’s p roje c t p ro p e rl y fa lls w ith in th e D O H ’s in te rp re ta tio n . ¶ 3 3
. A s m e n tio n e d a b o v e , the D O H h as “ alw ay s interpre ted th e m o ra to riu m to b e e x p re ss ly pr ohi bi t i ng the i ncr eas e of tw o thi ngs , n ew au t hori zed be ds and new f aci l i t i es w her e none had pr evi ous l y exi s t ed, ” and i thas “al w ays vi ew ed the r el ocat i on of exi s t i ng beds orf

aci l i t i es and/ orthe r epl ace m entof s uch exi s t i ng f

aci l i t i es w i th m or e m odern am eni t i es as out s i de the p a ra m e te rs o f t h e m o ra to ri u m .” ¶3 4
. T h e c o n tes tan ts a rg u e th a t M e a d o w b ro o k ’s p rojec t d o e s n o t fa ll w ith in th is i nt erpr et at i on. T hey ar gue thatM eadow br ook i s nota “ r epl ace m ent ” of an “exi s t i ng” f aci l i ty, becaus e K emperH om epl ace does not“exi s t . ” T hey al s o ar gue t hatt he pr oj ecti s not a “r el ocat i on” of

an exi s t i ng f

aci l i ty, as a gai n, K emperH om epl ace doe s note xi s t , and Popl ar S p ri n g s “ m e a n s to c o n tin u e d o in g b u s in e s s ri g h t w h e re it is .” W e d is a g re e . ¶35. Fi r s t , w e f

i nd thatK emperH om epl ace i s s t i l l a n “exi s t i ng” f aci l i ty f orpurpos es of the C O N pr oces s . T he C O N st atut e does notr equi r e a CO N i f a f aci l i ty att empt s t o r eopen
w ith in six ty m o n th s o f c e a s in g to o p e ra te . See M i s s . C ode § 

### 41-7- 191(1) (a) ( Rev. 2009). 22

### 20

A n d D o n E ich e r, th e D ire c to r o f th e D O H ’s O ffic e o f H e a lth P o licy an d P lan n in g , c le a rly tes tified th a t: T he Legi s l atur e amended the C ert i f i cat e of N eed l aw s everal year s ago, and they r equi r ed thata ny he al thcar e f aci l i ty that ’ s be en cl os ed ornotprovi ded se rv ice in 6 0 m o n th s o r m o re b e a n a ly z e d a s a n e w fa c ili ty . A n d so th is f aci l i ty w i l l l os e i t s – af

t er60 m onths of

bei ng closed a nd notpr ovi di ng any s e rv ic e , it w o u ld n o t b e c o n s id e re d a n e x is tin g fa c ility
. So , de sp ite th is fa c ili ty bei ng cl os ed f

orthr ee- and- a- hal

f year s , i t ’s s t i l li n exis t ence un derthe C er t i f i cat e of N eed law unt i lthat60- m onth thr es hold get s cr os s ed. S o w e fi n d th at m o v ing th e tw en ty-o n e K em p er H o m ep lace be d s t o M e a d o w b ro o k ’s pr opos ed f

aci l i ty i s a “r epl ace m ent ” of an “exis t i ng heal thcar e f aci l i ty, ” a pr oj ectnot pr ohi bi t ed by the mora t or i um underthe D O H ’ s i nt erpr et at i on. Second, w e f i nd thatm ovi ng t he thi r ty- ni ne beds f r om Popl arSpr i ngs t o M eadow br ook’ s pr opos ed f aci l i ty i s a “r el ocat i on, ” as def

i ned by the D O H , as i tcl ear l y st at es thati thas “al w ays vi ew ed the reloc ati o n o f exis t i ng beds ” as “out s i de the par amet er s of the mora t or i um . ” CO NC L US I ON ¶36. W e f

i nd t hatt he SH O ’ s deci s i on t o gr antM eadow br ook a C O N w as notarbi tr ary and
ca p ri ciou s, as h er d ec isi o n w as su p p o rt ed b y su b stan ti al ev iden ce . W e find that the D O H ’s i nt e rpr e t a t i on o f

the s t a tut ory mor a t or i um i s n ot“ r e pu gn a nt ” t o the p l a i n mea ni ng of t he sta tu te, a n d w e a g re e w ith its in terp re tatio n . W e a lso fin d th a t M e a d o w b ro o k ’s p rojec t fa lls
w i thi n t hati nt erpr et at i on. W e ther ef or e af f i r m the dec i s i ons of

the SH O and the H i nds C o u n ty C h a n c e ry C o u rt .

### 21

¶ 3 7
. AF F I RM ED . W AL L E R, C. J . , CA RL S ON AN D D I CK I NS ON , P . J J . , RA ND OL P H, KI TC HENS , CHANDL ER , P I ER CE AND KI NG, J J . , CONCUR.