Opinion: CJ Opinion

CON critic’s recent courtroom setback still has positive signs

Image from Institute for Justice
Image from Institute for Justice

Dr. Jay Singleton lost a recent legal battle, but his war is far from over. In fact, Singleton and his lawyers should see encouraging signals as they return to the trenches.

Please forgive the multiple military metaphors. Singleton’s constitutional challenge against North Carolina’s certificate-of-need law reminds this observer of a long, difficult campaign.

Singleton has performed more than 30,000 eye surgeries in his career. He runs a fully equipped and accredited surgery and recovery center in New Bern. He would like to offer patients regular access to outpatient procedures at that center.

The CON law stands in the way. Without a CON, which functions as a state government permission slip, Singleton may conduct cataract surgeries and other procedures at the Singleton Vision Center on an “incidental, limited” basis. In most cases, state government dictates that Singleton must perform those same procedures at a hospital.

Using the hospital means more expense and less convenience for patients. The CON restriction reduces access to beneficial health care.

So Singleton has gone to court. Working with the Institute for Justice, he filed suit in April 2020 to fight CON. Singleton’s lawyers argue that the law is unconstitutional as applied to the New Bern eye surgeon. A win would mean that Singleton would no longer need government’s permission to use his own facility for common outpatient procedures.

More than a year after filing the initial complaint, Singleton’s lawyers headed to court this month. They hoped to defeat the state’s attempt to have the lawsuit dismissed.

They lost.

After roughly two hours of argument on June 3, Superior Court Judge Michael O’Foghludha granted the state’s motion. He threw the case out.

Yet Singleton and his legal team should see more than one positive sign as they plan their next move.

First, O’Foghludha ruled quickly. After waiting more than 13 months to see any kind of hearing in the case, Singleton could have been forced to wait days or weeks as the judge mulled over a decision. But the judge told lawyers during the hearing that he already had read all of their written legal arguments. He was clearly ready to render a decision at the end of oral presentations.

All parties in the case realize that a constitutional challenge to CON will not be resolved by a single Superior Court judge. The N.C. Court of Appeals could settle the dispute, or the case could proceed to the state Supreme Court. If the case reaches the state’s highest court, seven justices could render an opinion that would affect CON restrictions for decades to come.

O’Foghludha’s quick action helps speed the process of resolving the CON dispute. Singleton can go ahead with an appeal.

The second positive sign for Singleton stems from the details of the judge’s ruling. State lawyers put forward two distinct reasons for the case to be dismissed. O’Foghludha accepted just one of those reasons.

He rejected state lawyers’ argument that Singleton could not proceed with a lawsuit before trying to secure a CON. The state contends Singleton should have applied for an existing CON or tried to convince a state governing board to create a new one.

In that scenario, it’s likely that Singleton would have faced multiple years of bureaucratic red tape and hundreds of thousands of dollars in legal expenses. All of that time and money would have led him to the same situation he faces today: no government permission slip. Only then would he have been allowed to go to court to challenge the CON process itself, according to state attorneys.

O’Foghludha did not see a need for Singleton to jump through those hoops. Instead he dismissed the suit for a different reason. He accepted state lawyers’ separate argument that the CON law should be upheld because of a legal standard known as “rational basis.”

Under that standard, a law is constitutional if government had any possible “rational basis” for approving it. That’s a relatively easy standard for government to meet. Under a “rational basis” standard, plaintiffs like Singleton must prove that government had no plausible reason to put the CON law in place.

That’s bad news for Singleton. But even this part of O’Foghludha’s ruling offered a glimmer of hope.

The judge reminded lawyers on both sides of the case that he was required to respond to precedents set by higher courts. Based on his reading of the law, he said, N.C. courts had set “rational basis” as the proper standard.

But the judge also concluded that a higher court could adopt a different interpretation. If so, O’Foghludha said he would be happy to address the case again based on new guidance from an appellate opinion.

Singleton and his legal team would have preferred the judge to allow the case to proceed. Convincing appellate judges to reverse O’Foghludha will be more difficult than asking them to affirm his ruling.

Still, this month’s dismissal does not mean it’s time for Singleton to raise a white flag. There are plenty of battles ahead in the campaign to conquer CON.

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