Court Opinion

ID: 3019265
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:20:40.016892+00
Date Added: 2024-06-11T11:47:15.225069
License: Public Domain

United States Court of Appeals
                        FOR THE EIGHTH CIRCUIT

                                ___________

                                No. 96-4076
                                ___________

Planned Parenthood of Greater          *
Iowa, Inc. *
                                       *
           Plaintiff - Appellee        *
                                       *   Appeal from the United States
     v.                                *   District Court for the Southern
                                       *   District of Iowa.
Christopher G. Atchison, In his        *
Capacity as the Director of the *
Department of Health of the            *
State of Iowa                          *
                                       *
           Defendant - Appellant       *

                                ___________

                   Submitted: June 9, 1997

                       Filed: September 25, 1997
                               ___________

Before MURPHY and HEANEY, Circuit Judges, and BOGUE,* District Judge.
                               ___________

BOGUE, Senior District Judge.

     *The HONORABLE ANDREW W. BOGUE, United States District
     Judge for the District of South Dakota, sitting by
     designation.
     This case involves an appeal from an injunction imposed by the
district court1 following a bench trial, enjoining the defendant from
requiring   the   plaintiff   to    comply    with     state   certificate    of   need
requirements or otherwise obtain a certificate of need in connection with
its plans for a new clinic.        We affirm.

                                         I.

     The plaintiff, Planned Parenthood of Greater Iowa, Inc. (PPI), is a
non-profit Iowa corporation which operates 16 clinics in Iowa.             Its clinics
provide   comprehensive   family     planning    and     reproductive     health   care
services, including pregnancy diagnosis and counseling, early prenatal
care, first and early second trimester pregnancy terminations, birth
control   counseling,   diagnosis     and    treatment    of   sexually   transmitted
diseases and urinary tract infections, and cancer screening.              In 1995 the
plaintiff announced plans to build and operate a clinic in the Quad Cities
area of Iowa and Illinois.     Upon learning of the plaintiff’s plans, some
individuals and organizations opposed to abortions held meetings and
rallies in an effort to thwart the plaintiff’s plans for the clinic.
Certain members of the opposition groups concentrated their efforts on
bringing their cause to the attention of various members of the Iowa state
legislature, the Governor’s office, and the Iowa Department of Health.              One
of the stated goals of the opposition was to convince state officials to
require the plaintiff to comply with state certificate of need procedures
before allowing the plaintiffs to construct its proposed clinic.

     In 1977 the Iowa General Assembly enacted the certificate of need
(CON) statutes to regulate the development of new or changed

     1
      The Honorable Charles R. Wolle, United States District
Judge for the Central Division of the Southern District of Iowa.

                                        -2-
institutional health services in that state. See, 1977 Iowa Acts, ch. 75.
The CON process is a regulatory framework designed to ensure “that the
offering     or   development    of   new    institutional    health    services    be
accomplished in a manner which is orderly, economical and consistent with
a goal of providing necessary and adequate institutional health services
to all the people of [Iowa] while avoiding unnecessary duplication of
institutional health services and preventing or controlling the cost of
delivering these services.” Id.             To this end, Iowa law prohibits the
offering or development of any new or changed institutional health service
“without prior application to the [Department of Health] for and receipt
of a certificate of need . . . .” Iowa Code § 135.63(1)(1995).            To commence
the CON process, the sponsor of a project must first submit a “letter of
intent” to the Department of Health (Department) giving a brief description
of the proposed project. Iowa Code § 135.65; Iowa Admin. Code r. 641-
202.2(1).     Not less than 60 days thereafter, the sponsor may submit an
application for a CON, pay a fee, and thereby commence a formal review of
the application. Iowa Code § 135.65; Iowa Admin. Code r. 641-202.                  CON
applications are reviewed by the Health Facilities Council (Council) which
is housed within the offices of the Department and whose members are
appointed by the Governor.       The decision to grant or deny a CON is made by
the Council.      The defendant, Christopher G. Atchison, was sued in his
official capacity as the Director of the Iowa Department of Health.           He was
not a member of the Council.

         The plaintiff alleges that only in response to the pressures exerted
by the opposition groups, and for the sole purpose of blocking construction
of   a   clinic   that   would   provide    pregnancy   termination    services,   the
Department began a campaign to delay or derail plans for the plaintiff’s
proposed clinic, by requiring the plaintiff to undergo the CON process.
This was so, despite that in

                                           -3-
the ten years prior to this case, no similarly structured health care
facility which opened in the state was made to apply for a certificate of
need.

        On November 15, 1995, Barb Nervig, the Department employee in charge
of the CON program, sent a letter to the plaintiff stating it had come to
the   attention of the Department that the plaintiff was planning to
construct a new clinic in Davenport, Iowa.        The express purpose of the
letter was to inform the plaintiff of the CON process and to alert it that
its project may be subject to review under the CON regulations.       After no
response was forthcoming and at defendant Atchison’s direction, on January
9, 1996, Nervig sent another letter to the plaintiff requesting information
about its proposed clinic so that a “determination of reviewability under
Certificate of Need” could be made.      In response to this letter, on March
11, 1997 special counsel to the plaintiff sent a letter to the Department
detailing     its   proposed   clinic    and   requesting   a   “reviewability
determination” from the Department.       On April 8, the Department returned
a   letter to the plaintiff indicating that its proposed project was
reviewable under the CON statute.    Nine days later the plaintiff filed this
action, pursuant to 42 U.S.C. § 1983, seeking a declaratory judgment that
the defendant’s reviewability determination unconstitutionally burdened
potential patients’ privacy rights because it was made for the purpose of,
and would have the effect of, imposing an obstacle on access to abortion.
The defendants moved the district court to dismiss and abstain from
exercising jurisdiction over the matter pursuant to Younger v. Harris, 401
U.S. 37 (1971).     The district court denied the motion, and after a one-day
court trial, enjoined the defendants from requiring the plaintiff to comply
with the CON requirements.     This appeal followed.

                                        -4-
                                          II.

      In issuing its ruling, the district made a number of findings of fact
and conclusions of law which, for purposes of brevity, are only summarized
herein. There are approximately 140,000 women of child bearing age in the
Quad Cities area, and from this group approximately 125 women per month
seek abortions.     Thirty percent of the clinic’s services would be devoted
to offering pregnancy termination services, which services would not
otherwise be available anywhere within 50 miles of the Quad Cities. Some
of the opponents to the clinic organized and conducted public rallies in
their campaign to impede PPI’s proposed construction.                 The Governor of
Iowa, who is opposed to abortion, spoke at one of these rallies in support
of the opponents’ cause.

      Although    the     Governor’s   office   normally     communicated   with   the
Department through a designated liaison, in this matter, the Governor’s
Chief-of-State and spokesman, Bob Rafferty, communicated directly with the
defendant Atchison regarding the issue of PPI and the certificate of need.
The Department’s Deputy Director, David Fries, took charge of the matter.
After the Department’s January 9 letter to PPI but before PPI’s response,
Fries took the unprecedented step of convening a four-member special team
to address PPI’s plans.          Following PPI’s response to the Department’s
letters,   and    while    the   team’s   discussions   of    PPI’s   request   for   a
reviewability determination were taking place, members of the opposition
groups contacted Rafferty to express concerns about how the matter was
being handled.    Rafferty in turn contacted Atchison to discuss the process
by which plaintiff’s letter was being reviewed.         Thereafter, the Department
of Health informed plaintiff that its project was reviewable under the CON
law, notwithstanding that the team was made aware that CON had not been
applied to any family planning clinics constructed in the prior ten years.
The

                                          -5-
April 8 letter was drafted by Nervig, submitted by Fries to Atchison, and
a copy was provided to Rafferty after Atchison approved the final draft.2

     The team concluded PPI’s proposed clinic was reviewable because it
was a new “institutional health facility” subject to CON reviewability
insofar    as    it   was   an   “organized   outpatient   facility.”   Iowa   Code   §
135.61(14)(d).        An organized outpatient facility is further defined as “.
. . a facility, not part of a hospital, organized and operated to provide
health    care   to    noninstitutionalized     and   nonhomebound   persons   on     an
outpatient basis . . . .” Iowa Code § 135.61(2).                The code, however,
exempts from CON, those “. . . private offices or clinics of individual
physicians, dentists or other practitioners, or groups of practitioners,
who are health care providers . . . .” Id.            The court found that in the
several years prior to this case, the delivery of health care in Iowa has
undergone considerable change.         Among the most significant aspects of that
change is the delivery of primary physician care through clinics structured
as businesses that are not owned or controlled by physicians, but that
employ or contract with physicians.             PPI’s proposed clinic would be so
structured.      That is, the clinic would be owned by the corporation, PPI,
which would in turn contract with non-owner physicians to deliver health
care services to the clinic’s patients.

     With the emergence of this new mode of health care delivery, the
Department was faced with applying outdated statutes to a health care
delivery system not contemplated by those statutes.

     2
      This was the first time that Atchison, Fries, and special
team member Mike Marshall, an executive officer within the
Department, had ever been involved with a CON reviewability
determination--an inquiry which, in the past, was normally
conducted by Nervig and her predecessor Leona Riggenburg.

                                          -6-
Thus, the practice of the department in the several years prior to this
case was to construe the physician-controlled office/clinic exception to
CON   reviewability   as   broadly   as    possible    in   order    to   exclude   from
reviewability the outpatient clinics, such as PPI’s, that characterize the
new mode of primary physician health care delivery.                 If a new proposed
facility was available for use by qualified physicians seeking “access,”
then the facility was viewed as an organized facility subject to review.
If the facility was not open in this sense, but was instead closed to all
physicians except those the facility chose to employ or contract with, then
it was viewed as a clinic of physicians or a group of health care
practitioners, and not subject to review.             Alternatively, if a proposed
facility provided services by or under the supervision of a physician, and
the services were of the same type as were historically available in a
private physician’s office, then the facility was not subject to review
under the CON statutes.    As a result of this interpretation of the statute,
in the ten years preceding this case, no similarly structured outpatient
clinic had been required to obtain a certificate of need before opening for
business.   Indeed, other clinics providing essentially the same services
as PPI, but not pregnancy termination services, were exempted from CON
review by the Department’s interpretation of the physician-controlled
office/clinic exception.

      The district court further found, based on past practice, the
defendant would not have required the plaintiff to satisfy CON requirements
if Rafferty had not contacted him in response to his contacts from members
of the groups opposed to abortion.        “Without question the defendant would
not   have required the plaintiff to satisfy CON requirements if the
plaintiff’s intention had been to provide family planning and related
services but not a medical doctor performing abortions.”                  Atchison was
influenced by Rafferty’s contacts into requiring the plaintiff to satisfy
CON

                                          -7-
requirements, thinking that Rafferty wanted CON requirements satisfied.
Although Rafferty testified he thought a decision about applying CON laws
should be based on past practices, the district court concluded if Atchison
had understood that to be Rafferty’s position, Atchison would not have
required PPI to satisfy CON requirements.

      The court concluded further that the defendant had not demonstrated
the State has a substantial interest in requiring PPI to satisfy CON
requirements.    Moreover, defendant’s attempt to apply the CON requirement
did not withstand scrutiny under administrative precedents inasmuch as he
did   not    adequately   justify   his   reasons        for   deviating     from   past
reviewability determinations.       The court ultimately concluded that the
defendant’s       reviewability         determination          substantially          and
unconstitutionally obstructed access to abortions.

                                        III.

      Defendant’s principal argument on appeal is that the federal district
court should have abstained pending completion of the CON process before
the Iowa Health Facilities Council, and appeals therefrom within the state
system pursuant to the principles set fourth in Younger v. Harris, 401 U.S.
37, 91 S. Ct. 746, 27 L.Ed.2d. 669 (1971).         We review the district court’s
abstention    decisions   under   the   Younger   principles      for   an    abuse    of
                                                    th
discretion. Fuller v. Ulland, 76 F.3d 957 (8             Cir. 1996).

       In Younger, the Supreme Court held, in the absence of extraordinary
circumstances, the doctrine of abstention precludes injunctive relief
against enforcement of a state criminal statute by a federal court, when
state court proceedings relative to that enforcement are pending. Younger,
401 U.S. at 54, 91 S.Ct. at 755.

                                        -8-
Abstention is based largely upon principles of federalism and comity which
include:
     a recognition of the fact that the entire country is made up of
     a Union of separate state governments, and a continuance of the
     belief that the National Government will fare best if the
     States and their institutions are left free to perform their
     separate functions in their separate ways . . . . [This concept
     represents] a system in which there is sensitivity to the
     legitimate interests of both State and National Governments,
     and in which the National Government, anxious though it may be
     to vindicate and protect federal rights and federal interests,
     always endeavors to do so in ways that will not unduly
     interfere with the legitimate activities of the States.

Younger, 401 U.S. at 44, 91 S.Ct. at 750; Alleghany Corp. v. McCartney, 896
F.2d 1138, 1142 (8th Cir. 1990).             Following Younger, the Supreme Court
extended the doctrine to those non-criminal state court proceedings,
including administrative proceedings, where: (1) there are ongoing state
proceedings   that     are   judicial   in    nature;   (2)   the   state   proceedings
implicate important state interests; and (3) the state proceedings afford
an adequate opportunity to raise federal claims. Middlesex Ethics Committee
v. Garden State Bar Association, 457 U.S. 423, 432, 102 S. Ct. 2515, 2521,
73 L. Ed. 2d 116 (1982).         The defendant maintains that all three of the
Middlesex criteria are met, and that abstention was therefore required.
The plaintiff, on the other hand, argues the district court properly
refused to abstain because at the time this suit was filed in federal
court, there were no ongoing state proceedings that were judicial in
nature.    We agree.

     As noted, pursuant to Iowa law, the sponsor of a proposed new
institutional health service is required to submit a “letter of intent” to
the Department briefly describing its proposed project. Iowa Code §
135.65(1).    Once the letter of intent is received by the Department, the
sponsor may then, after 60 days, submit a

                                         -9-
formal application, pay a fee, and, if the application is accepted by the
Department, thereby commence a “formal review” of the application. Iowa
Code § 135.66(3).         A formal review, at a minimum, consists of evaluation
of the application against the numerous criteria specified in § 135.64 and
a public hearing held by the Council to afford any affected persons the
opportunity to present testimony relative to the proposed project. Iowa
Code § 135.66(3) & (4).

     In     response      to   the     Department’s      letters    requesting       information
regarding     its    project,         the   plaintiff     here     supplied    the    requested
information    and     in      turn    submitted     a   request     for   a   “reviewability
determination” from the Department.                  The defendant characterizes this
request as the “letter of intent” necessary to begin the CON application
process.    Thus, the defendant argues, state proceedings were underway when
the plaintiff filed this suit.              We do not agree and conclude there was no
administrative proceeding of a kind subject to Younger that were “ongoing”
within the meaning of Younger when the plaintiff filed its § 1983 action
in federal court.

     Generally, a plaintiff need not exhaust administrative remedies
before seeking federal court relief pursuant to 42 U.S.C. § 1983. Patsy v.
Board of Regents, 457 U.S. 496, 102 S. Ct. 2557, 73 L. Ed. 2d 172 (1982).                        The
Supreme    Court    has     suggested,       however,     that     application       of   Younger
abstention in a § 1983 action is proper where administrative proceedings
are coercive, begin before any substantial advancement in the federal
action takes place, and involve an important state interest. Ohio Civil
rights Commission v. Dayton Christian Schools, Inc., 477 U.S. 619, 106
S. Ct. 2718, 91 L. Ed. 2d 512 (1986).             Here, the plaintiff was not yet subject
to coercive proceedings, and the CON administrative proceedings had not yet
begun in earnest before the plaintiff filed in federal

                                              -10-
court.   Although the Department contacted the plaintiff and requested
information relative to the plaintiff’s proposed project, such contact,
standing alone, is not sufficient to commence CON proceedings against the
plaintiff. See, Louisiana Debating and Literary Association v. City of New
Orleans, 42 F.3d 1483 (5th Cir. 1995)(no ongoing state proceedings when
plaintiff is notified of administrative complaint of discrimination filed
with Human Rights Commission); and Telco Communication, Inc. v. Carbaugh,
885 F.2d 1225 (4th Cir. 1989)(no ongoing state administrative proceeding
merely because state agency initiated contact with putative plaintiff).
Nor do we believe the plaintiff’s response to the Department’s letters and
subsequent request for a “reviewability determination” amounted to a
“letter of intent” as prescribed by the CON statutes.      The plaintiff’s
letter was a voluntary request for a preliminary determination whether its
project fell within the purview of the CON statutes.   Once the Department
notified the plaintiff that its proposal was reviewable, the plaintiff was
free to change its plans in order to fall outside the CON regulations, or
to file a letter of intent and formal application and proceed as planned,
or to file this action in federal court. See, Alleghany Corp. v. Haase, 896
F.2d 1046, 1050-51 (7th Cir. 1990), vacated as moot, 499 U.S. 933, 111
S. Ct. 1383, 113 L. Ed. 2d 441 (1991)(§ 1983 plaintiff may initiate action to
enjoin unconstitutional state conduct if he has not violated state law, has
not exposed himself to a state enforcement proceeding, and is not a
defendant in such a proceeding, but merely seeks to sweep away an illegal
obstacle to his activities).

     In any event, even if the transaction between the Department and the
plaintiff were properly characterized as ongoing proceedings, such were not
“judicial in nature.” Middlesex, 457 U.S. at 432, 102 S.Ct. at 2521.    “A
judicial inquiry investigates,

                                   -11-
declares and enforces liabilities as they stand on present or past facts
and under laws supposed already to exist.” McCartney, 896 F.2d at 1143 (8th
Cir. 1990)(citing New Orleans Public Service, Inc. v. Council of City of
New Orleans, 491 U.S. 350, 109 S. Ct. 2506, 105 L. Ed. 2d 298 (1989)).              Here,
there was no application pending before the Department.              It conducted no
investigation, held no hearings, received no evidence, kept no record, and
enforced no liabilities.          Rather, it merely declared that the plaintiff’s
project reviewable.

        In sum, we conclude the district court’s refusal to abstain was not
an abuse of discretion.           We do not hold, however, that a defendant in a
civil       or   administrative    proceeding    can   arbitrarily   sidetrack    that
proceeding by resorting to a § 1983 action in federal court.              Rather, we
merely find, on the facts of this case, there were no ongoing proceedings,
judicial in nature, which would require abstention by the district court.3
                                           IV.

        3
      Although we do not decide the issue here today, at some
point, the CON process may become sufficiently coercive and
ongoing and judicial in nature so as to require abstention by the
federal courts. For example, once the “formal review” of an
accepted application is underway, the argument in favor of
abstention becomes much more persuasive. See, e.g., Alleghany
Corp. v. McCartney, 896 F.2d 1138 (8th Cir. 1990)(abstention
proper where plaintiff sought federal relief from administrative
body’s denial of application rather than seeking judicial review
in state court); and Women’s Community Health Center v. Texas
Health Facilities Commission, 685 F.2d 974 (1982)(abstention
proper where plaintiff sought federal declaratory and injunctive
relief after denial of CON application but before exhausting
state appeal process). Moreover, one who proceeds with his plans
to begin a new service without first obtaining a required
certificate of need does so at his own peril. The law makes a
number of sanctions available to the Department for use against
those who proceed without first obtaining a certificate where one
is required. See, Iowa Code § 135.73.

                                          -12-
           Finally, we hold the district court did not err in concluding
that by requiring the plaintiff to undergo the CON review process, the
defendants would impose a substantial and unconstitutional burden on the
right of access to abortion.    We review the district court’s findings of
fact for clear error and its conclusions of law are reviewed de novo.
Camberos v. Branstad, 73 F.3d 174, 176 (8th cir. 1995).

     State action that has the purpose or effect of imposing a substantial
obstacle in the path of a woman seeking an abortion before the fetus
attains viability is an undue burden, and is unconstitutional. Planned
Parenthood of Southeastern Pennsylvania v. Casey, 505 U.S. 833, 112 S. Ct.
2791, 120 L. Ed. 2d 674 (1992).   As the Casey court explained, however:
     Numerous forms of state regulation might have the incidental
     effect of increasing the cost or decreasing the availability of
     medical care, whether for abortion or any other medical
     procedure. The fact that a law which serves a valid purpose,
     one not designed to strike at the right itself, has the
     incidental effect of making it more difficult or more expensive
     to procure an abortion cannot be enough to invalidate it. Only
     where state regulation imposes an undue burden on a woman’s
     ability to make this decision does the power of the State reach
     into the heart of the liberty protected by the Due Process
     Clause.

Casey, 505 U.S. at 874, 112 S.Ct. at 2819.   CON laws in general have been
recognized as a valid means of furthering a legitimate state interest. See,
Madarang v. Bermudes, 889 F.2d 251 (9th Cir. 1989)(recognizing importance
of CON laws in furthering the state’s legitimate interest in preventing the
establishment of unneeded health care facilities); Women’s Community Health
Center v. Texas health Facilities Commission, 685 F.2d 974 (5th Cir.
1982)(recognizing importance of CON laws in insuring health care services
are made available to all citizens in orderly economical

                                   -13-
manner); and Metropolitan Hospital v. Thornburgh, 667 F.Supp 208 (E.D. Penn
1987)(CON is important in establishing orderly and economical distribution
of health care resources).      No one contends that Iowa’s CON laws serve no
legitimate state interest, or that Iowa has no legitimate interest in
enforcing its CON laws.      Indeed, there is little question that enforcement
of the CON law is not unconstitutional if it merely has the incidental
effect of making it more difficult or more expensive to procure an abortion
and does not otherwise impose an undue burden on one’s ability to obtain
an abortion. Casey, 505 U.S. at 874, 112 S.Ct. at 2819.

       There is no question but that the groups opposed to abortion have a
perfect right to lobby in favor of subjecting PPI’s proposed new facility
to   CON   review.     Our   concern,   however,   chiefly      lies   in   the   state
authorities’ response to these lobbying efforts.          In this case, although
the district court did not expressly find that the defendant acted in bad
faith, the record, the stipulated facts, and the additional findings of the
court suggest that subjecting the plaintiff to review had the intended
effect of impeding or preventing access to abortions.            The district court
found that because of the fundamental change in the manner of delivery of
health care over the past several years, the provision of the CON statutes
that   excepted      physician-controlled      clinics   from    CON    review     were
consistently interpreted to include those facilities like the plaintiff’s
which characterized the new mode of health care delivery.              The testimony
of both Nervig and Riggenburg revealed that the broad tests used by the
Department in the past to determine whether a proposed clinic fell within
the exception to reviewability would certainly have brought PPI’s clinic
within the exception.        The plaintiff introduced evidence of specific
clinics across Iowa that were structured similarly to its proposed project
and which were exempted from CON review.         The plaintiff also

                                        -14-
introduced evidence of specific family planning clinics across Iowa which
were structured similarly to its proposed project, and which provided
essentially the same services, but not abortions, and which were exempted
from CON review.     Moreover, Department officials could not explain the
Department’s deviation from its past practice of exempting similar clinics
which did not offer pregnancy termination services to including the
plaintiff’s clinic which would offer such services.

     In light of the facts and circumstances surrounding the Department’s
decision to apply the CON requirements to PPI, we can not say the district
court clearly erred in finding the defendant would not have subjected the
plaintiff to CON review if the plaintiff had not intended to provide
pregnancy termination services. Where a requirement serves no purpose other
than to make abortions more difficult, it strikes at the heart of a
protected right, and is an unconstitutional burden on that right.    Casey
505 U.S. at 878, 112 S.Ct. at 2821.    Affirmed.

     A true copy.

           Attest:

                   CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.

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