ELECTRONICALLY FILED 2/3/2011 4:23 PM CV-2010-001587.00 CIRCUIT COURT OF MONTGOMERY COUNTY, ALABAMA FLORENCE CAUTHEN, CLERK IN THE CIRCUIT COURT OF MONTGOMERY COUNTY STATE OF ALABAMA
BROOKWOOD HEALTH SERVICES, INC. d/b/a BROOKWOOD MEDICAL CENTER and ST. VINCENT'S HEALTH SYSTEM;
Appellants/Petitioners,
v.
CASE NUMBER: CV-2010-001587.00 AFFINITY HOSPITAL, LLC d/b/a TRINITY MEDICAL CENTER OF BIRMINGHAM and ALABAMA STATE HEALTH PLANNING AND DEVELOPMENT AGENCY, an agency of the State of Alabama,
Appellees/Respondents.
MOTION TO QUASH
Pursuant to Alabama Rule of Civil Procedure 26 and Ala. Code § 41-22-20,
Appellee/Respondent Affinity Hospital, LLC d/b/a Trinity Medical Centers of Birmingham
(“Trinity”) respectfully moves this Court for an order quashing the discovery requests served by
Appellant/Petitioner Brookwood Health Services, Inc. d/b/a Brookwood Medical Center
(“Brookwood”).1 In support of this Motion, Trinity shows the Court as follows:
I. INTRODUCTION
This action asks the Court to review the State Health Planning and Development
Agency’s (“SHPDA”) final order granting Trinity’s request to relocate its hospital from
Montclair Road to Highway 280. Under the Alabama Administrative Procedures Act, the
Court’s review of that decision is limited to the administrative record generated during the agency proceedings and the decision must be affirmed if it is supported by any evidence in the
1 In bringing this motion, Trinity expressly reserves all objections to Brookwood’s discovery requests.
1137335.1 administrative record. Nevertheless, with the filing of its Petition for Judicial Review,
Brookwood served written discovery requests, deposition notices, and notices of intent to serve
third-parties with subpoenas (collectively, the “discovery requests”). The discovery requests
seek information relating to: (1) representations made in Trinity’s CON application; (2) Trinity’s
decision to forego its CON to relocate to Irondale in favor of applying for a CON to relocate to
Highway 280; and (3) negotiations between Trinity and the owner of the site on Highway 280.
All of these issues were litigated in the SHPDA proceedings and Alabama law does not allow
Brookwood to relitigate them in this forum. Accordingly, the Court must quash Brookwood’s discovery request. Otherwise, it would be exceeding the authority vested in it by the Alabama
Administrative Procedures Act.
II. STATEMENT OF RELEVANT FACTS
1. On December 1, 2008, Trinity filed an application for a Certificate of Need
(“CON”) to move its hospital from its current location on Montclair Road to the former
HealthSouth building on Highway 280 in Birmingham. A true and correct copy of Trinity’s cover letter to its CON application is attached hereto as Exhibit A.
2. Thereafter, Brookwood and St. Vincent’s Health System filed Notice[s] of
Intervention and Request[s] for a Contested Case Hearing. True and correct copies of those filings are attached hereto collectively as Exhibit B.
3. On April 20, 2009, while this matter was pending before the State Health
Planning and Development Agency (“SHPDA”), Brookwood served proposed Joint
Consolidated Discovery Requests on Trinity. True and correct copies of the Joint Consolidated
Discovery Requests are attached hereto as Exhibit C. Brookwood also served seven proposed subpoenas. True and correct copies of those subpoenas are attached hereto as Exhibit D.
1137335 2 4. On April 30, 2009, Trinity filed a Motion to Limit Discovery. A true and correct copy of the Motion to Limit Discovery is attached hereto as Exhibit E. In the Motion to Limit
Discovery, Trinity noted that the Certificate of Need Review Board’s (the “CON Board”) rules state that “substantial information is contained in applications for Certificates of Need” therefore discovery requests “are not favored, and it is recommended that the discretion to authorize such discovery be exercised against permitting such discovery, or that any such discovery be limited to the most rare and unusual circumstances.” Id. at pp. 2-4 (quoting CON Board Rule 410-1-8-
.02(6) and citing Ex Parte Wilbanks Health Care Servs., Inc., 986 So. 2d 422, 427 (Ala. 2007)
(holding that an agency must “vigorously comply” with its own administrative regulations).
5. On July 17, 2009, Brookwood filed a Motion to Compel discovery responses from
Trinity. A true and correct copy of the Motion to Compel is attached hereto as Exhibits F.
6. The administrative law judge (“ALJ”) issued an Order dated August 4, 2009, addressing the Motion to Compel. A true and correct copy of the ALJ’s Order dated August 4,
2009, is attached hereto as Exhibit G. In that Order, the ALJ directed the parties to “confer as to all remaining discovery issues.” Id. at p. 1, ¶ 3. The ALJ further stated that “in the absence of resolution of all conflicts, the parties should submit, in writing to the [ALJ], specific issues on a question-by-question basis and requests for production on a request-by-request basis.” Id. The
ALJ further explained that he would “rule on each issue, question and request for production as may be necessary.” Id.
7. On August 26, 2009, Brookwood filed a second Motion to Compel. A true and correct copy of the second Motion to Compel is attached hereto as Exhibit H. In the second
Motion to Compel, Brookwood only took issue with Trinity’s response to a single request for production in which Brookwood asked Trinity to produce documents between itself and other
1137335 3 healthcare providers by which the other healthcare provider would agree to withhold objection to
Trinity’s relocation. Id. at p. 1, ¶ 1.
8. On September 16, 2009, after holding an in camera inspection of the documents
requested by Brookwood, the ALJ denied Brookwood’s second Motion to Compel. A true and
correct copy of the ALJ’s Order dated September 16, 2009, is attached hereto as Exhibit I.
9. Thereafter, from September 28, 2009, through November 4, 2009, the parties
presented their arguments and evidence to the ALJ. After hearing all of the evidence and
arguments of the parties, the ALJ issued a recommendation that the CON Board grant Trinity’s
request for a certificate of need (“CON”) to relocate its hospital to the location on Highway 280.
A true and correct copy of the ALJ’s recommendation is attached hereto as Exhibit J. On
September 15, 2010, the CON Board adopted the ALJ’s findings and granted Trinity’s CON application. The CON Board issued SHPDA’s Final Order on September 30, 2010. A true and correct copy of the Final Order is attached hereto as Exhibit K.
10. On October 15, 2010, Brookwood filed a Request for Reconsideration of the final order. A true and correct copy of Brookwood’s Request for Reconsideration is attached hereto as Exhibit L.
11. On October 17, 2010, Trinity produced sixteen more documents, in addition to the
7,000 pages of documents it had already produced, to Brookwood, St. Vincent’s, and the CON
Review Board. The majority of the documents had been withheld from the original production because they were protected by the attorney-client privilege. However, in a separate lawsuit in which Trinity was represented by separate counsel, the documents were produced, thus arguably waiving the privilege. See Email from Carey B. McRae, a true and correct copy of which is attached hereto as Exhibit M.
1137335 4 12. On October 18, 2010, Trinity filed an Opposition to Brookwood’s Motion for
Reconsideration and pointed out that the newly produced documents did not provide any basis for SHPDA to reconsider its Final Order. A true and correct copy of Trinity’s Opposition to the
Motion for Reconsideration is attached hereto as Exhibit N.
13. On October 19, 2010, Brookwood filed a reply brief and argued that the contested case hearing should be re-opened based upon Trinity’s production of documents. A true and correct copy of Brookwood’s Reply Brief is attached hereto as Exhibit O.
14. On October 20, 2010, the parties appeared before the CON Board and argued their respective positions relating to Brookwood’s Motion for Reconsideration. See Exhibit Q at
¶ 83. On November 4, 2010, The CON Board issued an Order denying Brookwood’s Request for Reconsideration. A true and correct copy of the Order denying Brookwood’s Motion for
Reconsideration is attached hereto as Exhibit P.
15. On December 16, 2010, Brookwood filed this action for judicial review of
SHPDA’s final decision granting Trinity’s CON application. A stamped “filed” copy of the
Petition for Judicial Review is attached hereto as Exhibit Q. Brookwood’s Petition for Judicial review states that SHPDA’s final decision should be overturned because it was: (1) in violation of constitutional or statutory provisions; (2) in excess of the statutory authority of the agency; (3) in violation of an agency rule; (4) made upon unlawful procedure; (5) affected by other error of law; (6) clearly erroneous based upon the evidence contained in the whole record; and (7) unreasonable, arbitrary, capricious, or characterized by an abuse of discretion. Id. at ¶ 85.
Notably, Brookwood’s Petition for Judicial Review does not allege any fraud or other misconduct on the part of anyone involved in the administration of SHPDA. See id.
1137335 5 16. On December 16, 2010, Brookwood served Consolidated Discovery Requests
upon Trinity which included Interrogatories, Requests for Production, and Requests for
Admission. A true and correct copy of the Consolidated Discovery Requests are attached hereto as Exhibit R. The Consolidated Discovery Requests seek information regarding issues surrounding Trinity’s submission of its application for a Certificate of Need (“CON”) to relocate its hospital to Highway 280, but not one of the requests contained therein seeks any information that would shed light on whether any person engaged in the administration of the SHPDA engaged in fraud or other misconduct. See id.
17. On December 16, 2010, Brookwood also served notices to take the depositions of three employees of Community Health Systems Professional Services Corporation. A true and correct copy of the Notice to Take Deposition is attached hereto as Exhibit S. The deposition notices served by Brookwood contain no explanation as to how the testimony sought therein would shed light on whether any person engaged in the administration of the SHPDA engaged in fraud or other misconduct. See id.
18. On December 16, 2010, Brookwood served a Notice of Intent to serve eight non- party subpoenas. A true and correct copy of the Notice of Intent is attached hereto as Exhibit T.
The subpoenas attached to the Notice of Intent seek information relating to Trinity and its
affiliates’ activities relating to its attempt to relocate Trinity Hospital to Highway 280. See id.
However, none of the information sought in the subpoenas would shed light on whether any person engaged in the administration of the SHPDA engaged in fraud or other misconduct. See id.
III. ARGUMENT AND CITATION TO AUTHORITY
The discovery requests, deposition notices, and subpoenas served by Brookwood in this
action for judicial review must be quashed because they constitute nothing more than an
1137335 6 improper attempt to circumvent Ala. Code § 41-22-20’s prohibition on the admission of new
testimony during the appeal of an agency decision.
Ala. Code § 41-22-20 (the “statute” or “Alabama statute”) provides the mechanism by
which a person aggrieved by the decision of an administrative agency may seek judicial review
of that decision. The statute outlines the procedure by which the appeal of such a decision may be made and sets forth various other requirements such as the filing deadline, proper venue for the appeal, and the standard of review. The statute provides that some decisions, such as tax
assessments or rulings from the Department of Revenue, are judicially reviewed by a trial de
novo. See, e.g., Ala. Code § 41-22-20(j). Other decisions, such as the matter before the Court in
this case, are “confined to the record and the additions thereteo as may be made under [Ala.
Code § 41-22-20(i)].” Id.
The statute provides that “the review of contested cases shall be confined to the record
and the additions thereto as may be made under subsection (i) of this section.” The statute
clearly states that “a reviewing court shall not itself hear or accept any further evidence with
respect to those issues of fact whose determination was entrusted by law to the agency in that
contested case proceeding; provided, however, that evidence may be introduced in the
reviewing court as to fraud or misconduct of some person engaged in the administration of
the agency or procedural irregularities before the agency not shown in the record….” Ala.
Code § 41-22-20(i). Otherwise, additional evidence may not be considered unless the matter is
remanded to the administrative agency for further proceedings. Id.
Subsection (i) of the statute adopted language from Iowa Code § 17A.19(7) (the “Iowa
statute”) and the Revised Model State Administrative Procedure Act § 15(e) (1961) (the “Model
Act”). See Comments to Ala. Code § 41-22-20. The Iowa statute prohibits a reviewing court
1137335 7 from hearing any additional evidence on issues of fact that were entrusted by law to the agency
that presided over the contested case. See Iowa Code § 17A.19(7). The Model Act provides that
a reviewing court may hear evidence regarding alleged irregularities in procedure before the
agency to the extent that such irregularities are not shown in the record. See Revised Model
State Administrative Procedure Act § 15(f) (1961). Thus, the drafters of the Alabama statute
adopted the Model Act’s stance on a reviewing court’s consideration of additional evidence and
then added a provision allowing additional evidence to be introduced relating to “fraud or
misconduct of some person engaged in the administration of the administrative agency.”
Compare Ala. Code § 41-22-20(i) with Revised Model State Administrative Procedure Act §
15(e) (1961).
The exceptions to the Alabama statute exist to ensure that an appellate court’s review of
an agency decision is not based upon: (1) a record that is tainted by agency impropriety; or (2) a
record that does not accurately reflect the proceedings that took place before the agency. See,
e.g., Forman v. Motor Vehicle Admin., 630 A.2d 753 (Md. 1993) (interpreting the subsection (e)
of the Model Act); Abel v. Department of Personnel, 445 N.W.2d 385 (Iowa App. 1989) (same).
The Alabama statute is also very similar to the Federal Administrative Procedures Act
(the Federal Act”), in that both allow a reviewing court to overturn an agency decision only if the
decision is found to be: (1) arbitrary, capricious, or an abuse of discretion; (2) contrary to
constitutional or statutory provisions; (3) in excess of the statutory authority of the agency; (4)
made upon unlawful procedure; (5) not in accordance with the law; or (6) unsupported by the
administrative record. Compare Ala. Code § 41-22-20 with 5 U.S.C. § 706. Both statutes also
generally limit judicial review of an agency’s decision to the administrative record. See Ala.
Code § 41-22-20(i); 5 U.S.C. § 706 (providing that the judicial review of an agency decision
1137335 8 shall be made based upon “the whole record or those parts of it cited by a party”). Unlike the
Alabama statute, the Federal Act does not contain a statutory exception to its mandate that
judicial review of an agency decision be based entirely upon the administrative record. See 5
U.S.C. § 706. However, courts interpreting the Federal Act have carved out a judicial exception in limited circumstances in which the party seeking discovery is able to make a strong showing that the agency acted improperly in connection with the issuance of its decision. See Corning
Sav. & Loan Assoc. v. Federal Home Loan Bank Bd., 736 F.2d 479 (8th Cir. 1984) (noting that
“inquiry into the mental processes of administrative decisionmakers is usually to be avoided” therefore “there must be a strong showing of bad faith or improper behavior before such inquiry may be made”) (citing Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 28 L. Ed. 2d
136, 91 S. Ct. 814 (1971)).
The Court must quash Brookwood’s attempt to conduct discovery at the appellate review stage of this proceeding because Brookwood’s discovery requests do not fall into either of the
Alabama statute’s two narrow exceptions allowing additional discovery to be conducted at the judicial review phase of a proceeding.
1. Brookwood has not alleged that anyone involved in the administration of SHPDA engaged in fraud or other misconduct.
The first narrow exception to the Alabama statute’s prohibition against discovery at the
judicial review stage provides that “evidence may be introduced in the reviewing court as to
fraud or misconduct of some person engaged in the administration of the agency.” Ala. Code §
41-22-20(i). Brookwood cannot satisfy this exception because it did not allege fraud or misconduct during the proceedings before SHPDA or in its petition for judicial review.2
2 In fact, Brookwood would be estopped from arguing that SHPDA’s decision was tainted by fraud of misconduct of someone engaged in the administration of SHPDA because Brookwood did not raise that issue before the agency. See Nursing Home of Dothan, Inc. v. Alabama State Health Planning and Development, 542 So. 2d
1137335 9 Moreover, the information sought in Brookwood’s discovery requests does not seek to prove that
anyone engaged in such activity. To the contrary, the discovery requests, deposition notices, and
subpoenas issued by Brookwood in this judicial review proceeding seek information relating to:
(1) representations made in Trinity’s CON application; (2) Trinity’s decision to forego its CON
to relocate to Irondale in favor of applying for a CON to relocate to Highway 280; (3)
negotiations between Trinity and the owner of the site on Highway 280. See, e.g., Exhibits R
through T. The responses to such requests would shed no light whatsoever on whether anyone
engaged in the administration of SHPDA engaged in any fraud or other misconduct and they
must, therefore, be quashed.
2. Brookwood has not alleged that there were any procedural irregularities before SHPDA that are not shown in the record.
The second narrow exception to the Alabama statute’s prohibition against discovery at
the judicial review stage provides that “evidence may be introduced in the reviewing court as
to… procedural irregularities before the agency not shown in the record.” Brookwood cannot
satisfy this exception because it has not alleged that there were any procedural irregularities that
are not reflected in the administrative record. In fact, the only arguable procedural irregularity referenced anywhere in Brookwood’s Petition for Judicial Review is that Trinity produced an additional sixteen documents during the pendency of Brookwood’s motion for reconsideration.
See Exhibit Q at ¶¶ 79-84. Trinity expressly denies that its production of additional documents
constitutes a procedural irregularity. However, to the extent that such production could be
construed as such, such irregularity was sufficiently documented during the record. See Exhibits
O and Q at ¶¶ 79-84. In fact, Brookwood admits in its Petition for Judicial Review that SHPDA
935, 939 (Ala. 1988)(citing Green v. Taylor, 437 So. 2d 1259 (Ala. 1983)(holding that “[i]t is well settled that [reviewing courts] do not consider issues raised for the first time on appeal”)).
1137335 10 considered its argument that the contested case should be reopened based upon Trinity’s
additional production of documents. See Exhibit Q at ¶¶ 82-84. Brookwood further admits that
SHPDA ultimately determined that Brookwood’s argument lacked merit. Id. This Court is bound by SHPDA’s ruling on that issue so long as there is evidence in the record to support the
decision. Johnson v. Mobile County Personnel Board, 459 So. 2d 923 (Ala. Civ. App. 1984)
(holding that the “scope of review [in an action for judicial review] is limited to determining whether there is any evidence in the record to support the Board's decision”); Board. Roberson v.
Personnel Board, 390 So. 2d 658 (Ala. Civ. App. 1980) (holding that it is not within the
reviewing court’s prerogative to weigh the value of evidence or substitute its own judgment for
that of the agency). Accordingly, Brookwood is not entitled to conduct discovery under the
Alabama statute’s exception allowing the introduction of additional evidence relating to
procedural irregularities not found in the record.
IV. CONCLUSION
In sum, Brookwood’s discovery requests are nothing more than an improper attempt to
circumvent the Alabama Administrative Act’s prohibition on discovery in the judicial review
phase of a proceeding. Moreover, this Court would be acting beyond the power vested in it by
the Alabama Administrative Procedures Act if it allowed Brookwood to move forward with its discovery request. Accordingly, Trinity respectfully requests that the Court quash the discovery requests served by Brookwood in this action.
[Signature on follow page]
1137335 11 Respectfully submitted this 3rd day of February, 2011.
/s/ Carey B. McRae One of the Attorneys for Respondent Affinity Hospital, LLC d/b/a Trinity Medical Center
OF COUNSEL:
Bobby Segall ([email protected]) COPELAND, FRANCO, SCREWS & GILL, P.A. 444 South Perry Street Montgomery, Alabama 36104 Direct Telephone: (334) 420-2956 Direct Facsimile: (334) 834-3172
David R. Boyd ([email protected]) Robin G. Laurie ([email protected]) Dorman Walker ([email protected]) BALCH & BINGHAM LLP Post Office Box 78 Montgomery, Alabama 36101-0078 Direct Telephone: (334) 269-3138 Direct Facsimile: (866) 736-3854
Carey B. McRae ([email protected]) Jennifer H. Clark ([email protected]) BALCH & BINGHAM LLP Post Office Box 306 Birmingham, Alabama 35201-0306 Telephone: (205) 251-8100 Facsimile: (205) 226-8798
1137335 12 CERTIFICATE OF SERVICE
I certify that on February 3rd, 2011, I electronically filed the foregoing with the Clerk of the Court using the AlaCourt system which will send notification of such filing to the following and/or that a copy of the foregoing has been served by United States Mail, properly addressed and postage prepaid to the following:
David Hunt Daniel E. McBrayer JOHNSTON BARTON PROCTOR & ROSE LLP Colonial Brookwood Center 569 Brookwood Village, Suite 901 Birmingham, AL 35209
James E. Williams C. Mark Bain MELTON ESPY & WILLIAMS, PC 255 Dexter Avenue Montgomery, AL 36104
Mark Wilkerson Dana Billingsley WILKERSON & BRYAN Post Office Box 830 Montgomery, AL 36101
/s/ Carey B. McRae Of Counsel
1137335 13