STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
SHANDS JACKSONVILLE MEDICAL CENTER, INC., d/b/a UF HEALTH JACKSONVILLE,
Petitioner,
vs.
DEPARTMENT OF HEALTH,
Respondent,
and
ORANGE PARK MEDICAL CENTER, INC.,
Intervenor.
/
Case No. 16-3369
RECOMMENDED ORDER
Pursuant to notice, an evidentiary hearing was conducted in this case on October 17 through 19, 2016, before Administrative Law Judge W. David Watkins of the Division of Administrative Hearings.
APPEARANCES
For Petitioner Shands Jacksonville Medical Center, Inc.: Seann M. Frazier, Esquire
Marc Ito, Esquire
Parker, Hudson, Rainer & Dobbs LLP
215 South Monroe Street, Suite 750 Tallahassee, Florida 32301
For Respondent Department of Health:
Nichole Chere Geary, Esquire Jay Patrick Reynolds, Esquire Department of Health
4052 Bald Cypress Way, Bin A-02 Tallahassee, Florida 32399-1701
Daniel Ryan Russel, Esquire Jones Walker, LLP
215 South Monroe Street, Suite 130 Tallahassee, Florida 32301
For Intervenor Orange Park Medical Center, Inc.: Stephen A. Ecenia, Esquire
Gabriel F.V. Warren, Esquire Rutledge Ecenia, P.A.
119 South Monroe Street, Suite 202 Post Office Box 551
Tallahassee, Florida 32301-0551 STATEMENT OF THE ISSUES
Whether the application filed on April 1, 2016, by Orange Park Medical Center, Inc., d/b/a Orange Park Medical Center (Orange Park), to operate as a Level II trauma center met the applicable statutory and rule criteria to receive provisional approval? Whether the Department of Health’s (Department) approval of the application was based upon an unadopted rule?
PRELIMINARY STATEMENT
Orange Park applied to become a Level II trauma center in Trauma Service Area (TSA) 5. On April 28, 2016, the Department issued a letter provisionally approving Orange Park to operate a Level II trauma center in TSA 5.
On May 19, 2016, Shands Jacksonville Medical Center, Inc., d/b/a UF Health Jacksonville (UF Health Jacksonville), timely filed a petition challenging the Department's provisional approval of Orange Park to operate a Level II trauma center.
UF Health Jacksonville's Petition sought formal proceedings pursuant to sections 395.4025(7), 120.569. 120.57, and 120.57(1)(e), Florida Statutes. On June 6, 2016, Orange Park intervened. The Department referred UF Health Jacksonville's petition to the Division of Administrative Hearings (DOAH) on June 15, 2016.
The Department and Orange Park also requested a stay of this proceeding on the grounds that the Department proposed to amend its rules regulating trauma application approvals. That motion was denied.
The Department and Orange Park made repeated motions for the court to relinquish jurisdiction on the grounds that no factual dispute remained to be litigated. These motions were also denied.
Prior to the final hearing, the parties filed a Joint Pre- hearing Stipulation in which they set forth a number of admitted facts and agreed statements of law. The parties' stipulations are incorporated into this Recommended Order to the extent relevant.
The final hearing was held on October 17 through 19, 2016. The parties entered as a Joint Exhibit a disc containing Orange Park's trauma center application. In addition, Joint Exhibits 1 through 8 were entered into evidence.
At the final hearing, Orange Park presented the testimony of Chad Patrick, expert in health care administration; Keri Deaton, expert in trauma program administration; Dr. Jeffrey Levine, expert in trauma care and surgical and critical care; and Gene Nelson, expert in health care planning and trauma planning. In addition, the deposition testimony of Lorin Mock was admitted into evidence over objection. Further, Orange Park’s Exhibits 11, 12, 14 through 16, 18, 24, 27, 30, 31, 34,
35, 37 through 40, and 45 through 58 were admitted into evidence.
The Department presented the testimony of Leah Colston. The Department’s Exhibits 15, 16, and 18 were admitted into evidence.
UF Health Jacksonville presented the testimony of Cynthia Gerdik, expert in trauma and critical care nursing. In addition, the deposition testimony of Dean Cocchi was admitted into evidence subject to the Department's objections filed after the hearing. UF Health Jacksonville’s Exhibits 9 through 11 and 20 were admitted into evidence.
The Transcript of the final hearing, consisting of five volumes, was filed at DOAH on October 26, 2016. On November 9, 2016, the parties filed a joint request for
extension of time in which to file their proposed recommended orders. That request was granted, and on November 21, 2016, the parties timely filed their Proposed Recommended Orders. Each of those Proposed Recommended Orders has been carefully considered in the preparation of this Recommended Order.
Unless otherwise noted, all statutory references are to the 2016 version of the Florida Statutes.
FINDINGS OF FACT
The Parties
The Department is an agency of the State of Florida created pursuant to section 20.43, Florida Statutes (2016). The Department’s mandate is to “promote, protect and improve the health of all people in the state,” and it has primary responsibility for evaluating provisional trauma center applications submitted by acute care hospitals. §§ 381.001, 395.40(3), and 395.401(c), Fla. Stat. A "trauma center" is a "hospital that has been verified by the Department to be in substantial compliance with the requirements in section 395.4025 and has been approved by the Department to operate as a Level I trauma center, Level II trauma center, or pediatric trauma center." § 395.4001(14), Fla. Stat.
Petitioner, UF Health Jacksonville, operates a licensed 695-bed hospital and a Level I trauma center in Jacksonville, Duval County, Florida. UF Health Jacksonville's Level I trauma center is in TSA 5. The number of trauma patients treated by UF Health Jacksonville has declined sharply since the Department authorized Orange Park to operate as a trauma center. UF Health Jacksonville projects an annual loss of 320 to 540 trauma cases as a result of Orange Park's operation of a trauma center.
Orange Park is a 317-bed acute-care hospital located in TSA 5, Clay County, Florida. Orange Park provides a wide range of services, including inpatient pediatric care, open-heart surgery, and a comprehensive stroke program. Orange Park is also a teaching hospital with residency programs in internal medicine and family practice. It provides behavioral health services and is the only Baker Act receiving facility in Clay County. Orange Park applied for provisional approval to operate a Level II trauma center in TSA 5. Pursuant to the application decision that is the subject of this litigation, Orange Park has operated as a provisional Level II trauma center since May 2016. Subsequent to the initiation of this proceeding, Orange Park worked with the Department to purportedly complete the in-depth review of its application and has scheduled a final verification survey.
The Trauma Center Application and Review Process
Chapter 395, Part II, Florida Statutes, codifies the process and substantive standards for licensing trauma centers in Florida. As noted, the Department has primary responsibility for administering the trauma center statute, including licensing trauma centers pursuant to chapter 395, Part II, and Florida Administrative Code Chapter 64J-2.
The Legislature has capped at 44 the total number of trauma centers that may operate in Florida at a given time. Pursuant to section 395.402(4)(b), the Department has adopted rule 64J-2.010(3), which currently allocates one trauma center to TSA 5, which consists of Baker, Clay, Duval, Nassau, and St. Johns counties.
Section 395.4025(2) establishes a 21-month process a hospital must follow to obtain verification--i.e., final approval--as a trauma center, and the Department has, by rule, established additional procedures governing the selection of trauma centers. During this multi-stage process, there are discrete decision points at which the Department must take action on a hospital's application to become licensed as a trauma center. The first stage of the trauma center review and approval process--which is the stage at issue in this proceeding--is the provisional review stage. This stage commences when the Department receives a hospital's application
to be licensed as a trauma center. § 395.4025(2)(c), Fla. Stat. At the provisional review stage, the Department determines whether the hospital has the critical elements required for the level of trauma center for which the hospital has applied. Id. The provisional review stage culminates with the Department announcing its decision that the application is acceptable, or denying the application. If the proposed decision is to deny the application, the applicant is entitled to challenge that decision; if the proposed decision is to find the application acceptable, other hospitals must be given an opportunity to "protest," or challenge, that decision. Section 395.4025(7) requires challenges to the Department's trauma center licensure decisions to be conducted pursuant to sections 120.569 and 120.57.
Procedural History and the Processing of Orange Park's Application
On or before October 1, 2015, Orange Park filed a letter of intent to establish a new Level II trauma center in TSA 5. Thereafter, on or before April 1, 2016, Orange Park filed an application with the Department to become a Level II trauma center.
Consistent with statute, the Department sent the application for review by out-of-state reviewers.
On or about April 14, 2016, the Department set forth a list of omitted items that prevented Orange Park's application from being deemed complete. Critical elements missing from Orange Park's application included proof of adequate and up-to- date training of several trauma surgeons and emergency room physicians.
In particular, reviewers selected by the Department noted that Orange Park failed to meet the following requirements: at least one qualified trauma surgeon to be on backup trauma call at all times to provide trauma service care; documentation that the medical director shall approve all trauma-related patient care protocols before implementation; a minimum of five qualified trauma surgeons, assigned to the trauma service, with at least two trauma surgeons available to
provide primary and backup trauma coverage 24 hours a day at the trauma center when summoned; evidence that an orthopedic surgeon is available to arrive promptly at the trauma center when summoned; all specialists are board-certified or actively participating in the certification process and granted medical staff privileges by the hospital to care for adult and pediatric patients; at least one scrub nurse technician and one circulating registered nurse in the operating room and post- anesthesia recovery; at least eight hours of continuing education every two years for the rehabilitation unit; a
radiologist, board-certified or actively participating in the certification process and granted privileges by the hospital to provide radiological services for adult and pediatric patients, on trauma call and can arrive promptly at the trauma center when summoned; adequate quarterly reporting to the Department of Health; and adequate in-hospital trauma registry minimum data set.
The Department made Orange Park's lengthy trauma application available to UF Health Jacksonville through a public records request. Cynthia Gerdik, who holds a Ph.D. in nursing, spent over 40 hours reviewing Orange Park's application on behalf of UF Health Jacksonville.
Like the outside reviewers used by the Department, Dr. Gerdik found several discrepancies related to qualifications and training of trauma surgeons and personnel proposed to serve Orange Park's trauma center. Specifically, Dr. Gerdik's review found that one trauma surgeon's advanced trauma life support (ATLS) certification had expired on June 27, 2016, and that an emergency department physician's ATLS certification had expired
on June 29, 2016. Orange Park’s witness, Keri Deaton, testified that Orange Park retained documentation that the certifications were renewed but never provided the documentation to the Department. At hearing, it was revealed that one of the physicians, who had ostensibly missing education requirements,
had been married and was the same person identified by a different last name in the application.
After April 14, 2016, Orange Park supplemented its application, and the Department deemed the application complete.
Section 395.4001(10) defines “provisional trauma center” as follows:
“Provisional trauma center” means a hospital that has been verified by the department to be in substantial compliance with the requirements in s. 395.4025 and has been approved by the department to operate as a provisional Level I trauma center, Level II trauma center, or pediatric trauma center.
(emphasis added).
Notwithstanding her criticisms of the Orange Park application, Dr. Gerdik conceded that Orange Park’s application met the required trauma program standards. At hearing,
Ms. Gerdik testified:
Q. Did you form an opinion that the Orange Park application met the minimum criteria for critical elements?
A. Yes, sir. I did testify to that.
Q. Did you also conclude that they were in substantial compliance with all critical elements set forth in 150-9?
A. Correct. (Tr. 492-93).
With the exception of need, as evidenced by an available allocation slot determined pursuant to rule 64J-
2.010(3) as discussed below, the Orange Park application is in substantial compliance with the statutory and rule requirements for provisional approval.
On April 28, 2016, the Department sent a letter to Orange Park indicating that the Department intended to approve Orange Park's application. The same letter informed Orange Park that it may open its trauma center immediately and "begin to operate as a Provisional Level II trauma center beginning May 1, 2016."
The Department informed emergency responders to alter their trauma transport protocols, effective that same date, so that trauma patients that would have otherwise been seen at UF Health Jacksonville or another trauma provider could instead be sent to Orange Park for trauma services.
Beginning on May 1, 2016, and throughout the course of this administrative proceeding, Orange Park has operated a provisional Level II trauma center.
UF Health Jacksonville timely filed a petition challenging the provisional approval of Orange Park's application.
The Department referred UF Health Jacksonville’s petition to DOAH so that a fact-finding hearing could be conducted to resolve the question of whether Orange Park's
application should be provisionally approved to operate a trauma center.
After UF Health Jacksonville's petition was transferred to DOAH and the instant proceeding begun, the Department continued to process Orange Park's application through the in-depth review phase.
During the in-depth review stage, the Department informed Orange Park of five additional deficiencies that needed to be corrected in order to be approved. Orange Park participated in the Department's in-depth review of its application by submitting responses to the Department's listed deficiencies.
On or before September 30, 2016, Orange Park received a letter from the Department indicating that the in-depth review stage was complete, and the verification site survey had been scheduled. The Department never published its decision that the in-depth review was complete and, until this activity was revealed at the final hearing, never notified UF Health Jacksonville of its action.
The Department and Orange Park also worked to arrange the verification site survey, now scheduled for some time in February 2017.
The Department's Consideration of Need When Reviewing Orange Park's Application
The Department's existing rule 64J-2.010 is titled "Allocation of Trauma Centers Among Trauma Service Areas." The rule allocates the maximum number of trauma centers needed in each of 19 trauma service areas. See Id. Rule 64J-2.010(3) allocates a need for only one trauma center in TSA 5.
Rule 64J-2.010 references an Amended Trauma Service Area Assessment, dated March 14, 2014. See Fla. Admin. Code R.
64J-2.010(3). That assessment contains most of the data relevant to assess "points," the sum of which determines the number of trauma programs needed in a trauma service area.
When data relevant to population, transport times, the number of severely injured patients, where they are served, and the presence of UF Health Jacksonville's existing Level I trauma center were scored and tallied, a total of five points was found for TSA 5. See Fla. Admin. Code R. 64J-2.010(1)(b)1. This number of points led to the allocation of just one program needed for TSA 5.
The 2014 Assessment incorporated into rule 64J-2.010 makes no reference to community support for an additional trauma center in TSA 5, or anywhere else in the state. The 2014 Assessment does not contain any information that could result in
the award of an additional point for TSA 5 due to community support.
Thus, at all times relevant to the consideration of Orange Park's application, rule 64J-2.010 allocated a need for just one trauma center in TSA 5, and UF Health Jacksonville's long-standing Level I trauma center fills that need. No party disputed the allocation for just one trauma center in TSA 5 under the current version of rule 64J-2.010.
Pursuant to the Department's existing trauma application processing rule, the lack of an available slot for an additional trauma program in TSA 5 should have caused the rejection of Orange Park's letter of intent and application. The Department's existing rule 64J-2.012(1)(a) provides as follows:
The department shall accept a letter of intent, DH Form 1840, January 2010, “Trauma Center Letter of Intent”, which is incorporated by reference and available from the department, as defined by subsection
64J-2.001(4), F.A.C., postmarked no earlier than September 1 and no later than midnight, October 1, from any acute care general or pediatric hospital. The letter of intent is non-binding, but preserves the hospital’s right to complete its application by the required due date if an available position, as provided in Rule 64J-2.010, F.A.C., exists in the hospital’s TSA. If the hospital does not submit a completed application or does not request an extension to complete its application by April 1 of the following year, in accordance with Rule
64J-2.013, F.A.C., the hospital’s letter of intent is void;
Fla. Admin. Code R. 64J-2.012(1)(a)1/(emphasis added).
Though the Department made proposals to amend rule 64J-2.010 on several occasions, no amendments have been made to rule 64J-2.010 since July 29, 2014.
At all times relevant to this proceeding, rule 64J-
2.010 allocated a need for only one trauma center in TSA 5, and rule 64J-2.012(1)(a) only permitted the filing of a provisional trauma center application "if an available position, as provided in rule 64J-2.010, F.A.C., exists in the hospital’s TSA."
Prior to 2015, the Department's practice was to reject a letter of intent when there was no allocated need available for an additional trauma center in the relevant TSA under rule 64J-2.010. This practice was consistent with the requirements of rule 64J-2.012(1)(a).
In October of 2014, pursuant to its prior practice, the Department rejected Orange Park's letter of intent because there was no need for an additional program allocated in TSA 5. However, the Department changed its practice beginning in 2015, at which time it began accepting letters of intent and applications regardless of whether any need for an additional trauma center was allocated to the TSA under rule 64J-2.010.
In October 2015, the Department accepted Orange Park's letter of intent pursuant to its new practice, despite the lack of any allocated need for an additional trauma center in TSA 5.
As noted above, Orange Park was approved to operate a provisional trauma center beginning May 1, 2016. On
September 1, 2016, many months after the Department's preliminary decision to approve Orange Park's provisional application, and many months after this proceeding was initiated, the Department proposed amendments to rules 64J-2.010 and 64J-2.012. See Fla. Admin. Reg., Sept. 1, 2016, Vol. 42,
No. 171.
The Department offered no testimony or evidence to demonstrate why it was not feasible or practicable to adopt the Department's new policies into rules before applying them.
If adopted, those new amendments would alter the Department's consideration of the number of trauma centers allocated in rule 64J-2.010. However, those proposals have been challenged and are the subject of separate administrative proceedings. See Shands Jacksonville Med. Ctr., Inc., d/b/a UF
Health Jacksonville v. Dep’t of Health, DOAH Case Nos. 16- 5837RP, 16-5838RP, 16-5839RP, 16-5840RP, and 16-5841RP.
The Department's recently proposed changes to its trauma allocation and trauma application processing rules have
not been adopted and are not presumed to be valid or invalid. See § 120.56(2)(c), Fla. Stat.
The Department's newly proposed amendments to its trauma rules reveal the unadopted rule that the Department began to implement in 2015, when it accepted Orange Park's letter of intent, despite the lack of an available slot allocated for an additional trauma center. Pursuant to rule amendments that the Department now proposes to codify, but which presently constitute unadopted rules, the Department will now accept and process applications to operate as provisional trauma centers, regardless of any allocated need set forth in rule 64J-2.010.
UF Health Jacksonville has alleged that the Department's approval of Orange Park cannot be sustained because the approval violates the Department's own rules and governing statutes, but also because the approval is based upon an unadopted rule–-a new policy that would allow the approval of provisional trauma centers regardless of any need allocated in rule 64J-2.010.
Ms. Colston acknowledged that no statute changed in 2014 or 2015 to inspire the Department to change its practice. However, she indicated that the Department's position was evolving due to consideration of a recent Recommended Order stemming from litigation over a trauma center application. That Order, The Public Health Trust of Miami-Dade County Florida,
d/b/a Jackson South Community Hospital v. Department of Health,
Case. No. 15-3171 (Fla. DOAH Feb. 29, 2016), was rejected as moot in a Final Order issued by the Department on July 7, 2016. Nevertheless, Ms. Colston cited the rejected Order as the basis for the Department's new interpretation of rule 64J-2.012 and processing of provisional trauma applications in the absence of an allocated need:
Q: I did read the language correctly? Is that what the existing rule required when Orange Park was approved?
A: I would start with our full reading of the rule, which says that we shall accept the letter of intent.
We, again, looked at these rules and we looked at the statute, and we have some "shall" language in both the statute and the rule that tells us what we shall do that's interpreted by the Department in general and by me as something that we shall do.
So we shall accept the provisional application, we shall receive the letter of intent.
And then the other part that would have inspired us to act the way we did was a ruling that said that we are required to accept these--that we shall accept and shall act and shall do these things at the risk of being sued. So that was a consideration that the Department was also taking into-– under consideration when we did these actions.
Furthermore, I mean, there's been some discussion about need. But what we've seen and what was upheld especially in the latest lawsuit was that need is not determined on
the front end during the provisional review and during the letter of intent process. So all of these things contributed to the Department's decision.
Q: I may have mislead [sic] you with the timing of my question. I thought I understood you to say the policy processes that are announced in the September changes did not come into fruition in the Department's mind, become a firm way of doing things until they were proposed in September, is that true?
A: No. (Tr. 420-421).
Ms. Colston had difficulty explaining the Department's position regarding its interpretation and compliance with existing versions of rule 64J-2.010 and rule 64J-2.012.
Ms. Colston offered conflicting testimony regarding whether the Department was operating under the process set forth in the Department's newly proposed rule:
Q: Okay. Did that process described in the newly proposed rule, was that in place as a process that the Department would use when Orange Park was approved in late April 2016?
A: We can't function under an unadopted rule. So we would have been functioning under the current rule.
(Tr. 418).
At hearing, Ms. Colston confirmed that the Department considers "preliminary" and "provisional" reviews required by Florida law to be synonymous. She further testified that the
Department makes three separate decision points during its review of trauma center applications: provisional status; in- depth review; and then final verification. Ms. Colston then testified that the availability of allocated need (pursuant to rule 64J-2.010) is now only dispositive at the final stage of review-–the verification stage which follows site reviews and inspections. According to Ms. Colston, the Department now takes the position (and took the position during its review of Orange Park's application) that the availability of an allocated TSA slot is only applicable at the final verification stage.
Ms. Colston acknowledged that the establishment of a provisional trauma center involves millions of dollars of investment in equipment, staff, and expertise. When asked if it was reasonable to interpret Department rules in a way that would allow the operation of provisional trauma centers only to be told, at the final stage of review, that the lack of an available allocation “slot” prevents the trauma program's final verification, Ms. Colston admitted that the interpretation was not reasonable.
By approving Orange Park's provisional application in the absence of an available slot allocated by rule 64J-2.010, the Department failed to follow its own rules and precedent. Its new interpretation constitutes a generally applicable, unadopted rule that the Department is only now attempting to
codify. The Department's new "interpretation" of its existing rule is unsupported by the facts adduced at hearing and is, as admitted by the Department's representative, not reasonable.
But for the Department's reliance on an unadopted rule, the Department would have never processed Orange Park's application, nor permitted Orange Park to operate as a provisional trauma center.
Impact of Orange Park's Trauma Center on UF Health Jacksonville
High volumes of patients with high injury severity are necessary for trauma centers to improve and maintain quality through educational opportunities to their trauma staff.
Trauma nurses require a year and a half to two years of experience with severely injured patients to enable them to be a primary nurse in a trauma critical care unit. Reduced volumes of trauma cases cause a trauma center to have fewer educational opportunities to enable trauma nurses to gain experience. UF Health Jacksonville is a teaching hospital that trains nurses and trauma surgeons. The decline in trauma volumes caused by Orange Park's operation as a trauma center has reduced training opportunities at UF Health Jacksonville.
The opening of Orange Park's trauma center has caused the average injury severity score (ISS) for trauma patients to decrease at UF Health Jacksonville, thereby reducing the
educational opportunities for UF Health Jacksonville's trauma nurses to treat the most severely injured patients.
During the first three months after Orange Park opened its trauma center in 2016, UF Health Jacksonville's volume of its most severely injured patients decreased by 17 percent. Overall, UF Health Jacksonville projects an annual loss of 320 to 540 trauma cases caused by Orange Park's operation of a trauma center.
UF Health Jacksonville projects that a contribution margin loss of approximately $3.5 million to $5.9 million annually will be caused by Orange Park's operation of a trauma center.
CONCLUSIONS OF LAW
Jurisdiction and Standing
The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of this proceeding. §§ 120.569 and 120.57(1), Fla. Stat.
UF Health Jacksonville has standing pursuant to section 395.4025(7) which provides:
Any hospital that wishes to protest a decision made by the department based on the department’s preliminary or in-depth review of applications or on the recommendations of the site visit review team pursuant to this section shall proceed as provided in chapter 120. Hearings held under this subsection shall be conducted in the same manner as provided in ss. 120.569 and
120.57. Cases filed under chapter 120 may combine all disputes between parties.
Id. As noted in the Findings of Fact, Ms. Colston confirmed that the Department construes the word "preliminary," as used in section 395.4025(7), as synonymous with "provisional."
Also as found above, UF Health Jacksonville will suffer an injury-in-fact caused by the operation of a trauma center at Orange Park. In fact, UF Health Jacksonville is already suffering those injuries as a result of the Department's insistence that Orange Park operate as a provisional trauma center throughout the pendency of this administrative proceeding. Additionally, UF Health Jacksonville is within the zone of interest of Florida laws governing trauma approvals. See § 395.4025(7), Fla. Stat.; Shands Jacksonville Med. Ctr.,
Inc. v. Dep't of Health, 123 So. 3d 86 (Fla. 1st DCA 2013).
Burden of Proof
Findings of Fact shall be based on the preponderance of evidence. § 120.57(1)(j), Fla. Stat. As the applicant, Orange Park bears the burden of proving that the Department's preliminary decision to approve Orange Park's provisional trauma center application complied with statutes and rules that govern the application process.
This proceeding also involves an allegation by UF Health Jacksonville that the Department relied upon an
unadopted rule when approving Orange Park's application. Specifically, UF Health Jacksonville alleged that the Department relied upon an unadopted rule that would allow provisional trauma centers to be approved regardless of whether an available position is allocated in rule 64J-2.010. See UF Health
Jacksonville Pet., p. 10. UF Health Jacksonville also alleged that the unadopted rule was invalid. See Id.
Section 120.57(1)(e) provides that "[a]n agency or administrative law judge may not base agency action that determines the substantial interests of a party on an unadopted rule or a rule that is an invalid exercise of delegated legislative authority." § 120.57(1)(e)1., Fla. Stat. The only exception in section 120.57(1)(e)3. is when "rulemaking is neither feasible nor practicable" and the agency "demonstrates" that the unadopted rule is not an invalid exercise of delegated legislative authority. Id.
Statutory and Regulatory Framework of Statewide Trauma System
Part II of chapter 395 provides for the establishment of a statewide trauma system "designed to meet the needs of all injured trauma victims who require care in an acute-care setting and into which every health care provider or facility with resources to care for the injured trauma victim is incorporated." § 395.40(2), Fla. Stat. The Department is the
agency having primary responsibility for administering the trauma system.
The state's 67 counties have been assigned to TSAs for purposes of managing the trauma system. UF Health Jacksonville and Orange Park are located in TSA 5, which consists of Baker, Clay, Duval, Nassau, and St. Johns Counties. § 395.402(4)(a)5., Fla. Stat.; Fla. Admin. Code R. 64J-2.010(3).
The Legislature has capped, at 44, the total number of trauma centers that may operate in the state. § 395.402(4)(c), Fla. Stat. The Department is charged with deciding where trauma facilities are needed, so long as no more than 44 trauma centers are approved. The Department is required by law to allocate, by rule, the maximum number of trauma centers allowable in each TSA. § 395.402(4)(b), Fla. Stat.
In TSA 5, the Department has determined that there is a need for only one trauma center. Fla. Admin. Code R. 64J- 2.010(3). At all times relevant to this case, one verified trauma center, UF Health Jacksonville, has occupied that position in TSA 5, leaving no unallocated "slot" vacant for Orange Park to fill.
Section 395.4025 outlines the 21-month process a hospital must follow to obtain verification as a trauma center, and the Department, by rule, has established additional procedures governing the selection of trauma centers. See Fla.
Admin. Code R. 64J-2.012. This lengthy, multistage process is punctuated by three decision-points, or stages, at which the Department must take agency action on the hospital's application.
The first stage of the trauma center review and approval process--which is the stage at issue in this proceeding--is the provisional review stage. This stage commences when the Department receives a hospital's application
to be licensed as a trauma center. § 395.4025(2)(c), Fla. Stat. The provisional review stage culminates with the Department announcing its decision that the hospital has the critical elements required for a trauma center, and the application is therefore approved, or denying the application.
A hospital enters the provisional review stage by submitting a letter of intent to the Department, which must be received between September 1 and October 1 of the first year.
§ 395.4025(2)(a), Fla. Stat.; Fla. Admin. Code R. 64J- 2.012(1)(a). Because Orange Park timely submitted its letter of intent in 2015, this case involves the 2015-17 application cycle.
By October 15 of the first year, the Department provides an application package to each hospital that timely gave notice of its intent to apply. The package includes a pamphlet known as DHP 150-9. This pamphlet, a publication of
the Department, contains the Trauma Center Standards (Standards) with which a trauma center must comply to be verified.
DHP 150-9 is incorporated by reference in rule 64J-2.011. Having received an application package, a hospital has until the close of business on April 1 of the second year (2016 in this case) to submit its application.
Consideration of Need at the Provisional Review Stage
Section 395.402(4)(b) mandates that each TSA should have at least one Level I or Level II trauma center, and directs that “[t]he department shall allocate, by rule, the number of trauma centers needed for each trauma service area.”
The Department adopted rule 64J-2.010 in order to comply with the requirements of section 395.402(4)(b).
Rule 64J-2.010(3) assigns Duval and Clay counties to TSA 5, and then determines a need for only one trauma center in that area. Because UF Health Jacksonville offers an existing Level I trauma center in TSA 5, there is no need for another trauma center, pursuant to the Department's rule.
Notably, the Department attempted to amend rule 64J-
2.010 so that two trauma positions would be available in TSA 5.
However, that attempt to amend the rule was challenged and officially withdrawn. See Shands Jacksonville Med. Ctr., Inc. v. Dep't of Health, DOAH Case No. 16-1597RP (Order of Dismissal,
filed Apr. 15, 2016). As a result, rule 64J-2.010 is unamended,
and still establishes a need for only one trauma center in TSA 5.
Pursuant to the rulemaking authority vested by section 395.405, the Department has also adopted rule 64J-2.012(1)(a), entitled “Process for the Approval of Trauma Centers,” which provides in relevant part:
The department shall accept a letter of intent, DH Form 1840, January 2010, “Trauma Center Letter of Intent”, which is incorporated by reference and available from the department, as defined by subsection
64J-2.001(4), F.A.C., postmarked no earlier than September 1 and no later than midnight, October 1, from any acute care general or pediatric hospital. The letter of intent is non-binding, but preserves the hospital’s right to complete its application by the required due date if an available position, as provided in Rule 64J-2.010, F.A.C., exists in the hospital’s TSA. If the hospital does not submit a completed application or does not request an extension to complete its application by April 1 of the following year, in accordance with Rule 64J-2.013, F.A.C., the hospital’s letter of intent is void;
Fla. Admin. Code R. 64J-2.012(1)(a)(emphasis added).
Thus, pursuant to rule 64J-2.012(1)(a), the Department may accept an application for a new trauma center only "if an available position, as provided in Rule 64J-2.010, F.A.C., exists in the hospital's TSA." Thus, the availability of an unmet "position" in rule 64J-2.010(3) is a prerequisite to the
acceptance of a trauma application and before approval of any new trauma center in Florida.2/
When construing a statute, one looks first to the statute's plain meaning. Moonlit Waters Apts., Inc. v. Cauley, 666 So. 2d 898, 900 (Fla. 1996). Furthermore, "[w]hen the language of the statute is clear and unambiguous and conveys a clear and definite meaning, there is no occasion for resorting to the rules of statutory interpretation and construction; the statute must be given its plain and obvious meaning." Holly v. Auld, 450 So. 2d 217, 219 (Fla. 1984) (citing A.R. Douglass,
Inc. v. McRainey, 137 So. 157, 159 (1931)).
The above-highlighted provision within the Department's existing rule 64J-2.012(1)(a) is consistent with section 395.4025(5), which plainly and unequivocally provides that “[i]n addition, hospitals being considered as provisional trauma centers shall meet all the requirements of a trauma center and shall be located in a trauma service area that has a need for such a trauma center.”3/ (emphasis added).
An agency is required to follow its own rules. See
Vantage Healthcare Corp. v. Ag. for Health Care Admin., 687 So. 2d 306, 308 (Fla. 1st DCA 1997); Collier Cnty. Bd. of Cnty.
Comm'rs v. Fish & Wildlife Conser. Comm'n, 993 So. 2d 69, 74 (Fla. 2d DCA 2008). In Cleveland Clinic Florida Hospital, Inc.
v. Agency for Health Care Administration, 679 So. 2d 1279 (Fla.
1st DCA 1997), the First District Court of Appeal held:
Without question, an agency must follow its own rules, Boca Raton Artificial Kidney Center v. Department of Health and Rehabilitative Services, 493 So. 2d 1055 (Fla. 1st DCA 1986), but if the rule, as it plainly reads, should prove impractical in operation, the rule can be amended pursuant to established rulemaking procedures.
However, “[a]bsent such amendment, expedience cannot be permitted to dictate its terms.” Id. at 1057. That is, while an administrative agency “is not necessarily bound by its initial construction of a statute evidenced by the adoption of a rule,” the agency may implement its changed interpretation only by “validly adopting subsequent rule changes.” Department of Administration, Division of Retirement v.
Albanese, 445 So. 2d 639, 642 (Fla. 1st DCA
1984).
Id. 679 So. 2d at 1242.
Ms. Colston's testimony regarding rule 64J-2.012(1)(a) was inconsistent and lacked credibility. Moreover, the Department’s stated reliance on the Recommended Order in The Public Health Trust of Miami-Dade County Florida, supra, is
misplaced. In his Recommended Order, Judge Van Laningham recognized that there must be an “open slot” in order for the Department to accept an application for provisional approval, albeit there may be situations where multiple applicants are vying for the available slot. As Judge Van Laningham observed:
43. Unlike a bid protest, this case arises out of a licensing process. There is
neither a contract to be awarded nor a competition afoot here. It is important to emphasize that the Provisional Review Stage does not, under any circumstances, entail a competition between applicants, even if during a particular application cycle, as happens to be true for TSA 19 in 2014-16, the number of applicants exceeds the number of slots available. This is because while there is a limit on the number of verified trauma centers that can be licensed in each trauma service area, there is no limit on the number of provisional trauma centers that a trauma service area can have (if it still has one or more open slots). Not until the end of the Onsite Visit Stage can the prospect of a head-to-head competition between applicants possibly arise, and then only "if the number of Provisional trauma centers found eligible for selection by the department in a given TSA exceeds the number permitted." See Fla. Admin. Code R. 64J- 2.016(11). During the Provisional Review Stage, applications are never mutually exclusive.
(RO at 27, 28. (emphasis added).
Not only is the Department’s new policy of accepting letters of intent and ensuing applications in the absence of an available slot contrary to statute and its existing rule, it is also unreasonable and nonsensical. All parties, including the Department, acknowledged that the establishment of a provisional trauma center involves millions of dollars of investment in equipment, staff, and expertise. It is highly unlikely that a hospital would make the investment necessary to establish a provisional trauma center, and undergo the lengthy and time- consuming review process, knowing in advance that final denial
of the program is a foregone conclusion, due to lack of allocated need. And while in some instances there might be more than one applicant vying for a single available slot within a particular TSA, those competing applicants are free to exercise their own judgment as to the competitiveness of their programs, and their ultimate chances of winning final approval pursuant to the “tie-breaker” criteria contained in rule 64J-2.016.4/
Moreover, imposing the numeric need requirement at the front end of the application process, i.e., the provisional application stage, further protects the substantial investment made by the trauma center applicant, since subsequent revisions to the TSA allocations, including possible downward need revisions, would not “pull the rug” out from under an applicant that initially applied when a slot was available, but was later eliminated as a result of a later needs assessment.
The plain and unambiguous language of rule 64J- 2.012(1)(a) dictates that Orange Park's letter of intent and application should have been rejected due to the absence of an available slot as established by rule 64J-2.010(3).
The Department Relied on An Unadopted Rule to Approve Orange Park's Application
Agencies may not rely upon unadopted rules to justify proposed agency action. See Flamingo Lake RV Resort, Inc. v.
Dep't of Transp., 599 So. 2d 732, 733 (Fla. 1st DCA 1992)
("Moreover, we know of no authority that would legitimize an agency's adoption of a nonrule policy which takes away that which a properly promulgated rule explicitly provides.").
This basic requirement, that agency action not be based upon unadopted rules, is now codified at section 120.57(1)(e). Section 120.57(1)(e) may be used to invalidate preliminary agency action. See Saunders v. Fla. Dep't of Child.
and Fams., 185 So. 3d 1298, 1302 n.3(Fla. 1st DCA 2016); Shands
Jacksonville Med. Ctr., Inc. v. Ag. for Health Care Admin., Case No. 11-4461 (Fla. DOAH Dec. 16, 2011; AHCA Jan. 24, 2012).
In Department of Business and Professional Regulation, Construction Industry Licensing Board v. Seamon, Case No. 16-
2845PL (Fla. DOAH Oct. 5, 2016), the Administrative Law Judge explained the history of section 120.57(1)(e):
The 2016 amendment of section 120.57(1)(e) “was designed to protect regulated persons from an agency's use of an invalid or unadopted rule in enforcement, licensing or other § 120.57 proceedings.” H. French Brown, IV and Larry Sellers, The 2016 Amendments to the APA: Say Goodbye to United Wisconsin - and More, Fla. Bar J., Sept./Oct. 2016, at 46. It is well established that, even before the 2016 amendments to chapter 120, “[a]n agency may not base agency action that determines the substantial interests of a party on an unadopted rule.” Amerisure Mut. Ins. Co. v. Fla. Dep't of Fin. Servs., 156 So. 3d 520,
531 (Fla 1st DCA 2015). The 2016 amendments to sections 120.57 create no new substantive rights, but serve only to establish a procedure by which a substantially affected
party may enforce pre-existing rights against the application of an unadopted rule.
Seamon, n.4.
Ms. Colston testified that the Department's current policy is to accept all letters of intent irrespective of need allocated in rule 64J-2.010, and limited only by the statewide cap of 44. Ms. Colston testified that the Department applied this policy uniformly to all letters of intent received in 2015.
This policy is substantially the same procedure as set forth in the proposed rule amendments to rules 64J-2.010 and 64J-2.012. The policy represents a significant shift from the Department's existing rule requirements. In any event, these proposed amendments have not yet been adopted or made effective.
An unadopted rule is "an agency statement that meets the definition of the term 'rule,' but that has not been adopted pursuant to the requirements of s. 120.54." § 120.52(20), Fla. Stat. The Department has not adopted the policy pursuant to the requirements of section 120.54.
The Department’s new policy meets the definition of a rule as provided in section 120.52(16). The Department's policy does not meet any of the exceptions to the definition of a rule contained in section 120.52(16)(a)-(c).
Because the Department's policy meets the definition of a rule but has not yet been adopted pursuant to section
120.54, the Department's policy is an unadopted rule. Neither this tribunal nor the Department may base agency action that determines the substantial interests of a party on an unadopted rule. See § 120.57(1)(e)1., Fla. Stat.
Rulemaking was practicable and feasible as evidenced by the Department's proposed rule amendments to adopt the unadopted policy. Since rulemaking was practicable and feasible, the Department is not permitted to rely on the exceptions in section 120.57(1)(e)3.a.-f.5/
Even if rulemaking were not practicable and feasible, however, the burden would then shift to the Department to "demonstrate" that the unadopted rule is valid. See
§ 120.57(1)(e)3.a.-f. The Department presented no such evidence.
The Department Acted Illegally in Allowing Orange Park to Operate a Provisionally Approved Trauma Center
The Provisional Review Stage of the application process culminates with the Department's decision either finding the hospital's application "acceptable," or denying it. The Department must notify the applicant of its intended decision on or before May 1. Fla. Admin. Code R. 64J-2.012(1)(g).
Section 395.4025(7) provides as follows:
(7) Any hospital that wishes to protest a decision made by the department based on the department’s preliminary or in-depth review of applications or on the recommendations of
the site visit review team pursuant to this section shall proceed as provided in chapter
120. Hearings held under this subsection shall be conducted in the same manner as provided in ss. 120.569 and 120.57. Cases filed under chapter 120 may combine all disputes between parties.
It is, of course, a basic tenet of Florida administrative law that intended agency action is ineffective until it becomes final at the conclusion of a formal administrative proceeding, if timely requested, or after the right to a hearing is waived. See Capeletti Bros., Inc. v. Dep't of Transp., 362 So. 2d 346, 348-49 (Fla. 1st DCA
1978)("Absent [an express] waiver [of the right to an administrative hearing], we must regard an agency's free-form action as only preliminary irrespective of its tenor . . . .
Until proceedings are had satisfying Section 120.57, or an opportunity for them is clearly offered and waived, [an agency] is powerless to" determine a party's substantial interests.).
Therefore, if a hospital contests the Department's intended decision to approve another hospital's application after the provisional review, as UF Health Jacksonville has done, the Provisional Review Stage continues until the conclusion of the formal administrative proceeding.
If the Department finds the hospital's application acceptable based on the provisional review, the hospital "shall be eligible to operate as a provisional trauma center."
§ 395.4025(3), Fla. Stat. This means that an agency decision in the applicant's favor at the end of the Provisional Review Stage results in the hospital's receiving a "provisional license" under which it may operate a trauma center "for a significant period of time." Shands Jacksonville Med. Ctr., Inc. v. Dep't
of Health, 123 So. 3d 86, 94 (Fla. 1st DCA 2013).
However, the Department's intended decision to issue a preliminary license to a hospital whose application has been found acceptable is merely preliminary agency action having no legal effect until the conclusion of a formal administrative proceeding, if timely requested, or after the right to a hearing is waived.
Appellate courts have already observed that "the intent to issue a provisional license is proposed final agency action that existing trauma centers have a right to challenge." Shands Jacksonville Med. Ctr., 123 So. 3d at 87 (emphasis
added). If an existing trauma center requests a formal administrative hearing on the Department's intended decision to grant a provisional license authorizing the operation of a new trauma center, then the provisional license cannot lawfully be issued, or take effect, until the conclusion of the administrative proceeding--and then only if the resulting final order implements the proposed agency action.
The Department has argued throughout this proceeding that if a hospital is granted provisional approval, it is required to begin operation as a provisional trauma center on May 1, and becomes a full member of Florida's integrated trauma system on that day. The Department bases this contention on rule 64J-2.012(1)(g)1., which provides that the "department shall notify each hospital whose application it has found acceptable upon completion of the provisional review that the hospital shall operate as a Provisional trauma center beginning May 1." The rule is a paraphrase of section 395.4025(3}, which states that "[a]fter April 30, any hospital that submitted an application found acceptable by the department based on provisional review shall be eligible to operate as a provisional trauma center." (emphasis added).
The statute quite clearly does not require the provisional licensee to commence operations immediately after April 30. Rather, the statute simply says that the licensee may
do so after April 30. Put another way, section 395.4025(3} prohibits a newly approved provisional trauma center from opening before May 1, a restriction which is neither tantamount to, nor even implies, a requirement that the provisional licensee start operating on May 1. An affirmative requirement of that nature, if intended, must be stated explicitly, for a license is an authorization to act, not a mandate.
§ 120.52(10}, Fla. Stat. Here, such a directive has not been stated at all.
Additionally, the Department cannot cite to any exemption that would absolve it from complying with the pre- deprivation due process of the Administrative Procedures Act (APA). Cf. §§ 120.80 and 120.81, Fla. Stat. (listing agency specific exemptions to the APA, but not listing any exemptions related to trauma approval). To the contrary, the Department's governing trauma laws specifically invoke the protections available through formal administrative proceedings. See
§ 395.4025(7), Fla. Stat. (referencing ability to seek section
120.57 hearing on preliminary trauma decisions).
If rule 64J-2.012(1)(g)l. required a provisional trauma center to begin operating on May 1, then the rule plainly would modify or enlarge section 395.4025(3), which it purports to implement, making the rule an invalid exercise of delegated legislative authority. § 120.52(8)(c), Fla. Stat.
The Department failed to follow its own rules and governing statutes when it instructed Orange Park to operate as a trauma center and instructed emergency responders to send their trauma patients to Orange Park. The Department's preliminary application decision was not final agency action, and should not have been treated as if it were.
Although the trauma center statute, rather than the certificate of need (CON) statute, is the subject of this proceeding, the court's reasoning in Boca Raton Artificial
Kidney equally applies in this case. This proceeding, brought under sections 120.569 and 120.57(1), is a de novo proceeding, the purpose of which is to formulate agency action, not review action taken earlier and preliminarily. As discussed above, the Department has not identified any statutory provisions exempting this proceeding from full compliance with sections 120.569 and
120.57. Thus, pursuant to Boca Raton Artificial Kidney and
Capeletti, and other cited authority, the Department is not authorized to permit Orange Park to operate as a provisional Level I trauma center during the pendency of this proceeding.
The undersigned observes that UF Health Jacksonville lacks an administrative remedy to prevent Orange Park from operating as a provisional trauma center while this proceeding is pending. The Florida Legislature has vested the district courts of appeal with the authority to review administrative agency action. However, the circuit courts retain their power to issue injunctive, declaratory, and mandatory relief, subject to the judicially-created requirement that parties to an administrative proceeding must exhaust administrative remedies when such remedies are both available and adequate. State ex
rel. Dep't of Gen. Servs. v. Willis, 344 So. 2d 580 (Fla. 1st
DCA 1977)(emphasis added). Conversely, when agency errors are so egregious or devastating that the promised administrative remedy is too little or too late, or if the agency acts without colorable legal authority and there is no administrative remedy for that illegality, then exhaustion of administrative remedies is not required, and a circuit court may properly invoke its jurisdiction to remedy the error. Id. at 590.
Here, UF Health Jacksonville lacks an available, adequate administrative remedy. UF Health Jacksonville established that it is suffering immediate and ongoing economic harm and potential quality of care diminution as a result of the Department allowing Orange Park to operate as a provisionally approved trauma center while this proceeding is pending.
Because DOAH lacks the authority to order or otherwise require the Department to direct Orange Park to cease doing so, there is no administrative remedy available to UF Health Jacksonville to address the immediate and continuing economic harm and potential quality of care diminution it has incurred while this proceeding is pending. To that point, even if UF Health Jacksonville were to ultimately prevail at the conclusion of this proceeding, resulting in the issuance of a final order determining that Orange Park is not entitled to a provisional trauma center license, that determination would not provide an adequate remedy for the economic harm and potential quality of care diminution
UF Health Jacksonville established it currently is suffering, and will continue to suffer, while this proceeding is pending. Under those circumstances, any administrative remedy to which UF Health Jacksonville may ultimately be entitled would be too little, too late to remedy this specific injury. See Id.
It is also well-established that when an agency engages in conduct for which there is no colorable legal authority--i.e., the agency's action is illegal--exhaustion is not required and the aggrieved party should be able to invoke the circuit court's jurisdiction for redress from that illegality. Dep't of Envtl. Reg. v. Falls Chase Special Taxing Dist., 424 So. 2d 787, 796 (Fla. 1st DCA 1982). Pursuant to the
authority discussed above, the Department lacks colorable legal authority to permit Orange Park to operate as a provisional trauma center while this proceeding is pending. Accordingly, here, UF Health Jacksonville should not be required to exhaust administrative remedies. See Baker Cnty. Med. Servs. v. Ag. for
Health Care Admin., 178 So. 3d 71 (Fla. 1st DCA 2015)(exhaustion not required because agency lacked colorable statutory authority for its action).
Orange Park’s Defense of Equitable Estoppel
In its Proposed Recommended Order, Orange Park argues that UF Health Jacksonville’s Petition should be denied because
the Department is equitably estopped from revoking Orange Park’s provisional approval.
Estoppel is appropriate in matters involving government actions when: (1) a representation is made by the government as to a material fact which is contrary to a later- asserted position; (2) a party relies on that representation; and (3) that party changes its position in a manner detrimental to it caused by the representation and its reliance thereon. See Council Bros., Inc. v. City of Tallahassee, 634 So. 2d 264,
266 (Fla. 1st DCA 1994); Dolphin Outdoor Adver. v. Dep’t of
Transp., 582 So. 2d 709, 710-11 (Fla. 1st DCA 1991). The party relying on the government representation must also show “the existence of affirmative conduct by the government that goes beyond mere negligence”; “that the government conduct will cause serious injustice”; and finally, that the application of the estoppel doctrine “will not unduly harm the public interest.” Council Bros., 634 So. 2d at 266. Even where a representation
by the government is premised on a misunderstanding of law, estoppel applies where an agency’s representation was one of fact. Branca v. City of Miramar, 634 So. 2d 604, 606-07 (Fla. 1994)(applying equitable estoppel where party relied on the fact that an ordinance had been enacted, even though the ordinance was later found to be illegal). Orange Park argues that all three of these elements have been met because Orange Park
reasonably relied on the Department’s acceptance of its letter of intent, review and approval of its application, and direction to begin trauma center operations.
As to the first element, Orange Park asserts that the Department effectively represented to Orange Park that, if Orange Park’s application for provisional approval met the trauma Standards, it would be approved. After Orange Park submitted its notice of intent to become a Level II trauma center, the Department accepted it and provided Orange Park with a link to the trauma center application. The Department then reviewed and approved the application, and directed Orange Park to begin trauma center operations.
Here the Department's agent made a mistake of law when she advised Orange Park that the Department had the legal authority to accept and review Orange Park’s provisional application in the absence of an available trauma center “slot.” Orange Park was well aware that its previous efforts to submit an application had been rebuffed, due to lack of allocated need, and was also undoubtedly aware that there had been no statutory amendments that would justify this sudden change in the Department’s policy. There was no mistake of fact upon which Orange Park relied to its detriment. Accordingly, equitable estoppel is not an appropriate remedy under these circumstances.6/
Motions for Attorney’s Fees
On October 26, 2016, the Department filed a Motion for Attorney’s Fees and Costs Pursuant to Section 120.595, Florida Statutes, directed at UF Health Jacksonville. On November 21, 2016, UF Health Jacksonville itself filed a motion for attorney’s fees and costs, requesting an award against the Department, pursuant to section 120.569(2)(e). On December 6, 2016, the Department filed a Response in Opposition to Shands’ Motion for Attorney’s Fees and Costs.
Section 120.595 provides in relevant part:
CHALLENGES TO AGENCY ACTION PURSUANT TO SECTION 120.57(1).
The provisions of this subsection are supplemental to, and do not abrogate, other provisions allowing the award of fees or costs in administrative proceedings.
The final order in a proceeding pursuant to s. 120.57(1) shall award reasonable costs and a reasonable attorney’s fee to the prevailing party only where the nonprevailing adverse party has been determined by the administrative law judge to have participated in the proceeding for an improper purpose.
For purposes of section 120.595(1), the term “improper purpose” is defined as “participation in a proceeding pursuant to s. 120.57(1) primarily to harass or cause unnecessary delay or for frivolous purpose or to needlessly increase the cost of litigation, licensing, or securing approval
of an activity.” See § 120.595(1)(e)1., Fla. Stat. Further,
whether a party intended to participate in a section 120.57(1) proceeding for an improper purpose is an issue of fact. See
Burke v. Harbor Estates Ass’n, Inc., 591 So. 2d 1034 (Fla. 1st DCA 1991).
Section 120.569(2)(e) provides:
(e) All pleadings, motions, or other papers filed in the proceeding must be signed by the party, the party’s attorney, or the party’s qualified representative. The signature constitutes a certificate that the person has read the pleading, motion, or other paper and that, based upon reasonable inquiry, it is not interposed for any improper purposes, such as to harass or to cause unnecessary delay, or for frivolous purpose or needless increase in the cost of litigation. If a pleading, motion, or other paper is signed in violation of these requirements, the presiding officer shall impose upon the person who signed it, the represented party, or both, an appropriate sanction, which may include an order to pay the other party or parties the amount of reasonable expenses incurred because of the filing of the pleading, motion, or other paper, including a reasonable attorney’s fee.
The evidence of record in this proceeding does not establish that any of the parties hereto participated in this proceeding for an improper purpose. Likewise, it is not apparent to the undersigned that any pleading, motion, or other paper was interposed for any improper purposes, such as to harass or to cause unnecessary delay, or for frivolous purpose
or needless increase in the cost of litigation. Accordingly, both of the above motions are denied.7/
On November 10, 2016, UF Health Jacksonville filed a Motion for the Department of Health to Pay Reasonable Attorney’s Fees, based upon a different statutory authority, to wit,
section 57.105(5).
Section 57.105(5) provides:
In administrative proceedings under chapter 120, an administrative law judge shall award a reasonable attorney’s fee and damages to be paid to the prevailing party in equal amounts by the losing party and a losing party’s attorney or qualified representative in the same manner and upon the same basis as provided in subsections (1)-(4). Such award shall be a final order subject to judicial review pursuant to s. 120.68. If the losing party is an agency as defined in
s. 120.52(1), the award to the prevailing party shall be against and paid by the agency. A voluntary dismissal by a nonprevailing party does not divest the administrative law judge of jurisdiction to make the award described in this subsection.
Section 57.105(1) identifies the circumstances under which an award of attorney’s fees is warranted:
Upon the court’s initiative or motion of any party, the court shall award a reasonable attorney’s fee, including prejudgment interest, to be paid to the prevailing party in equal amounts by the losing party and the losing party’s attorney on any claim or defense at any time during a civil proceeding or action in which the court finds that the losing party or the losing party’s attorney knew or should have known that a claim or defense when initially
presented to the court or at any time before trial:
Was not supported by the material facts necessary to establish the claim or defense; or
Would not be supported by the application of then-existing law to those material facts.
At hearing, the Department’s representative testified that the Department’s changed interpretation of its duties under the trauma statutes was due, at least, in part, to the Department’s understanding of the Recommended Order entered in the Jackson South case. As the undersigned noted previously,
the Department misunderstood and misapplied the holding in that case. Nonetheless, it is not entirely implausible to believe that the Department felt that its actions were supported by the facts, and law (erroneously) applied to those facts.
Accordingly, UF Health Jacksonville’s motion for attorney’s fees pursuant to section 57.105(5) is denied.
Conclusion
The Department's policy of accepting letters of intent and trauma center applications irrespective of need as established in rule 64J-2.010, constitutes an unadopted rule and is contrary to its validly adopted rules and statute.
This tribunal and the Department must give effect to existing rules 64J-2.010 and 64J-2.012. The parties have
stipulated that at all times relevant to this proceeding, rule 64J-2.010 has allocated a need for only one trauma center in TSA 5. UF Health Jacksonville currently fills that need. Rule 64J-2.012(1)(a) clearly provides that "[t]he letter of intent is non-binding, but preserves the hospital’s right to complete its application by the required due date if an available position, as provided in Rule 64J-2.010, F.A.C., exists in the hospital’s TSA." Id.
Because there is a need for only one trauma center in TSA 5 and UF Health Jacksonville currently fills that need, Orange Park's application for provisional approval must be denied.
RECOMMENDATION
Based on the forgoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Health enter a final order denying Orange Park's Application to operate a provisional trauma center in TSA 5.
DONE AND ENTERED this 27th day of January, 2017, in Tallahassee, Leon County, Florida.
S
W. DAVID WATKINS Administrative Law Judge
Division of Administrative Hearings The DeSoto Building
1230 Apalachee Parkway
Tallahassee, Florida 32399-3060
(850) 488-9675
Fax Filing (850) 921-6847 www.doah.state.fl.us
Filed with the Clerk of the Division of Administrative Hearings this 27th day of January, 2017.
ENDNOTES
1/ As a proposed rule, rule 64J-2.010 was subject to challenge in Shands Teaching Hospital and Clinics, Inc. v. Department of Health, DOAH Case No. 14-1022RP (Fla. DOAH June 20, 2014). The rule was found to be valid by Administrative Law Judge
Bruce McKibben. Companion rule 64J-2.012 was not subjected to challenge in that proceeding and has been in effect in its current form since April 20, 2010.
2/ Arguably, a point of entry to challenge the Department’s acceptance (or denial) of a letter of intent should be given. Such a point of entry, provided at the outset of the long, expensive, and protracted application/review process, would potentially save would-be applicants considerable time and resources. However, the Legislature has expressly provided that challenges may only be brought at the time of the Department’s preliminary or in-depth review of the application, or on the recommendations of the site visit review team. § 395.4025(7), Fla. Stat.
3/ The subject language within rule 64J-2.012(1)(a) is also consistent with section 395.4025(2)(d)1. relating to the circumstances under which an extension of time may be granted to a provisional trauma center applicant to meet the trauma center
standards set forth in 395.4025(2)(c). Section 395.4025(2)(d)1. provides:
Notwithstanding other provisions in this section, the department may grant up to an additional 18 months to a hospital applicant that is unable to meet all requirements as provided in paragraph (c) at the time of application if the number of applicants in the service area in which the applicant is located is equal to or less than the service area allocation, as provided by rule of the department. An applicant that is granted additional time pursuant to this paragraph shall submit a plan for departmental approval which includes timelines and activities that the applicant proposes to complete in order to meet application requirements. Any applicant that demonstrates an ongoing effort to complete the activities within the timelines outlined in the plan shall be included in the number of trauma centers at such time that the department has conducted a provisional review of the application and has determined that the application is complete and that the hospital has the critical elements required for a trauma center.
(emphasis added).
4/ Rule 64J-2.016(11) provides as follows:
(11) If the number of Provisional trauma centers found eligible for selection by the department in a given TSA exceeds the number permitted, as provided in subsection 64J- 2.010(3), F.A.C., the following criteria shall be applied independently and consecutively to all Provisional trauma centers in the TSA until application of the criteria results in the number of trauma centers authorized in subsection 64J- 2.010(3), F.A.C., for that TSA. When that occurs, the remaining criteria shall not be considered. The criteria to be applied are as follows:
A hospital recommended to be a trauma center in the department-approved local or regional trauma agency plan pursuant to subparagraph 64J-2.007(2)(d)3., F.A.C., shall be given approval preference over any hospital which was not recommended.
A hospital shall be given selection preference based on the level of service they intend to provide according to the following sequence:
A Provisional Level I trauma center will be given preference over a Provisional
Level II trauma center with pediatrics, a Provisional Level II trauma center, and a Provisional pediatric trauma center;
A Provisional Level II trauma center with pediatrics will be given preference over a Provisional Level II trauma center and a Provisional pediatric trauma center; and
A Provisional Level II trauma center will be given preference over a Provisional pediatric trauma center in TSA having only one allocated trauma center position, and in a TSA with more than one allocated trauma center position if there already exists an approved Level I trauma center, Level II trauma center with pediatrics, or a pediatric trauma center, or if in the instant selection process a Level I trauma center, Level II trauma center with pediatrics, or pediatric trauma center is to be selected.
An applicant hospital in a geographic location that is most conducive to access by the greatest number of people to be served within a TSA shall be given preference for selection.
A hospital representing the best geographic distribution with respect to terrain, population served and projected
service population in a given TSA shall be given preference for selection.
A hospital which, according to the most recent complete year of Agency for Health Care Administration data, shows a higher level of commitment of care to the service area, as evidenced by the ratio of non- paying to paying patients, shall be given preference for approval.
5/ Section 120.57(1)(e)3., provides as follows:
Notwithstanding subparagraph 1., if an agency demonstrates that the statute being implemented directs it to adopt rules, that the agency has not had time to adopt those rules because the requirement was so recently enacted, and that the agency has initiated rulemaking and is proceeding expeditiously and in good faith to adopt the required rules, then the agency’s action may be based upon those unadopted rules if the administrative law judge determines that rulemaking is neither feasible nor practicable and the unadopted rules would not constitute an invalid exercise of delegated legislative authority if adopted as rules. An unadopted rule shall not be presumed valid. The agency must demonstrate that the unadopted rule:
Is within the powers, functions, and duties delegated by the Legislature or, if the agency is operating pursuant to authority vested in the agency by the State Constitution, is within that authority;
Does not enlarge, modify, or contravene the specific provisions of law implemented;
Is not vague, establishes adequate standards for agency decisions, or does not vest unbridled discretion in the agency;
Is not arbitrary or capricious. A rule is arbitrary if it is not supported by logic
or the necessary facts; a rule is capricious if it is adopted without thought or reason or is irrational;
Is not being applied to the substantially affected party without due notice; and
Does not impose excessive regulatory costs on the regulated person, county, or city.
6/ While equitable estoppel is not available to Orange Park because there was no mistake of fact upon which Orange Park relied, the undersigned also notes that the continued operation of the Orange Park trauma center, in the absence of need, has the potential to “unduly harm the public interest” due to the adverse impact on the quality of the program at UF Health Jacksonville.
7/ In denying UF Health Jacksonville’s motion for attorney’s fees and costs, the undersigned has been mindful of the issue sub judice in this de novo administrative proceeding. That is, whether the trauma center application filed by Orange Park meets the applicable statutory and rule criteria and should therefor receive provisional approval. And while the undersigned has found, as a matter of law, that the Department has acted illegally in allowing Orange Park to operate a trauma center during the pendency of this proceeding, the Department’s conduct in doing so is not within the scope of this proceeding.
Accordingly, the denial of UF Health Jacksonville’s motion for attorney’s fees and costs herein should not be construed to preclude any recourse UF Health Jacksonville may have in any appropriate judicial forum.
COPIES FURNISHED:
Seann M. Frazier, Esquire Marc Ito, Esquire
Parker, Hudson, Rainer & Dobbs, LLP Suite 750
215 South Monroe Street Tallahassee, Florida 32301 (eServed)
Nichole Chere Geary, General Counsel Department of Health
Bin A-02
4052 Bald Cypress Way Tallahassee, Florida 32399-1701 (eServed)
Jay Patrick Reynolds, Esquire Department of Health Prosecution Services Unit
Bin A-02
4052 Bald Cypress Way Tallahassee, Florida 32399 (eServed)
Stephen A. Ecenia, Esquire Rutledge Ecenia, P.A.
119 South Monroe Street, Suite 202 Post Office Box 551
Tallahassee, Florida 32302-0551 (eServed)
J. Stephen Menton, Esquire Rutledge Ecenia, P.A.
119 South Monroe Street, Suite 202 Post Office Box 551
Tallahassee, Florida 32301 (eServed)
Gabriel F.V. Warren, Esquire Rutledge Ecenia, P.A.
119 South Monroe Street, Suite 202 Post Office Box 551
Tallahassee, Florida 32301 (eServed)
Daniel Ryan Russell, Esquire Jones Walker, LLP
Suite 130
215 South Monroe Street Tallahassee, Florida 32301 (eServed)
Shannon Revels, Agency Clerk Department of Health
4052 Bald Cypress Way, Bin A02 Tallahassee, Florida 32399-1703 (eServed)
Celeste Philip, M.D., M.P.H. Interim State Surgeon General Department of Health
4052 Bald Cypress Way, Bin A00 Tallahassee, Florida 32399-1701 (eServed)
NOTICE OF RIGHT TO SUBMIT EXCEPTIONS
All parties have the right to submit written exceptions within
15 days from the date of this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this case.
| Issue Date | Document | Summary |
|---|---|---|
| Apr. 27, 2017 | Agency Final Order | |
| Jan. 27, 2017 | Recommended Order | There is no available "slot" for a new trauma center in TSA 5, and, therefore, Orange Park's application for provisional approval must be denied. The Department improperly relied upon an unadopted rule in accepting Orange Park's application. |
