Georgia Dep't of Cmty. Health v. Northside Hosp. Inc.

The superior court properly reversed the Department of Community Health's approval of a hospital's application for a certificate of need to develop an ambulatory surgery center in Cobb County, as the regulation the Department relied upon in making its determination was unconstitutionally vague.

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This case arises from the Department of Community Health’s the “Department” initial approval of the application of Kennestone Hospital, Inc. “Kennestone” for a certificate of need “CON” to develop an ambulatory surgery center “ASC” in Cobb County based on the Department’s determination that the ASC would be part of a hospital and, therefore, subject to less-stringent criteria to qualify for a CON. The Department determined that the ASC was part of a hospital under the provision for a case-by-case determination set forth under the Department’s Rule 111-2-2-.40 1 a. Northside Hospital, Inc. “Northside” opposed the CON and sought administrative review of the Department’s initial decision. An appeal panel and the Commissioner of the Department upheld the Department’s initial determination. Northside then filed a petition for judicial review in the superior court. The superior court reversed the Department’s final decision on the basis that the “case-by-case” provision in the Department’s Rule 111-2-2-.40 1 a was unconstitutionally vague because it lacked ascertainable standards and specific guidelines to limit the Department’s discretion. We granted the discretionary applications for review filed by the Department and Kennestone.

In Case A13A0936, the Department contends that Northside lacked standing to assert a vagueness challenge to Rule 111-2-2-.40 1 a, and that the superior court erred in concluding that the rule was unconstitutionally vague. In Case A13A0937, Kennestone further contends that the superior court erred in finding the rule to be unconstitutionally vague and in failing to apply judicial estoppel to prevent Northside from challenging the constitutionality of the rule since it had previously obtained favorable determinations under it. We conclude that the superior court’s decision must be affirmed because the lack of ascertainable standards to guide the Department’s “case-by-case” review under Rule 111-2-2-.40 1 a gives the agency unfettered discretion and fails to provide fair notice to prospective applicants.1

Georgia Dep't of Cmty. Health v. Northside Hosp. Inc.

The superior court properly reversed the Department of Community Health's approval of a hospital's application for a certificate of need to develop an ambulatory surgery center in Cobb County, as the regulation the Department relied upon in making its determination was unconstitutionally vague.

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