Court Opinion

ID: 9596071
Source: CourtListenerOpinion
Date Created: 2023-08-22 00:45:52.743851+00
Date Added: 2024-06-11T18:01:32.081310
License: Public Domain

Justice KIRSHBAUM
specially concurring.
Although I agree with the conclusion reached in part II of the majority opinion that the hospital created by sections 23-21-401 to -410, 9 C.R.S. (1990 Supp.) (the Act), is a public rather than a private institution, I do so on grounds more narrow than those articulated by the majority. I join part III of the majority opinion, concluding, for the reasons set forth therein, that section 23-21-406, 9 C.R.S. (1990 Supp.), violates provisions of article XII, section 13, of the Colorado Constitution establishing the personnel system for this state’s public entities.
In adopting the Act, the General Assembly clearly intended to create a private, not a public, corporation. §§ 23-21-401(1)(e), -402(3), -403(1)(a), 9 C.R.S. (1990 Supp.). In the context of the facial constitutional challenge asserted by the plaintiffs in this action, the initial question is whether the Act as adopted achieves that goal. The factors relevant for a determination of whether an entity such as the hospital is in fact a private or a public entity include the source and purposes for the establishment of the institution and the source of ultimate authority and control over the institution’s policies, fiscal operations and provision of services. See Queen v. West Virginia Univ. Hosp., 365 S.E.2d 375 (W.Va.1987); Woodard v. Porter Hosp., Inc., 125 Vt. 419, 217 A.2d 37 (1966).
The majority does not suggest that an institution not “founded and maintained by private individuals or a private corporation” can never be deemed a “private” entity. (at 143). If that were the case, such governmentally created institutions as the Future Farmers of America, 36 U.S.C. § 271 (1988), and the Boy Scouts of America, 36 U.S.C. § 21 (1988), might be deemed public rather than private nonprofit corporations. The Legal Services Corporation, 42 U.S.C. § 2996 (1988), subject to great direct Congressional control, has been found to be a private, not a public, corporation. Spokane County Legal Serv. v. Legal Serv. Corp., 433 F.Supp. 278 (E.D.Wash.1977).
The inquiry must, as the majority indicates, focus on the degree to which governmental sources in fact exercise actual control over essential functions of a particular entity. In this case, I do not find the presumed authority of the regents to remove members of the hospital’s board of directors to be a critical factor. In considering a facial challenge to a statute, our responsibility is to ascertain whether a constitutionally valid construction is reasonable and practical in view of the purpose and context of the statute. See Mr. Lucky’s v. Dolan, 197 Colo. 195, 591 P.2d 1021 (1979). Section 23-21-404(1)(b) states in pertinent part as follows:
Nothing in this paragraph (b) shall be construed to limit the power of the regents to remove any director at any time.
§ 23-21-404(l)(b), 9 C.R.S. (1990 Supp.). On its face, this sentence neither grants unlimited authority to the regents to remove directors of the hospital nor indicates the extent of such authority. However, in section 23-21-403(l)(a), 9 C.R.S. (1990 Supp.), the General Assembly has provided that, unless otherwise established by the Act, the corporation “shall have all the rights and powers of a private nonprofit corporation organized under the laws of this state.” Construing these provisions together, in light of the admitted legislative intent to create a private corporation, I conclude that the board of directors of the hospital shall have the same authority to remove its members as do all other boards of directors of hospitals under their respective articles of incorporation and bylaws. See § 10-16-106(1), 4A C.R.S. (1987). Since the Act itself does not authorize the regents to adopt any rule or regulation defining the circumstances in which this removal authority may be exercised, the regents’ authority to remove directors may, in my view, be defined by valid rules or regulations adopted by the hospital’s board of directors. Such construction would support the legislative intent and give harmonious content to an otherwise problematical sentence.
As indicated, I do not agree that, properly construed, the final sentence of section *14923-21-404(l)(b) confers any impermissible control by the regents over the hospital’s policies or operations. Nor do I agree that the provisions of section 23-21-405, 9 C.R.S. (1990 Supp.), authorizing review of the hospital’s use of state funds by a separate board of visitors, establishes any measurable degree of control by the regents or state institutions over the hospital’s operations. Such review and reporting functions are consistent with legislative concerns over proper accounting for expenditures of state funds and, in my view, do not amount to impermissible government authority over daily operations.
However, I agree with the majority that the provisions of section 23-21-401(l)(g), 9 C.R.S. (1990 Supp.) (the General Assembly must approve any change in the hospital’s mission), section 23-21-404(l)(f), 9 C.R.S. (1990 Supp.) (the General Assembly must approve the transfer of the corporation to any entity other than the regents), section 23-21-404(l)(i) (the General Assembly may limit the aggregate indebtedness of the hospital), and section 23-21-404(l)(/) (the General Assembly may limit the ability of the hospital to amend its articles of incorporation), establish substantial governmental authority over essential features of the hospital’s activities. More significantly, the provisions of section 23-21-410(1), 9 C.R.S. (1990 Supp.), and section 23-21-410(2), 9 C.R.S. (1990 Supp.), require the regents, not the hospital’s board of directors, to determine by rules or regulations the basis for charges for all services rendered by the hospital and the allocation of all income received by the hospital from the provision of such services. The lodging of this ultimate control over the hospital’s fundamental policies and functions outside the authority of the hospital’s board of directors and wholly within the authority of the public regents establishes beyond a reasonable doubt that the direction and operations of the hospital will be determined by public, not private, personnel. No rules of statutory construction can alter the plain meaning of these statutory provisions. The effect, unfortunately, is to irreparably undermine the stated legislative intent. I therefore concur with the majority’s conclusion in part II of its opinion that the entity created by the Act is essentially public in nature.