Opinion
DOCKET NO. A-1744-15T3
08-04-2016
VIRTUA HEALTH, INC., and CAPITAL HEALTH SYSTEM, INC., Plaintiffs-Respondents, v. STATE OF NEW JERSEY and CHRISTOPHER J. CHRISTIE, in his official capacity as Governor of the State of New Jersey, Defendants-Appellants.
Jacqueline Augustine, Deputy Attorney General, argued the cause for appellants (Robert Lougy, Acting Attorney General, attorney; Melissa Dutton Schaffer, Assistant Attorney General, of counsel; Ms. Augustine and Francesco Ferrantelli, Jr., Deputy Attorney General, on the briefs). Philip H. Lebowitz (Duane Morris LLP) of the Pennsylvania bar, admitted pro hac vice, argued the cause for respondents (Duane Morris LLP, attorneys; Mr. Lebowitz, Christopher L. Soriano, Seth A. Goldberg, and Erin M. Duffy, of counsel and on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Yannotti, St. John and Vernoia. On appeal from Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-1720-15. Jacqueline Augustine, Deputy Attorney General, argued the cause for appellants (Robert Lougy, Acting Attorney General, attorney; Melissa Dutton Schaffer, Assistant Attorney General, of counsel; Ms. Augustine and Francesco Ferrantelli, Jr., Deputy Attorney General, on the briefs). Philip H. Lebowitz (Duane Morris LLP) of the Pennsylvania bar, admitted pro hac vice, argued the cause for respondents (Duane Morris LLP, attorneys; Mr. Lebowitz, Christopher L. Soriano, Seth A. Goldberg, and Erin M. Duffy, of counsel and on the brief). PER CURIAM
Defendants State of New Jersey and Governor Christopher J. Christie appeal from a judgment of the trial court, which declared L. 2015, c. 70 (the Act) special legislation in violation of the New Jersey Constitution. For the reasons that follow, we reverse.
I.
The Act was introduced in the Senate on June 8, 2015, as bill S.-2980, and three days later in the Assembly as bill A.-4526. Both bills included the following statement:
It is the sponsor's belief that linking advanced life support and basic life support services under the State's designated regional trauma centers will centralize medical oversight, facilitate high-quality prehospital care, and support a more cost-efficient system.The Senate and the Assembly passed the legislation on June 25, 2015, and Governor Christie signed the bill into law on July 6, 2015.
It provides:
a. (1) A hospital which has been issued a certificate of need by the Department of Health to operate a Level 1 trauma center shall be exclusively authorized to develop and maintain advanced life support services in the municipality in which the trauma center is located, and shall have the right of first refusal to provide both advanced life support and basic life support services
in the municipality, provided that the services are provided at no charge to the municipality, and the municipality does not provide basic life support services as a municipal service or as part of a shared services agreement.The Act went into effect on January 2, 2016. P.L. 2015, c. 70, § 2.
(2) A hospital that develops and maintains advanced life support services pursuant to paragraph (1) of this subsection shall be subject to the same level of oversight by the Department of Health as would apply to an entity that holds a certificate of need for advanced life support services, as provided by regulation at N.J.A.C. 8:33.
b. A hospital which has been issued a certificate of need by the Department of Health to operate a Level 1 trauma center shall have the right to apply under expedited review to provide advanced life support services in additional municipalities in which an acute care hospital that, as of July 1, 2015, is part of the same health system as the Level 1 trauma center is located, provided such application for expedited review is submitted on or before December 31, 2016.
[N. J.S.A. 26:2K-12.1.]
As noted, the Act grants a Level I trauma center the exclusive authority to develop and maintain advanced life support services (ALS) in the municipality in which the trauma center is located. The Act also gives any such hospital the right of first refusal to provide basic life support services (BLS) in that municipality, subject to certain conditions.
Three hospitals in New Jersey presently hold a certificate of need (CN) issued by the Department of Health (Department) to operate as a Level I trauma center: Cooper University Hospital (Cooper) in Camden, Robert Wood Johnson University Hospital (RWJUH) in New Brunswick, and University Hospital (UH) in Newark. Seven hospitals are designated Level II trauma centers.
ALS and BLS are two distinct categories of "emergency medical services" (EMS), which is defined in the New Jersey Administrative Code (the Code) as "a system for the provision of emergency care and transportation of persons who are sick or injured and in need of immediate medical care." N.J.A.C. 8:40A-1.3; N.J.A.C. 8:41-1.3. BLS are typically provided by emergency medical technicians responding in an ambulance, and ALS are provided by paramedics responding in mobile intensive care units (MICUs). N.J.A.C. 8:40A regulates BLS and N.J.A.C. 8:41 regulates ALS.
BLS is "first-tier treatment" and is comprised of "non-invasive, urgent, low-level on-scene medical care." The Code defines BLS as "a basic level of prehospital care that includes patient stabilization, airway clearance and maintenance, cardiopulmonary resuscitation . . . hemorrhage control, initial wound care, fracture stabilization, victim extrication and other techniques and procedures" meeting specific criteria. N.J.A.C. 8:40A-1.3; N.J.A.C. 8:41-1.3.
Each municipality in New Jersey arranges, by ordinance or contract, for the BLS service provider for that municipality. BLS providers range from volunteer ambulance squads to paid agencies. The BLS ambulance vehicle, the personnel staffing it, and the entity providing BLS ambulance service all must be licensed by the Department and conform to its regulations. N.J.A.C. 8:40; N.J.A.C. 8:40A-1.3; N.J.A.C. 8:41-1.3.
It is undisputed that BLS ambulances respond to all 911 emergency medical calls and transport virtually all patients to the closest hospital for treatment. On the other hand, ALS service providers are only dispatched when advanced treatment is needed to treat and stabilize patients during transport to the closest appropriate hospital or trauma center. ALS is defined as "an advanced level of prehospital, inter-facility or emergency medical care." N.J.A.C. 8:40A-1.3; N.J.A.C. 8:41-1.3. ALS includes, among other things, basic life support functions. Ibid.
In New Jersey, ALS services must be provided twenty-four hours a day, seven days a week. ALS services are provided through a responding MICU vehicle. The vehicle is operated in connection with a "mobile intensive care program" developed by a "mobile intensive care hospital," defined as "an acute care hospital" authorized by the Commissioner of Health, through the issuance of a CN, to develop and maintain such a program for a specific population, region or political subdivision. N.J.A.C. 8:41-1.3.
II.
On July 27, 2015, Virtua Health, Inc. (Virtua) and Capital Health System, Inc. (Capital) filed a verified complaint in the Law Division, naming the State of New Jersey and Governor Christie as defendants. Plaintiffs sought a declaration that the Act is special legislation in violation of Article IV, Section VII, paragraph 9 of the New Jersey Constitution.
Virtua is a healthcare system with three acute care hospitals in southern New Jersey and additional emergency departments in the cities of Camden and Berlin. Virtua has a CN to provide ALS services throughout Camden and Burlington Counties, and it had been the sole provider of ALS services in these two counties since about 1977. Because Cooper is the only Level I trauma center located in the City of Camden, the Act allows Cooper to become the exclusive ALS and BLS service provider in the City.
Capital is comprised of two hospitals, an outpatient facility in Hamilton Township, and various primary and specialty care practices in the region. Capital has a Level II trauma center, which serves Mercer County. Capital holds a CN to provide ALS services in Mercer County and has been the sole provider of services in that county since 1977. In the fall of 2015, Capital had ten MICUs serving Mercer County.
Plaintiffs claim that the Act provides a benefit to RWJUH because it grants RWJUH the right to apply under expedited procedures for a CN to provide ALS services in Hamilton. According to the complaint, the result would adversely affect Capital's ability to provide ALS services in Hamilton and Mercer County.
In 2015, defendants filed a motion to dismiss the complaint, but the trial court deferred consideration of the motion and allowed the parties time for limited discovery. Thereafter, plaintiffs filed a motion for summary judgment. The judge considered the motions on December 16, 2015.
On December 22, 2015, the judge entered orders, which denied defendants' motion to dismiss and granted plaintiffs' motion for summary judgment. The judge placed an oral decision on the record that day. The judge found the Act to be special legislation in violation of the New Jersey Constitution.
The judge acknowledged that "Level I [t]rauma [c]enters have greater resources, are university affiliated and have clinical distinctions recognized in the [Department's] regulations that differentiate them from Level II [t]rauma [c]enters." The judge found, however, that "the differences between Level I and Level II trauma care centers and acute care centers with an emergency department [have] no bearing on the quality, expense or coordination of ALS and BLS services because trauma surgeons are not involved in ALS or BLS services."
The judge observed that the stated goal of the sponsors of the legislation was to link ALS and BLS "under the State's designated regional trauma centers." The judge found that the classifications in the Act are not, however, rationally related to this goal because, as written, the Act pertains to Level I trauma centers in three or four cities, and does not concern all "regional trauma centers."
The judge also found no rational basis to distinguish Level I from non-Level I providers with respect to prehospital services. The judge stated that "[t]here is no showing beyond words that [] hospital trauma services of Level I [providers] have any impact at all on [prehospital] services." The judge also stated that
there is no support put forward by defendants [to show] that making Level I
[t]rauma [c]enters the exclusive providers of [prehospital] services is rationally related to the Act's objectives.
In fact, there is no relationship at all. The rationale of limiting this legislation to Level I [t]rauma [c]enters bears no relationship to the purpose that is expressed in the Act. The conclusory statements put forth by [] defendants are just that, and they do not provide a rational basis as required by the [caselaw].
In addition, the judge found that the Act would have the practical effect of creating "a piecemeal ALS system," and "no rational basis to say that the Act will further centralization" generally. The judge noted that the Act, by its plain terms, "does not provide for the coordination of ALS and BLS anywhere" because it allows, but does not require, Level I trauma centers to provide BLS services. The linking of ALS and BLS services would therefore be at the sole choice of the Level I trauma centers themselves.
The judge stated that there was nothing before the court which suggested that the quality of prehospital care would be improved by the Act. The judge explained:
[D]efendants keep pressing that it is the coordination of ALS and BLS under the umbrella of trauma centers that will increase efficiencies, quality of care and reduce cost. In support of this position [] defendant[s] cite[] to the resources and clinical advantages of Level I Centers. On the surface this can appear to be a rational explanation, but when one considers the
reality of how these services work, the legislative record and the submissions by the plaintiffs, it is clear that there is no substance behind this statement.
Defendants thereafter filed a notice of appeal, and the trial court denied defendants' motion for a stay of the judgment pending appeal. Defendants then filed a motion in this court for a stay pending appeal, which we granted. Plaintiffs thereafter filed a motion in the Supreme Court to vacate the stay. The Supreme Court denied the motion.
On appeal, defendants argue that the trial court erred by declaring the Act unconstitutional special legislation. Plaintiffs disagree, arguing that the trial court correctly found that the Act's classifications and exclusions are not rationally related to the Act's goals.
III.
We note initially that "a statute is presumed to be constitutional and that a court should exercise sparingly the power to declare a statute unconstitutional." Jordan v. Horsemen's Benevolent & Protective Ass'n, 90 N.J. 422, 433 (1982) (citations omitted). Although the presumption of validity may be rebutted, the party attacking the constitutionality of a statute bears a heavy burden. State Farm Mut. Auto Ins. Co. v. State, 124 N.J. 32, 45-46 (1991) (citing Hutton Park Gardens v. Town Council, 68 N.J. 543, 564-65 (1975)).
Furthermore, in deciding whether a statute is constitutional, the court does not sit as a "super-legislature" and should not evaluate a statute's "efficacy or wisdom," which is the sole province of the Legislature. In re Am. Reliance Ins. Co., 251 N.J. Super. 541, 549 (App. Div. 1991) (citation omitted), certif. denied, 127 N.J. 556 (1992); Newark Superior Officers Ass'n v. Newark, 98 N.J. 212, 222 (1985). A court should only strike down a statute when it is "clearly repugnant to the Constitution." Ibid. (citing Paul Kimball Hosp. v. Brick Twp. Hosp., 86 N.J. 429, 446-47 (1981)).
The constitutional provision at issue in this case is the special legislation clause of the New Jersey Constitution, which states in pertinent part that "[t]he Legislature shall not pass any private, special or local laws . . . . [g]ranting to any corporation, association or individual any exclusive privilege, immunity or franchise whatever." N.J. Const. art. IV, § VII, ¶ 9.
To establish that a measure runs afoul of the special legislation clause, the party challenging the legislation must do more than show that the benefits of the statute apply only to a specific or limited class. See Newark, supra, 98 N.J. at 223. A law is deemed "general" rather than "special" where it "affects equally all of a group who, bearing in mind the purposes of the legislation, are distinguished by characteristics sufficiently marked and important to make them a class themselves." Ibid.
"[T]he determining factor is what is excluded and not what is included" in the classification, and "if no one is excluded who should be included, the law is general" and passes constitutional muster. Id. at 223 (citation omitted). See also Vreeland v. Byrne, 72 N.J. 292, 299 (1977) ("The test, of course, is whether the classification is reasonable, not arbitrary, and can be said to rest upon some rational basis justifying the distinction.") (citation omitted); Horizon Blue Cross Blue Shield of N.J. v. State, 425 N.J. Super. 1, 20 (App. Div.) ("The test is not what the classification includes, but whether the classification excludes some that should be included."), certif. denied, 211 N.J. 608 (2012).
Our Supreme Court has further explained how to determine whether a law is special legislation:
Briefly restated, the method of analysis is this: we first discern the purpose and object of the enactment. We then undertake to apply it to the factual situation presented. Finally we decide whether, as so applied, the resulting classification can be said to rest upon any rational or reasonable basis relevant to the purpose and object of the act.
[Vreeland, supra, 72 N.J. at 300-01.]
Under this analysis, "the judicial task is to decide 'whether there is any conceivable state of facts bearing a reasonable relation to the object of the act which affords a basis for the classification.'" Jordan, supra, 90 N.J. at 433 (quoting Robson v. Rodriquez, 26 N.J. 517, 524 (1958)). "A statute must clearly and irremediably violate[] the ban on special legislation to be invalidated." City of Jersey City v. Farmer, 329 N.J. Super. 27, 38 (App. Div.) (citation omitted), certif. denied, 165 N.J. 135 (2000).
Moreover, "[t]he propriety of exclusions must be examined utilizing the principles generally applicable to equal protection." Paul Kimball, supra, 86 N.J. at 446. If a classification is related to a legislative policy with "a conceivably rational basis," then that classification is not "invidious per se and violative of equal protection." Id. at 441; see also Camden City Bd. of Educ. v. McGreevey, 369 N.J. Super. 592, 605 (App. Div. 2004) (noting that "[t]he test for distinguishing a special law from a general law" is similar to an equal protection analysis and asks "whether the law 'appropriately' excludes persons to which the law, but for its limitations would apply.") (citation omitted).
IV.
As stated previously, the Act grants a Level I trauma center the exclusive right to provide ALS services in the municipality in which it is located. The Act also gives the Level I trauma center the right of first refusal to provide BLS in the municipality if it agrees to do so without charge, and the municipality does not provide BLS as a municipal service or shared service agreement. According to the sponsors' statements to S.-2980 and A.-4526, the goals of the legislation are to "centralize medical oversight, facilitate high-quality prehospital care, and support a more cost-efficient system."
It is undisputed that Level I trauma centers have greater resources, university-affiliation, and experience from serving a greater number of trauma patients than Level II trauma centers or other hospitals with emergency departments. Moreover, the record shows that Level I trauma centers have certain clinical advantages over Level II trauma centers and other acute care hospitals.
Plaintiffs insist that granting Level I trauma centers the exclusive right to provide ALS and BLS services in the municipality in which the trauma center is located is not rationally related to the Act's goals. We disagree. It is conceivable that a Level I trauma care center, with its greater resources, university affiliation, and clinical advantages, could provide these services in a more capable and cost-efficient manner, and that conceivable state of facts provides a reasonable basis for the granting Level I trauma centers the exclusive authority to provide ALS and BLS in the municipalities in which these centers are located.
The testimony that Cooper provided to the Senate and Assembly Committees that considered the legislation supports this conclusion. Cooper's counsel testified and presented a memorandum that identified the advantages of aligning Camden's EMS with Cooper. Counsel noted that connecting the City's EMS services to Cooper would facilitate high-quality care.
Counsel pointed out that Cooper has expertise in advanced care in traumatology, emergency medicine, cardiology, neurology, pediatrics, critical care and other surgical or medical sub-specialties. Counsel stated that Cooper allows its EMS workers "to experience the entire spectrum of clinical diagnoses that may be encountered in the prehospital setting, with access to clinical expertise in numerous specialties and sub-specialties."
Counsel also detailed the benefits that could accrue if Camden's EMS services are provided by Cooper. The hospital's EMS workers could provide mobile health resources to discharged patients in order to decrease preventable readmissions, and if necessary, transport the patient back to the same hospital for continuity of care. Cooper is rooted in the community and could integrate preventative and population-based health practices to improve the overall health of the City's residents.
According to counsel, Cooper would be capable of identifying patients who need the additional resources of a Level I trauma center, a regional children's hospital, or a tertiary care facility. Misdirection of patients to the wrong facilities could be avoided. Counsel noted that time lost in transferring patients to the correct facility could lead to "unfavorable clinical outcomes due to delayed care."
In addition, counsel stated that EMS systems could be used for community paramedicine "to help alleviate unmet healthcare needs." Counsel observed that EMS personnel have "unparalleled access to our underserved patients' homes" and could "identify problems early, improve care, and reduce complications."
Targeted preventative treatment and referrals could reduce emergency room visits and repetitive hospital admissions. According to Cooper, implementation of such a program could result in a fifty percent reduction in the use of emergency room resources by the City's population. Moreover, having a single entity provide both ALS and BLS services would necessarily ensure certain cost-efficiencies.
Counsel stated that aligning EMS care with the region's designated Level I trauma center "will leverage the hospital's collective medical, academic, and research expertise, as well as surgical and medical specialties." Counsel also stated that the legislation would "centralize and enhance medical oversight over all levels of [prehospital] care, including physician field response and 24/7 medical command."
In addition, Dr. Steven E. Ross, Cooper's Director of the Center for Trauma Services, provided written testimony to the Assembly Appropriations Committee with regard to A.-4526. Dr. Ross stated that Cooper was the only trauma center in the State that does not direct ALS in the local service area. He said, "The lack of integration of [prehospital] and hospital care of the injured had been particularly problematic for the City of Camden" and EMS, as then configured, was "fragmented." Dr. Ross added that "Under the [current] system, the [t]rauma program at Cooper is unable to provide [m]edical [d]irection or [m]edical [c]ommand for our local EMS, even if the patient is being transported [to] our center."
We are therefore convinced that the information provided by Cooper shows that there is a conceivable state of facts, which have a reasonable relationship to the goals of the Act, and justifies conferring upon Level I trauma centers the exclusive authority to provide ALS and BLS in the municipalities in which they are located. The trial court found, however, that the Act was unconstitutional special legislation because, according to the court, it is based on the erroneous assumption that the Act's goals could only be achieved if ALS and BLS services are linked to a Level I trauma center.
The court found that the Act's goals could also be achieved if a Level II trauma center or hospital such as Virtua provided the services. The court stated that there was no evidence indicating that the quality of prehospital care would be improved by having the services provided by a Level I trauma center.
The court noted that a Level I trauma center may have greater resources, experience, and capability to handle traumatic injuries than Level II trauma centers or acute care facilities with emergency rooms. Even so, the court found that the superior capabilities of Level I trauma centers had no bearing upon the provision of ALS or BLS "because trauma surgeons are not involved in ALS or BLS services."
The court's analysis is flawed for several reasons. As noted previously, the court was tasked with determining "whether 'there [was] any conceivable state of facts bearing a reasonable relation to the object of the [A]ct which afford[ed] a basis for the classification.'" Jordan, supra, 90 N.J. at 433 (quoting Robson, supra, 26 N.J. at 524). As we have explained, defendants identified a conceivable state of facts which met that test. Under the circumstances, it was inappropriate for the court to second-guess the Legislature's judgment.
The court also stated that defendants had not presented sufficient evidence to support the classifications and exclusions in the Act, but defendants were only obligated to identify any conceivable state of facts which would justify the classifications in the Act. They did so.
Plaintiffs nevertheless argue that combining ALS and BLS under a single provider is not a rational basis for granting a Level I trauma center the exclusive right to provide these services in the municipality in which it is located. Plaintiffs contend that Virtua has provided ALS services in the City of Camden and the City could have elected to have Virtua provide both ALS and BLS services.
Plaintiffs assert that there is no reason why these services should be provided by a Level I trauma center like Cooper. However, as we have explained, it is conceivable that ALS and BLS can be provided more efficiently if provided by a Level I trauma center, and having a Level I trauma center provide the services would facilitate high-quality prehospital care.
Plaintiffs further argue that centralization of medical oversight is not a rational basis for classifying Level I trauma centers as the exclusive providers of ALS and BLS services. Plaintiffs contend that the Act does not centralize ALS and BLS because it does not require a Level I trauma center to provide BLS. Rather, the Act gives a Level I trauma center that provides ALS services the right of first refusal to provide BLS. Plaintiffs further argue that the Act does not centralize anything because it only applies to three or four municipalities and does not acknowledge that EMS patients must be transported to the closest appropriate hospital.
We are not persuaded by these arguments. It is conceivable that centralization will be achieved by having ALS and BLS services provided by a single entity. It is also conceivable that having these services provided by a single entity will mean centralization of medical oversight, regardless of the hospital to which an EMS patient is transported.
Plaintiffs further argue that granting Level I trauma centers the exclusive right to provide ALS and BLS services is not required for centralization. They argue that Level I and Level II trauma centers are "clinically indistinguishable." It is, however, conceivable that Level I trauma centers have clinical advantages that Level II trauma centers and other hospitals do not have. It is also conceivable that EMS patients, particularly those requiring trauma services, would benefit if the services were linked to a Level I trauma center, because these hospitals have greater resources, university affiliations, and clinical advantages. These conceivable states of facts are reasonably related to the goals of the Act, and provide a sufficient justification for the Act's classifications and exclusions.
In addition, plaintiffs argue that classifying Level I trauma centers as the exclusive ALS and BLS service providers is not rationally related to improving community health. We note that this was not one of the stated goals of the legislation. Nevertheless, defendants have cited improvements to community health as one of the potential benefits from the Act.
In support of this contention, defendants point to the testimony that Cooper's Counsel presented before the Assembly and Senate Committees, which indicated that if ALS and BLS services are linked to Cooper in the City of Camden, its EMS workers could be used for community paramedicine. This could, in Cooper's view, address "unmet healthcare needs," provide preventative treatment and referrals, thereby reducing emergency room visits and repeat hospital admissions.
In response, plaintiffs submitted to the trial court an affidavit of Dr. Jeffrey Beeson, one of the authors of an article on community paramedicine. In his affidavit, Dr. Beeson describes community paramedicine as "a novel health care delivery model [that is] intended to serve a range of patients in the out-of-hospital setting by providing 24/7 needs-based at-home integrated acute care, chronic care and prevention services."
Dr. Beeson asserts that that community care involves all types and levels of providers, and there is no basis for assuming that Level I trauma centers alone could provide such care. He also states that there is no evidence that linking ALS and BLS services to a Level I trauma center has any connection to establishment of this type of community health care program.
However, as noted, Cooper informed the Legislature that if Cooper were to provide ALS and BLS services in Camden, it would have the opportunity to develop a program of community paramedicine. This may not be the sort of program envisioned by Dr. Beeson, but it is conceivable that linking the provision of ALS and BLS services with a Level I trauma center like Cooper will result in cost efficiencies that would allow the development of other health care programs in the City of Camden, like the community paramedicine program is described, that would be of benefit to the community. This conceivable state of facts is reasonably related to one of the goals of the Act, which is to facilitate the provision of high quality care. It also provides a justification for granting Level I trauma centers the exclusive right to provide ALS and BLS in the municipalities in which they are located.
We therefore conclude that the trial court erred by finding that plaintiffs had overcome their heavy burden of showing that the Act is special legislation that violates the New Jersey Constitution.
Reversed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION