- The North Carolina General Assembly's top two leaders disagree about whether the state Supreme Court should take another look now at a case challenging the certificate-of-need health care law.
- Dr. Jay Singleton, a New Bern eye surgeon, is asking the high court to bypass the North Carolina Court of Appeals and review the case now.
- Senate Leader Phil Berger supports returning Singleton's CON case to the state Supreme Court. House Speaker Destin Hall opposes the idea.
The two top leaders of North Carolina’s General Assembly disagree about whether the state Supreme Court should take another look now at a case challenging the state’s certificate-of-need law.
Dr. Jay Singleton, a New Bern eye surgeon, is asking the high court to bypass the North Carolina Court of Appeals and hear his complaint against the CON law. He argues that CON restrictions violate his state constitutional rights to provide services to his patients.
State Senate Leader Phil Berger, R-Rockingham, and House Speaker Destin Hall, R-Caldwell, took opposite stances on Singleton’s bypass petition in a court filing Tuesday.
“Senator Berger agrees with plaintiffs that bypassing the Court of Appeals would be appropriate on the facts of this case and that this Court’s immediate review is warranted,” according to a footnote in the 15-page document. “This position is taken without conceding any of the merits arguments raised in plaintiffs’ petition.”
“Speaker Hall does not join this request and opposes the bypass petition,” the footnote added.
Hall joined Gov. Josh Stein, Health and Human Services Secretary Devdutta Sangvai, and Sangvai’s Department of Health and Human Services in opposing state Supreme Court review of the CON lawsuit at this stage of the case.
A unanimous state Supreme Court ruled in October 2024 that Singleton could proceed with his lawsuit. A three-judge trial court panel threw out Singleton’s complaint last December.
The case sits now the state Court of Appeals, but Singleton hopes the high court will skip the intermediate review.
“Since this Court’s remand, the case has changed, both substantively and procedurally,” state government lawyers led by Solicitor General Nicholas Brod wrote Tuesday. “As for substance, plaintiffs amended their complaint to expressly assert facial claims, as well as a claim under the fruits of labor clause. As for procedure, plaintiffs’ facial claims under the exclusive-emoluments and anti-monopoly clauses went beyond the pleading stage, with plaintiffs moving for partial summary judgment. The parties below litigated these new features of the case, and the three-judge panel issued a decision dismissing plaintiffs’ claims and denying their motion for partial summary judgment.”
“Thus, although this Court has heard this case once before, the case is now differently situated in its current posture,” the court filing continued. “In view of those differences, this Court would benefit from initial review by the Court of Appeals, and a bypass is unwarranted.”
State government lawyers also cited other reasons for the Supreme Court to reject Singleton’s petition.
“The CON law has been in place for almost a half-century,” the court filing explained. “The General Assembly has frequently amended and updated the law to account for an ongoing conversation among elected officials and policymakers about whether and to what extent the CON law is needed to maintain a fair and efficient healthcare system.”
“Plaintiffs ask the judicial branch to end this democratic debate on a disputed matter of economics,” state government lawyers wrote. “But nothing about the merits of their arguments warrants immediate review by this Court. To the contrary, given the sweep of plaintiffs’ claims — claims that challenge a longstanding statute in a highly complex and politically contested area of the economy — the Court should adhere to, rather than depart from, the standard procedural rules that structure appellate review.”
Singleton has attracted support for his bypass petition. State Treasurer Brad Briner and the State Employees Association of North Carolina filed a brief in favor of Singleton’s position. The John Locke Foundation and University of North Carolina constitutional scholar John Orth also urged the state Supreme Court to take Singleton’s case.
Singleton has been challenging North Carolina’s CON law in court since 2020 with help from the Institute for Justice. They filed paperwork in March asking the state Supreme Court to take a second look at his case.
The certificate of need acts as a government permission slip. Health care providers need a CON before building hospitals and other facilities, adding beds, or purchasing the most expensive medical equipment.
Singleton argues that North Carolina’s CON law violates his state constitutional rights by preventing him from performing most eye surgeries at his Singleton Vision Center. He must send his patients instead to CarolinaEast, a hospital that holds the region’s only applicable CON. Singleton argues that his patients face much higher bills because of the state government regulation.
“The North Carolina Supreme Court has already granted discretionary review in this case once before,” Singleton’s lawyers wrote in March. “Plaintiffs-Appellants contend that their petition for discretionary review presents substantially the same questions on which the North Carolina Supreme Court previously granted review.”
“Since this case was filed six years ago, the parties have briefed and argued the same issues four times,” according to the Supreme Court petition. “Each fresh round has bought the CON law more time to violate North Carolinians’ rights. One more round in the Court of Appeals would not clarify matters. The last time the Court of Appeals decided this case, it only entrenched the constitutional issues on which this Court later granted review. Now that the procedural error has been corrected, this Court should grant review without delay to finally answer the important questions it took up before.”
The trial court panel announced its decision on Dec. 12, less than one month after lawyers for Singleton and DHHS argued about the CON law in a 2 ½-hour hearing in Raleigh.
“Having considered the motions, pleadings, other filings of record, all other competent evidence of record, briefs and arguments of counsel, and relevant case law, this Panel determines N.C.G.S. § 1181E-175 et seq to be facially constitutional,” according to an 11-page order from Superior Court Judges Jeffery Foster, Jacqueline Grant, and Troy Stafford.
Foster and Stafford are Republicans from Pitt and Iredell counties, respectively. Grant is a Democrat from Buncombe County. State Supreme Court Chief Justice Paul Newby assigned them to hear the case.
“Plaintiffs’ allege the CON Law, on its face, violates their economic liberty and right to earn a living in violation of Article I, Sections 1 and 19 of the North Carolina constitution,” the judges wrote.
“[T]o survive constitutional scrutiny under Sections 1 and 19, the challenged state action ‘must be reasonably necessary to promote the accomplishment of a public good, or to prevent the infliction of a public harm,’” the order explained. “This test involves a ‘twofold’ inquiry: ‘(1) is there a proper governmental purpose for the statute, and (2) are the means chosen to effect that purpose reasonable?’”
In a 2010 case called Hope – A Women’s Cancer Center v. State, the state Appeals Court “previously upheld a challenge to CON Law under Sections 1 and 19 of the North Carolina constitution, determining that the purpose of the CON Law was proper and means chosen were reasonable,” the judges wrote. “The Court of Appeals held that the ‘purpose in enacting the CON law was to protect the health and welfare of North Carolina Citizens by providing affordable access to necessary health care,’ and that purpose is ‘legitimate.’”
“Defendants’ motion to dismiss regarding Plaintiffs’ fruits of labor and law of the land claims is granted,” the panel added.
The judges rejected Singleton’s argument that the CON law provides a monopoly and “exclusive emolument” to CarolinaEast.
“While it is true that nine operating rooms in the Craven, Jones, Pamlico service area are owned by one provider CarolinaEast patients in the service area have access to a total of 80 operating rooms owned by nine different providers in the service areas bordering the Craven, Jones, Pamlico service area,” the order explained. “Competition is not stifled, and individuals are free to choose from any of those nine providers.”
“Plaintiffs’ arguments focus on their own inability to open an operating room without a certificate of need, but those allegations taken as true do not demonstrate that the CON Law is invalid in all circumstances,” the judges wrote. “The existence of numerous healthcare providers who have obtained certificates of need statewide confirms that the law operates constitutionally in a wide range of applications. Plaintiffs fail to address how it is facially unconstitutional in these applications.”
“Considering the merits, Plaintiffs’ facial challenge to CON Law cannot overcome the high bar imposed by the presumption of constitutionally given to legislative acts,” the panel concluded.
A unanimous state Supreme Court ruled in October 2024 that Singleton could move forward with his lawsuit. That decision reversed lower courts that had ruled against Singleton. In an unsigned unanimous four-page opinion, the court directed the case back to the trial level.
Justices said a trial court must take into account two unanimous state Supreme Court decisions. One dealt with claims that Kinston engaged in racial discrimination when choosing which city properties to condemn. The other involved Ace Speedway’s claim that state officials violated the Alamance County racetrack owners’ rights when targeting the track for a shutdown during the COVID-19 pandemic.