Opinion

Centuries-old legal idea could help fight N.C. health care restriction

At a July 31, 2018, press conference, Dr. Gajendra Singh, a Forsyth County surgeon, discusses the lawsuit he has filed challenging certificate of need laws. At left is Raleigh attorney H. Denton Worrell and at right is Institute for Justice Attorney Renee Flaherty. (CJ photo by Don Carrington)
At a July 31, 2018, press conference, Dr. Gajendra Singh, a Forsyth County surgeon, discusses the lawsuit he has filed challenging certificate of need laws. At left is Raleigh attorney H. Denton Worrell and at right is Institute for Justice Attorney Renee Flaherty. (CJ photo by Don Carrington)

No one had access to an MRI machine in 1603. But a legal principle dating back at least that far could help some N.C. patients get easier, less expensive access today to this vital modern-day medical device.

The principle involves the ban of state-sponsored monopolies. It’s one piece of Winston-Salem surgeon Dr. Gajendra Singh’s ongoing challenge of North Carolina’s certificate-of-need law.

“The anti-monopoly clause was originally adopted for the specific purpose of forbidding government-granted monopolies such as the one created by North Carolina’s CON law,” writes the John Locke Foundation’s Jon Guze in the latest issue of Political Economy in the Carolinas. “Fortunately for Dr. Singh — and for the thousands of other North Carolinians whose right to earn a living has been violated by state laws that confer monopoly privileges on politically favored groups — the anti-monopoly clause can still serve that purpose today.”

Before turning the clock back to the early 1600s, let’s revisit basic details of the Singh case. He opened a diagnostic-imaging center in Forsyth County in 2017. Offering X-rays, ultrasound, and CT scans, Singh also wanted to provide his patients access to low-cost magnetic resonance imaging at the same location.

He couldn’t. The state CON law blocked Singh from buying an MRI machine. Only a health care provider with a government permission slip could add new MRI equipment in Forsyth or any other N.C. county.

Singh filed suit in July 2018 to challenge the CON restriction. His case could head to a courtroom hearing this fall.

Lawyers working with Singh contend that the CON law violates multiple provisions of the N.C. Constitution. Among them: The Declaration of Rights’ proclamation in Article I, Section 34 that “Perpetuities and monopolies are contrary to the genius of a free state and shall not be allowed.”

The anti-monopoly clause “has been part of North Carolina’s constitutional endowment from the very beginning,” writes Guze, JLF’s director of legal studies. It was part of the original state constitution in 1776 and has remained part of each succeeding version, including the current governing document ratified in 1971.

Opposition to government-granted monopolies had a lengthy history before the American revolutionary era. Those who placed the anti-monopoly clause into North Carolina’s first constitution would have relied on lessons from the “great 17th-century jurist” Sir Edward Coke, Guze reports.

A “widely read” report from Coke documented a 1603 case involving Queen Elizabeth, playing cards, and two men fighting over the right to manufacture, import, and sell those cards. An English court tossed out a monopoly the queen granted to one of the antagonists. The court ruled that “the end of all these monopolies is for the private gain of the patentees.” Moreover, the monopoly was “against the Common Law.”

More than 20 years later, still 150 years before North Carolina’s first constitution, Coke drafted a Statute of Monopolies, which declared them “altogether contrary to the laws of this realm, and so are and shall be utterly void and of none effect.”

Despite those precedents, monopolies persisted. American colonists had firsthand experience with them, including the infamous monopoly that led to one of the key events on the path to the American Revolution: the Boston Tea Party of 1773.

Guze concludes “there can be little doubt that the members of the Fifth Provincial Congress had government-granted monopolies specifically in mind when they added the anti-monopoly clause to the state constitution in 1776.” They meant to block those monopolies in order to secure “the right to earn an honest living by engaging in a lawful occupation,” he writes.

The definition of “monopoly” has changed in the past 240 years. It now includes businesses that gain power over an economic sector without government involvement. But that new meaning has expanded — not replaced — the original meaning, Guze writes.

In fact, the N.C. Supreme Court ruled as recently as 1973 that the state prohibition on monopolies applied to another government-granted monopoly. It was an earlier version of the CON law. Deciding a case in favor of a private hospital that wanted to build a new, larger facility, the court wrote that a CON restriction “establishes a monopoly in the existing hospitals, contrary to Art. I, Sec. 34 of the Constitution of North Carolina.”

Does this precedent mean Singh is bound to win his case? No.

The fight against government-granted monopolies “can never be decisively won,” Guze concludes. “The potential rewards are huge, and would-be monopolists and politicians will never stop trying to secure and share those rewards.”

But as “those who wish to exercise their right to engage in lawful occupations” continue to wage their courtroom battles, they have more than 400 years of legal history on their side.

Mitch Kokai is senior political analyst for the John Locke Foundation.