CON critic seeks boost at NC Supreme Court from Ace Speedway case

Image from Institute for Justice
  • The New Bern eye surgeon challenging North Carolina's certificate-of-need law in court is taking interest in the N.C. Supreme Court's decision in a separate case.
  • The high court's decision to take up a lawsuit involving Ace Speedway has prompted the surgeon's lawyers to renew their request for a state Supreme Court review.

The New Bern eye surgeon challenging North Carolina’s certificate-of-need law in court hopes the N.C. Supreme Court’s decision in another case will help his cause.

The state’s highest court agreed in March to take up Kinsley v. Ace Speedway Racing. In that case, the owner of an Alamance County racetrack accuses Gov. Roy Cooper and his top health official of unfairly targeting the track for a shutdown during the early months of the COVID-19 pandemic.

A unanimous N.C. Court of Appeals ruled that Ace Speedway could proceed with its suit. The Supreme Court agreed to take up state Health and Human Services Secretary Kody Kinsley’s appeal of that decision.

Now, lawyers working for Dr. Jay Singleton hope the Ace Speedway case can bolster their own request for a state Supreme Court review. Singleton filed paperwork Monday asking to amend his request for high court action.

“This Court’s recent decision to grant review in Ace provides support for granting review here,” according to a proposed footnote that would be added to an existing 30-page brief. “The Ace petition argued that the lower court mistakenly relied on allegations challenging the basis for an executive order. That is the precise issue on which Plaintiffs seek review, except Plaintiffs are appealing a decision taking the opposite approach.”

Singleton first appealed to the N.C. Supreme Court in August 2022, less than two months after a unanimous state Appeals Court decision to dismiss his case.

The John Locke Foundation, which oversees Carolina Journal, is participating in this case with a friend-of-the-court brief supporting Singleton.

“The CON law is a constitutional abomination,” said Joshua Windham of the Institute for Justice in August. IJ attorneys represent Singleton. “In North Carolina, laws are supposed to protect the public from harm, and monopolies are expressly forbidden. But the CON law thrives on violating these principles. It cripples competition, props up established players, bans innovators, and forces you — the patient — to pay more for less. The time has come for the North Carolina Supreme Court to take these issues up and to declare, once and for all, that in our state, public power cannot be used for private gain.”

The CON case presents three issues for the N.C. Supreme Court’s consideration, according to the initial filing with the state’s highest court from Windham and his colleagues.

“Whether the CON law, as applied, violates the law of the land clause (Art. I, § 19) of the North Carolina Constitution,” according to Singleton’s lawyers. “This issue raises substantial questions about the importance of economic liberty, what test applies in substantive challenges under the clause, and whether facts matter under that test.”

“Whether the CON law, as applied, violates the anti-special privileges clause (Art. I, § 32) of the North Carolina Constitution,” the brief added. “This issue raises a substantial question about how the clause applies to special economic privileges.”

“Whether the CON law, as applied, violates the anti-monopoly clause (Art. I, § 34) of the North Carolina Constitution,” the filing listed as the third issue. “This issues raises a substantial question about how the clause applies when the government grants an exclusive right to provide a service.”

Singleton’s lawyers reminded the state Supreme Court that it struck down CON restrictions once before, in 1973. Five years later, the General Assembly approved a new, “substantially similar” CON law. The state Court of Appeals then declared the original state Supreme Court ruling “moot,” and now there is “confusion” about the original decision’s status.

“The time has come for this Court to put that confusion to rest,” according to IJ attorneys. “This case alleges that the current CON law, as applied to Dr. Singleton, violates the same three provisions the original CON law violated.”

The appeal labels the case’s facts “simple.” “Dr. Singleton owns an operating room that he could use to expand patients’ access to safe, affordable eye surgeries,” according to the court filing. “But the CON law says that only operating rooms with a CON can be used. And Dr. Singleton cannot even apply for a CON unless the state first declares a ‘need’ for a new operating room in his area — which it has not done in well over a decade.”

“In fact, the only entity in Dr. Singleton’s area to ever own an operating room CON is CarolinaEast, a hospital located two miles down the road,” according to the surgeon’s lawyers. “Dr. Singleton could provide eye surgeries at his facility for thousands of dollars less than those same procedures cost at CarolinaEast. But the CON law bars him from doing so. As a result, patients suffer while CarolinaEast profits.”

For example, Singleton could perform cataract surgeries for $1,800, while the facility fee alone at CarolinaEast reaches almost $6,000, according to the appeal.

Current law blocks Singleton from applying for a CON “until at least 2024 — and likely well beyond that,” according to the filing. “The market is closed.”

“If excluding Dr. Singleton from the market does not benefit real patients, what does it do? The obvious: It ‘protect[s] established healthcare providers’ — namely, CarolinaEast— ‘from competition.’”

In a later brief filed in October 2022, Singleton’s lawyers argued that his case offered the court an opportunity to clear up “rampant confusion” about the CON law.

Since the Appeals Court panel’s decision was unanimous, the state Supreme Court faces no obligation to take Singleton’s case.