Opinion ID: 2595652
Heading Depth: 4
Heading Rank: 1

Heading: Whether Mat-Su had standing under AS 18.07.091

Text: Mat-Su argues that, as a direct competitor of Advanced Pain, it has standing to seek injunctive relief under AS 18.07.091(a) for what it calls Advanced Pain's fraudulent activity. Mat-Su argues that as a member of the public substantially and adversely affected, it is within the statute's third category of complainants. It contends that it was error to conclude that because Mat-Su was not alleging a violation of an existing CON, it did not have standing to obtain injunctive relief under subsection .091(a). It argues that the superior court's conclusion was contrary to South Central Health Planning & Development, Inc. v. Commissioner of Department of Administration, [14] and would insulate those violators who completely disregard the CON laws. Although the state concedes that Mat-Su may have standing to challenge the commissioner's decision or [Advanced Pain's] alleged violations of the CON laws, Advanced Pain disagrees. It argues that the superior court's common sense and well-reasoned interpretation of AS 18.07.091(a) is consistent with the plain language of the statute. Advanced Pain asserts that the superior court's interpretation is not inconsistent with our holding in South Central because the plaintiff in that case was challenging the violation of an existing CON, whereas Advanced Pain had no CON. We conclude that there are two main reasons why summary judgment should not have been entered against Mat-Su on the standing issue. First, South Central is inconsistent with requiring third-category complainants to show that an existing CON was violated. Second, we independently read the statute to contain no such requirement. We read South Central as foreclosing a conclusion that a member of the public cannot obtain injunctive relief unless a CON was violated. A state agency there failed to submit for CON review the proposed construction of an addition to the Anchorage Pioneers' Home. [15] In other words, the case concerned the failure to seek a certificate, not the violation of an existing certificate. We held that South Central, as a member of the public substantially and adversely affected, had standing under AS 18.07.091(a) to obtain a preliminary injunction. [16] The opinion established that a substantially and adversely affected member of the public may seek injunctive relief under AS 18.07.091(a) if a health care facility fails to obtain a required CON. South Central was within the statute's third category of eligible complainants, even though it did not allege violation of an existing certificate. Advanced Pain reads South Central as involving the equivalent of an existing CON; it refers to our recognition that the facility would be constructed without conforming to South Central's plan, and our statement that this could disrupt the plan. [17] Advanced Pain refers to the plan as essentially [South Central's] federally-mandated CON. We think Advanced Pain misreads our opinion. As Mat-Su argues in reply, we described the violation claimed by South Central as the state's fail[ure] to submit the proposed addition to [CON] review as required by state law.... [18] Our independent review of the statute and the superior court's analysis confirms that South Central did not misapply AS 18.07.091(a). We interpret the statute as allowing substantially and adversely affected members of the public to challenge any violation of Alaska's CON statutes or associated regulations, not just violations of an existing CON. We read the statute to provide that [i]njunctive relief against violations of this chapter or regulations adopted under this chapter may be obtained from a court ... at the instance of ... any member of the public substantially and adversely affected by the violation.  [19] Two main reasonsgrammar and the effect on enforcementcompel this reading. First, it is grammatically most correct to link the two nouns, violations in the opening clause and violation in the last clause, because it permits the three categories to be read independently. The first category is clearly independent, and the word or precedes the third category. This implies that each category is independent, and that each can be read and applied without referring to any other. Advanced Pain's reading would effectively make the third category dependent on the second, requiring it to borrow an element from the second, a result that seems grammatically unlikely. Likewise, one would expect that if the drafters had intended the first and second categories to be independent but the third to depend in some way on the second, they would have more clearly treated the third as related to the second. In that event, one would not expect three ostensibly independent categories. And given the way the subsection is constructed, we assume the drafters would have recognized that if the third category could be rationally read to borrow an element from the second, it would create inherent ambiguity about whether the final violation refers to violations in the subsection's opening words or to violation in the second category. Consequently, if the legislature had intended both the second and third categories to require the violation of a certificate, we would expect the third category to refer more explicitly to a certificate violation, and to parallel more explicitly the second category in construction. At the least, one would have expected the legislature to have added of the certificate after violation in the third category to unambiguously indicate that both the second and third categories require the violation of an existing CON. Similarly, if the third category had been intended to carry forward the second category's requirement of activities conducted in violation of the certificate, ambiguity would have been avoided if the third category used activity or activities, rather than violation. It is improbable that the legislature would have used an ambiguous, indirect, and ungrammatical shortcut to refer to a restriction explicitly required only for the second category of prospective complainants. The two clauses' constructional divergence also renders the superior court's reading less plausible. The initial clause of the subsection and the third category directly use violations and violation as nouns. But the second category uses violation only as part of the clause in the exercise of the activities conducted in violation of the certificate. [20] As used there, violation is a buried verb [21] that modifies activities conducted; translated, the second category really requires activities violating the holder's certificate. It is unlikely the legislature used an unadorned noun in the third category to adopt an entire clause in the second category simply by repeating one word that is used as a modifier in the second. Furthermore, treating the usage of violation in the second category as the same as the usage of violations and violation in the opening words and in the third category would inherently lead to ambiguity. Any such ambiguity is avoided by giving independent effect to each of the categories and reading the statute carefully. The superior court relied on one grammatical tool, proximity, to decide which of the two choices it perceived was correct. We conclude that the subsection's text strongly favors the reading we give the statute. The second main reason for our reading of the statute derives from the effect Advanced Pain's reading would have on enforcing Alaska's CON laws. At least two different sorts of claims are possible with respect to the CON statutes and regulations: first, claims that someone has acted without obtaining a required CON; and second, claims that someone has violated an existing CON. Limiting third-category complainants to this second sort of claim would mean that the first sort of claim could only be pursued by the commissioner, as the sole first-category complainant. That reading would leave a significant hole in enforcement if the state, contrary to law, erred in failing to require someone to apply for or obtain a CON, because no one other than the commissioner who erred could seek relief under subsection.091(a). That result would effectively render the legislature's chosen enforcement mechanisminjunctive reliefa nullity, as either unavailable or unneeded. [22] We doubt that the legislature intended to limit enforcement of Alaska's CON laws so narrowly or improbably. The superior court also thought that there was no reasonable argument that a member of the public's right to remedy should exceed that of an adversely affected certificate holder. The court's reading of the subsection seemed to assume that, like certificate holders, members of the public only had to show that they were adversely affected. The court therefore concluded that, because a certificate holder could not obtain relief unless a certificate was violated, a member of the public could not, either. The court's underlying assumption appears to be incorrect. Although the statute requires that a certificate holder be adversely affected, it requires that a member of the public be substantially and adversely affected. [23] This difference suggests that the statute does not impose identical requirements on the two categories of complainants, undermining one of the two bases for the superior court's reading of the statute. The statute neither states nor implies that members of the public may challenge only violations of existing CONs. We see no reasonable basis for inferring such a limitation. Because such a reading would also be contrary to the state's common law precedent on standing, [24] we assume the legislature would have used unambiguous language to adopt such a limitation, if that had been its intention. We are consequently unwilling to read into the subsection a limitation that is neither explicitly nor implicitly stated. It was therefore error to conclude that a member of the public may only obtain injunctive relief for an alleged violation of an existing CON. Mat-Su may seek injunctive relief for the alleged violation of the statutes and regulations if it is a member of the public substantially and adversely affected by the violation. It appears to be undisputed that Mat-Su is indeed a member of the public. Neither Advanced Pain nor the state argues otherwise. Nothing in AS 18.07.091(a) implies that the second and third categories of complainants were intended to be mutually exclusive. Neither Advanced Pain nor the state appears to argue that an entity that holds a CON is ineligible to seek relief as a member of the public. Such a reading would be illogical in this case because it would mean that a would-be competitor who had not yet been issued a CON could obtain injunctive relief under subsection .091(a) even though Mat-Su could not. We therefore assume without deciding that Mat-Su is a member of the public even though it may have held its own certificate. The closer question is whether Mat-Su was indeed substantially and adversely affected by Advanced Pain's alleged violation of the CON laws and regulations. The superior court assumed without deciding that Mat-Su, as a competitor of Advanced Pain, would be adversely affected by the construction of Advanced Pain's Wasilla facility. Mat-Su argues that it is substantially and adversely affected in part because Advanced Pain's project will compete directly with Mat-Su. It also argues that because Advanced Pain's ambulatory surgery center will be included as part of the existing supply of surgery suites in any need analysis for new surgery suites, Advanced Pain's facility will limit Mat-Su's ability to expand. Advanced Pain contended at oral argument before us that Mat-Su was not substantially and adversely affected. Advanced Pain conceded that its Wasilla facility was in the same service area as Mat-Su's medical facility. But it also argued that its facility had only one procedure room, which was intended to be used only for pain-management procedures in which drugs are injected into the spine, nerve root, or joint to reduce pain. Advanced Pain also appeared to concede at argument that the same kind of pain-management procedures were performed at Mat-Su's facility. And Mat-Su's chief financial officer stated in an affidavit that from 2005 to 2007, Mat-Su performed over 127 pain-related, outpatient procedures, including nerve blocks, trigger point injections, and joint injections. Based on these facts, we agree with Mat-Su's contention that it would be substantially and adversely affected if Advanced Pain were to open and operate even a single pain-management procedure room in the same service area without complying with the CON laws and regulations. For purposes of determining whether the alleged violation gives Mat-Su standing, we assume that Advanced Pain will be able to perform procedures that might otherwise have been performed at Mat-Su. Mat-Su has arguably invested resources in complying with the CON laws and regulations with the expectation that DHSS would control the market by enforcing those same rules against potential competitors. We accordingly hold that Mat-Su has standing as a substantially and adversely affected member of the public to seek injunctive relief for Advanced Pain's alleged violations under AS 18.07.091(a).