Justice Harold Melton, Supreme Court of Georgia. John Disney /ALM

The Georgia Supreme Court has dismissed a challenge to the state's Certificate of Need law, turning aside a surgery center's arguments that having to obtain Department of Community Health permission before launching an expansion project violated its constitutional right to due process.

The high court held that the Certificate of Need (CON) law serves a legitimate state interest in ensuring that health care services are distributed reasonably and economically. It also said the law does not violate the Georgia Constitution's “Anti-Competitive Contracts Clause.”

The case drew national attention, with lawyers for the conservative Goldwater Institute in Colorado helping file the suit and the Pacific Legal Foundation in California and others filing amicus briefs supporting the Women's Surgical Center.

Monday's ruling by Justice Harold Melton did, however, agree that the surgical center had standing to bring its constitutional claims in court. The Department of Community Health had asked the justices to rule that the center had to exhaust all of its administrative appeals before filing suit.

The court upheld rulings by a Fulton County judge who first refused to dismiss the case on the administrative appeals grounds, then several months later tossed it, ruling that the law is not unconstitutional.

As detailed in court filings and Melton's order, the case began in 2014, when Drs. Hugo Ribot Jr. and Malcolm Barfield wanted to add a second operating room to their business, which does business as Georgia Advanced Surgery Center for Women in Cartersville.

Georgia's CON law, first passed in 1979, requires hospitals and certain other medical providers to obtain the clearance before opening a new facility, expanding or adding certain medical equipment.

The doctors sought a CON, but, according to their complaint, they were opposed by Floyd Medical Center, Wellstar Kennestone Hospital and Cartersville Medical Center, the last of which, according to the complaint, is across the street from the Women's Surgical Center.

The Department of Community Health denied the CON request, ruling that neither the surgery center nor other ambulatory centers in the area were operating at capacity. It held that allowing the expansion would cause “unnecessary duplication of services.”

In 2015, the center sued Department of Health then-Commissioner Clyde Reese and the department's planning director in Fulton County Superior Court. (Reese was named to the Georgia Court of Appeals last year; the new commissioner is Frank Berry.)

The complaint sought declaratory and injunctive relief, asking that the CON law be declared unconstitutional, arguing that it restrained competition and limited patient choice.

State Law Department lawyers urged Judge Jackson Bedford to dismiss the case, arguing that the declaratory judgment action was barred where no “actual controversy” existed between the parties, but Bedford declined to do so, Melton wrote.

The center faced an “actual and imminent” threat of injury, Melton wrote, and thus had standing to file suit.

But the center's claims that the CON law violates the due process clauses of the federal and state constitutions and the state's Anti-Competitive Contracts clause “are without merit,” Melton wrote.

The center argued that its due process claims were justified because the CON law “restricts competition among health care providers by requiring them to seek a CON before adding new services.”

But the high court has previously ruled that “promoting the availability of quality health care services” is as “legitimate legislative purpose,” Melton wrote, citing 2010's Gliemmo v. Cousineau, 287 Ga. 7.

The center had not shown that the CON law “does not bear a rational relationship to the legitimate government objectives” the law addresses or that its requirements are “arbitrary or discriminatory,” he said.

The Anti-Competitive Contracts Clause claims also miss the mark, he said, since the CON law “does not authorize monopolistic 'contracts' relating to providers of new institutional health services. It only requires that all such providers obtain a CON before adding new services.”

“While the CON requirement could have an impact on the expansion plans of certain providers within an existing market, this does not implicate the Anti-Competitive Contracts Clause of the Georgia Constitution in any way,” he said.

The center's lawyers include Atlanta solo Glenn Delk and Goldwater Institute attorney Jim Manley.

In a statement from the institute, Manley said the ruling “put profits over patient care. Georgia hospitals can still use the Certificate of Need bureaucracy to veto new options for care.”

A spokeswoman for Attorney General Chris Carr did not respond to a query.