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Global Diagnostic Dev. LLC v. Diagnostic Imaging of Atlanta

The trial court erred in failing to give deference to the State Health Planning Review Board's final decision to grant a certificate of need to the first appellant to purchase the equipment and assets of a diagnostic imaging center, which is under a cease and desist order issued by the Georgia Department of Community Health.

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In 2001, North Atlanta Scan Associates, Inc., relocated its diagnostic imaging center from one Atlanta location to another. In 2003, the Georgia Department of Community Health issued a cease and desist order, directing North Atlanta to shut down its facility because it had failed to obtain the required certificate of need before relocating the imaging center.1 Thereafter, Global Diagnostic Development, LLC, applied to the department for a certificate of need, proposing to purchase the equipment and assets of North Atlanta for the purpose of operating a diagnostic imaging center at that same location. The department granted the certificate of need, allowing the transfer of the North Atlanta equipment and assets to Global. Northside Hospital, Inc., and Diagnostic Imaging of Atlanta, competitors with Global, appealed the department’s decision to grant the certificate of need, arguing that the sale of assets from North Atlanta to Global is a sham transaction because both companies are owned by the same person, Dr. Howard Rosing. A hearing officer affirmed the department’s decision to grant the certificate of need to Global, and the State Health Planning Review Board affirmed the hearing officer’s decision.

Northside and Diagnostic sought judicial review, and the superior court reversed the board’s final decision. Global and the department filed separate applications for discretionary review of the trial court’s ruling in favor of Diagnostic and Northside. Because the appeals arise from the same facts and raise the same issues, they shall be considered together in this opinion.

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