Reston Hospital Center, LLC v. Karen Remley, M.D., M.B.A., F.A.A.P., etc.

The State Health Commissioner issued a certificate of public need (COPN) to Inova Health Care Services authorizing it to relocate a medical radiation therapy service from Inova Fairfax Hospital to Inova Fair Oaks Hospital, both situated in Fairfax County. A competitor, Reston Hospital Center, LLC, objected to the relocation during the administrative process and on appeal to the circuit court. The circuit court held that the Commissioner acted within her authority when she issued the COPN. We agree and affirm the circuit court’s ruling.

I. Background

A. The Administrative Regulatory System

A comprehensive regulatory system governs nearly every aspect of medical care facilities in the Commonwealth. 2 Arti *761 ele 1.1, Chapter 4 of Title 32.1 requires a “certificate of public need” for various types of projects conducted by medical care facilities. Code § 32.1-102.1. “No person shall commence any project without first obtaining a certificate issued by the Commissioner. No certificate may be issued unless the Commissioner has determined that a public need for the project has been demonstrated.” Code § 32.1-102.3(A). The statute directs the Board of Health to establish “regional health planning agencies,” which manage the “health planning regions” in the Commonwealth and assist the Board in a number of ways, including by “reviewing applications for certificates of public need and making recommendations to the Department.” Code § 32.1-122.05. The Board of Health must also prepare a “State Medical Facilities Plan” to guide planning and forecasting efforts. Code § 32.1-102.1.

B. The Dispute over the Location of a Single Linear Accelerator

Several hospitals are located in Health Planning Region II (HPR II), which encompasses the same area as Planning District 8 (PD 8) and includes Fairfax County. Multiple hospitals in HPR II utilize radiation therapy machines, called linear accelerators, to provide cancer treatment services. Inova Fairfax has four linear accelerators, and Reston has two. Although Inova Fair Oaks provides extensive cancer treatment services, it does not have a linear accelerator.

In 2008, Inova applied for a COPN to add a linear accelerator to Inova Fair Oaks. The Commissioner denied the application for a number of reasons, including because there was no demonstrable need for a new linear accelerator in that area of service. The Commissioner had previously authorized the operation of thirteen linear accelerators in HPR II, and she determined that there was no need for one more.

A few months later, Inova submitted a new application — the one at issue in this case — for a COPN authorizing a “proposed project ... to move one of four existing linear accelerators from the campus of Inova Fairfax Hospital to the campus of Fair Oaks Hospital.” App. at 1441. The project would involve *762 the decommissioning of one of Inova Fairfax’s older linear accelerators, thereby reducing the number of such machines at Inova Fairfax from four to three, and the relocation of that service (with the installation of a new linear accelerator) to Inova Fair Oaks. With its proposed change, Inova pointed out, HPR II would still have thirteen linear accelerators.

During the administrative process, Reston intervened as a “good cause” party. Id. at 635. Reston asserted various reasons why the Commissioner should not issue the COPN to Inova. The Commissioner rejected Reston’s objections and issued the COPN on August 26, 2009, designating it COPN No. VA-04223. Reston appealed to the circuit court under the Virginia Administrative Process Act (VAPA), Code §§ 2.2-4000 through -4033. The circuit court held that Reston did not have standing and dismissed the appeal. On appeal to our Court, we reversed and remanded the case to the circuit court for a decision on the merits. See Reston Hosp. Ctr., LLC v. Remley, 59 Va.App. 96, 717 S.E.2d 417 (2011). On remand, the circuit court upheld the Commissioner’s decision to issue the COPN to Inova. Reston again appealed to us. Over Inova’s objection, the circuit court extended Reston’s time to file its notice of appeal pursuant to Code § 8.01-428(C).

While the case has been on appeal, the Commissioner issued another certificate, designated COPN No. VA-04386 (issued April 19, 2013). It authorized the “[rjelocation and replacement of the existing linear accelerator located in the satellite facility at 8503 Arlington Boulevard (in Fairfax County) to Inova Fair Oaks Hospital (also in Fairfax County).” Appellant’s Supp’l Br. Ex. A at 3. 3 The certificate added that the *763 “relocation of the Arlington Boulevard linear accelerator will be in place of the linear accelerator authorized for relocation from Inova Fairfax Hospital under COPN No. VA-04223.” Id.

After oral argument in this appeal, the Commissioner issued a “corrected certificate” on June 13, 2013, because “[t]he original certificate issued on April 19, 2013 did not reflect the project as specified in the letter of intent and requested in the application.” Appellant’s Supp’l Br. Ex. B at 1. The certifícate, still designated as COPN No. VA-04386, “identifie[d] the correct project site” as “Inova Fairfax Hospital Main Campus,” id., 4 and no longer included the original certificate’s language referencing “replacement” of the accelerator previously authorized to Inova Fair Oaks. Instead, the corrected certificate phrased the approved action as a “[rjelocation of *764 the existing linear accelerator authorization” from the satellite facility to Inova Fairfax. Id. at 2; compare Appellant’s Supp’l Br. Ex. A (COPN No. VA-04386 (issued Apr. 19, 2013)) with Appellant’s Supp’l Br. Ex. B (Corrected COPN No. VA-04386 (issued June 13, 2013)).

While retaining appellate jurisdiction, we remanded the case to the circuit court to address whether COPN No. VA-04386 mooted any need for our review of the original COPN No. VA-04223 and whether the June 13, 2013 corrections to COPN No. VA-04386 were valid. In June 2014, the circuit court held that the case was not moot and that the corrections to COPN No. VA-04386 were valid.

II. Extension of Time to File Notice of Appeal

We first address Inova’s assignment of cross-error claiming that the circuit court erroneously extended the time for Resten to file its notice of appeal pursuant to Code § 8.01-428(C). Inova contends that the circuit court abused its discretion in granting the extension. We disagree.

Rule 5A:6(a) requires an appellant to file a notice of appeal within thirty days after the entry of the final order in the circuit court. The General Assembly enacted Code § 8.01-428(C) to provide a narrow exception to this thirty-day deadline when an appellant is “not notified by any means of the entry of a final order,” and the circuit court finds that the lack of notice does not result from appellant’s “failure to exercise due diligence.” The statute vests the discretion to grant the party leave to appeal in the circuit court, not the appellate court.

An abuse of discretion occurs “only ‘when reasonable jurists could not differ’ ” as to the proper decision. Brandau v. Brandau, 52 Va.App. 632, 641, 666 S.E.2d 532, 537 (2008) (quoting Robbins v. Robbins, 48 Va.App. 466, 482, 632 S.E.2d 615, 623 (2006)). This highly deferential standard of review “necessarily implies that, for some decisions, conscientious jurists could reach different conclusions based on exactly the same facts — yet still remain entirely reasonable.” Hamad v. *765 Hamad, 61 Va.App. 593, 607, 739 S.E.2d 232, 239 (2013). The circuit court “has a range of choice, and its decision will not be disturbed as long as it stays within that range and is not influenced by any mistake of law.” Lawlor v. Commonwealth, 285 Va. 187, 212-13, 738 S.E.2d 847, 861 (2013) (alteration and internal quotation marks omitted).

We apply this “bell-shaped curve of reasonability” based on our “venerable belief that the judge closest to the contest is the judge best able to discern where the equities lie.” Hamad, 61 Va.App. at 607, 739 S.E.2d at 239. Suffice it to say, “if nothing else,” the abuse-of-discretion standard “means that the trial judge’s ruling will not be reversed simply because an appellate court disagrees.” Thomas v. Commonwealth, 44 Va.App. 741, 753, 607 S.E.2d 738, 743 (internal quotation marks omitted), adopted upon reh’g en banc, 45 Va.App. 811, 613 S.E.2d 870 (2005); see also Beck v. Commonwealth, 253 Va. 373, 385, 484 S.E.2d 898, 906 (1997) (noting that, when applying an abuse-of-discretion standard, appellate judges do “not substitute [their] judgment for that of the trial court”).

Given the unique circumstances of this case, we cannot say that the circuit court abused its discretion in granting the extension. It appears that all of the circuit court’s orders during this protracted litigation — except the final order that triggered the thirty-day deadline for filing the notice of appeal — had been mailed by the clerk of court to counsel of record as a matter of course. In addition, it took over a month for the draft final order to be submitted to the court, a designated judge from another circuit presided over the case pursuant to Code § 32.1-102.9, and two different clerk’s offices handled the record. Though we may not have been as forgiving as the circuit court, reasonable jurists could reach different conclusions on the question whether Reston exercised due diligence under the uncommon conditions of this case. We thus defer to the circuit court’s decision to extend the deadline for filing the notice of appeal under Code § 8.01-428(C).

*766 III. Mootness on Appeal

Prior to deciding the merits of this appeal, we must also determine whether this case has become moot because of the issuance of COPN No. VA-04386 (issued April 19, 2013 and corrected on June 13, 2013). We conclude that the case continues to present a live, justiciable controversy.

“A case becomes moot ‘when the issues presented are no longer “live” or the parties lack a legally cognizable interest in the outcome.’ ” Ingram v. Commonwealth, 62 Va.App. 14, 21, 741 S.E.2d 62, 66 (2013) (quoting Chafin v. Chafin, — U.S. —, 133 S.Ct. 1017, 1019, 185 L.Ed.2d 1 (2013)). “ ‘No matter how vehemently the parties continue to dispute the lawfulness of the conduct that precipitated the lawsuit, the case is moot if the dispute is no longer embedded in any actual controversy about the plaintiffs’ particular legal rights.’ ” Id. at 21-22, 741 S.E.2d at 66 (quoting Already, LLC v. Nike, Inc., — U.S. —, 133 S.Ct. 721, 727, 184 L.Ed.2d 553 (2013)); see also Daily Press, Inc. v. Commonwealth, 285 Va. 447, 452, 739 S.E.2d 636, 639 (2013) (noting that “a case is moot and must be dismissed when the controversy that existed between litigants has ceased to exist”). Mootness on appeal can occur for a variety of reasons, including settlement agreements 5 or other intervening events that overtake litigable controversies. 6

*767 While it is true that a case is moot when “our resolution of an issue could not possibly have any practical effect on the outcome of the matter,” Norfolk S. Ry. Co. v. City of Alexandria, 608 F.3d 150, 161 (4th Cir.2010), the burden of establishing that we lack jurisdiction rests on “the party who alleges that a controversy before us has become moot,” Michigan v. Long, 463 U.S. 1032, 1042 n. 8, 103 S.Ct. 3469, 3477 n. 8, 77 L.Ed.2d 1201 (1983) (quoting Cnty. of Los Angeles v. Davis, 440 U.S. 625, 645, 99 S.Ct. 1379, 1390, 59 L.Ed.2d 642 (1979)). “That is, we presume in those circumstances that we have jurisdiction until some party establishes that we do not for reasons of mootness,” id., unless, of course, we sua sponte rebut that presumption entirely on our own, de Haan v. de Haan, 54 Va.App. 428, 436, 680 S.E.2d 297, 301 (2009) (“This Court may raise the [jurisdictional] issue sua sponte.” (quoting Earley v. Landsidle, 257 Va. 365, 371, 514 S.E.2d 153, 156 (1999))).

Inova claims that this appeal is moot. Inova argues that COPN No. VA-04386 (issued April 19, 2013 and corrected on June 13, 2013) eliminated any need for us to decide whether the Commissioner properly issued the original COPN No. VA-04223 (issued August 26, 2009). After all, Inova contends, Reston never intervened in the administrative process for the 2013 COPN. According to this argument, even if we were to invalidate the 2009 COPN, the 2013 COPN would independently validate Inova’s plan to move the linear accelerator to *768 Inova Fair Oaks. The circuit court rejected this argument, as do we.

The 2013 COPN presupposes the validity of the 2009 COPN. When issuing the 2013 COPN, the Commissioner undoubtedly relied in part on the existence of the 2009 COPN, which authorized the establishment of radiation therapy services at Inova Fair Oaks and the corresponding relocation of a linear accelerator from Inova Fairfax to Inova Fair Oaks. That authorization created the need for the relocation of a linear accelerator from a satellite facility to Inova Fairfax. The clearest indication that the 2013 COPN added to rather than replaced the 2009 COPN appears in the 2013 COPN as issued on April 19, 2013, which noted that “the total authorized capital cost ... for the relocation and replacement of a linear accelerator is included in COPN No. VA-04223.” Appellant’s Supp’l Br. Ex. A.

The correction issued in June 2013 further clarified that understanding by simply stating that there was “no capital cost associated with the project” authorized by the 2013 COPN. Appellant’s Supp’l Br. Ex. B. Essentially, the 2009 COPN authorized the establishment of radiation therapy services at Inova Fair Oaks by the transfer of one linear accelerator from Inova Fairfax to Inova Fair Oaks and also authorized the capital cost of that project. The 2013 COPN, presuming the authorization for radiation therapy services at Inova Fair Oaks under the 2009 COPN, merely effectuates that transfer in a slightly different manner by authorizing Inova Fairfax to maintain its three current linear accelerators on the main campus and instead decommission the unit at the satellite facility. Perhaps this explains why Inova — quite understandably — has not affirmatively relinquished the 2009 COPN on the assumption that it can rely exclusively on the 2013 COPN, which Inova nevertheless claims stands incontestably on its own.

In short, if we were to invalidate the 2009 COPN, the 2013 COPN could be subject to continuing litigation because the underlying basis for the relocation authorized by the 2013 *769 COPN would be in question. We thus have no confidence that dismissing this appeal as moot would end the seemingly interminable litigation of the disputed location of this single piece of medical equipment. 7 For these reasons, we decline to dismiss this appeal as moot. 8

*770 IV. Reston’s Challenge to the 2009 COPN

We now turn to the primary dispute: whether the circuit court erred in holding that the Commissioner did not violate the law by issuing COPN No. VA-04223 on August 26, 2009. Before addressing that issue, we must frame the nature of our review.

A. The VAPA Standards of Judicial Review

“Under the VAPA, the circuit court reviews [an] agency’s action in a manner equivalent to an appellate court’s role in an appeal from a trial court.” Mattaponi Indian Tribe v. Dep’t of Envtl. Quality, 43 Va.App. 690, 707, 601 S.E.2d 667, 676 (2004) (internal quotation marks omitted), aff'd in relevant part sub nom. Alliance to Save the Mattaponi v. Dep’t of Envtl. Quality, 270 Va. 423, 621 S.E.2d 78 (2005). “ ‘In this sense, the General Assembly has provided that a circuit court acts as an appellate tribunal.’ ” Laurels of Bon Air, LLC v. Med. Facilities of Am. LIV Ltd. P’ship, 51 Va.App. 583, 591, 659 S.E.2d 561, 565 (2008) (quoting Gordon v. Allen, 24 Va.App. 272, 277, 482 S.E.2d 66, 68 (1997)).

The circuit court “has no authority under [the] VAPA to reweigh the facts in the agency’s evidentiary record.” Family Redirection Inst., Inc. v. Dep’t of Med. Assistance Servs., 61 Va.App. 765, 771, 739 S.E.2d 916, 920 (2013). The “VAPA authorizes the court to ‘reject the agency’s findings of fact only if, considering the record as a whole, a reasonable mind would necessarily come to a different conclusion.’ ” Id. (quoting Mattaponi Indian Tribe, 43 Va.App. at 706, 601 S.E.2d at 675). “Nor can the court substitute its own judgment for the agency’s on matters committed by statute to the agency’s discretion.” Boone v. Harrison, 52 Va.App. 53, 62, 660 S.E.2d 704, 708 (2008).

*771 That said, “[p]ure statutory construction” involves “a matter within the core competency of the judiciary” and thus “requires de novo review.” Va. Emp’t Comm’n v. Cmty. Alts., Inc., 57 Va.App. 700, 708, 705 S.E.2d 530, 534 (2011) (internal quotation marks omitted); see also Finnerty v. Thornton Hall, Inc., 42 Va.App. 628, 634-35, 593 S.E.2d 568, 571 (2004) (“[P]ure statutory interpretation is the prerogative of the judiciary.” (quoting Sims Wholesale Co. v. Brown-Forman Corp., 251 Va. 398, 404, 468 S.E.2d 905, 908 (1996))). The task of interpreting the Commissioner’s enabling statutes, therefore, is not one we delegate in whole or in part to the Commissioner.

B. Reston’s Assignments of Error

Although Reston asserts four assignments of error, they can be synthesized into three substantive arguments: (1) the issuance of the 2009 COPN was “inconsistent” with the State Medical Facilities Plan (SMFP), (2) the Commissioner failed “to explain sufficiently the basis for her decision or her departure from prior case decisions,” and (3) the Commissioner’s decision to issue the 2009 COPN was, on the merits, indefensible. Appellant’s Br. at 3. 9

*772 1. The State Medical Facilities Plan

Reston contends that the Commissioner did not comply with Code § 32.1-102.3(A), which provides that any COPN issued “shall be consistent” with the most recent applicable provisions of the SMFP. The inconsistency, Reston argues, arises from the portion of the SMFP entitled “Need for new service.” 12 Va. Admin. Code § 5-230-290. 10 Subsection (A)(1) states that “[n]o new radiation therapy service should be approved unless ... [e]xisting radiation therapy machines located in the health planning district performed an average of 8,000 procedures per existing and approved radiation therapy machine in the relevant reporting period.” Id. § 5-230-290(A)(l). Reston correctly points out that, for several years prior to the issuance of the 2009 COPN, PD 8 performed less than an average of 8,000 procedures per linear accelerator. For this reason alone, Reston concludes, the Commissioner was without authority to authorize the new linear accelerator service at Inova Fair Oaks.

The flaw underlying Reston’s argument is the assumption that the phrase “new radiation therapy service,” as used in 12 Va. Admin. Code § 5-230-290(A)(l), includes the mere relocation of an existing service from one hospital to another hospital, which is owned and operated by the same company and serves patients within the same planning district. The *773 ordinary understanding of the word “new” does not naturally lend itself to this interpretation. 11 Though the linear accelerator service was new to Inova Fair Oaks, it was not new to Inova. Inova merely relocated the service from one hospital to another. Nor was the service new to the planning district. PD 8 had thirteen linear accelerators before the relocation and thirteen after. We thus reject Reston’s reading of “new radiation therapy service,” 12 Va. Admin. Code § 5-230-290(A)(1), to include the unique circumstances presented in COPN No. VA-04223. 12

*774 The banter over the textual meaning of the words in a statute or regulation must always be framed by the manifest legislative will underlying the law. One of the principal purposes of the Medical Care Facilities Certificate of Public Need Law, originally enacted in 1973, was “to assist in promoting the highest quality of health care at the lowest possible cost.” 1973 Va. Acts ch. 419; see also 12 Va. Admin. Code § 5-230-30 (listing the “general principles” behind the COPN program and including “cost effectiveness and quality of medical services in Virginia”). 13 The COPN requirement was meant to limit access to the competitive, free market only to the extent that it might endanger those legislative goals. See generally FTC v. Phoebe Putney Health Sys., — U.S. —, 133 S.Ct. 1003, 1015-16, 185 L.Ed.2d 43 (2013) (interpreting a similar regulatory scheme “in light of our national policy favoring competition, ... to reflect more modest aims” than expansive “anticompetitive conduct,” even though the scheme “does limit competition in the market for hospital services in some respects”). Interpreted in light of these policy goals, the phrase “new radiation therapy service,” as used in 12 Va. Admin. Code § 5-230-290(A)(l), does not include the relocation of an existing service from one hospital to another hospi *775 tal, which is owned and operated by the same company and serves patients within the same planning district.

2. Alleged Departure from Prior Case Decisions

Reston also argues that the Commissioner acted arbitrarily and capriciously by issuing the COPN to Inova under circumstances that, according to Reston, have never been found previously by the Commissioner to be acceptable. The nine examples Reston gives as precedent, however, all apparently involve requests for COPNs for truly new services, not the relocation of existing services — at least no one has suggested to us otherwise. Reston acknowledges that “[t]he only possible explanation is the fact that Inova’s project purportedly involves the relocation of an existing linear accelerator,” Appellant’s Br. at 22, but Reston rejects that explanation as a “distinction without a difference,” id. at 6.

Reston’s argument fails because it presupposes too much. As we explained earlier, a sensible distinction exists between issuing a COPN for a new service that expands existing capacity and a mere relocation of an existing service that does not. See supra Part IV.B.l. In our view, 12 Va. Admin. Code § 5-230-290(A)(l) incorporates that distinction. This point more than answers Reston’s inconsistency challenge because the 2009 COPN awarded to Inova cannot be compared fairly to prior COPNs involving wholly new services that increased the inventory of medical services or machines in the relevant planning district. Reston, therefore, has not shown that the Commissioner made a “ ‘sudden and unexplained change’ ” in administrative policy or “fail[ed] to take into account ‘legitimate reliance on prior interpretation.’ ” Appellant’s Br. at 19 (quoting Boyd v. People, Inc., 43 Va.App. 82, 91, 596 S.E.2d 100, 105 (2004) (Kelsey, J., concurring)). 14

*776 3. Arbitrary & Capricious Decisionmaking

Reston also contends that the Commissioner’s decision to issue the 2009 COPN should be judicially vacated because physicians at Inova Fair Oaks who previously have treated cancer patients have had to refer them, out of necessity, to other hospitals like Reston. If Inova Fair Oaks gets a linear accelerator, Reston worries that patients at Inova Fair Oaks may not need to travel to another hospital for radiation therapy and that, to a certain extent, this would reduce the revenues that Reston receives for the use by these patients of its linear accelerator. Unmoved by this argument, the Commissioner concluded that Reston would likely be able “to weather any competitive stresses that may stem from approval of the project proposed by Inova.” App. at 612. 15

The question we must answer is not whether we agree or disagree with the Commissioner’s exercise of discretion on this issue, but whether she was faithful to her statutory duty to “consider” the enumerated statutory criteria for the issuance of a COPN. Code § 32.1-102.3(B). One of those factors involves “the utilization and efficiency of existing services or facilities,” Code § 32.1 — 102.3(B)(5), while another emphasizes “[t]he extent to which the proposed service or facility fosters institutional competition,” Code § 32.1 — 102.3(B)(4). 16 The par *777 ties offer a battery of conflicting statistics in support of their differing views on these points. We see no need, however, to pick apart the data matrices in the administrative record to answer this question.

As we have often said, “when the appellant challenges a judgment call on a topic on which ‘the agency has been entrusted with wide discretion by the General Assembly,’ we will overturn the decision only if it can be fairly characterized as ‘arbitrary or capricious’ and thus a ‘clear abuse of delegated discretion.’ ” Citland, Ltd. v. Commonwealth ex rel. Kilgore, 45 Va.App. 268, 275, 610 S.E.2d 321, 324 (2005) (quoting Vasaio v. Dep’t of Motor Vehicles, 42 Va.App. 190, 196-97, 590 S.E.2d 596, 599 (2004)). “This standard recognizes the larger premise that, before any legal question can be answered, an a priori question must first be asked — who has the authority to decide. It is the one question that precedes all others.” Boone, 52 Va.App. at 62, 660 S.E.2d at 708.

The Commissioner conscientiously considered the effect Inova’s relocated service would likely have on Reston’s market share. And what we have said in analogous circumstances can be said here: “While it appears the subject was not given dispositive weight, nothing in the statute requires that any specific factor be given any measurable weight, only that it be considered by the [agency] during the decisionmaking process.” Id. at 65, 660 S.E.2d at 710. Whatever “weight that should be properly given to any specific factor” is a discretionary decision for the agency, “not the courts.” Id. at 66, 660 S.E.2d at 710. It is enough to conclude, as we do, that nothing in the administrative record, taken as a whole, persuades us that “a reasonable mind would necessarily come to a different conclusion.” Id. at 62, 660 S.E.2d at 708 (internal quotation marks omitted).

*778 V.

In sum, we find no abuse of discretion in the circuit court’s decision to extend Reston’s time to file its notice of appeal. Nor do we believe the case has been rendered moot by the issuance of COPN No. VA-04386 (issued April 19, 2013 and corrected on June 13, 2013). On the merits, we hold that the Commissioner lawfully issued COPN No. VA-04223 and that the circuit court correctly rejected Reston’s challenge to the Commissioner’s decision.

Affirmed.