United States District Court, S.D. West Virginia, Charleston Division
MEMORANDUM OPINION AND ORDER
E. JOHNSTON UNITED STATES DISTRICT JUDGE
before the Court is Plaintiffs' Motion for Temporary
Restraining Order, Preliminary and/or Permanent
Injunction. (ECF No. 8.) For the reasons provided
below, the Court GRANTS Plaintiffs'
motion for preliminary injunctive relief.
case involves an action by out-of-state healthcare
organizations Marietta Memorial Hospital and Marietta Area
Health Care, Inc., and in-state corporation MHC Physicians,
Inc., (collectively, “Marietta”), who are
challenging a recently passed state statute that creates a
new exemption to West Virginia's Certificate of Need
(“CON”) program. See W.Va. Code §
16-2D- 11(c)(12). Marietta seeks to prevent the West Virginia
Health Care Authority (“HCA”) from enforcing the
allegedly unconstitutional statute.
Virginia's CON program, codified at West Virginia Code
§ 16-2D-1, et seq., requires that a hospital
seeking to introduce or remove various health services obtain
approval from HCA in the form of a CON. See §
16-2C-8. The types of changes in health services that require
a CON include, among many others, constructing, developing,
or acquiring a health care facility; substantially changing
the bed capacity of a health care facility; and acquiring
major medical equipment. See § 16-2C-8(a)(1),
(5), (8), (9). To obtain a CON, a health care entity must
first file an application with HCA. See Id. §
16-2D-13. HCA then reviews the application, taking into
consideration the criteria set forth in § 16-2D-12.
Subsection twelve requires HCA to find that the proposed
change in health services is needed and consistent with the
state health plan. See § 16-2D-12(a). An
“affected person, ” as defined in § 16-2D-2,
may request a hearing on any application, and upon such a
request, HCA must hold a hearing and consider testimony and
evidence offered prior to approving a CON application.
See §§ 16-2D-7, 16-2D-13. After
satisfaction of the statutory procedures provided in §
16-2D-13, HCA renders a final decision accompanied by written
findings. See § 16-2D-15. HCA may issue an
approval, denial, or approval with conditions. See
Id. These laws implement the legislature's
pronounced public policy regarding CONs set out in §
Sixteen of the West Virginia Code provides various exceptions
to the CON process. See §§ 16-2D-10,
16-2D-11. Under § 16-2D-10, certain health services may
be provided to the public without obtaining a CON or applying
to HCA for approval. On the other hand, § 16-2D-11
enumerates specific exemptions to the CON procedure that
nonetheless require approval from HCA. Exemptions requiring
approval from HCA include, among others, a health care
facility acquiring medical equipment, adding health services,
or obligating a capital expenditure, to be used solely for
research and without affecting other services within the
facility; the addition of forensic beds in a health care
facility; and the replacement of major medical equipment with
like equipment. See § 16-2D-11(c)(3), (7), (9).
West Virginia's legislature enacted an exception by
legislative rule in 2010 that exempted in-state hospitals
from seeking a CON “for the construction, development,
acquisition or other establishment by a hospital of an
ambulatory health care facility.” See W.Va.
Code R. § 65-27-3. If an affected person opposed the
exemption, then the hospital was required to file a CON
application. (See ECF No. 23 at 3, ¶ 9.)
in its 2016 session, the Legislature modified this exemption.
Thus, as of June 10, 2016, a full-fledged exemption to the
CON process went into effect for “[t]he construction,
development, acquisition or other establishment by a licensed
West Virginia hospital of an ambulatory health care facility
in the county in which it is located and in a contiguous
county within or outside this state . . . .” §
16-2D-11(c)(12). As with other exemptions in subsection (c),
and unlike the former legislative rule exemption related to
ambulatory health care facilities, “[a]n affected party
may not file an objection to the request for an
exemption.” § 16-2D-11(b). The only review
provided by this section is the ability of the exemption
applicant to appeal an unfavorable decision “to the
Office of Judges or refile the application with the
authority.” Id. West Virginia entities
Camden-Clark Memorial Hospital and Camden-Clark Physician
Corporation (collectively, “Camden-Clark”), filed
a request for an exemption under § 16-2D-11(c)(12), on
August 15, 2016, “to open a new ambulatory health care
facility by completing its multi-million dollar purchase of a
large primary care physician practice in West Virginia . . .
.” (ECF No. 23 at 6, ¶ 23.) That exemption request
prompted Marietta to file the current action.
filed its Complaint in this Court on September 6, 2016,
challenging the exemption set out in § 16-2D-11(c)(12).
(ECF No. 1.) Subsequently, it filed the current motion on
September 15, 2016. (ECF No. 8.) Defendants responded to the
motion on October 19, 2016, (ECF No. 20), and a motion
hearing was held by the Court on October 24, 2016. (ECF No.
24.) As such, Marietta's motion has been briefed and
argued by the parties and is ready for disposition.
65 of the Federal Rules of Civil Procedure provides for the
issuance of preliminary injunctions as a means of preventing
harm to one or more of the parties before the court can fully
adjudicate the claims in dispute.” Fred Hutchinson
Cancer Research Ctr. v. BioPet Vet Lab, Inc., 768
F.Supp.2d 872, 874 (E.D. Va. 2011). A preliminary injunction
is an extraordinary remedy never awarded as of right. See
Real Truth About Obama, Inc. v. FEC, 575 F.3d 342, 345
(4th Cir. 2009) (hereinafter “Real Truth
I”), vacated on other grounds, 559 U.S.
1089 (2010), reissued as to Parts I & II,
Real Truth About Obama, Inc. v. FEC, 607 F.3d 355
(4th Cir. 2010). In each case, the Court must balance the
competing claims of injury and consider the effect of
granting or withholding the requested relief. “In
exercising their sound discretion, courts of equity should
pay particular regard for the public consequences in
employing the extraordinary remedy of injunction.”
Weinberger v. Romero-Barcelo, 456 U.S. 305, 312
plaintiff seeking a preliminary injunction must establish (1)
that he is likely to succeed on the merits, (2) that he is
likely to suffer irreparable harm in the absence of
preliminary relief, (3) that the balance of equities tips in
his favor, and (4) that an injunction is in the public
interest.” Winter v. Nat. Res. Def. Council,
Inc., 555 U.S. 7, 20 (2008) (citing Munaf v.
Geren, 553 U.S. 674, 689-90 (2008)). “All four
elements must be established by a ‘clear showing'
before the injunction will issue.” Imagine Medispa,
LLC v. Transformations, Inc., 999 F.Supp.2d 862, 868
(S.D. W.Va. 2014) (quoting Real Truth I, 575 F.3d at
346). The plaintiff bears the burden of showing a
“sufficient factual basis” for granting the
injunction “beyond the unverified allegations in the
pleadings.” Id. at 868-69 (citations omitted).
plaintiff must demonstrate a likelihood of
irreparable harm without a preliminary injunction; a mere
possibility of harm will not suffice. Id.
at 21. Such likelihood of irreparable harm justifies a
preliminary injunction to protect the status quo and
“preserve the court's ability to render a
meaningful judgment on the merits.” United States
v. South Carolina, 720 F.3d 518, 524 (4th Cir. 2013)
(quoting In re Microsoft Corp. Antitrust Litig., 333
F.3d 517, 525 (4th Cir. 2003)). See also Univ. of Tex. v.
Camenisch, 451 U.S. 390, 395 (1981) (“The purpose
of a preliminary injunction is merely to preserve the
relative positions of the parties until a trial on the merits
can be held.”). A plaintiff does not have to prove his
or her case in full to succeed on a motion for preliminary
injunction, and the findings of fact and conclusions of law
made at this stage are not binding at a trial on the merits.
See Id. (citations omitted).
likelihood of success, prior law in the Fourth Circuit was
that there is a “‘flexible interplay' among
all the factors considered . . . for all four [factors] are
intertwined and each affects in degree all the others.”
Blackwelder Furniture Co. of Statesville v. Seilig Mfg.
Co., 550 F.2d 189, 196 (4th Cir. 1977) (citations
omitted). Accordingly, plaintiffs were not strictly required
to demonstrate likelihood of success on the merits. Rather,
“it [was] enough that grave or serious questions on the
merits [were] presented.” Id. But in the wake
of the Supreme Court decision in Winter, the
Blackwelder balancing approach “may no longer
be applied in granting or denying preliminary injunctions in
the Fourth Circuit.” Real Truth I, 575 F.3d at
347. Instead, the Fourth Circuit has held that a party
seeking a preliminary injunction must demonstrate by “a
clear showing that it is likely to succeed at trial on the
merits.” Id. at 351. The Fourth Circuit has
not expressly required a movant to prove that success on the
merits is “more likely than not” in order to meet
the requirement of a clear showing, but the new requirement
“is far stricter than the Blackwelder
requirement that the plaintiff demonstrate only a grave or
serious question for litigation.” Id. at
argues that each of the Winter factors is satisfied
in this case and requests that the Court enter preliminary
injunctive relief. (See ECF No. 9 at 5-14.)
Defendants contest each of the Winter factors.
(See ECF No. 20 at 11-32.) For the reasons that
follow, the Court finds that each of the Winter
factors weighs in favor of granting a preliminary injunction
in this matter.
Likelihood of Success on Merits
the first Winter factor, “plaintiffs seeking
preliminary injunctions must demonstrate that they are likely
to succeed on the merits.” Pashby v. Delia,
709 F.3d 307, 321 (4th Cir. 2013) (citing Winter,
555 U.S. at 20). “Although this inquiry requires
plaintiffs seeking injunctions to make a clear showing that
they are likely to succeed at trial, plaintiffs need not show
a certainty of success.” Id. (citations
omitted). Nonetheless, “[m]erely showing that
‘grave or serious questions are presented for
litigation' will not suffice.” Imagine Medispa,
LLC v. Transformations, Inc., 999 F.Supp.2d 862, 871
(S.D. W.Va. 2014) (quoting Real Truth I, 575 F.3d at
relies on the following four bases in the Complaint when
arguing that West Virginia Code § 16-2D-11(c)(12) is
unconstitutional: the dormant commerce clause, the Fourteenth
Amendment due process clause, Civil Rights Act of 1871, 42
U.S.C. §§ 1983, 1988, and the Fourteenth Amendment
equal protection clause. For the purposes of the instant
opinion addressing prospective injunctive relief, the Court
shall focus on Marietta's claim that HCA is enforcing a
state law that violates Marietta's rights under the
dormant commerce clause. (See ECF No. 9 at 6-9; ECF
No. 1 at 17, ¶¶ 56-60.)
commerce clause provides the United State Congress a vehicle
with which to regulate aspects of interstate commerce.
See U.S. Const. art. I, § 8, cl. 3. Congress
has the authority to regulate the channels and
instrumentalities of interstate commerce as well as economic
activities that have a substantial effect on interstate
commerce. See, e.g., Hodel v. Va. Surface Min.
& Reclamation Ass'n, Inc., 452 U.S. 264, 275-77
(1981); Perez v. United States, 402 U.S. 146, 150-
52 (1971). The Tenth Amendment to the U.S. Constitution acts
as a limit on Congressional powers by stating that all powers
not granted to the United States, nor prohibited to the
states, are reserved to the states or the people.
See U.S. Const. amend. X; S. Pac. Co. v. Arizona
ex rel. Sullivan, 325 U.S. 761, 767 (1945) (“[I]n
the absence of conflicting legislation by Congress, there is
a residuum of power in the state to make laws governing
matters of local concern which nevertheless in some measure
affect interstate commerce or even, to some extent, regulate
this localized power, a state or local law may be held
unconstitutional if it places undue burden on interstate
commerce. See C & A Carbone, Inc. v. Town of
Clarkstown, 511 U.S. 383, 390 (1994) (hereinafter
“Carbone”). Courts have long held that the
commerce clause “limits the power of the States to
erect barriers against interstate trade.” See,
e.g., Dennis v. Higgins, 498 U.S. 439, 446
(1991) (quoting Lewis v. BT Inv. Managers, Inc., 447
U.S. 27, 35 (1980)). The doctrine analyzed below, the dormant
commerce clause, has been inferred by the Supreme Court to
represent the negative implications of the commerce clause.
See, e.g., Wickard v. Filburn, 317 U.S.
111, 123-24 (1942). See also Envtl. Tech. Council v.
Sierra Club, 98 F.3d 774, 782 (4th Cir. 1996).
state law burdens interstate commerce, it violates the
dormant commerce clause unless it is necessary to achieve a
legitimate government purpose. See Maine v. Taylor,
477 U.S. 131, 138 (1986). Otherwise, a state law “that
discriminates against interstate commerce is the clearest
example of the type of State law that imposes an
unconstitutional burden” on commerce. Beskind v.
Easley, 325 F.3d 506, 514 (4th Cir. 2003). A law
discriminating against out-of-state actors is presumed
invalid unless the state government shows a legitimate local
purpose and demonstrates that the discrimination is necessary
to achieve that goal-that the purpose cannot be achieved
through any less discriminatory method. See Envtl. Tech.
Council, 98 F.3d at 785. Favoring a state's own
citizens is not a sufficient purpose, nor is advancing the
state's economy while harming the economies of other
states. See Yahama Motor Corp. v. Jim's Motorcycle,
Inc., 401 F.3d 560, 567 (4th Cir. 2005) ...