Court Opinion

ID: 5846777
Source: CourtListenerOpinion
Date Created: 2022-01-12 23:48:12.083252+00
Date Added: 2024-06-11T08:43:56.942988
License: Public Domain

Kane, J.
(concurring). Although the orders before us should be affirmed, I do not subscribe to the majority’s reasoning in Action No. 1 or to its analysis regarding Standard Scanning Associates, Inc. (SSA) in Action No. 2. The record developed in this litigation persuades me that injunctive relief should be denied solely because the scanner became operational before a proper application was made for judicial intervention, a circumstance for which the Health Department is largely responsible.
St. Joseph’s press release, dated August 31, 1978, stated that “[a] professional corporation has requested and received authorization * * * to lease rental space in which to house a CT Scanner in the Elmira Medical Arts Center.” FLHSA immediately asked it to reconsider its decision and, on October 2, 1978, the Health Department issued an order that St. Joseph’s “immediately cease and desist from any and all construction necessary to the installation” of the scanner. Scanner Diagnostic Services, P.C. (SDS) was thereafter formed, in apparent contradiction of the release, and SSA agreed to buy a scanner with delivery scheduled for February 15,1979. By service of an order to show cause dated February 8, 1979, an action was commenced by Finger Lakes Health Systems Agency (FLHSA) against St. Joseph’s, its administrator and chairman, the Department of Health, and the Attorney-General. On February 28, 1979 a notice was issued by the Health Department that it would conduct an investigatory hearing on March 20, 1979 to determine whether St. Joseph’s was in violation of article 28 of the Public Health Law. While the complaint *410in that action was not made a part of the record, the answer of the Attorney-General and the Health Department, dated March 2, 1979, objected in point of law that no request had been made of the former to maintain an action against St. Joseph’s and, in light of the pending hearing, that there had been no final administrative determination by the latter upon which FLHSA could force the Commissioner of Health to perform some duty. On March 14, 1979, Special Term made an order dismissing this action on the ground it was premature as to the Attorney-General and the Health Department, and because jurisdiction had not been obtained over the remaining defendants. It does not appear that any appeal was taken from this order. Meanwhile, a lease was executed between SDS and St. Joseph’s on March 2, 1979. Action No. 1 was thereafter commenced by FLHSA. It obtained an order to show cause dated March 13, 1979 bringing on an application for a preliminary injunction, but Special Term’s decision denying relief indicates that the scanner was in operation before the motion was heard. The Health Department conducted its hearings on March 20, 1979 and April 27, 1979. A representative of the Health Department, in a letter dated August 8, 1979, requested the Attorney-General to commence what later became Action No. 2. Lastly, on August 24, 1979, the hearing officer issued his report concluding that he was unable to determine whether St. Joseph’s was offering the services of a scanner.
The foregoing sequence of events readily demonstrates that St. Joseph’s proceeded openly with its arrangements to acquire a scanner even after the Health Department was sufficiently aware of and concerned about those plans to issue an order of cessation. Over four months later, when finally prodded into some further efforts to arrest the project by FLHSA’s first lawsuit, the Health Department scheduled a hearing into the circumstances of the matter, but strenuously resisted being compelled to take legal action against St. Joseph’s. Thereafter, following the denial of FLHSA’s application for a preliminary injunction in Action No. 1, the Health Department requested the Attorney-General to bring suit to enjoin St. Joseph’s operation of a scanner. Interestingly, this apparent reversal of position *411occurred before the hearing officer issued his report on the investigation.
As a not-for-profit corporation, FLHSA plainly has legal capacity to sue and be sued (Not-For-Profit Corporation Law, § 202, subd [a], par [2]). The chief purpose of such an agency is to make recommendations on applications to construct hospitals in an effort to control spiralling medical costs (see US Code, tit 42, § 3001 et seq.; Public Health Law, § 2802, subds 1, 2). Construction is defined to include substantial improvement or modification of a hospital, including its equipment (Public Health Law, § 2801, subd 5), and the Commissioner of Health may not take action contrary to the advice of a health systems agency on such applications without giving it an opportunity to request a public hearing (Public Health Law, § 2802, subd 5). AI: though its functions are largely advisory in nature, I fail to understand how an agency intimately concerned with hospital planning and cost containment can be denied standing to litigate whether the activities of St. Joseph’s in procuring scanner services required prior approval. Of course it might conceivably be found, on the merits, that those endeavors lie outside the scope of article 28 of the Public Health Law, but if an individual physician has standing to seek relief in the courts from a threatened violation of that article (Matter of Fritz v Huntington Hosp., 39 NY2d 339, 346), it would be illogical to deny judicial access to FLHSA on a matter which touches on its very reason for existence. The denial of standing would obviously injure its ability to completely discharge its proper responsibilities. It would be academic, however, to pass on FLHSA’s alternate request for a declaration of rights in Action No. 1 since it is apparent that effective relief could no longer be granted even if the article was violated.
In Action No. 2, summary judgment should be granted to SSA and its president simply because it would be inequitable to direct the removal of its scanner at this late date. The majority views SSA as the mere owner of a piece of machinery not subject to article 28 control. However, the pleadings herein reveal far more than the casual lease of a scanner from an independent supplier. The re*412lationships between St. Joseph’s, SDS and SSA point to a studied attempt to evade the application and approval process. Whether that objective was accomplished in a legally acceptable manner is immaterial now, but the issue may recur in the future and this court should not prematurely give its indorsement to this practice.
Mahoney, P. J., Sweeney and Weiss, JJ., concur with Casey, J.; Kane, J., concurs in a separate opinion.
Orders affirmed, without costs.