Court Opinion

ID: 9645794
Source: CourtListenerOpinion
Date Created: 2023-08-22 21:35:24.500193+00
Date Added: 2024-06-11T18:11:31.677138
License: Public Domain

FLANDERS, Justice,
concurring in part dissenting in part
Although I agree with that portion of the Court’s opinion holding that the De*814partment of Health (department) has standing to seek review of the Superior Court’s judgment, I respectfully dissent with respect to its application of the doctrine of administrative finality in this case. Even assuming, without deciding, that the department’s director owed no special deference to the recommendations of the Health Services Council (council), I do not believe that the doctrine of administrative finality should apply to this type of administrative proceeding, which depends so heavily on a showing of “demonstrated need at the time and place and under the circumstances proposed * * *.” G.L.1956 § 23-15-4(f)(l). (Emphasis added.) Because of volatile conditions in the rapidly evolving market for health-care services, the very same new health-services proposal that fails to win approval at one time and place for lack of need, may succeed at a later time and place, based upon conditions external to the application itself. These would include changes in the relative need for the proposed health-care project as shown by the variable market conditions prevailing when the later application is considered, as well as how the then-incumbent health-care authorities assess the proposal in light of such need.
Here, the certificate-of-need (CON) enabling legislation requires that time-sensitive, health-care policy considerations, rather than legalistic doctrines like collateral estoppel and res judicata, should control whether applications like this one merit approval. The CON enabling legislation contains no restrictions on the successive filing and approval of applications in subsequent review cycles after the department’s director has denied an initial request for approval. Indeed, the legislation at issue implicitly allows such subsequent applications to be resubmitted without the necessity of demonstrating any material change in circumstances because it requires the state agency to undertake a review of pending applications “no less often than twice a year,” § 23 — 15—6(b)(1), and requires written notification to the applicant of the agency’s final decision within 120 days after notifying those affected about the application. See § 23-15-6(b)(2). The enabling act thereby implicitly endorses the filing of successive applications during subsequent review periods. Only when an applicant seeks reconsideration of a previously filed application must it satisfy certain statutory requirements warranting such reconsideration. See § 23 — 15—6(b)(9)(i)—(iv). But reconsideration is a different matter than a refiling of the application during a later review period or a filing of a new application altogether: the first does not require the entire application to be refiled, and it avoids the paperwork, costs, hearings, and other procedural requirements that a refiled or new application must meet. Most significantly, only reconsiderations, not refilings or new filings, are subject to satisfying the change factors detailed in § 23 — 15—6(b)(9) (for example, showing “significant changes in factors or circumstances relied upon by the state agency in reaching its decision,” id. at § 23-15-6(b)(9)(ii)).
Thus, the judicial imposition of an administrative-finality requirement on successive applications imposes a legalistic construct on the CON process that draws no support from the legislation that created it. And because of the chilling effect that such a finality requirement imposes on innovative health-care initiatives, I believe that it is an ill wind that blows, one that stunts economic growth, stifles entrepreneurial creativity, and stultifies competition in an otherwise dynamic and rapidly changing health-care market.
It also disinters the dead hand of a long-since-departed director of the department, one whose policy views were rejected not only by the council that initially recommended the proposed JASA surgical center, but also by the present council and director, both of whom have concluded that this project is both needed and affordable, and, therefore, should be approved. Thus, the majority of the Court allows the *815parting blow of an absconding health-care director to kill this proposal again, long after her repudiated policy should have been dead and buried.
Moreover, even if (contrary to § 23-15-6) the enabling legislation in question had required subsequent CON applications to evince significant changes in the facts or circumstances that existed when the original application was denied, this application and the relevant administrative record show that such significant changes did exist. Although Johnston Ambulatory Surgical Associates Limited’s (JASA) 1994 and 1995 CON applications prayed for the same relief, the 1995 application contained additional material demonstrating the existence of public need. For instance, the 1995 Zimmerman update supported the need for nine additional outpatient operating rooms during the period 1996 through 1999. In its 1996 report, the health-services council found this estimate to be “conservative at best.” Consistent with this finding, JASA’s 1995 application also demonstrated that other outpatient surgical care centers were performing procedures more often and of a more complicated nature in 1995 than previously had been expected. Thus, the council concluded— and the director incorporated this conclusion by reference — that “[t]he competent testimony in the record demonstrates the need for the outpatient surgery setting proposed by JASA. * * * Where JASA and St. Joseph’s [sic ] differ, is on JASA’s ability to provide the outpatient surgery in an innovative setting where the surgery is conducted more efficiently, benefiting the patient and the doctor, and on a more cost effective basis.” The trial justice acknowledged these changed circumstances, but concluded that the differences did not “reflect any substantial or material change in circumstances.” This conclusion, however, reflects an inappropriate weighing of this evidence by the trial justice that violated the applicable G.L.1956 § 42-35-15(g) standard of review, forbidding the court from “substituting] its judgment for that of the agency as to the weight of the evidence on questions of fact.”
Instead of searching the administrative record for any evidence of material changed circumstances since the former director denied the original application, the reviewing trial justice, on his own initiative and without any request to do so from any party (including the objecting hospital), determined that he should apply the doctrine of administrative finality to overturn the judgment of this state’s present healthcare policymakers and find that the proposed surgical center was a project unworthy of their approval. But when the trial justice concluded that these changes in JASA’s 1995 application were not substantial enough to warrant a reversal of the previous director’s denial of the earlier request, he substituted his judgment for that of the current health-care officials who found otherwise and who then approved the application. In my judgment, he had no business or legal warrant to do so.
The majority concedes that, if it ever were “to examine the evidence and draw conclusions therefrom, we might conclude that circumstances have changed sufficiently to warrant a reversal of the decision on the 1994 application.” It then asserts, however, that “it is not the role of this Court, nor is it the role of the trial justice, to engage in such an analysis,”8 but only to determine “whether there was sufficient competent evidence to support the findings made by the administrative agency.” Although neither the department’s director (Nolan) nor the council made any such explicit finding of changed circumstances vis-a-vis the 1994 application, they did find that JASA had established the requisite need for its 1995 proposal. And because neither the enabling statute nor any prior ruling of this Court had alerted the department that it was *816required to make such a changed-circumstances finding, I find it hard to fault them for this omission. Thus, instead of seizing on the technicality that Director Nolan’s decision was “inadequate because it contained no finding in respect to any changed circumstances warranting reversal of De-Buono’s decision on the 1994 application,” I would, as an alternative to reversing the trial justice, direct the Superior Court to remand this case to the department to give it the opportunity to make such a finding.
As this Court stated in Lemoine v. Department of Mental Health, Retardation and Hospitals, 113 R.I. 285, 320 A.2d 611 (1974), a remand is
“intended as a safety valve, permitting the reviewing court to require a second look at situations and conditions which might not warrant a reversal, but which, to the court reviewing the record, would indicate to it that the * * * [agency] may have acted on incomplete or inadequate information; or may have failed to give adequate consideration to an alternative route * * *.
“A remand for further consideration is not a determination that the [agency] is wrong; but it is an indication that the disinterested court, which has reviewed the record, is not satisfied on the basis of that record that the [agency] is right.” Id. at 291-92, 320 A.2d at 615 (quoting State ex rel. Gunstone v. State Highway Comm’n, 72 Wash.2d 673, 434 P.2d 734, 735 (1967)).
Given that the record contains evidence from which even the majority “might conclude that circumstances have changed sufficiently to warrant a reversal of the decision on the 1994 application,” the Court is simply elevating form over substance in refusing to direct the Superior Court to remand this case to the present director of the department so she can have the opportunity to make what the Court now says is the requisite finding based upon these changed circumstances. Such a remand is especially appropriate when this Court is announcing a new rule of law that is not apparent on the face of the statute, that pertains to an issue that no person or party raised before the agency or the reviewing court, and that is contrary to the historical practice of the agency in question. Cf. Taglianetti v. Fontaine, 105 R.I. 596, 601, 253 A.2d 609, 612 (1969) (stating, in a bail-proceeding context, that “[p]rior to our decision [in that case], the rules governing a proceeding of [that] type were uncertain” and “[f]or [that] reason, [the Court] remand[ed] th[e] cause to the superior court * * * ”). Other jurisdictions also prefer to remand cases upon similar circumstances. See, e.g., V.C. v. M.J.B., 163 N.J. 200, 748 A.2d 539, 555 (2000) (stating that “[o]rdinarily, when [the New Jersey Supreme Court] announces a new standard, [it] remandfs] the case to the trial court for reconsideration”).
I also respectfully suggest, however, that there is a good reason why the vast majority of other jurisdictions in states throughout this country have no administrative-finality doctrine similar to the one the majority applies to the applicant in this case. Such a rule, as applied to administrative policymaking under this type of a need-based enabling statute, is bad law, bad policy, and, taken to its extreme, wrongly imposes an overly legalistic and technocratic regime on administrative poli-cymaking in the protean field of new health-care services without any legislative warrant to do so.
Other jurisdictions have warned against exactly this kind of “too doctrinaire” application of this rule, since the actions of administrative agencies, unlike those of courts, usually involve “deciding issues according to a public interest that often changes with shifting circumstances and passage of time.” McCaw Communications of Florida, Inc. v. Clark, 679 So.2d 1177, 1179 (Fla.1996). For this reason, the doctrine of administrative finality should not necessarily preclude an agency from revisiting an earlier order. See id.
*817As the majority admits, the Rhode Island cases it cites to support its application of the doctrine of administrative finality involve adjudication of land-use matters— such as appeals of zoning board decisions or environmental agency matters (Palazzolo v. State, 746 A.2d 707 (R.I.2000), petition for cert. filed (U.S. June 21, 2000) (No. 99-2047); Audette v. Coletti, 539 A.2d 520 (R.I.1988)) — areas in which the majority’s application of administrative finality arguably makes more sense than it does here. The adjudication of land-use disputes requires a greater need for stability and predictability than need-based policy decisions in the dynamic health-care market of today. The majority also cites Department of Corrections of the State of Rhode Island v. Tucker, 657 A.2d 546, 548 (R.I.1995), which concerned an appeal by a corrections officer of a decision of the Personnel Appeal Board of the state to the Rhode Island Commission for Human Rights. Tucker, however, did not involve an appeal to the same body that made the original decision, as is the case here. Tucker merely stands for the proposition that claim preclusion should occur when an adjudicative decision of one administrative agency is appealed, after a decision, to a different agency. Thus, it has no application to the kind of administrative policy decisions that are at issue here.
In § 42-35-15(g), the Legislature intended for the reviewing court to defer to the expertise of the administrative agency on questions of fact because the director and the council are in a better position than the trial justice to know and understand the factors affecting the public’s need for health-service proposals and, thus, to judge the credibility, weight, and materiality of JASA’s additional evidence presented in support of its 1995 application. Whether a public need exists for this particular surgical-care center is primarily a question of fact and of health-care policy and, therefore, it fell squarely within the purview of the department. Director Nolan specifically found that the 1995 application contained sufficient evidence of public need to approve the CON. Even though the trial justice reviewed the record and acknowledged the changes regarding the evidence of public need, he determined that they were not substantial enough to justify a change in the agency’s 1994 decision. But his obvious weighing of this evidence ignored the deferential “any competent evidence” standard of review that the court should have applied. Thus, in my judgment, the trial justice committed reversible error when he substituted his judgment for the agency on this issue.
In Capaldo v. Public Utility Hearing Board, 77 R.I. 378, 383, 75 A.2d 302, 305 (1950), we held that the Public Utility Hearing Board could not preclude a rede-termination of public need if the evidence presented demonstrated the existence of public need at a later time. In this case, by applying the doctrine of administrative finality to this agency’s initial denial of an application that may have been premature or ahead of its time when it was first denied, the majority’s decision forecloses the department’s reassessment of public need for proposals like this one that may not be ripe for approval when they are first considered and denied but become so later as more data establish the existence of need. In my judgment, however, it is a mistake to apply administrative finality to policy decisions like this one that are based on a time-specific and place-sensitive assessments of public need.
The virtue of administrative finality is to conserve agency, intervenor, and judicial resources from being wasted on repetitive hearings of the same evidence on the same issues. But a redetermination of the public’s need for a proposed health-care services project does not undermine this worthy goal because the need for these services is subject to rapid change and the hearings on any refiled application can be confined and limited to whatever evidence of need is new or different from that previously submitted. The CON statute also allows for such redeterminations by not *818precluding successive applications in later review periods. Moreover, the department’s unfettered ability to reevaluate the public’s health-care needs vis-á-vis a specific proposal “at the time and place and under the circumstances proposed” is critical to the health and well-being of Rhode Island citizens. If the benefits of the administrative-finality doctrine needed to be balanced against the assurance of adequate health-care resources for our community, the Legislature has come down squarely in favor of the latter. Thus, judicially force-feeding the doctrine of administrative finality into Rhode Island’s health care system will prove a bitter pill for the public to swallow. Instead of encouraging applicants to present their innovative health-services proposals for certification as soon as they become available, administrative finality will tend to dissuade them from doing so because they may, as a practical matter, get only one shot at approval. And if they fail to win the director’s approval upon his or her initial review, they may thereafter fail forever, because no matter how much market conditions and the need for such a proposal may change over time, some reviewing trial justice may think that these changes are not as significant as the state’s healthcare policymakers say they are, thereby dooming such proposals to perpetual rejection because of administrative finality.
Accordingly, I would reverse the trial justice’s sua-sponte decision to apply administrative finality to this situation because the court erred in substituting its judgment for that of the state’s current health-care administrators concerning whether JASA’s application was needed as a matter of health-care policy. Alternatively, I would vacate the Superior Court’s judgment and direct that it remand this case to the department so that it can analyze and determine whether JASA’s 1995 application established changed circumstances sufficient to warrant reversal of Director DeBuono’s decision denying its 1994 application.
Chief Justice WEISBERGER did not participate.

. Note that the trial justice did engage in such an analysis, substituting his judgment for the Department of Health concerning the significance of these changed circumstances.