Jefferson Parish Hosp. Serv. Dist. No. 2 v. Hosp. Serv. Dist. No. 1 of the Parish of St. Charles

218 So.3d 696

JEFFERSON PARISH HOSPITAL SERVICE DISTRICT NO. 2, PARISH OF JEFFERSON, State of Louisiana, d/b/a East Jefferson General Hospital

v.HOSPITAL SERVICE DISTRICT NO. 1 OF the PARISH OF ST. CHARLES d/b/a St. Charles Parish Hospital

NO. 16–CA–702

Court of Appeal of Louisiana, Fifth Circuit.

April 12, 2017

COUNSEL FOR PLAINTIFF/APPELLANT, JEFFERSON PARISH HOSPITAL SERVICE DISTRICT NO. 2, PARISH OF JEFFERSON, STATE OF LOUISIANA, D/B/A EAST JEFFERSON GENERAL HOSPITAL, P. J. Stakelum, III, David R. Sherman, Glenn S. Newbauer

COUNSEL FOR DEFENDANT/APPELLEE, HOSPITAL SERVICE DISTRICT NO. 1 OF THE PARISH OF ST. CHARLES PARISH D/B/A ST. CHARLES PARISH HOSPITAL, Matthew K. Brown, Jack M. Stolier

Panel composed of Fredericka Homberg Wicker, Marc E. Johnson, and Robert A. Chaisson

WICKER, J.

This appeal arises out of a judgment of the district court granting a declinatory exception of lack of subject matter jurisdiction in favor of defendant, Hospital Service District No. 1 of the Parish of St. Charles (the "SCPH District"), and dismissing without prejudice the declaratory action that plaintiff, Jefferson Parish Hospital Service District No. 2 ("EJGH"), filed against the SCPH District. Although the SCPH District initially objected to EJGH's attempt to open the designated healthcare facility within the bounds of St. Charles Parish's hospital service district, the SCPH District has since withdrawn its objection to this facility, and the record contains no evidence that EJGH is considering further expansion within the boundaries of the SCPH District. Accordingly, we affirm the judgment of the district court and find that the court did not have subject matter jurisdiction because there is presently no justiciable controversy between the SCPH District and EJGH.

FACTUAL AND PROCEDURAL BACKGROUND

In order to understand the alleged dispute between the parties, it is necessary to understand the legal framework under which both hospital districts operate.

In 1950, the state legislature passed La. R.S. 46:1051, which empowered the police juries of the parishes to create hospital service districts tasked with the duties and functions of owning and operating hospitals. Washington Parish Police Jury v. Washington Parish Hosp. Serv. Dist. No.1 , 152 So.2d 362, 366 (La. App. 1 Cir. 1963), writ denied , 244 La. 669, 153 So.2d 883. Specifically, under this statute,

[t]he police juries of parishes are authorized and empowered, upon their own initiative, to form and create one or more hospital service districts within the respective parishes, or with agreement among police juries concerned, to combine two or more parishes into a single hospital service district with such names as the police juries may designate, and, in so doing, police juries may create hospital service districts whose boundaries overlap those of other hospital service districts.

La. R.S. 46:1051(A).

Pursuant to the authority granted by La. R.S. 46:1051, St. Charles Parish enactedCode of Ordinances, Chapter 11, Article I, Section 11–11, creating the SCPH District,

a hospital service district to be known as "Hospital Service District No. 1 of the Parish of St. Charles, State of Louisiana," and containing within its boundaries and corporate limits all of the territory within the boundaries and corporate limits of the parish as constituted on the adoption date of this Code.

Likewise, Jefferson Parish enacted Code of Ordinances, Chapter 17, Article II, Section 17–17, creating EJGH,

a hospital service district within the parish comprising and embracing all that territory within the following described boundaries:

All that portion of the Parish of Jefferson lying on the east side or the left descending bank of the Mississippi River, which portion comprises all of the wards numbered 7, 8, 9 and 10 of the Parish of Jefferson and is bounded on the east by the Parish of Orleans, on the west by the Parish of St. Charles, on the north by Lake Pontchartrain and on the south by the north bank of the Mississippi River.

In 1984, the Legislature enacted the Enhanced Ability to Compete Act, La. R.S. 46:1071 –76. Recognizing that "hospital service districts are presently at a competitive disadvantage," the Legislature expressly sought "to enhance the ability of a hospital service district to compete effectively and equally in the market for health care services." La. R.S. 46:1071.

EJGH and the SCPH District disagree over the interplay between La. R.S. 46:1051 et seq . and the Enhanced Ability to Compete Act—that is, La. R.S. 46:1071 –76. The SCPH District contends that La. R.S. 46:1051 prohibits a hospital service district, like EJGH, from operating a healthcare facility outside of its own geographic boundaries unless it obtains the consent of the hospital service district in which it seeks to operate. In contrast, EJGH argues that, through the Enhanced Ability to Compete Act, the Legislature "amended and supplanted" the provisions of La. R.S. 46:1051, removing "those limitations that would prevent a hospital service district, such as EJGH, from establishing satellite clinics outside of its home service district."

In 2015, EJGH opened East Jefferson Primary Care Boutte (the "Boutte Clinic"), a primary care medical practice centrally located in Boutte, Louisiana, which is on the West Bank of the Mississippi River, situated within the SCPH District. On August 25, 2015, the SCPH District notified EJGH that it objected to EJGH's operation of the Boutte Clinic within the boundaries of the SCPH District and expressed its intention "to take action to stop the unauthorized operation of [the Boutte Clinic]." Thereafter, EJGH filed an action seeking a declaratory judgment affirming its position that the Enhanced Ability to Compete Act, La. R.S. 46:1071 –76, authorized EJGH to open, own, and/or operate a satellite location within the SCPH District. Jefferson Parish Hospital Service District No. 2, Parish of Jefferson, State of Louisiana v. Hospital Service District No. 1 of the Parish of St. Charles , No. 80, 587, Twenty–Ninth Judicial District Court, Parish of St. Charles ("EJGH I "). The SCPH District reconvened against EJGH, asserting its position that EJGH must obtain the consent of the SCPH District in order to open and operate healthcare facilities in St. Charles Parish.

According to EJGH's petition in the instant matter, on December 22, 2015, the SCPH District transmitted a letter to EJGH, withdrawing its objection to EJGH's operation of the Boutte Clinic and requesting that EJGH voluntarily dismiss its declaratory judgment action without prejudice. The following day, EJGH submitted a letter to the SCPH District, questioning whether the SCPH District "consent[ed] to [EJGH] opening its own satellite facility in St. Charles Parish and concurr[ed] in [EJGH's] position that [the SCPH District's] consent is not required for [EJGH] to open one or more satellite locations in St. Charles Parish." The SCPH District did not respond to this inquiry but, instead, filed a motion to dismiss without prejudice its own reconventional demand and a declinatory exception of lack of subject matter jurisdiction, seeking dismissal without prejudice of EJGH's declaratory judgment action. At the March 7, 2016 hearing on the SCPH District's motion to dismiss and exception, the district court refused to consider EJGH's proffer—contained in the instant record—in which EJGH expressly revealed its plan to open and to operate a new clinic centrally located on the East Bank of St. Charles Parish in Destrehan (the "Destrehan Clinic"). Finding that a justiciable controversy no longer existed between EJGH and the SCPH District because the SCPH District had withdrawn its objection to the Boutte Clinic, on March 10, 2016, the district court in EJGH I granted the SCPH District's declinatory exception of lack of subject matter jurisdiction and dismissed EJGH's declaratory judgment action and the SCPH District's reconventional demand without prejudice. EJGH did not seek review of this judgment or of the district court's refusal to consider its proffer concerning the Destrehan Clinic.

On March 30, 2016, the SCPH District transmitted a letter via e-mail to EJGH, voicing the SCPH District's objection to EJGH's plan to own and to operate the Destrehan Clinic and demanding that EJGH "immediately cease any further activity in St. Charles Parish related to [the Destrehan Clinic]." The next day, EJGH filed a second petition seeking a declaratory judgment that

despite the protestation of the SCPH District, EJGH is authorized and permitted by law to open, own and operate healthcare facilities in St. Charles Parish in order to provide healthcare services under the Enhanced Ability To Compete Act (LSA–R.S. 46:1071 et seq. ) and that it need not solicit the consent of the SCPH District in order to do so....

EJGH also alleged that its "expanded offering of healthcare services is and will be accomplished through the establishment of satellite healthcare facilities on both the East and the West Banks of St. Charles Parish." To that end, EJGH explained, it had opened the Boutte Clinic on the West Bank of St. Charles Parish, and it intended to own and to operate a medical practice at the Destrehan Clinic on the East Bank of St. Charles Parish. Critically, beyond asserting its right to open facilities in St. Charles Parish without the SCPH District's consent, EJGH did not indicate that it is considering or contemplating further expansion within St. Charles Parish.

On May 18, 2016, the SCPH District sent EJGH a letter withdrawing its objection "to the operation of the primary care clinic identified in the proffer which is located at 159 Longview Drive, Suite C, in Destrehan, Louisiana" and requesting that EJGH join it in submitting a joint motion to dismiss the declaratory action without prejudice. Several days later, on May 23, 2016, the SCPH District filed a declinatory exception of lack of subject matter jurisdiction, arguing that an actual controversy no longer...