No. _________

IN THE ALABAMA COURT OF CIVIL APPEALS

EX PARTE AFFINITY HOSPITAL, LLC d/b/a TRINITY MEDICAL CENTER OF BIRMINGHAM,

PETITIONER.

(In re: Brookwood Health Services, Inc. d/b/a Brookwood Medical Center,

Plaintiff, v.

Affinity Hospital, LLC d/b/a Trinity Medical Center of Birmingham, et al.,

Defendants.) and

(In re: St. Vincent’s Health System, Plaintiff,

v. Affinity Hospital, LLC

d/b/a Trinity Medical Center of Birmingham, et al., Defendants.)

PETITION FOR WRIT OF MANDAMUS TO THE HONORABLE JIMMY B. POOL

FROM THE CIRCUIT COURT OF MONTGOMERY COUNTY CIVIL ACTION NOS. CV-2010-001587 AND CV-2010-901590

Attorneys for Petitioner, Affinity Hospital, LLC d/b/a Trinity Medical Center Of Birmingham:

Robert D. Segall Email: segall@copelandfranco.com COPELAND, FRANCO, SCREWS & GILL, P.A. 444 South Perry Street Montgomery, AL 36104 Telephone: (334) 420-2956 Facsimile: (334) 834-3172 April 5, 2011

David R. Boyd Email: dboyd@balch.com Colin H. Luke Email: cluke@balch.com Carey B. McRae Email:cmcrae@balch.com Ed R. Haden Email: ehaden@balch.com BALCH & BINGHAM LLP 1901 Sixth Avenue North Suite 1500 Birmingham, AL 35303-4642 Telephone: (205) 251-8100 Facsimile: (205) 226-8799

ELECTRONICALLY FILED4/5/2011 4:37 PM

CV-2010-001587.00CIRCUIT COURT OF

MONTGOMERY COUNTY, ALABAMAFLORENCE CAUTHEN, CLERK

i

TABLE OF CONTENTS

TABLE OF AUTHORITIES ...................................viii

SUMMARY ...................................................2

STATEMENT OF THE FACTS ....................................4

SHPDA Grants Trinity a CON for Irondale...............4

In the Digital Hospital CON Proceeding, the ALJ Examines Trinity’s Decision Process to Change from the Irondale Location to the Digital Hospital and Does Not Find Any Fraud or Other Disqualification. ................................7

Trinity Discloses 16 Additional Documents, and the CON Review Board Examines Them. .................10

The Circuit Court Orders Remand Based on the Same 16 Documents Being “New” Evidence. ..............15

STATEMENT OF THE ISSUES ..................................18

RELIEF SOUGHT ............................................19

MANDAMUS STANDARD ........................................19

STATEMENT OF WHY THE WRIT SHOULD ISSUE ...................20

I. The Circuit Court Acted Outside Its Statutory Jurisdiction By Not Dismissing Brookwood’s Three New, Non-Administrative Claims.......................21

II. The Circuit Court Acted Outside Its Statutory Jurisdiction By Remanding Under Section 41-22-20(i) Because The 16 Documents Are Not New Evidence.............................................23

III. The Circuit Court Acted Outside Its Statutory Jurisdiction By Effectively Reversing SHPDA Under Section 41-22-20(k)..................................27

CONCLUSION ...............................................30

CERTIFICATE OF SERVICE ...................................32

ii

APPENDICES:

Timeline of Events on Irondale-Digital Hospital Decision ...........................................A

Proposed Orders and Final Order.......................B Judge Pool’s Order Remanding Cases to SHPDA ......B-1

Proposed Order submitted by Brookwood & St. Vincent’s ..................................B-2

Proposed Order submitted by Trinity ..............B-3

Brookwood’s Supplement to Motion to Compel Seeking Remand Based on the 16 Documents Showing Trinity’s Consideration of the Possible Vacant Digital Hospital Location ..........................C

Trinity’s Opposition to Motion to Compel..............D

Trinity’s Opposition to Motion to Remand..............E

Trinity’s Motion to Dismiss/Motion for Judgment on the Pleadings ......................................F

St. Vincent’s Motion to Remand Based on the 16

Documents Showing Trinity’s Consideration of the Possible Vacant Digital Hospital Location ..........G

Brookwood’s Motion to Compel Based on the 16

Documents Showing Trinity’s Consideration of Possible Vacant Digital Hospital Location ..........H

Trinity’s Motion to Quash.............................I

Presiding Judge Price’s Order Appointing District Judge Pool to this Case ............................J

Circuit Judge Reese’s Sua Sponte Order Requesting

Appointment of District Judge Pool .................K Brookwood’s Petition for Review.......................L

iii

St. Vincent’s Petition for Review.....................M CON Review Board’s Issuance of CON and Denial of

Motions for Reconsideration Concerning the 16 Documents ..........................................N

Transcript of CON Review Board’s Hearing on Motion

for Reconsideration Concerning the 16 Documents Showing Trinity’s Consideration of Possible Vacant Digital Hospital Location

(10-20-10) .........................................O Motions for Reconsideration and Briefing..............P Brookwood’s Motion for Reconsideration ...........P-1

St. Vincent’s Motion for Reconsideration .........P-2

Trinity’s Response to Motions for Reconsideration ................................P-3

Brookwood’s Reply in Support of Motion for Reconsideration and Motion to Remand ...........P-4

St. Vincent’s Reply Brief ........................P-5

Sixteen Documents Showing Trinity’s Consideration of Possible Vacant Digital Hospital Location .......Q

June 4, 2007 Memo to David Miller from Shan Carpenter (TMC6-0474-0478) .....................Q-1 March 14, 2008 Email from John R. Barnes attaching “Daniel Corporation” information

(CHSPSC 00393-394) and March 15, 2008 Email from Gordon Carlisle to David Miller (CHSPSC00393) ..................................Q-2

March 26, 2008 Handwritten Note regarding Daniel meeting (TMC6-0041) .....................Q-3

iv

May 1, 2008 11:34 a.m. Bill Heburn Email to David Miller (CHSPSC 000032-33); May 1, 2008

4:08 p.m. David Miller Email to Bill Heburn (CHSPSC 000032); and May 2, 2008 8:58 a.m. Bill Heburn Email to David Miller (CHSPSC 000032-33) .....................................Q-4

June 27, 2008 CHSPSC memorandum to Marty Schweinhart from Miller (TMC6-0235) ............Q-5 July 7, 2008 CHS from David Miller (TMC6-0047) ...Q-6 July 14, 2008 Email from Gordon Carlisle to Marty Schweinhart (CHSPSC 000076) ..............Q-7 September 3, 2008 11:24 a.m. Email from Paul Smith to David Miller (TMC6-0545-0546);

September 3, 2008 12:00 p.m. Email from David Miller to Paul Smith (TMC6-0545) ...............Q-8

September 4, 2008 Email from Paul Smith /Corporate/CHS to David Miller/Corporate/CHS (TMC6-0544) ....................................Q-9 September 8, 2008 Memo from David Miller to Jennifer Peters, VP and Associate General

Counsel (TMC6-1095) ...........................Q-10 September 24, 2008, handwritten note of David Miller memorializing conversation with Charlie

Tickle (TMC6-0252) ............................Q-11 September 29, 2008 Email from Bill Heburn to David Miller (CHSPSC 00001-0002) ..............Q-12 September 29, 2008, Email from Rosemary Plorin outlining schedule of activities for following

day’s announcement of decision to pursue relocation to the 280 site, attaching Q&As for review by Charlie Tickle(TMC6-1135-1140) ......Q-13

v

September 29, 2008, email from Rosemary Plorin to CHSPSC executives attaching proposed Q&As

for Bill Heburn for following day’s announcement of decision to pursue relocation to the digital hospital (TMC6-1141-1144) ......Q-14

September 29, 2008, email from Leisha Harris to Rosemary Plorin, Bill Heburn, and David

Miller, attaching a revised outline of activities for the following day’s announcement of decision to pursue relocation to the digital hospital (TMC6-0530-0536) ......Q-15

Undated document with no indication of author entitled “Acquisition/Development Candidate,

Trinity Medical Center, Birmingham, AL” (CHSPSC 000046) ...............................Q-16

SHPDA’s Final Order Adopting ALJ’s Recommendation.....R Transcript of Hearing Before CON Review Board

(09-15-10) .........................................S Excerpts of Transcripts before ALJ in Digital

Hospital CON Proceeding Showing Trinity’s Consideration of Possible Vacant Digital Hospital Location ..................................T

Testimony of David Miller ........................T-1 Testimony of Bill Heburn .........................T-2 Testimony of Gordon Carlisle .....................T-3 Exhibits from Digital Hospital CON ALJ Hearing........U Trinity Ownership Chart (TMC37) ..................U-1 February 21, 2008 Memo to David Miller from Gordon Carlisle regarding digital hospital

(STV328) .......................................U-2 March 14-17, 2008 Emails between Gordon Carlisle and Charlie Tickle (STV351) ....................U-3

vi

May 22, 2008 Email from David Miller to Bill Heburn regarding replacement hospital design

(BMC325) .......................................U-4 May 28, 2008 Internal Email confirming Brookwood and St. Vincent’s expansion along Highway 280

(STV400) .......................................U-5 August 19, 2008 Letter from Frank McFadden referring to appeal as “frivolous” and “no

more than deliberate attempt to delay” (BMC189) .......................................U-6

September 10, 2008 Email to Heburn attaching draft press release (STV401) ...................U-7 May 2, 2002 Ruling of CON Review Board on Montclair Campus renovation (STV11) ............U-8 Excerpts of Trinity’s Application for CON at for

Digital Hospital ...................................V Trinity’s Letter of Intent for Vacant Digital

Hospital Location ..................................W Trinity’s Surrender of CON for Irondale Location......X Brookwood’s Petition for Judicial Review of

Irondale CON .......................................Y CON for Irondale......................................Z SHPDA’s Final Order Adopting ALJ Recommendation

for Irondale CON ..................................AA Excerpts of Transcript of CON Review Board Hearing

on Irondale CON ...................................BB Excerpt of David Miller Testimony before ALJ in

Irondale CON Proceeding Regarding Trinity’s Intent to Locate at Irondale in May 2008 ..........CC

vii

Trinity’s Irondale CON Application...................DD St. Vincent’s Opposition to Motion to Stay...........EE

viii

TABLE OF AUTHORITIES

Cases

Alabama Medicaid Agency v. Peoples, 549 So. 2d 504 (Ala. Civ. App. 1989)...................................28

Alabama State Pers. Bd. v. Garner, 4 So. 3d 545 (Ala. Civ. App. 2008)...............................20, 29

Brookwood Health Servs., Inc. v. Baptist Health Sys., Inc., 936 So. 2d 529 (Ala. Civ. App. 2005)..............25

Ex parte Brookwood Health Servs., Inc., 781 So. 2d 954 (Ala. 2000).........................................19

Ex parte Brunner, 10 So. 3d 24 (Ala. 2008) ...............29

Ex parte Worley, 46 So. 3d 916 (Ala. 2009) ........1, 21, 25

Hutchenson v. Daniel, 53 So. 3d 909, 2009 Ala. Civ. App. LEXIS 565 (Ala. Civ. App. Nov. 20, 2009)..........30

Klein v. State Board of Educ., 547 So. 2d 549 (Ala. Civ. App. 1988)...................................23

Smith v. Civil Serv. Bd. of Florence, 289 So. 2d 614 (Ala. Civ. App. 1974)...................................22

State Medicaid Agency v. Anthony, 528 So. 2d 326 (Ala. Civ. App. 1988)...................................21

Statutes

Ala. Code § 22-21-265.2 ..........................16, 18, 21

Ala. Code § 41-22-3 ......................................25

Ala. Code § 41-22-11 .................................22, 23

Ala. Code § 41-22-15 .....................................25

Ala. Code § 41-22-40 .....................................20

ix

Rules

Ala. R. Civ. P. Rule 54(b) ...............................30

Other Authorities

SHPDA Rule § 410-1-10-.03 .................................9

SHPDA Rule § 410-1-8-.05 .................................25

SHPDA Rule § 410-1-6-.06(1)(f) ...........................13

SHPDA Rule § 410-1-8-.07 .................................25

1

PETITION FOR THE WRIT OF MANDAMUS

Affinity Hospital, LLC d/b/a Trinity Medical Center of

Birmingham (“Trinity”) asks this Court to issue a writ of

mandamus directing District Judge Jimmy Pool to vacate his

order that remanded these cases to the State Health

Planning and Development Agency (“SHPDA”) and that will

cause another long delay in the $555 million project to

complete the now unfinished and vacant digital hospital on

Highway 280 in Birmingham, Alabama. The circuit court

acted outside its jurisdiction by reversing and remanding

SHPDA’s orders granting Trinity a certificate of need

(“CON”) without new evidence or any finding of arbitrary or

capricious action by SHPDA. The circuit court’s order

closely tracks the proposed order submitted by Brookwood

Health Services, Inc. d/b/a Brookwood Medical Center

(“Brookwood”) and St. Vincent’s Health System (“St.

Vincent’s”), who have opposed the CON as any delay

insulates them from competition. Mandamus is the

appropriate remedy when a circuit court acts outside its

statutorily prescribed jurisdiction in reviewing agency

action. See Ex parte Worley, 46 So. 3d 916, 921 (Ala.

2009).

2

SUMMARY

In 2006, Trinity applied for a CON to relocate its

hospital to Irondale, Alabama and leased land there to

construct a new building. Brookwood intervened and opposed

the CON for the Irondale location, as any delay in a new

Trinity facility insulates it from competition. SHPDA

issued the CON for the Irondale site in June 2008.

Although Trinity was exploring the possibility of

relocating to the unfinished digital hospital in

Birmingham, there was no completion of due diligence or

deal to purchase at that time. On September 30, 2008,

Trinity filed a letter of intent with SHPDA and publicly

announced its intention to complete the unfinished digital

hospital instead of moving to Irondale.

Trinity then surrendered its CON for the Irondale

location and applied for a new CON. Brookwood and St.

Vincent’s intervened and opposed the CON for the vacant

digital hospital as any delay in a new Trinity facility

insulates them from competition. The documents and

testimony before the administrative law judge (“ALJ”)

confirmed that in early 2008, Trinity began to explore the

possibility of completing the digital hospital, but did not

3

reach proposed deal terms until late September 2008. After

hearing this evidence, SHPDA’s ALJ recommended issuance of

the CON for the digital hospital to Trinity. SHPDA granted

the CON unanimously.

After discovering 16 additional Trinity documents from

another lawsuit, Brookwood and St. Vincent’s filed for

reconsideration claiming new evidence of “fraud.” The 16

documents, however, simply confirmed the evidence before

the ALJ that Trinity had been exploring the digital

hospital possibility throughout Spring and Summer of 2008

and did not reach proposed deal terms before September

2008. After conducting a hearing on the 16 documents, the

CON Review Board denied reconsideration.

On appeal, the circuit court found that these 16

documents were “new” evidence warranting reversal and

remanded for more discovery of the Irondale-digital

hospital decision, citing Alabama Code section 41-22-20(i)

and (k). While subsection (i) allows a remand based on

“new evidence” presented for the first time to the circuit

court, the 16 documents here are not “new” because they

were presented to SHPDA, argued about, and ruled on by

SHPDA. While subsection (k) allows a remand for SHPDA to

4

take new evidence if the court makes a finding that SHPDA’s

ruling was arbitrary or capricious, etc., there was no such

finding. Although Judge Pool’s order accomplishes the

delay that Brookwood and St. Vincent’s seek in order to

protect their monopolistic positions, it falls outside the

circuit court’s appellate jurisdiction. See Ala. Code

§ 41-22-20. The circuit court also acted outside its

jurisdiction by not dismissing three new claims that

Brookwood asserted for the first time on appeal. Trinity

respectfully requests that this Court: (1) issue a writ of

mandamus to direct the circuit court to dismiss the three

new claims; (2) hold that section 41-22-20(i) does not

authorize remand to SHPDA; and (3) proceed with the review

on an expedited basis of the circuit court’s reversal of

SHPDA’s orders in the appeal that Trinity has filed

contemporaneously with this Petition.

STATEMENT OF THE FACTS

SHPDA Grants Trinity a CON for Irondale

On November 3, 2006, Trinity filed a CON application

with SHPDA to move its operations from its current facility

on Montclair Road in Birmingham (the “Montclair Campus”) to

a new hospital that it proposed to build in Irondale.

5

(Appendix DD.) Brookwood intervened and opposed Trinity’s

Irondale project, as any delay in a new Trinity facility

would serve to insulate it from competition.1 (AA.) The ALJ

held a hearing where Trinity and Brookwood presented

testimony and documents over sixteen days from October 1 to

November 7, 2007. (AA.) At the hearing before the ALJ on

October 2, 2007, David Miller, president of division 1 of

Community Health Systems Professional Services Corporation

(“CHSPSC”)2, testified as follows:

Q. . . . It is your intention to build a new hospital for Trinity as described in the CON application if the SHPDA Board should grant that right?

A. Yes. Should the CON be granted, we will build the hospital.

(CC, p. 208).

The ALJ issued an order on April 3, 2008, recommending

that SHPDA grant Trinity’s CON application to move its

operations to Irondale. (AA.) On May 21, 2008, at the CON

Review Board hearing, counsel for Trinity argued for

1 Brookwood had previously opposed a CON for a planned

$108 million, four-story building for heart surgery on the Montclair Campus. (U-8.)

2 CHSPSC manages Trinity under a management agreement. (T-1, 1560-61.) Both CHSPSC and Trinity are remotely owned by the same parent company. (Id.; U-1.)

6

issuance of the CON for Trinity to go to Irondale. (BB.)

The CON Review Board adopted the ALJ’s recommended order.

(AA & BB.) On June 23, 2008, SHPDA issued a CON to Trinity

for the Irondale location. (Z.) Brookwood appealed. (Y.)

While the Irondale CON application was pending, Trinity

was informed in January 2008 of the possibility of

completing the unfinished digital hospital on Highway 280

in Birmingham. (T-1, 1576-77, 1737; T-2, 3918.) Trinity’s

management began to explore whether it was operationally,

financially, legally, and politically possible and prudent

to complete the digital hospital instead of building a new

hospital at Irondale. (T-1, 1577-92; 1622.) Negotiations

with an entity owned by Daniel Corporation (“Daniel”)

reached a point, in September 2008, that allowed Trinity to

file a letter of intent with SHPDA and publicly announce

that it intended to move instead to the digital hospital

location. (W.) Trinity then surrendered its CON for

Irondale and applied for a new CON for the unfinished

digital hospital. (V & X.)

7

In the Digital Hospital CON Proceeding, the ALJ Examines Trinity’s Decision Process to Change from the Irondale Location to the Digital Hospital and Does Not Find Any Fraud or Other Disqualification.

When Trinity filed for a new CON for the digital

hospital location, Brookwood and St. Vincent’s intervened

to oppose this CON, as any delay insulated their business

interests from competition. (R.) The ALJ heard testimony

from 58 witnesses at the 21-day hearing. (R., 4-5.)

The evidence before the ALJ regarding the Irondale-

digital hospital decision showed that in February 2008,

Trinity and CHSPSC personnel toured the digital hospital,

but had concerns regarding its size and operational

viability. (T-2, 3918, 3924-25; U-2.) On March 1, 2008,

Daniel acquired the unfinished digital hospital and later

met with Trinity to discuss a possible sale and completion

project. (A & U-3.)

When the ALJ recommended a CON for the Irondale

location on April 3, 2008, and the CON Review Board adopted

that recommendation on May 21, 2008, Trinity had not

completed its due diligence or reached an agreement with

Daniel to purchase the digital hospital. (Q & T.) The day

after the CON Review Board adopted the ALJ’s recommendation

for the Irondale CON, David Miller emailed Bill Heburn,

8

Trinity’s CEO, stating that while Trinity was still

considering its options, Trinity was, at present, using the

Irondale location and original facilities design:

All of us are pleased with the successful outcome yesterday with the CON Board and the board’s approval of the replacement hospital for Trinity Medical Center. As we move forward with the project, you know that we have several options with respect to facility design and facility location. At present, we are using the former Triad[3] design and bed size and the Irondale location . . . Given the extremely difficult reimbursement climate in Alabama, we are evaluating whether or not to go forward with the current Triad definition of size and scope. . . . It may be possible to develop a first class facility of 325 beds with plenty of outpatient space in the $200 million range instead of the oversized $315 million project envisioned by the former Triad management team.

(U-4) (emphases added).

In an internal email dated May 28, 2008, David Miller

confirmed that Brookwood and St. Vincent’s were planning to

expand their presence along Highway 280:

It looks like it is ‘heating up’ on the 280 corridor south of Birmingham. The existing St. Vincent’s site and the existing Brookwood site are about two/three miles south of the current “digital hospital” site . . . . As we discussed

3 Triad Hospitals, Inc. (“Triad”) and Baptist Health

System, Inc. jointly owned Trinity when the Irondale CON application was filed. (A.) An affiliate of CHSPSC merged with Triad in 2007, acquiring its interest in Trinity. (Id.)

9

before, the proposed free standing ER by Brookwood (and now St. Vincent’s) was probably only the first step toward more healthcare development on those adjacent campuses. Now it is clear that they do in fact, have long term plans for an acute care hospital on their respective sites. The St. Vincent’s CEO makes the comment that a hospital is needed in the area now, so that probably would help our case should we elect to change locations for the Trinity -- Birmingham replacement facility. . . .

(U-5) (emphases added).

In May and June 2008, Trinity’s building team

determined that the plan for new building space at the

Irondale location could be adapted to the digital hospital

if senior management decided to move there. (T-3.) On

June 28, 2008, SHPDA issued Trinity the CON for the

Irondale location. (Z.) Trinity considered whether, if

the CON for Irondale had become final, it could apply for a

change of location of its CON to the digital hospital in a

streamlined change-of-venue proceeding. (Q-5; SHPDA Rule

§ 410-1-10-.03.) If the CON was appealed, however, Trinity

would have to apply for a new CON in a new proceeding that

would start from scratch. (Id.)

Trinity’s counsel requested that Brookwood’s counsel

drop its appeal because it was frivolous and a deliberate

attempt to delay Trinity from building any project. (U-6.)

10

When asked at the ALJ hearing whether Trinity had made that

request because Trinity was not going to Irondale, David

Miller replied that “[i]t was one of the possibilities.”

(T-1, 1673).

Through September 2008, Trinity considered the digital

hospital site. (T-2, 4077.) A September 10, 2008 email to

Bill Heburn, Trinity’s CEO, attached a draft press release

regarding the decision to pursue relocation to the digital

hospital instead of Irondale. (U-7.)

Negotiations with Daniel reached a point in September

2008 that allowed Trinity to file a letter of intent with

SHPDA and to publicly announce that it intended to go to

the digital hospital instead of Irondale. (W.) On December

1, 2008, Trinity surrendered its Irondale CON and applied

for a CON to complete the digital hospital. (X & V.)

After reviewing this and all the other evidence at the

21-day hearing, the ALJ recommended issuance of a CON to

Trinity for the digital hospital. (R.) The CON Review Board

unanimously adopted the ALJ’s recommendation. (Id.)

Trinity Discloses 16 Additional Documents, and the CON Review Board Examines Them.

In a separate lawsuit, the City of Irondale sued

Trinity and CHSPSC for not coming to Irondale, and sought

11

documents from them. (P-3, 4-5.) Trinity’s and CHSPSC’s

attorneys, different law firms from Trinity’s counsel

before SHPDA and in this case, combed CHSPSC’s and

Trinity’s files and produced numerous documents regarding

Trinity’s Irondale-digital hospital decision. (Id. at 4.)

This production included 16 documents that Trinity’s

different SHPDA counsel had not produced after conducting a

separate search of CHSPSC’s and Trinity’s files and

producing over 7,000 pages of documents. (Id. at 4, Exs. D

& E.) Although the 16 documents were subject to a

protective order in the other lawsuit, counsel for Irondale

gave them to Brookwood counsel in this case. (Id. at Ex.

B.) After being reminded of the protective order,

Irondale’s counsel asked for the documents back. (Id.)

Brookwood and St. Vincent’s alleged that Trinity had

violated the discovery orders of the ALJ by not producing

the 16 documents. (P-2, P-4, & P-5.) Trinity, although

asserting that the majority of the 16 documents had been

subject to the attorney-client privilege, acknowledged that

the privilege had arguably been waived and, to avoid any

speculation as to their content, produced all 16 documents

in the SHPDA proceeding. (P-3, 4, Exs. D & E.)

12

St. Vincent’s filed a motion for reconsideration with the

CON Review Board based on some of the 16 documents. (P-2.)

Brookwood and St. Vincent’s argued that the 16 documents

warranted a remand to the ALJ. (P-2, P-4, & P-5.)

An examination of the contents of the 16 documents,

however, simply confirmed what the ALJ had already heard:

The possibility of completing the vacant digital hospital arose in early 2008;

Trinity explored that possibility, but had no deal before September 2008; and

On September 30, 2008, Trinity publicly announced its intent to move to the digital hospital and filed a letter of intent to do so with SHPDA.

The 16 documents confirmed that Trinity, before

investing half a billion dollars, examined the legal,

economic, and political hurdles of completing the

unfinished digital hospital instead of building a new

hospital in Irondale. (Q.) A note from a March 26, 2008

meeting with Daniel, stated “shoot for end of April deal,”

“deal contingent on CON, government help, assistance on old

site and possibly new site,” (Q-3), but no deal was

reached.

On May 1-2, 2008, CHSPSC made plans for engaging

lobbyists, including the Fine and Geddie firm, “if” Trinity

13

decided to move to the digital hospital location. (Q-4.)

See SHPDA Rule § 410-1-6-.06(1)(f) (“The applicant may at

its option, submit endorsements from community officials

and individuals expressing their reaction to the

proposal.”); (S, 23, 31-33).

On June 27, 2008 -- the day before the Irondale CON

issued -- David Miller sent a memo to Marty Schweinhart,

senior vice president of operations for CHSPSC, confirming

that there still was no deal because Daniel was “trying to

extract too many concessions from us”:

At present Trinity has an active CON application before the State to build the replacement facility in Irondale, Alabama. If Brookwood does not challenge the CON Board decision, then it may make sense to approach the state and inquire about a change in venue.

. . .

Marty, for a property that has been sitting idle for many years, the seller is trying to extract too many concessions from us, the first qualified buyer they have seen in a long time.

(Q-5) (emphasis added).

On September 3, 2008, CHSPSC’s chief executive officer,

whom Mr. Miller had kept informed of the negotiations with

Daniel, requested a plan to change the location of

Trinity’s proposed new hospital building in Irondale to the

14

unfinished digital hospital. (Q-8.) David Miller asked what

economic incentives Trinity should pursue, and said that

public relations and lobbying firms had been selected.

(Id.) On September 8, 2008, David Miller authored an email

to Jennifer Peters, CHSPSC associate general counsel,

setting forth a plan of several steps to be taken in an

attempt to obtain a CON for the digital hospital, including

the use of lobbyists. (Q-10.)

Given Brookwood’s consistent opposition to competition

from Trinity, Paul Smith, vice president of operations of

division 1 of CHSPSC, predicted “[t]he largest risk is

being accused of fraud/misleading the agency and having the

current CON taken away. Fraud would be a very high test

and difficult to prove, but it is risk none the less

. . . . Legal action by Brookwood and St. Vincent’s likely

regardless of what we do.” (Q-9.) This prediction of the

opponents’ likely tactics proved accurate.

There was no evidence that when David Miller testified

before the ALJ in the Irondale CON hearing on October 2,

2007, that “[s]hould the CON be granted, we will build the

hospital [in Irondale],” that he had the present intent to

move to the digital hospital instead. (CC, 208.) There was

15

no evidence that on April 3, 2008, when the ALJ recommended

issuance of the Irondale CON, or on May 21, 2008, when the

CON Review Board adopted the ALJ’s recommendation, that

Trinity had the present intent to change to the digital

hospital location. The additional 16 documents showed that

prior to the June 28, 2008 issuance of the Irondale CON,

Trinity was negotiating with Daniel, exploring its options,

making contingency plans, and employing experts to help it

make a decision on where and how to invest over $500

million – just as the evidence before the ALJ had shown.

(Q, U, T, P, S, & O.)

Before the CON Review Board, Trinity’s counsel noted

that the 16 documents were cumulative to the evidence

already reviewed by the ALJ and that the reconsideration

request was yet another delay tactic. (O.) After reviewing

the 16 documents, reading the briefs, and hearing arguments

from counsel for all parties, the CON Review Board denied

the motions for reconsideration. (N & O.)

The Circuit Court Orders Remand Based on the Same 16 Documents Being “New” Evidence.

The appeals were consolidated and assigned to Circuit

Judge Eugene Reese. (K.) Without motion or rationale, Judge

Reese issued an order asking Presiding Judge Charles Price

16

to re-assign by special appointment these cases involving a

$555 million renovation project to District Judge Jimmy

Pool. (Id.) Judge Price did so. (J.)

In addition to the standard petition for review from a

SHPDA proceeding, Brookwood asserted claims for the first

time on appeal to the circuit court: (1) a claim for

declaratory judgment that the CON is invalid; (2) a claim

alleging a violation of SHPDA’s review statute, Alabama

Code section 41-22-20(i); and (3) a claim alleging a

violation of SHPDA’s legislative intent statute, Alabama

Code section 22-21-265.2. (L.) Although there was an

administrative record, Brookwood sought discovery in the

appellate proceeding. (H & I.)

Trinity filed a motion to quash the discovery requests,

reminding the circuit court that the Alabama Administrative

Procedure Act (“AAPA”) confines appellate review to the

administrative record and allows appellate discovery only

when there is evidence that the agency has committed fraud

or irregularities (and no such allegation had been made).

(I.) When Brookwood filed a motion to compel seeking

discovery on its new claims, Trinity responded that the

circuit court had no jurisdiction to entertain new claims

17

while sitting as an appellate court. (D.) In reply,

Brookwood sought remand to the ALJ to take more discovery

based on the same 16 documents that the CON Review Board

had already ruled on, alleging that the 16 documents

constituted “new” evidence. (C.) St. Vincent’s filed a

motion to remand based on the 16 documents being “new”

evidence. (G.) Trinity filed a motion to dismiss, or in the

alternative, a motion for judgment on the pleadings for the

three new claims. (F.)

District Judge Pool’s order, which closely tracked the

proposed order submitted by Brookwood and St. Vincent’s

(B-1 & B-2), concluded:

1. That Trinity violated the ALJ’s discovery order by

failing to produce the 16 documents. (B-1, 6.)

2. That “[t]he withheld documents and additional

evidence related thereto are material to the issues in this

case, and Brookwood and St. Vincent’s were not able to

present this additional evidence in the previous

proceedings.” (Id. at 7.)

3. That “[t]he Motion to Remand is GRANTED pursuant

to Ala. Code § 41-22-20(i) and (k), subject to this Court’s

instructions below.” (Id.)

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4. That “[u]pon completion of the reconvened hearing,

ALJ Hampton shall issue another recommended order in light

of the additional evidence presented, then return it to the

CON Board for consideration de novo with all additional

evidence included.” (Id. at 9.)

5. That “[b]ecause this case is remanded to SHPDA,

this Court finds that any claims Brookwood may assert under

Ala. Code § 41-22-20(i) and Brookwood’s declaratory relief

not ripe for consideration. Therefore, this Court will not

address those two claims at this time.” (Id. at 6.)

The order also did not address Brookwood’s claim for

violation of the legislative intent statute for SHPDA,

Alabama Code section 22-21-265.2, and did not rule on

Trinity’s motion to dismiss. (Id.)

STATEMENT OF THE ISSUES

I. Whether the circuit court acted outside its appellate

jurisdiction by retaining Brookwood’s three new claims.

II. Whether the circuit court acted outside its

jurisdiction under Alabama Code section 41-22-20(i) by

remanding the case based on the 16 documents when those

documents are not “new,” but were presented to, argued

about, and ruled on by the CON Review Board.

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III. Whether the circuit court acted outside its

jurisdiction under Alabama Code section 41-22-20(k) by

effectively reversing SHPDA’s grant of the CON without

any arbitrary and capricious, etc. rationale.

RELIEF SOUGHT

Trinity respectfully requests that this Court (1) order

the circuit court to dismiss the three new claims, (2) hold

that the circuit court lacked jurisdiction to remand under

section 41-22-20(i), and (3) allow the appeal of the final

judgment of the reversal under subsection (k) to proceed.

MANDAMUS STANDARD

A writ of mandamus shall issue when the petitioner

demonstrates: (1) a clear legal right in the petitioner to

the order sought; (2) an imperative duty upon the

respondent to perform, accompanied by a refusal to do so;

(3) the lack of another adequate remedy; and (4) properly

invoked jurisdiction of the court. See Ex parte Brookwood

Health Servs., Inc., 781 So. 2d 954, 956 (Ala. 2000).

This Court’s “review of the trial court’s determination

in this case is without a presumption of correctness

because that court was in no better position to review the

20

Board’s order than is this court.” Alabama State Pers. Bd.

v. Garner, 4 So. 3d 545, 550 (Ala. Civ. App. 2008).

STATEMENT OF WHY THE WRIT SHOULD ISSUE

The half appeal-half trial, reversal-without-saying-so

order, as requested by Brookwood and St. Vincent’s, is

almost the perfect delay trap for the $555 million digital

hospital project. On its face, the order is not a final

judgment that can be appealed because it does not rule on

the three new claims. On its face, it does not use the

word “reverse,” which would require a finding under the

arbitrary and capricious review standard. On its face, it

simply remands, citing Alabama Code section 41-22-40(i) and

(k), based on the 16 cumulative documents that SHPDA had

considered in denying the motions for reconsideration.

Under SHPDA’s appeal statute, however, the circuit court

has no subject matter jurisdiction over the three new

claims, no jurisdiction to remand under subsection (i)

unless new evidence is presented to the circuit court (none

has been), and no jurisdiction under subsection (k) to

reverse the CON (which it did) without addressing the

arbitrary or capricious factors (which the order omits).

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I. The Circuit Court Acted Outside Its Statutory Jurisdiction By Not Dismissing Brookwood’s Three New, Non-Administrative Claims.

In its petition for review to the circuit court,

Brookwood asserted three new claims that had not been

presented to SHPDA: (1) an alleged violation of SHPDA’s

review statute, Alabama Code section 41-22-20(i); (2) a

declaratory judgment claim that SHPDA’s final order was

invalid; and (3) an alleged violation of SHPDA’s

legislative intent statute, Alabama Code section

22-21-265.2. (L.) Because this petition for review is

governed by the AAPA’s appeal provisions, the circuit court

is without subject matter jurisdiction to entertain these

new claims, and they cannot be used as a procedural gimmick

to shield the circuit court order from appellate review.

“Appeals from decisions of administrative agencies are

purely statutory . . . .” State Medicaid Agency v.

Anthony, 528 So. 2d 326, 328 (Ala. Civ. App. 1988). A

circuit court does not sit as a court of general

jurisdiction open to all claims in an AAPA appeal, but as

an appellate court with statutorily limited jurisdiction.4

4 See Worley, 46 So. 3d 916 (holding that the statutory

appeal scheme provided by the AAPA forecloses other methods of relief); Smith v. Civil Serv. Bd. of Florence, 289

22

Accordingly, the circuit court had no jurisdiction under

section 41-22-20 to entertain Brookwood’s new claims for

violation of SHPDA’s review statute and SHPDA’s legislative

intent statute.

Instead of allowing a new claim for a declaratory

judgment to be filed with the circuit court, section

41-22-20(k) provides that a circuit court on appeal may set

aside the declaratory relief granted by an agency:

The court may reverse or modify the decision or grant other appropriate relief from the agency action, equitable or legal, including declaratory relief, if the court finds that the agency action is due to be set aside . . . .

(Emphases added.)

Consistent with the AAPA’s appellate review statute,

section 41-22-11(a) allows an aggrieved person to seek a

declaratory judgment from an agency. See Ala. Code § 41-

22-11(a) (“[A]n agency may issue a declaratory ruling with

respect to the validity of the rule or with respect to the

applicability to any person, property or state of facts of

any rule or statute enforceable by it . . . .”). Section

So. 2d 614 (Ala. Civ. App. 1974) (holding that when a special statutory procedure has been provided as an exclusive method for review for a particular type of case, no other statutory review is available).

23

41-22-11(b) provides that the agency’s declaratory judgment

is then reviewable under section 41-22-20. See Ala. Code

§ 41-22-11(b) (“Such rulings are subject to review in the

Circuit Court of Montgomery County . . . in the manner

provided in Section 41-22-20 . . . .”). The circuit court

is without jurisdiction to entertain Brookwood’s

declaratory judgment claim. See Klein v. State Board of

Educ., 547 So. 2d 549 (Ala. Civ. App. 1988) (“A declaratory

judgment is not the proper vehicle for obtaining judicial

review of an agency decision, nor is it the proper

mechanism for reversing or rescinding the action”).

II. The Circuit Court Acted Outside Its Statutory Jurisdiction By Remanding Under Section 41-22-20(i) Because The 16 Documents Are Not New Evidence.

The circuit court’s remand under section 41-22-20(i)

based on the same 16 documents that SHPDA already reviewed,

considered, and ruled upon is outside its appellate

jurisdiction. Section 41-22-20(i) provides that appellate

review of agency action is generally confined to the

administrative record: “[A] reviewing court shall not

itself hear or accept any further evidence with respect to

those issues of fact whose determination was entrusted by

24

law to the agency in that contested case proceeding

. . . .”

Subsection (i), however, makes an exception for

evidence of fraud by the agency or procedural

irregularities not shown in the record:

provided, however, that evidence may be introduced in the reviewing court as to fraud or misconduct of some person engaged in the administration of the agency or procedural irregularities before the agency not shown in the record and the affecting order, ruling, or award from which review is sought, and proof thereon may be taken in the reviewing court.

(Emphases added.)

Neither Brookwood nor St. Vincent’s alleges any fraud

or misconduct by SHPDA. While they allege a “procedural

irregularity” not shown in the record, the 16 documents are

in the record, (Q.), as are the arguments of counsel about

them, (O.), the briefs, (P.), and the CON Review Board’s

denial of reconsideration based on the documents,

arguments, and briefs, (N.).

Subsection (i) further provides that if there is

additional evidence that was not presented to the agency,

the circuit court may remand based on that new evidence:

If, before the date set for hearing a petition for judicial review of agency action in a contested case, it is shown to the satisfaction of the court

25

that additional evidence is material and that there were good reasons for failure to present it in the contested case proceeding before the agency, the court may remand to the agency and order that the additional evidence be taken before the agency upon conditions determined by the court.

(Emphases added.)

“Additional evidence” that was not “present[ed] in the

contested case,” is new evidence presented for the first

time to the circuit court. This case was contested before

the ALJ and the CON Review Board,5 and the 16 documents were

5 The “contested case” includes the CON Review Board

decisions which are the final determinations of SHPDA made after hearings. See Ala. Code § 41-22-3(3) (defining “contested case” as a proceeding “in which the legal rights, duties, or privileges of a party are required by law to be determined by an agency after an opportunity for hearing”) (emphasis added). The ALJ only recommends issuance of a CON. See Brookwood Health Servs., Inc. v. Baptist Health Sys., Inc., 936 So. 2d 529, 536 (Ala. Civ. App. 2005) (“[T]he ALJ’s recommendation is not a binding order on the parties, and the SHPDA regulations do not require that the CONRB give any deference to an ALJ’s recommendation.”) (Internal quotation marks and citation omitted.); SHPDA Rule §§ 410-1-8-.05 & -.07 (ALJ recommends). If a party contests the ALJ’s recommendation, as happened in this case, the CON Review Board finally determines whether a CON will issue. See SHPDA Rule § 410-1-8-.05. Until there is a final decision by the CON Review Board, there can be no appellate review under § 41-22-20(k). See Ala. Code § 41-22-20 (a person “who is aggrieved by a final decision in a contested case is entitled to judicial review under this chapter”); Worley, 46 So. 3d at 922 (“A ‘final decision’ is one that garners the support of ‘a majority of the officials who are to render the final order.’”) (Quoting § 41-22-15).

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presented to that Board, briefed, argued, and ruled on.

(N, O, P, & Q.) They are not additional or new.

Because the 16 documents and arguments seeking

testimony about those documents were presented to the CON

Review Board, which issued a final agency action rejecting

those arguments, remand constitutes a reversal of the CON

Review Board’s order. But reversal of an agency’s final

order can be sought only under subsection (k). If new

evidence is presented, subsection (i) provides that the

“agency may modify its findings and decision . . . .”

(Emphasis added.) By contrast, subsection (k) authorizes

the circuit court to “affirm,” “remand,” “reverse,” or

“modify” the final agency action:

The court may affirm the agency action or remand the case to the agency for taking additional testimony and evidence or for further proceedings. The court may reverse or modify the decision or grant other appropriate relief from the agency action, equitable or legal, including declaratory relief, if the court finds that the agency action is due to be set aside or modified under standards set forth in appeal or review statutes applicable to that agency.

(Emphases added.)

District Judge Pool’s decision does not provide that

the CON Review Board “may” modify its order denying

rehearing as provided in subsection (i). It says: “Upon

27

completion of the reconvened hearing, ALJ Hampton shall

issue another recommended order in light of the additional

evidence presented, then return it to the CON Board for

consideration de novo.” (B-1, 9) (emphases added). Without

using the label “reversed,” this language reversed (1) the

CON Review Board’s order denying reconsideration, (2) the

CON Review Board’s order adopting the ALJ recommendation

and issuing the CON, and (3) the ALJ’s order making the

recommendation to issue the CON to Trinity. See id.

Because there is no new evidence and because the order

reverses SHPDA, subsection (i) does not apply.

III. The Circuit Court Acted Outside Its Statutory Jurisdiction By Effectively Reversing SHPDA Under Section 41-22-20(k).

To reverse and remand under Alabama Code section

41-22-20(k), a circuit court must determine that the agency

order fails under one or more of the seven criteria --

arbitrary or capricious, in excess of statutory authority,

etc.:

The court may reverse or modify the decision or grant other appropriate relief from the agency action, equitable or legal, including declaratory relief, if the court finds that the agency action is due to be set aside or modified under standards set forth in appeal or review statutes applicable to that agency or if substantial rights of the

28

petitioner have been prejudiced because the agency action is any one or more of the following:

(1) In violation of constitutional or statutory provisions;

. . . .

(7) Unreasonable, arbitrary, or capricious, or characterized by an abuse of discretion or a clearly unwarranted exercise of discretion.

(Emphases added.)

Judge Pool’s order reverses three orders -- the ALJ’s

recommended order, the CON Review Board’s order adopting

that recommendation, and the CON Review Board’s order

denying reconsideration: “Upon completion of the reconvened

hearing, ALJ Hampton shall issue another recommended order

in light of the additional evidence presented, then return

it to the CON Board for consideration de novo.” (B-1, 9)

(emphases added). Judge Pool’s order can be interpreted in

two different ways. First, the order omitted any reasons

or analysis of the above seven factors. Section 41-22-20(l)

provides: “Unless the court affirms the decision of the

agency, the court shall set out in writing, which writing

shall become a part of the record, the reasons for its

decision.” See Alabama Medicaid Agency v. Peoples,

549 So. 2d 504, 506 (Ala. Civ. App. 1989) (“[T]he trial

29

court must provide, pursuant to § 41-22-20 (l) specific

reasons in its order to support its conclusions.”). By not

setting out the reasons for reversing all three orders of

SHPDA (e.g., arbitrary or capricious), the circuit court

acted outside the jurisdiction of section 41-22-20(k).

Second, sheared of the three new, non-administrative

claims and falling outside subsection (i), Judge Pool’s

order should be reviewed for what it is -- a final judgment

under subsection (k) that reverses SHPDA’s final agency

action and remands, and is thus subject to review by this

Court on the direct appeal that is also pending here.6 This

Court is in as good a position as the circuit court to

review the 16 documents and the arguments of counsel and

avoid even more delay of the $555 million project to

complete the digital hospital. See Ala. State Pers. Bd. v.

Garner, 4 So. 3d 545, 549-550 (Ala. Civ. App. 2008) (“This

court [the Court of Civil Appeals] reviews a circuit

6 See Ex parte Brunner, 10 So. 3d 24, 25 (Ala. 2008)

(“[T]he labels provided in a judgment are not controlling . . . It is the effect of the [judgment] that determines what it is . . . .”) (Internal quotation marks omitted) (bracketed language by court). Indeed, St. Vincent’s has confirmed that the circuit court’s order disposed of the entire appeal, stating to the circuit court that the “appeal of the CON granted to Trinity is no longer pending before this Court.” (EE, pp. 2-3.)

30

court’s judgment without a presumption of correctness

because the circuit court is in no better position to

review an agency’s decision than this court.”).

CONCLUSION

This Court should: (1) grant the petition, issue the

writ, and direct the circuit court to dismiss the three new

claims; (2) hold that section 41-22-20(i) does not

authorize the remand to SHPDA; and (3) leave the final

judgment for review on the appeal in this Court. As an

alternative to (3), this Court should direct the circuit

court to vacate its remand order and enter findings under

section 41-22-20(k) within 14 days. See generally, e.g.,

Hutchenson v. Daniel, 53 So. 3d 909, 2009 Ala. Civ. App.

LEXIS 565 *11 n.2 (Ala. Civ. App. Nov. 20, 2009) (noting

remand to trial court for 14 days to certify under Rule

54(b)). This Court should also grant whatever additional

relief is appropriate.

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Respectfully submitted this 5th day of April, 2011,

/s/ David R. Boyd David R. Boyd Email: dboyd@balch.com Colin H. Luke Email: cluke@balch.com Carey B.McRae Email:cmcrae@balch.com Ed R. Haden Email: ehaden@balch.com BALCH & BINGHAM LLP 1901 Sixth Avenue North Suite 1500 Birmingham, AL 35303-4642 Telephone: (205) 251-8100 Facsimile: (205) 226-8799 Robert D. Segall Email: segall@copelandfranco.com COPELAND, FRANCO, SCREWS & GILL, P.A. 444 South Perry Street Montgomery, AL 36104 Telephone: (334) 420-2956 Facsimile: (334) 834-3172

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CERTIFICATE OF SERVICE

I hereby certify that a copy of the foregoing has been

served upon the following by AlaFile and by Federal Express

on this the 5th day of April, 2011:

Honorable Jimmy B. Pool Montgomery County Courthouse 251 South Lawrence Street Montgomery, Alabama 36102-1667 Ms. Florence M. Cauthen, Clerk Montgomery County Courthouse 251 South Lawrence Street Montgomery, Alabama 36102 I hereby certify that a copy of the foregoing has been

served upon the following by email and by Federal Express

on this the 5th day of April, 2011:

David M. Hunt JOHNSTON BARTON PROCTOR & ROSE, LLP 569 Brookwood Village, Suite 901 Birmingham, Alabama 35209 James E. Williams C. Mark Bain MILTON, ESPY & WILLIAMS, P.C. P.O. Drawer 5130 Montgomery, Alabama 36103 Mark Wilkerson Dana Billingsley WILKERSON & BRYAN Post Office Box 830 Montgomery, Alabama 36101

/s/ David R. Boyd Of Counsel