Alaska Supreme Court Opinions made Available byTouch N' Go Systems and Bright Solutions


Touch N' Go
, the DeskTop In-and-Out Board makes your office run smoother.

  This site is possible because of the following site sponsors. Please support them with your business.
www.gottsteinLaw.com

You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Mat-Su Valley Medical Center, LLC v. Advanced Pain Centers of Alaska, Inc. (11/6/2009) sp-6430

Mat-Su Valley Medical Center, LLC v. Advanced Pain Centers of Alaska, Inc. (11/6/2009) sp-6430, 218 P3d 698

     Notice:   This opinion is subject to correction  before
     publication  in  the  Pacific  Reporter.   Readers  are
     requested to bring errors to the attention of the Clerk
     of  the  Appellate  Courts, 303  K  Street,  Anchorage,
     Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
     e-mail corrections@appellate.courts.state.ak.us.


            THE SUPREME COURT OF THE STATE OF ALASKA


MAT-SU VALLEY MEDICAL )
CENTER, LLC, an Alaska limited ) Supreme Court No. S-13062
liability company, d/b/a Mat-Su )
Regional Medical Center, ) Superior Court No. 3AN-96-12646 CI
)
Appellant, ) O P I N I O N
)
v. ) No. 6430 November 6, 2009
)
ADVANCED PAIN CENTERS OF )
ALASKA, INC., an Alaskan )
corporation, d/b/a Advanced )
Medical Centers of Alaska; STATE )
OF ALASKA, DEPARTMENT OF )
HEALTH AND SOCIAL SERVICES, )
and KARLEEN JACKSON, in her )
capacity as Commissioner of the )
Department of Health and Social )
Services, State of Alaska, )
)
Appellees. )
)

          Appeal  from the Superior Court of the  State
          of    Alaska,   Third   Judicial    District,
          Anchorage, Peter A. Michalski, Judge.

          Appearances:  John F. Sullivan, Inslee, Best,
          Doezie  &  Ryder, P.S., Bellevue, Washington,
          for  Appellant.   Stanley  T.  Lewis,  Birch,
          Horton,  Bittner  and Cherot,  and  Linda  A.
          Webb,  Hagans, Ahearn & Webb, Anchorage,  for
          Advanced Pain Centers of Alaska, Inc.   Kelly
          E. Henriksen, Assistant Attorney General, and
          Talis  J. Colberg, Attorney General,  Juneau,
          for State of Alaska, Department of Health and
          Social Services and Karleen Jackson.

          Before:     Fabe,  Chief  Justice,  Eastaugh,
          Carpeneti, Winfree, and Christen, Justices.

          EASTAUGH, Justice.

I.   INTRODUCTION
          After  the  Alaska  Department  of  Health  and  Social
Services decided no certificate of need (CON) was required for  a
health care facility proposed by Advanced Pain Centers of Alaska,
Inc.,  Mat-Su  Valley  Medical Center  sued  Advanced  Pain,  the
department,  and  its commissioner.  Mat-Sus  lawsuit  sought  to
enjoin construction and operation of the facility and also sought
a judgment declaring that the states CON decision was contrary to
law  and  void.   The  superior court  granted  summary  judgment
against  Mat-Su.  It held that because there was no violation  of
an  existing CON, Mat-Su lacked standing under AS 18.07.091(a) to
seek  injunctive relief for the alleged violations.  It also held
that  Mat-Sus claim against the state defendants was an  untimely
administrative  appeal.  Because Mat-Su  did  not  lack  standing
under  the  statute  and because an appeal would  not  have  been
untimely, we reverse and remand.
II.  FACTS AND PROCEEDINGS
          Advanced Pain Centers of Alaska, Inc. is a health  care
provider  specializing  in interventional  pain  management.   It
wished  to  convert office space in Wasilla into  a  single-suite
ambulatory  surgery  center.   It  therefore  wrote  the   Alaska
Department of Health and Social Services (DHSS) in February 2006,
asking the department to determine whether a certificate of  need
(CON)  was required for Advanced Pains proposed project. Advanced
Pains  letter stated that the estimated total cost of the project
would be $966,035.54.
          Alaska  Statute  18.07.031  provides  that  a  CON   is
required whenever the intended cost of constructing a new  health
care  facility  is over a certain statutory threshold.   For  the
year  between  July  1,  2005 and July 1,  2006,  that  statutory
threshold was $1,050,000.1  Because the estimated total  cost  of
Advanced Pains project was under the threshold, DHSS Commissioner
Karleen Jackson determined that a CON was not required.
          DHSS    published    notice   of   the    commissioners
determination  on  March 15, 2006.  The notice invited  person[s]
substantially  affected  by  the  CON  determination  to  request
reconsideration.  It stated that any request for  reconsideration
must  be  postmarked no later than 4:30 P.M. April 14,  2006  and
must  be  made in accordance with 7 [Alaska Administrative  Code]
AAC 07.033.
          On  April 26, 2006, twelve days after the deadline  for
seeking reconsideration had expired, Mat-Su Valley Medical Center
sent  the  commissioner a letter requesting that she  investigate
Advanced Pains project and make a determination as to whether the
requirements   of   AS  18.07  and  the  [CON]  regulations   are
          applicable.  By letter of May 3, Commissioner Jackson denied Mat-
Sus request because it had not been postmarked by April 14.
          In  October 2006 Mat-Su sued Advanced Pain,  DHSS,  and
Commissioner  Jackson  in her official capacity.   Its  complaint
alleged  that  Advanced  Pain knowingly  misrepresented  material
facts  in requesting and obtaining its CON determination.  Mat-Su
sought  to  enjoin construction and operation of  Advanced  Pains
Wasilla  surgery  center  under  AS  18.07.091  and  requested  a
declaratory judgment that the commissioners CON determination was
contrary to law and therefore void.2
          DHSS  and  the commissioner (collectively the state  or
the state defendants) and Advanced Pain filed motions for summary
judgment.    The  superior  court  granted  the  states   motion,
reasoning that Mat-Su lost the chance to obtain a judicial ruling
reversing the commissioners CON determination when timely  appeal
of  the decision was not taken.  The court granted Advanced Pains
motion  for  summary  judgment, reasoning  that  AS  18.07.091(a)
permitted  Mat-Su to challenge only a violation  of  an  existing
CON,  not  a  violation of a CON statute or  regulation.   Mat-Su
unsuccessfully moved for reconsideration.
          Mat-Su appeals.
III. DISCUSSION
     A.   Standard of Review
          We  review grants of summary judgment de novo,  drawing
all  factual inferences in favor of, and viewing the facts in the
light  most favorable to, the non-prevailing party.3   We  affirm
grants  of  summary judgment when there are no genuine issues  of
material  fact and the prevailing party was entitled to  judgment
as a matter of law.4
          Questions  regarding the interpretation and application
of  a  statute  are  questions of  law  to  which  we  apply  our
independent judgment.5  When construing the meaning of a  statute
under this standard, we look to the meaning of the language,  the
legislative history, and the purpose of the statute and adopt the
rule  of  law  that  is  most persuasive in light  of  precedent,
reason, and policy.6
          We  review  for  abuse of discretion a superior  courts
decision  to strictly enforce the thirty-day deadline for  filing
an administrative appeal under Alaska Appellate Rule 602(a)(2).7
     B.   Whether It Was Error To Grant Summary Judgment in Favor
          of Advanced Pain
          
          Mat-Su   argues   that  it  had   standing   under   AS
18.07.091(a) to seek injunctive relief, and that it was therefore
error to grant summary judgment to Advanced Pain.
          Alaska  Statute 18.07.091(a) describes three categories
of   complainants  eligible  to  obtain  injunctive  relief   for
violations  of  Alaskas CON statutes or regulations.   Subsection
.091(a)  provides, with bracketed numbers inserted to demark  the
categories:
          [i]njunctive  relief  against  violations  of
          this  chapter  or regulations  adopted  under
          this chapter may be obtained from a court  of
          competent  jurisdiction at  the  instance  of
          [(1)] the commissioner, [(2)] a holder  of  a
          certificate of need who is adversely affected
          in  the  exercise of the activities conducted
          in violation of the certificate, or [(3)] any
          member   of  the  public  substantially   and
          adversely affected by the violation.[8]
          
Thus,  the  three categories are: (1) the commissioner,  (2)  CON
holders,   and  (3)  member[s]  of  the  public.9   The   statute
prescribes  additional requirements for two  of  the  categories.
For  the  second,  the  statute requires the  CON  holder  to  be
adversely affected in the exercise of the activities conducted in
violation  of  the  certificate.10  For the  third,  the  statute
requires  the  member  of  the public  to  be  substantially  and
adversely affected by the violation.11
          The  superior court concluded that Mat-Su did not  fall
within  any  of  the  three  categories  of  persons  capable  of
obtaining injunctive relief under AS 18.07.091(a).  It determined
that the first category did not apply because Mat-Su was not  the
commissioner and that the second did not apply because Mat-Su was
not  alleging the violation of an existing CON.  Mat-Su does  not
challenge those conclusions.12  The superior court also held that
because  Mat-Su could not show that it was adversely affected  by
the  violation of a certificate, it did not fall within the third
category.
          The superior courts conclusion as to the third category
turned  on  the  courts interpretation of the text of  subsection
.091(a).   The  court read the last word in the  third  category,
violation,  to  refer  back  to  the  words  violation   of   the
certificate  that end the second category, and not to  the  words
violations  of  this  chapter  or  regulations  that   open   the
subsection and precede all three categories.13
          The court gave two reasons for its reading.  First,  it
concluded  that  common  sense English usage  requires  that  the
statute  be  interpreted to refer in the last  use  of  the  word
violation   to  the  immediately  precedent  violation   of   the
certificate,  not  to the first use in the phrase  violations  of
this chapter or regulations.
          Second,  it  relied on its reading  of  the  rights  of
certificate  holders,  given that it saw no  reasonable  argument
that  a member of the publics right to remedy should exceed  that
of an adversely affected certificate holder.
            On  these  bases,  the court granted  Advanced  Pains
summary judgment motion.
          1.   Whether Mat-Su had standing under AS 18.07.091
               
          Mat-Su  argues that, as a direct competitor of Advanced
Pain,  it  has  standing  to  seek  injunctive  relief  under  AS
18.07.091(a)   for  what  it  calls  Advanced  Pains   fraudulent
activity.   Mat-Su  argues  that  as  a  member  of  the   public
substantially and adversely affected, it is within  the  statutes
third category of complainants.  It contends that it was error to
conclude that because Mat-Su was not alleging a violation  of  an
existing  CON,  it  did  not have standing to  obtain  injunctive
          relief under subsection .091(a).  It argues that the superior
courts conclusion was contrary to South Central Health Planning &
Development,    Inc.   v.   Commissioner   of    Department    of
Administration,14   and  would  insulate  those   violators   who
completely disregard the CON laws.
          Although  the  state  concedes  that  Mat-Su  may  have
standing  to  challenge the commissioners decision  or  [Advanced
Pains]  alleged  violations  of  the  CON  laws,  Advanced   Pain
disagrees.  It argues that the superior courts common  sense  and
well-reasoned  interpretation of AS  18.07.091(a)  is  consistent
with  the  plain language of the statute.  Advanced Pain  asserts
that  the superior courts interpretation is not inconsistent with
our  holding in South Central because the plaintiff in that  case
was  challenging  the  violation  of  an  existing  CON,  whereas
Advanced Pain had no CON.
          We conclude that there are two main reasons why summary
judgment  should  not  have been entered against  Mat-Su  on  the
standing  issue.   First,  South  Central  is  inconsistent  with
requiring  third-category complainants to show that  an  existing
CON  was violated.  Second, we independently read the statute  to
contain no such requirement.
          We  read South Central as foreclosing a conclusion that
a  member of the public cannot obtain injunctive relief unless  a
CON  was violated.  A state agency there failed to submit for CON
review  the proposed construction of an addition to the Anchorage
Pioneers Home.15  In other words, the case concerned the  failure
to   seek  a  certificate,  not  the  violation  of  an  existing
certificate.   We  held that South Central, as a  member  of  the
public  substantially and adversely affected, had standing  under
AS 18.07.091(a) to obtain a preliminary injunction.16  The opinion
established that a substantially and adversely affected member of
the public may seek injunctive relief under AS 18.07.091(a) if  a
health  care  facility  fails to obtain a  required  CON.   South
Central  was  within  the  statutes third  category  of  eligible
complainants,  even  though it did not  allege  violation  of  an
existing certificate.
          Advanced  Pain  reads South Central  as  involving  the
equivalent of an existing CON; it refers to our recognition  that
the  facility  would be constructed without conforming  to  South
Centrals  plan,  and our statement that this  could  disrupt  the
plan.17   Advanced Pain refers to the plan as essentially  [South
Centrals]   federally-mandated  CON.   We  think  Advanced   Pain
misreads  our  opinion.  As Mat-Su argues in reply, we  described
the violation claimed by South Central as the states fail[ure] to
submit the proposed addition to [CON] review as required by state
law . . . .18
          Our  independent review of the statute and the superior
courts  analysis confirms that South Central did not misapply  AS
18.07.091(a).
          We  interpret the statute as allowing substantially and
adversely  affected  members  of  the  public  to  challenge  any
violation of Alaskas CON statutes or associated regulations,  not
just  violations  of  an existing CON.  We read  the  statute  to
provide  that  [i]njunctive  relief against  violations  of  this
          chapter or regulations adopted under this chapter may be obtained
from  a  court . . . at the instance of . . . any member  of  the
public  substantially and adversely affected by the  violation.19
Two  main reasons  grammar and the effect on enforcement   compel
this reading.
          First, it is grammatically most correct to link the two
nouns, violations in the opening clause and violation in the last
clause,  because  it  permits the three  categories  to  be  read
independently.   The first category is clearly  independent,  and
the  word or precedes the third category.  This implies that each
category  is  independent, and that each can be read and  applied
without  referring  to any other.  Advanced Pains  reading  would
effectively  make  the third category dependent  on  the  second,
requiring it to borrow an element from the second, a result  that
seems grammatically unlikely.
          Likewise,  one  would expect that if the  drafters  had
intended  the  first and second categories to be independent  but
the  third  to depend in some way on the second, they would  have
more clearly treated the third as related to the second.  In that
event,   one   would  not  expect  three  ostensibly  independent
categories.  And given the way the subsection is constructed,  we
assume  the  drafters would have recognized  that  if  the  third
category  could be rationally read to borrow an element from  the
second,  it  would  create inherent ambiguity about  whether  the
final  violation refers to violations in the subsections  opening
words  or to violation in the second category.  Consequently,  if
the legislature had intended both the second and third categories
to  require  the violation of a certificate, we would expect  the
third   category  to  refer  more  explicitly  to  a  certificate
violation, and to parallel more explicitly the second category in
construction.   At  the  least,  one  would  have  expected   the
legislature  to have added of the certificate after violation  in
the third category to unambiguously indicate that both the second
and third categories require the violation of an existing CON.
          Similarly,  if the third category had been intended  to
carry  forward  the  second categorys requirement  of  activities
conducted  in violation of the certificate, ambiguity would  have
been  avoided if the third category used activity or  activities,
rather  than  violation.  It is improbable that  the  legislature
would   have  used  an  ambiguous,  indirect,  and  ungrammatical
shortcut  to refer to a restriction explicitly required only  for
the second category of prospective complainants.
          The  two clauses constructional divergence also renders
the  superior courts reading less plausible.  The initial  clause
of  the subsection and the third category directly use violations
and  violation as nouns.  But the second category uses  violation
only  as  part  of the clause in the exercise of  the  activities
conducted  in  violation of the certificate.20   As  used  there,
violation  is a buried verb21 that modifies activities conducted;
translated,  the  second  category  really  requires   activities
violating   the   holders  certificate.   It  is   unlikely   the
legislature used an unadorned noun in the third category to adopt
an  entire clause in the second category simply by repeating  one
word that is used as a modifier in the second.
          Furthermore,  treating the usage of  violation  in  the
second  category  as  the  same as the usage  of  violations  and
violation  in  the opening words and in the third category  would
inherently  lead to ambiguity.  Any such ambiguity is avoided  by
giving  independent effect to each of the categories and  reading
the   statute  carefully.   The  superior  court  relied  on  one
grammatical  tool, proximity, to decide which of the two  choices
it  perceived was correct.  We conclude that the subsections text
strongly favors the reading we give the statute.
          The  second main reason for our reading of the  statute
derives  from  the effect Advanced Pains reading  would  have  on
enforcing  Alaskas  CON laws.  At least two  different  sorts  of
claims  are  possible  with  respect  to  the  CON  statutes  and
regulations:  first,  claims  that  someone  has  acted   without
obtaining  a  required CON; and second, claims that  someone  has
violated  an  existing CON.  Limiting third-category complainants
to  this  second sort of claim would mean that the first sort  of
claim  could  only be pursued by the commissioner,  as  the  sole
first-category   complainant.   That  reading   would   leave   a
significant  hole in enforcement if the state, contrary  to  law,
erred in failing to require someone to apply for or obtain a CON,
because  no one other than the commissioner who erred could  seek
relief  under subsection .091(a).  That result would  effectively
render  the legislatures chosen enforcement mechanism  injunctive
relief  a nullity, as either unavailable or unneeded.22  We doubt
that the legislature intended to limit enforcement of Alaskas CON
laws so narrowly or improbably.
          The  superior  court also thought  that  there  was  no
reasonable argument that a member of the publics right to  remedy
should  exceed that of an adversely affected certificate  holder.
The  courts reading of the subsection seemed to assume that, like
certificate holders, members of the public only had to show  that
they  were  adversely  affected.  The court  therefore  concluded
that, because a certificate holder could not obtain relief unless
a  certificate  was violated, a member of the public  could  not,
either.    The  courts  underlying  assumption  appears   to   be
incorrect.   Although  the statute requires  that  a  certificate
holder  be adversely affected, it requires that a member  of  the
public be substantially and adversely affected.23  This difference
suggests  that the statute does not impose identical requirements
on the two categories of complainants, undermining one of the two
bases for the superior courts reading of the statute.
          The statute neither states nor implies that members  of
the  public may  challenge only violations of existing  CONs.  We
see no reasonable basis for inferring such a limitation.  Because
such  a  reading would also be contrary to the states common  law
precedent on standing,24 we assume the legislature would have used
unambiguous language to adopt such a limitation, if that had been
its  intention.  We are consequently unwilling to read  into  the
subsection a limitation that is neither explicitly nor implicitly
stated.
          It was therefore error to conclude that a member of the
public may only obtain injunctive relief for an alleged violation
of  an  existing CON.  Mat-Su may seek injunctive relief for  the
          alleged violation of the statutes and regulations if it is a
member of the public substantially and adversely affected by  the
violation.
          It  appears  to be undisputed that Mat-Su is  indeed  a
member of the public.  Neither Advanced Pain nor the state argues
otherwise.   Nothing in AS 18.07.091(a) implies that  the  second
and third categories of complainants were intended to be mutually
exclusive.  Neither Advanced Pain nor the state appears to  argue
that an entity that holds a CON is ineligible to seek relief as a
member of the public.  Such a reading would be illogical in  this
case because it would mean that a would-be competitor who had not
yet  been  issued  a  CON  could obtain injunctive  relief  under
subsection  .091(a) even though Mat-Su could not.   We  therefore
assume  without deciding that Mat-Su is a member  of  the  public
even though it may have held its own certificate.
          The  closer  question  is  whether  Mat-Su  was  indeed
substantially  and adversely affected by Advanced  Pains  alleged
violation  of  the CON laws and regulations.  The superior  court
assumed without deciding that Mat-Su, as a competitor of Advanced
Pain, would be adversely affected by the construction of Advanced
Pains  Wasilla  facility.  Mat-Su argues that it is substantially
and  adversely  affected in part because Advanced  Pains  project
will  compete directly with Mat-Su.  It also argues that  because
Advanced Pains ambulatory surgery center will be included as part
of the existing supply of surgery suites in any need analysis for
new  surgery  suites, Advanced Pains facility will limit  Mat-Sus
ability to expand.
          Advanced Pain contended at oral argument before us that
Mat-Su  was  not substantially and adversely affected.   Advanced
Pain  conceded that its Wasilla facility was in the same  service
area  as  Mat-Sus medical facility.  But it also argued that  its
facility  had only one procedure room, which was intended  to  be
used  only  for  pain-management procedures in  which  drugs  are
injected  into  the spine, nerve root, or joint to  reduce  pain.
Advanced Pain also appeared to concede at argument that the  same
kind  of  pain-management procedures were  performed  at  Mat-Sus
facility.   And  Mat-Sus chief financial  officer  stated  in  an
affidavit that from 2005 to 2007, Mat-Su performed over 127 pain-
related,  outpatient procedures, including nerve blocks,  trigger
point injections, and joint injections.
          Based  on these facts, we agree with Mat-Sus contention
that it would be substantially and adversely affected if Advanced
Pain  were  to  open  and  operate even a single  pain-management
procedure  room  in the same service area without complying  with
the  CON  laws  and  regulations.  For  purposes  of  determining
whether  the alleged violation gives Mat-Su standing,  we  assume
that  Advanced Pain will be able to perform procedures that might
otherwise  have  been performed at Mat-Su.  Mat-Su  has  arguably
invested resources in complying with the CON laws and regulations
with  the  expectation  that DHSS would  control  the  market  by
enforcing those same rules against potential competitors.
          We  accordingly  hold that Mat-Su  has  standing  as  a
substantially and adversely affected member of the public to seek
injunctive relief for Advanced Pains alleged violations under  AS
18.07.091(a).
          2.   Whether  Mat-Sus claim against Advanced  Pain  was
               untimely
          Advanced Pain argues that because Mat-Su failed to seek
judicial review in a timely manner the superior court was correct
to  dismiss Mat-Sus claims.  Advanced Pain contends that  Mat-Sus
claim  against  it  for injunctive relief was  an  administrative
appeal  because it necessarily require[d] the superior  court  to
second-guess an agency decision.  Advanced Pain argues that under
both  AS  44.62.560(a) and Alaska Appellate Rule 602, Mat-Su  had
just thirty days following the final agency decision in which  to
seek  judicial review.25  Because Mat-Su did not file  its  claim
within  thirty days of DHSSs final decision, Advanced Pain argues
that Mat-Sus claim was untimely.
          The  superior  court  did not hold that  Mat-Sus  claim
against Advanced Pain was an untimely appeal of an administrative
decision.   Advanced  Pain appears to argue  untimeliness  as  an
alternative  basis for affirming the superior courts  decision.26
To  affirm  on this ground, we would have to conclude both  that:
(1)  Mat-Sus  request for injunctive relief was an administrative
appeal   subject  to  the  thirty-day  appeal  deadline   in   AS
44.62.560(a)  and  Appellate Rule 602, and (2) Mat-Su  failed  to
file its complaint within the thirty-day deadline prescribed  for
administrative appeals.
          We   have  held  that  [a]  claim  is  functionally  an
administrative  appeal if it requires the court to  consider  the
propriety of an agency determination.  A review on the record, as
distinct   from  the  de  novo  reception  of  evidence,   is   a
characteristic of appeals.27  Mat-Sus claim for injunctive relief
against  Advanced  Pain  required only that  the  superior  court
consider  whether  Advanced Pain had violated the  CON  laws  and
regulations  by  omitting  costs from  its  project  estimate   a
question  that would have involved the reception of new  evidence
not the propriety of DHSSs CON determination.  Therefore, Mat-Sus
claim  for  injunctive relief against Advanced Pain  was  not  an
administrative appeal.
          But  even  if it had been, that appeal would  not  have
been  untimely.  Under Appellate Rule 602, the thirty-day  period
in which an administrative appeal must be filed does not begin to
run  until  the agency has issued a decision that clearly  states
that it is a final decision and that the claimant has thirty days
to appeal.28  We have held that [w]here an administrative agencys
decision  is communicated in a letter that fails to do either  of
these  things,  it is an abuse of discretion not  to  relax  Rule
602(a)(2)s thirty-day appeal deadline.29  In such cases, we  have
held  that  the  thirty-day period for filing  an  administrative
appeal never began to run.30
          The  state  appears  to argue that DHSSs  May  3,  2006
letter denying Mat-Sus request for reconsideration was the  final
agency  action.31  But that letter did not clearly  state  either
that  it was the final agency decision or that Mat-Su had  thirty
days  to  appeal.   We accordingly conclude that  the  thirty-day
period  for filing an administrative appeal never began  to  run.
Even  if it had been an administrative appeal, Mat-Sus claim  for
          injunctive relief would not have been untimely.
          3.   Whether    Mat-Su   was   required   to    exhaust
               administrative   remedies   before    suing    for
               injunctive relief under AS 18.07.091(a)
               
          As  a  second alternative basis for affirming, Advanced
Pain   argues   that   Mat-Su   failed   to   exhaust   available
administrative remedies before seeking judicial review.  Advanced
Pain  appears to be renewing an argument it made in the  superior
court  that,  because Mat-Su failed to make a timely request  for
reconsideration   by   the   commissioner,   it   allow[ed]   its
administrative remedies to lapse.
          Mat-Su   replies  that  Advanced  Pains  interpretation
seek[s]  to impose a new condition upon the applicability  of  AS
18.07.091(a)  that simply does not exist in the statute.   Mat-Su
argues  that subsection .091(a) does not condition the  right  to
seek injunctive relief upon first filing an administrative appeal
or  exhausting administrative remedies.  It also contends that it
would  be nonsensical to impose such a prerequisite, because  one
of  the  parties  that may seek relief under the statute  is  the
commissioner.
          We  have noted that the basic purpose of the exhaustion
doctrine  is  to  allow  an  administrative  agency  to   perform
functions  within  its  special competence   to  make  a  factual
record, to apply its expertise, and to correct its own errors  so
as  to  moot judicial controversies.32  The United States Supreme
Court  has held that [p]roper exhaustion demands compliance  with
an  agencys deadlines and other critical procedural rules because
no  adjudicative system can function effectively without imposing
some  orderly structure on the course of its proceedings.33   But
the  case  in which the Court so held involved a lawsuit  brought
under  the Prison Litigation Reform Act of 1995, which explicitly
provided  that  the  action  could  not  be  brought  until  such
administrative remedies as are available are exhausted.34
          Nothing  in  AS 18.07.091  or in Alaskas CON  laws  for
that  matter   explicitly required Mat-Su  to  exhaust  available
administrative remedies before suing for injunctive relief in the
superior  court.  Furthermore, as discussed above, Mat-sus  claim
for   injunctive  relief  against  Advanced  Pain  was   not   an
administrative appeal because the dispute focused far more on the
validity  of  Advanced  Pains cost  estimate  than  on  what  the
commissioner  did.   A  failure to exhaust therefore  is  not  an
alternative ground for affirming.
     C.   Whether It Was Error To Grant Summary Judgment in Favor
          of the State Defendants
          
          Mat-Su  asked  the superior court to declare  that  the
states  CON  determination was contrary to the CON  statutes  and
regulations.  Mat-Su argued that the state defendants  adopted  a
laissez  faire  attitude  and blindly accepted  [Advanced  Pains]
representations  with no independent analysis  or  investigation.
Mat-Su  contended that their head-in-the-sand-approach  permitted
Advanced Pain to violate the CON laws.
          Mat-Su  appears  to renew on appeal the contentions  it
          made below.  It argues that DHSS blindly accepted Advanced Pains
representations with no independent analysis or investigation and
was,  as a result, at least partially complicit in Advanced Pains
deception.   Mat-Su  contends  that  even  a  cursory  review  of
Advanced Pains CON determination request would have revealed that
it  was inadequate because it did not contain certified estimates
or  other  supporting information for the claimed project  costs.
Mat-Su  argues that this information was required by 7 AAC 07.031
and  that  the state defendants might have been able to  discover
Advanced  Pains  duplicity if they had properly administered  the
CON laws and regulations.
          The  state  responds that Mat-Su has either  waived  or
abandoned   any  claims  it  may  have  had  against  the   state
defendants.  Even if Mat-Sus claim was not abandoned,  the  state
argues  that  we  should  affirm the grant  of  summary  judgment
because  Mat-Sus complaint was an untimely administrative  appeal
and  because  the commissioners consideration of  Advanced  Pains
request for determination was proper as a matter of law.
          The  superior  court granted summary  judgment  to  the
state  defendants  on the sole ground that [t]he  opportunity  to
obtain    a   judicial   ruling   reversing   the   commissioners
administrative  decision  was lost  when  timely  appeal  of  the
decision  was not taken.  But we noted above that the  thirty-day
period  in  which  to  seek judicial review never  began  to  run
against Mat-Su because DHSS did not clearly state in its  May  3,
2006  letter either that the letter was the final agency decision
or  that  Mat-Su had thirty days to appeal.35  We therefore  hold
that  it  was  error  to  grant summary  judgment  to  the  state
defendants on the ground Mat-Sus action was untimely, and  remand
for further proceedings.36
     D.   Whether the Attorneys Fees Awards to Advanced Pain  and
          the State Were Manifestly Unreasonable
          
          The  superior  court  awarded the  state  $3,336.58  in
attorneys  fees  under  Alaska Civil Rule  82;  it  also  awarded
Advanced  Pain  $76,899.38 in attorneys fees under  Alaska  Civil
Rule  68.   Mat-Su  argues  that  these  awards  were  manifestly
unreasonable and an abuse of discretion.
          We do not need to reach the merits of Mat-Sus attorneys
fees  arguments.   Because Advanced Pain and  the  state  are  no
longer prevailing parties, we vacate their fees awards.
IV.  CONCLUSION
          For  these  reasons, we REVERSE the grants  of  summary
judgment in favor of Advanced Pain and the state, and REMAND  for
further proceedings.  Because Advanced Pain and the state are  no
longer prevailing parties, we VACATE their attorneys fees awards.
_______________________________
     1    AS 18.07.031(d).

     2     Advanced Pain contended in the superior court that  it
had  begun  construction on the new facility in early  2006,  and
that the facility was completed in September 2006.

     3     Rockstad v. Erikson, 113 P.3d 1215, 1219 (Alaska 2005)
(citing  Ellis  v.  City  of Valdez, 686 P.2d  700,  702  (Alaska
1984)).

     4     Id.  at 1219 (citing Witt v. State, Dept of Corr.,  75
P.3d 1030, 1033 (Alaska 2003)).

     5    State v. Jeffrey, 170 P.3d 226, 229 (Alaska 2007).

     6     Enders  v.  Parker,  66 P.3d 11, 13-14  (Alaska  2003)
(internal   citations  and  quotation  marks  omitted)   (quoting
Fancyboy  v. Alaska Vill. Elec. Coop., Inc., 984 P.2d 1128,  1132
(Alaska 1999); citing Guin v. Ha, 591 P.2d 1281, 1284 n.6 (Alaska
1979)).

     7     Carlson  v.  Renkes, 113 P.3d 638, 641  (Alaska  2005)
(citing Manning v. Alaska R.R. Corp., 853 P.2d 1120, 1124 (Alaska
1993)).

     8    AS 18.07.091(a).

     9    Id.

     10    Id.

     11    Id.

     12    Mat-Su does not contend here that it is eligible to sue
as a member of the second category, or that it has standing as an
adversely  affected  CON holder, or that the defendants  violated
any CON of Mat-Sus.

     13    AS 18.07.091(a).

     14     South Cent. Health Planning & Dev., Inc. v. Commr  of
Dept of Admin., 628 P.2d 551 (Alaska 1981).

     15    Id. at 552.

     16    Id.

     17    Id.

     18    Id.

     19    AS 18.07.091(a) (emphasis added).

     20    AS 18.07.091(a).

     21    See Bryan A. Garner, A Dictionary of Modern Legal Usage
122-23 (2d ed. 1995).

     22     Injunctive  relief  would be  unavailable  because  a
commissioner  unwilling to require a facility  to  obtain  a  CON
would   be  unlikely  to  sue  either  to  enjoin  the  facilitys
construction  or  to compel herself to require  the  facility  to
apply  for  a  CON.  It would be unneeded because a  commissioner
willing  to require a facility to obtain a CON would require  the
facility to apply.  In that event an injunction would be unneeded
unless the facility declined to comply.

     23    AS 18.07.091(a).

     24     We broadly interpret the concept of standing to favor
increased accessibility to judicial forums.  Moore v. State,  553
P.2d  8,  23 (Alaska 1976).  To establish general interest-injury
standing, a plaintiff need only demonstrate that he or she has  a
sufficient  personal stake in the outcome of the controversy  and
an  interest  which  is adversely affected by  the  complained-of
conduct.   Keller  v.  French, 205 P.3d 299,  304  (Alaska  2009)
(internal quotation marks and citations omitted) (quoting  Ruckle
v.  Anchorage  Sch.  Dist.,  85 P.3d 1030,  1040  (Alaska  2004);
Alaskans for a Common Language v. Kritz, 3 P.3d 906, 915  (Alaska
2000)).

          Applying the general standing test, we have held that a
hospital had standing to obtain review of a decision by DHSS that
a   competitors  project  had  been  substantially   implemented.
Sisters  of  Providence in Washington, Inc. v. Dept of  Health  &
Soc.  Servs.,  648  P.2d  970,  975 (Alaska  1982)  (noting  that
hospital  had  demonstrated a sufficient personal  stake  in  the
outcome of the controversy to assure that the proceedings will be
adversarial  in  nature); see also Fuhs v. Gilbertson,  186  P.3d
551, 556 (Alaska 2008) (noting that because AS 18.07.091(a) is  a
permissive  statute[] that expressly grant[s] standing  and  only
impliedly  den[ies] it, subsection .091(a) does  not  necessarily
foreclose the possibility that litigants may have standing  under
the general standing requirements).

     25    AS 44.62.560(a) provides that [j]udicial review by the
superior  court of a final administrative order  may  be  had  by
filing a notice of appeal . . . within 30 days after the last day
on  which reconsideration can be ordered.  Alaska Appellate  Rule
602  similarly  states  that [a]n appeal  may  be  taken  to  the
superior court from an administrative agency within 30 days  from
the  date  that the decision appealed from is mailed or otherwise
distributed to the appellant.

     26    See Snyder v. Am. Legion Spenard Post No. 28, 119 P.3d
996,  1001 (Alaska 2005) (We may affirm a judgment on any grounds
that  the  record supports, even if not relied on by the superior
court.  (citing  Marshall v. First Natl Bank of Alaska,  97  P.3d
830,  835  (Alaska  2004); Ransom v. Haner,  362  P.2d  282,  285
(Alaska 1961))).

     27     Carlson  v.  Renkes, 113 P.3d 638, 641 (Alaska  2005)
(internal citations and quotation marks omitted) (quoting  Haynes
v.  State,  Commercial Fisheries Entry Commn, 746 P.2d  892,  893
(Alaska  1987); Dept of Corr. v. Kraus, 759 P.2d 539, 540 (Alaska
1988)).

     28    Alaska R. App. P. 602(a)(2).

     29    Carlson, 113 P.3d at 642 (quoting Skudrzyk v. Reynolds,
856 P.2d 462, 463 (Alaska 1993)).

     30    Id.

     31     Advanced Pain treats Commissioner Jacksons March  15,
2006  letter as the final administrative decision that a CON  was
not required for [its] facility.

     32     State, Dept of Transp. & Pub. Facilities v. Fairbanks
N.  Star Borough, 936 P.2d 1259, 1262 (Alaska 1997) (quoting  Ben
Lomond,  Inc. v. Municipality of Anchorage, 761 P.2d 119,  121-22
(Alaska 1988)).

     33    Woodford v. Ngo, 548 U.S. 81, 90-91 (2006).

     34    Id. at 87-88 (quoting 42 U.S.C.  1997e(a) (2000)).

     35    See Alaska R. App. P. 602(a)(2); see also Part III.B.2.

     36    The state argues that we can still affirm the superior
courts  decision on the alternative ground that  the  states  CON
determination  was proper as a matter of law.  We decline  to  so
hold.

This site is possible because of the following site sponsors. Please support them with your business.
www.gottsteinLaw.com
Case Law
Statutes, Regs & Rules
Constitutions
Miscellaneous


IT Advice, Support, Data Recovery & Computer Forensics.
(907) 338-8188

Please help us support these and other worthy organizations:
Law Project for Psychiatraic Rights
Soteria-alaska
Choices
AWAIC