In a previous post I discussed Perry County’s recent adoption of a “Certificate of Need” ordinance which prohibited construction of new medical facilities unless the builder obtained a “certificate of need” from the County.
Back in November, Judge Hamilton struck down a similar ordinance adopted by Morgan County. According to a story in the Perry County News, the Perry County commissioners were aware of the Morgan County case and proceeded to adopt the ordinance anyway, claiming that they had drafted the language of the ordinance more narrowly. As I explained in that previous post, there is no way the ordinance can be read as being permissible in light of Judge Hamilton’s ruling.
Yesterday, Judge Barker issued her opinion striking down similar ordinances in Clark and Floyd Counties. The reasoning of both Judges Hamilton and Barker is the same. Under Indiana’s Home Rule Act (IC 36-3-1), counties simply do not have this authority.
The Home Rule basically starts with the presumption that a local unit of government has the authority to do something. However, it states that “Counties may not exercise powers that are expressly denied by a state statute or that are expressly granted to another entity.†It goes on to specifically withhold from counties the power to “regulate any conduct that is regulated by a state agency, except that which is expressly granted by statute.â€
The Indiana State Department of Health is granted the right to license and regulate hospitals and is directed to enhance competition. There is no support for an inference that the General Assembly had given a county the power to hinder a county hospital’s competition. Judge Hamilton went on to say:
Morgan County’s Ordinance in this case does not meet the standards of these Indiana decisions. The Ordinance serves a purpose of restricting competition, a purpose that is not merely different from the state regulations and policy, but is flatly contrary to the express state policy of promoting competition.
It remains incomprehensible to me how or why the Perry County Commissioners would adopt their ordinance. If they had simply been ignorant of the prior Morgan County decision, the ordinance would have mad a bit of sense. But, according to the Perry County News, they knew about it and adopted the ordinance anyway. With the latest decision striking down the Floyd and Clark County ordinances, they probably ought to save themselves some legal fees and repeal their ordinance as soon as they can.
Being no lawyer, it interests me that this judge seemed to find a Sherman Act violation, which the previous ruling didn’t. Any thoughts? Or did I read this wrong?
I think the first one addressed the question of the Sherman Act with respect to a Motion for Summary Judgment either in favor or against it. The second one addressed in terms of a 12(b)(6) motion to dismiss the Sherman Act claim. The standard for 12(b)(6) is merely whether the Plaintiff stated a claim that a Sherman Act violation occurred. At summary judgment, some evidence would have had to be produced to sustain the action.