RALEIGH RADIOLOGY LLC d/b/a RALEIGH RADIOLOGY CARY, Petitioner,
N.C. DEPARTMENT OF HEALTH AND HUMAN SERVICES, DIVISION OF HEALTH SERVICE REGULATION, HEALTH CARE PLANNING & CERTIFICATE OF NEED, Respondent, and DUKE UNIVERSITY HEALTH SYSTEM, Respondent-Intervenor.
originally in the Court of Appeals 13 March 2019.
by Respondents and cross-appeal by Petitioner from an amended
final decision entered 16 March 2018 by Judge J. Randolph
Ward in the Office of Administrative Hearings No. 17 DHR
04088. This matter was reconsidered in the Court pursuant to
an order allowing Petitioner's Petition for Rehearing.
This opinion supersedes the opinion Raleigh Radiology v.
NC DHHS, No. 18-785, __ N.C.App. __, 827 S.E.2d 337
(2019), previously filed on 7 May 2019.
Brooks, Pierce, McLendon Humphrey & Leonard, L.L.P., by
James C. Adams, II, for Petitioner Raleigh Radiology LLC.
Attorney General Joshua H. Stein, by Assistant Attorney
General Bethany A. Burgon, for Respondent N.C. Department of
Health and Human Services, Division of Health Service
Regulation, Health Care Planning & Certificate of Need.
Spruill LLP, by Kenneth L. Burgess, William R. Shenton, and
Matthew A. Fisher, for Respondent-Intervenor Duke University
Raleigh Radiology LLC ("Raleigh") and Respondents
N.C. Department of Health and Human Services, Division of
Health Care Regulation, Healthcare Planning and Certificate
of Need (the "Agency"), and Duke University Health
System ("Duke") all appeal a final decision of the
Office of Administrative Hearings ("OAH") regarding
the award of a Certificate of Need ("CON") for an
MRI machine in Wake County.
early 2016, the Agency determined a need for a fixed MRI
machine in Wake County and began fielding competitive
requests. In April 2016, Duke and Raleigh each filed an
application for a CON with the Agency.
131E-183 of our General Statutes sets forth the procedure the
Agency should use when reviewing applications for a CON. N.C.
Gen. Stat. § 131E-183 (2016). The Agency uses a two
stage process: First, the Agency reviews each application
independently to make sure that it complies with certain
statutory criteria. See Britthaven, Inc. v. N.C.
Dep't of Human Res., 118 N.C.App. 379, 385, 455
S.E.2d 455, 460 (1995) (citing N.C. Gen. Stat. §
131E-183(a)). Typically, if only one application is found to
have complied with the statutory criteria, that applicant is
awarded the CON. But if more than one application complies,
the Agency moves to a second step, whereby the Agency
conducts a comparative analysis of the compliant
applications. Britthaven, 118 N.C.App. at 385, 455
S.E.2d at 461.
present case, the Agency approved Duke for the CON, denying
Raleigh's application, on two alternate grounds. First,
the Agency determined that Duke's application alone was
compliant. Alternatively, the Agency conducted a comparative
analysis, assuming both applications were compliant,
and determined that Duke's application was superior.
October 2016, Raleigh filed a Petition for Contested Case
Hearing. After a hearing on the matter, the administrative
law judge (the "ALJ") issued a Final Decision,
determining that both applications were compliant but
that, based on its own comparative analysis,
Raleigh's application was superior. Accordingly, the ALJ
reversed the decision of the Agency and awarded the CON to
and the Agency timely appealed. Raleigh also timely
Standard of Review
review a final decision from an ALJ for whether
"substantial rights of the petitioners may have been
prejudiced[.]" N.C. Gen. Stat. § 150B-51(b) (2018).
We use a de novo standard if the petitioner appeals
the final decision on grounds that it violates the
constitution, exceeds statutory authority, was made upon
unlawful procedure, or was affected by another error of law.
N.C. Gen. Stat. § 150B-51(b)(1)- (4), (c) (2018). And we
use the whole record test if the petitioner alleges that the
final decision is unsupported by the ...