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4040 - Commander Health Care Facilities v. SCDHEC

THE STATE OF SOUTH CAROLINA
In The Court of Appeals


Commander Health Care Facilities, Inc., Appellant,

v.

South Carolina Department of Health and Environmental Control and Heritage Home of Florence, Respondents.


Appeal From Florence County
 James E. Brogdon, Jr., Circuit Court Judge


Opinion No. 4040
Heard September 12, 2005 – Filed November 7, 2005


REVERSED AND REMANDED


Wm. Howell Morrison and Phyllis W. Ewing, both of Charleston, for Appellant.

Cheryl Harris Bullard and Matthew Summers Penn, both of Columbia and Karl A. Folkens and Philip B. Atkinson, both of Florence, for Respondents.

HEARN, C.J.:  In this declaratory judgment action, Commander Health Care Facilities, Inc. appeals the circuit court’s grant of summary judgment in favor of the South Carolina Department of Health and Environmental Control and Heritage Home of Florence.  We reverse and remand.

FACTS

Commander Health Care Facilities and Heritage Home of Florence both operate nursing home facilities in Florence County.  In 1997, Heritage Home applied for and was granted a certificate of need by the South Carolina Department of Health and Environmental Control (DHEC) for the replacement of 44 Medicaid beds with 44 residential care beds.  In May 1998, Heritage Home applied for another certificate of need for the addition of 60 new nursing home beds to be dedicated to serving Medicaid patients.

In June 1998, the South Carolina legislature passed the 1998 Appropriation Bill, including Proviso 9.35 which appropriated funds for Medicaid patient days for the 1998-1999 fiscal year.  This bill, which became effective on July 1, 1998, authorized a substantial number of additional Medicaid patient days and set forth provisions for granting permits for the additional Medicaid days “notwithstanding any other provision of law.”  At the time this bill passed, Heritage Home had already requested approval of additional Medicaid beds through the May certificate of need.

In September 1998, DHEC Commissioner Douglas E. Bryant wrote Senator Hugh Leatherman of Florence, requesting an interpretation of Proviso 9.35.  As a result of that letter, Bryant and Senator Leatherman researched the legislative intent of the proviso and determined the proviso applied to currently licensed beds plus those nursing home beds issued under a 1998 certificate of need.  Senator Leatherman also opined in the letter that Proviso 9.35 would allow for the expansion of Medicaid beds without requiring a certificate of need.  Commissioner Bryant stated the “legislative intent was to maximize the number of beds available.”  Moreover, Albert Whiteside, Director of the Division of Planning and Certification of Need with DHEC, testified because the number of new Medicaid beds approved by the legislature in 1998 exceeded the number of requests for additional Medicaid beds from nursing homes, no application for new Medicaid beds was denied in 1998.

On October 5, 1998, DHEC authorized Heritage Home to license 44 additional Medicaid beds under Proviso 9.35 and withdrew Heritage Home’s pending May 1998 certificate of need.  DHEC never issued a certificate of need for the new Medicaid beds; the only approval was pursuant to Proviso 9.35.  Commander never applied for any of the additional Medicaid beds under Proviso 9.35.  Nor did DHEC deny Commander approval for additional beds under the proviso.   

In June 2000, Commander filed a declaratory judgment action seeking to overturn DHEC’s approval of additional new Medicaid beds for Heritage Home.  Commander also sought a declaration that DHEC’s grant of permission to Heritage Home to build new Medicaid beds under Proviso 9.35 without obtaining a formal certificate of need was in violation of the provisions of the South Carolina Code prohibiting special legislation.  In addition, Commander sought a permanent injunction prohibiting DHEC from authorizing the construction of new Medicaid beds under Proviso 9.35 without requiring facilities to obtain a formal certificate of need.   Commander and Heritage, together with DHEC, filed cross-motions for summary judgment.  Heritage Home and DHEC argued Commander lacked the standing necessary to maintain the declaratory judgment action.  The circuit court agreed, and granted the motion.   This appeal followed.

LAW/ANALYSIS

Commander argues the circuit court erred in (1) finding Commander lacked standing, and (2) granting summary judgment in favor of Heritage Home and DHEC.  We agree.

I.                  Standing

Commander contends the circuit court erred in finding that it suffered no injury in fact, and therefore, lacked standing to maintain the declaratory judgment action.  We agree.

As a general rule, to have standing, a litigant must have a personal stake in the subject matter of the litigation.[1]  Glaze v. Grooms, 324 S.C. 249, 478 S.E.2d 841 (1996).  Moreover, a private individual may not invoke the judicial power to determine the validity of an executive or legislative act unless the private individual can show that, as a result of that action, a direct injury has been sustained, or that there is immediate danger a direct injury will be sustained.  Joytime Distribs. & Amusement Co., Inc. v. State, 338 S.C. 634, 639, 528 S.E.2d 647, 649-50 (1999).   The injury must be of a personal nature to the party bringing the action, not merely of a general nature that is common to all members of the public. Quality Towing, Inc. v. City of Myrtle Beach, 340 S.C. 29, 34, 530 S.E.2d 369, 371 (2000).

However, “the rule of standing is not an inflexible one.”  Thompson v. South Carolina Comm’n on Alcohol & Drug Abuse, 267 S.C. 463, 467, 229 S.E.2d 718, 719 (1976).  Standing may be conferred upon a party “when an issue is of such public importance as to require its resolution for future guidance.”  Baird v. Charleston County, 333 S.C. 519, 531, 511 S.E.2d 69, 75 (1999).  Recently, South Carolina courts have held standing may be conferred upon a party when an issue is of such public importance as to require its resolution for future guidance.  See Sloan v. Wilkins, 362 S.C. 430, 608 S.E.2d 579 (2005); see also Sloan v. Sanford, 357 S.C. 431, 593 S.E.2d 470 (2004) (finding standing existed to challenge governor’s commission as an officer in the Air Force reserve); Sloan v. Greenville County, 356 S.C. 531, 548, 590 S.E.2d 338, 347 (Ct. App. 2003) (finding standing to bring declaratory judgment action alleging county failed to comply with ordinances governing procurement of construction services on design-build public works projects).

In Sloan v. Wilkins, 362 S.C. 430, 608 S.E.2d 579 (2005), a taxpayer sought to challenge a legislative enactment as violative of the South Carolina Constitution.  Sloan challenged the legislative enactment as violative of the South Carolina Constitution’s “one subject provision” as found in Art. 3, section 17.  Wilkins argued Sloan lacked the standing necessary to maintain an action challenging the legislative enactment.  The supreme court, in its original jurisdiction, found Sloan had the standing to challenge the legislative enactment “in light of the great public importance of this matter.”  Wilkins, 362 S.C. at 437, 608 S.E.2d at 583.  The supreme court held that “standing may be conferred upon a party when an issue is of such public importance as to require its resolution for future guidance.”  Id.

Similar to the action taken in Wilkins, Commander seeks to challenge a legislative enactment, Proviso 9.35 of the 1998 Appropriations Bill, as violating the established certificate of need program as required by the State Certificate of Need and Health Facility Licensure Act contained in section 44-7-110, et seq. of the South Carolina Code (2002).  We deem the legislature’s funding and regulation of the state’s nursing home facilities, especially the regulation of Medicaid and Medicaid spending, an issue of great public importance.  Moreover, the legislature has the opportunity in each year’s Appropriations Bill to regulate the nursing home industry and corresponding Medicaid requirements.  Therefore, in light of the great public importance and need for future guidance for the legislature in this area, we find Commander has standing to maintain this action.

II.               Summary Judgment

Commander argues the circuit court erred in granting summary judgment in favor of Heritage and DHEC.  Specifically, Commander contends a material issue of fact exists as to whether the term “Medicaid patient days” as used in Proviso 9.35 is synonymous with the use of “Medicaid patient beds” as used in the certificate of need program.  We agree.

In reviewing the grant of a summary judgment motion, the appellate court must apply the same standard which governs the trial court under Rule 56, SCRCP.  South Carolina Elec. & Gas Co. v. Town of Awendaw, 359 S.C. 29, 34, 596 S.E.2d 482, 485 (2004).  Summary judgment is appropriate when there are no genuine disputes of material facts and a party is entitled to a judgment as a matter of law.  Rule 56, SCRCP; Etheridge v. Richland School Dist. One, 341 S.C. 307, 311, 534 S.E.2d 275, 277 (2000).  “In determining whether any triable issues of fact exist, the evidence and all reasonable inferences therefrom must be viewed in the light most favorable to the non-moving party.”  Osborne v. Adams, 346 S.C. 4, 7, 550 S.E.2d 319, 321 (2001).  “On appeal from an order granting summary judgment, the appellate court will review all ambiguities, conclusions, and inferences arising in and from the evidence in a light most favorable to the non-moving party below.”  Id.

Here, Heritage applied for the additional Medicaid beds under Proviso 9.35, and its original certificate of need for the beds was withdrawn.  Based on Heritage’s application for the beds under the Proviso, DHEC issued 44 additional Medicaid beds.  Proviso 9.35 addresses provisions for granting permits for the “additional Medicaid days” while the Certificate of Need program focuses on “additional Medicaid beds.”  DHEC maintains the terms are used interchangeably, and that one Medicaid bed equals 365 Medicaid patient days, therefore enabling DHEC to grant the 44 beds under the Proviso.  However, DHEC cannot point to any case, statute, regulation, or provision that has established this “formula” to be the universally accepted definition in the nursing home community.  Therefore, we find a material issue of fact exists as to whether the term “Medicaid patient days” as used in Proviso 9.35 is synonymous with the use of “Medicaid patient beds” as used in the certificate of need program.  Accordingly, the circuit court erred in granting summary judgment in favor of Heritage Home and DHEC.

CONCLUSION

Because the circuit court erred in finding Commander lacked standing, and in granting summary judgment in favor of Heritage and DHEC, the decision of the circuit court is hereby

REVERSED and REMANDED.

BEATTY and SHORT, J.J. concur.


[1] “A party seeking to establish standing must prove the ‘irreducible constitutional minimum of standing,’ which consists of three elements: (1) the plaintiff must have suffered an injury in fact; (2) the injury and the conduct complained of must be causally connected; and (3) it must be likely, rather than merely speculative, that the injury will be redressed by a favorable decision.”  Sea Pines Ass’n for the Prot. of Wildlife v. South Carolina Dep’t of Natural Res. & Cmty. Servs. Assocs., Inc., 345 S.C. 594, 601, 550 S.E.2d 287, 291 (2001) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 55 (1992)).