ST. MARY'S MEDICAL CENTER, INC., and PALLOTTINE HEALTH SERVICES, INC., Petitioners
STEEL OF WEST VIRGINIA, INC., and PATRICK MORRISEY, ATTORNEY GENERAL, Respondents and PATRICK MORRISEY, ATTORNEY GENERAL, Petitioner
STEEL OF WEST VIRGINIA, INC., Respondent
Submitted: January 23, 2018
from the Circuit Court of Kanawha County The Honorable Tod J.
Kaufman, Judge Civil Action No. 15-C-2214
W. Thomas, Esq. Rachel D. Ludwig, Esq. Jackson Kelly PLLC
Charleston, West Virginia Counsel for Petitioners St.
Mary's Medical Center, Inc., and Pallottine Health
P. Goodwin, Esq. Frost Brown Todd LLC Charleston, West
Virginia Counsel for Respondent Steel of West Virginia, Inc.
Patrick Morrisey, Esq. Attorney General Elbert Lin, Esq.
Solicitor General Edward M. Wenger, Esq. General Counsel
Katherine A. Schultz, Esq. Steven A. Travis, Esq. Office of
the Attorney General Charleston, West Virginia Counsel for
the State of West Virginia.
West Virginia Freedom of Information Act, W.Va.
Code, 29B-1-4(a)(5) , which excepts from public
accessibility "information specifically exempted from
disclosure by statute, " incorporates the investigative
exemption from disclosure of information set forth in the
West Virginia Antitrust Act, W.Va. Code, 47-18-7(d)
. The investigative exemption is mandatory in
specifying that the Attorney General "shall not"
make public the name or identity of a person whose acts or
conduct he investigates or "the facts" disclosed in
the language of a statute is free from ambiguity, its plain
meaning is to be accepted and applied without resort to
interpretation." Syl. pt. 2, Crockett v.
Andrews, 153 W.Va. 714, 172 S.E.2d 384 (1970).
"The presumption is that a statute is intended to
operate prospectively, and not retrospectively, unless it
appears, by clear, strong and imperative words or by
necessary implication, that the Legislature intended to give
the statute retroactive force and effect." Syl. pt. 4,
Taylor v. State Comp. Comm'n., 140 W.Va. 572, 86
S.E.2d 114 (1955).
Virginia Attorney General Patrick Morrisey ("Attorney
General") appeals from two orders of the Circuit Court
of Kanawha County entered on October 28, 2016, unsealing an
index of 349 documents and directing the Attorney General to
produce 89 of those documents. The orders were entered in an
action brought by Steel of West Virginia, Inc.
("Steel"), to enforce its request for production of
material under this State's Freedom of Information Act
("FOIA"). The Attorney General received the 349
documents in connection with his investigative powers under
the West Virginia Antitrust Act regarding the proposed merger
of St. Mary's Medical Center, Inc. ("St.
Mary's"), and Cabell Huntington Hospital, Inc.
opposed the merger before the West Virginia Health Care
Authority. The Authority's approval of the merger through
its award of a certificate of need was the subject of a
separate appeal before this Court. The issues in that appeal,
however, were settled and resolved, and Steel's appeal
from the Authority's decision was dismissed as moot. A
motion to dismiss the current FOIA matter in conjunction with
the dismissal of Steel's appeal on the merits of the
Authority's decision was refused by this Court.
See syl. pt. 1, State ex rel. M.C.H. v.
Kinder, 173 W.Va. 387, 317 S.E.2d 150 (1984) (A case not
rendered moot if the issues "are capable of repetition
and yet will evade review.").
current matter, limited to Steel's FOIA request, both the
Attorney General and St. Mary's contend that the index of
the 349 documents and the 89 documents to be produced are
exempt from disclosure. Thus, the Attorney General's appeal
has been consolidated with two related appeals filed by St.
Mary's. In one appeal, St. Mary's challenges the
denial of its motion to intervene in the underlying FOIA
action. In the other, St. Mary's challenges the unsealing
of the index and the production of the 89 documents.
Court concludes that the circuit court committed error in
ordering the production of the index and the 89 documents.
The circuit court ordered the production of the index as a
sanction against the Attorney General for sharing part of the
index with the Federal Trade Commission. We find the sanction
inappropriate. We further find that the 89 documents are not
subject to production because of the statutory exemption
raised by the Attorney General. That exemption is set forth
in W.Va. Code, 29B-1-4 , of the Freedom of
Information Act which incorporates, in subsection (a)(5), the
confidentiality provisions of the Antitrust Act. Finally,
inasmuch as the arguments of St. Mary's largely mirror
those of the Attorney General, we find the two appeals filed
by St. Mary's to be moot.
orders entered by the circuit court on October 28, 2016, are
reversed, and this action is remanded to the circuit court
for the entry of an order dismissing Steel's FOIA action.
Mary's is a general, acute care hospital in Huntington,
West Virginia. Its parent corporation is Pallottine Health
Services, Inc. In 2014, Pallottine decided to sell St.
Mary's, and, following a competitive bidding process, an
agreement was reached in November 2014 whereby St. Mary's
would merge with Cabell Huntington, another general, acute
care hospital in the Huntington area. Support for the merger
in the local community was based on the likelihood that the
merger would save jobs, allow more portability of health care
providers and result in better patient care. Steel opposed
the merger, asserting that healthcare costs will increase if
the two hospitals do not remain in competition.
regulatory reviews and approvals were required before the
merger could take place. Among the requirements was the
opening in 2014 of antitrust investigations by the Federal
Trade Commission and the West Virginia Attorney General. The
Attorney General's investigative authority regarding the
merger is found in the West Virginia Antitrust Act, W.Va.
Code, 47-18-1 , et seq.
concerning the business operations and finances of the two
hospitals, and the bidding process, were sent by St.
Mary's and Cabell Huntington to the Federal Trade
Commission and the Attorney General. The Federal Trade
Commission transferred a number of the documents it received
to the Attorney General. On November 25, 2014, a
confidentiality agreement was executed by St. Mary's,
Cabell Huntington and the Attorney General which stated that
the documents received by the Attorney General would not be
subject to disclosure and would only be used in the
investigation "for any legal challenge of the
Transaction [merger] under federal or state antitrust laws,
or for other law enforcement purposes."
31, 2015, the Attorney General filed an Assurance of
Voluntary Compliance in the Office of the Clerk of Cabell
County. An amended Assurance of Voluntary Compliance was
filed on November 4, 2015. In both documents, the Attorney
General concluded that the merger was in the best interests
of the State of West Virginia. However, the Assurances also
secured commitments from St. Mary's and Cabell Huntington
to abide by antitrust laws in future operations.
St. Mary's and Cabell Huntington were required under the
Assurances of Voluntary Compliance to observe a number of
conditions for a period of years following the merger's
consummation. The November 4, 2015, amended Assurance
extended the period of years from seven to ten years. Both
Assurances stated that neither St. Mary's nor Cabell
Huntington would oppose the award of a certificate of need to
any health care provider seeking to provide services
"similar to or competitive with" the services
provided by St. Mary's or Cabell Huntington in the market
area. The amended Assurance clarified that
"services" in that context included both outpatient
and inpatient services. Moreover, under the amended
Assurance, St. Mary's and Cabell Huntington were required
to submit compliance reports to the Attorney General until
the amended Assurance expired. St. Mary's and Cabell
Huntington were also required to submit additional
information or documentation upon request of the Attorney
General "at any time." Should such a request be
made, the request would be deemed "made in the
investigation of a potential violation of state and/or
federal antitrust laws and as such both the request and any
response thereto, including documents or things produced, are
subject to confidentiality provisions contained in state
and/or federal law."
September 2015, Steel sent the Attorney General a request
under the West Virginia Freedom of Information Act, W.Va.
Code, 29B-1-1 , et seq., "to inspect
or obtain copies of all public records and incoming and
outgoing correspondence relating to the proposed merger of
Cabell Huntington Hospital and St. Mary's Medical
response, the Attorney General provided Steel with copies of
documents considered subject to disclosure but determined
that the remaining documents were statutorily exempt under
subsection (a)(5) of W.Va. Code, 29B-1-4 .
Subsection (a)(5) provides in relevant part:
(a) There is a presumption of public accessibility to all
public records, subject only to the following categories of
information which are specifically exempt from disclosure
under the provisions of this article:
(5) Information specifically exempted from disclosure by
parties do not dispute that subsection (a)(5), concerning
"statutory exemptions, " incorporates the
"investigative exemption" of the West Virginia
Antitrust Act, W.Va. Code, 47-18-7(d) .
W.Va. Code, 47-18-7(d) , states: "The
attorney general shall not make public the name or identity
of a person whose acts or conduct he investigates pursuant to
this section or the facts disclosed in the investigation, but
this subsection does not apply to disclosures in actions or
enforcement proceedings pursuant to this article."
December 2015, Steel filed a complaint in the Circuit Court
of Kanawha County to enjoin the Attorney General from
withholding the documents claimed to be exempt from
disclosure. Steel alleged that the Attorney General
had no basis for the exemptions and that, in any event, the
Attorney General should submit a "Vaughn
Index" of the withheld documents and an affidavit
providing a detailed explanation why each document is exempt
and why disclosure of the document would be
harmful. St. Mary's, Pallottine and Cabell
Huntington were not named parties in the action.
Attorney General asserted in the answer that the documents
sought were collected in the course of an antitrust
investigation. Therefore, production of the documents or
providing a Vaughn Index would be precluded by the
confidentiality provisions of the Freedom of Information Act
and the Antitrust Act.
parallel proceeding, Cabell Huntington filed an application
with the West Virginia Health Care Authority for a
certificate of need regarding the merger. Steel, granted
"affected person" status by the Authority, was
permitted to participate in the proceeding and oppose the
merger. On March 16, 2016, the Health Care
Authority granted certificate of need approval to Cabell
Huntington to complete the merger. That decision was affirmed
by the Office of Judges. In April 2017, the Office of
Judges's approval of the certificate of need was affirmed
by the Circuit Court of Kanawha County. Steel's ...