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  • Carolina Journal Staff

Latest UNC, Duke court battle focuses on CON dispute


The two health care giants are battling over UNC’s plans to move into Durham County, Duke’s home base. Their legal arguments focus on the CON, a state government permission slip that allows health care providers to move forward with new facilities.

The competitors await word from the Appeals Court about UNC’s plans for a new 40-bed hospital in Durham County. Duke appealed the state’s 2021 decision allowing UNC to proceed with that plan. Appellate judges considered the appeal in November but have issued no ruling.

Meanwhile, a separate dispute involves a CON for 68 new acute-care beds for Durham and Caswell counties. UNC’s court filings label its bid for the new beds as an “expansion of that previously-approved project” for the Durham County hospital. Duke filed a competing CON application for the same beds.

Regulators ruled in favor of UNC, but Duke appealed. An administrative law judge ruled in Duke’s favor, throwing out UNC’s CON. The judge cited the absence of a legally required public hearing during the CON approval process.

“This case represents the second attempt by Duke to thwart UNC’s entrance into the acute care services market in Durham County and prevent competition,” UNC lawyers argued in February.

UNC lawyers amplified their criticism of their Duke rivals in Tuesday’s court filing.

“This Court recently examined the central issue of this appeal — the effect of the Respondent-Appellant’s (the ‘Agency’) decision to accept written public commentary on pending certificate of need (‘CON’) applications in lieu of in-person public hearings during the COVID-19 pandemic,” the new UNC brief explained. “In a published opinion dated 19 March 2024, … this Court held that the public hearing provision of the CON Law is both mandatory and jurisdictional, and a failure to hold a public hearing constitutes Agency error.”

“This Court further held, however, that a petitioner must still separately demonstrate substantial prejudice with concrete and particularized facts as a result of the Agency’s failure to hold in-person hearings,” UNC lawyers added. “In other words, substantial prejudice is not automatically established if the Agency fails to hold an in-person public hearing.”

The recent Fletcher ruling  “governs here,” UNC lawyers argued. Both competing health systems participated in the written CON comment process for the 68 beds in Durham and Caswell counties. “Duke, like the Fletcher petitioner, presents no evidence of record that it was substantially prejudiced as a result of the lack of an in-person public hearing.”

If state regulators failed to follow the law, both UNC and Duke should get CONs for the 68 beds, UNC lawyers argued. “If this Court does not award CONs to both UNC and Duke, then Duke must still meet its burden of proving that the lack of an in-person public hearing substantially prejudiced its rights. Mere speculation of harm does not satisfy the requirements to demonstrate substantial prejudice.”

The UNC court filing noted that lawyers representing Duke also pushed for publication of the Fletcher opinion, which helped a separate client in a western North Carolina CON dispute. That published opinion now undermines Duke’s case, UNC lawyers argued. “The logical conclusion is that Duke’s counsel cannot explain its contradictory positions, which appear to be entirely outcome driven rather than supported by legal authorities.”

“This is the second case involving a new hospital to be established by UNC in a county nearly entirely dominated by Duke, the original approval of which is currently on appeal with this Court,” UNC lawyers reminded appellate judges. “Duke controls 98% of the 1,382 existing acute care beds in Durham County and is taking every possible measure to maintain its dominance and to keep UNC out of the Service Area.”

“Duke’s tactics include taking legal positions to its own detriment, such as filing a summary judgment motion to invalidate this entire CON review, so long as it may result in disapproval of UNC’s application,” UNC lawyers argued. “Duke’s tactics are both transparent and misplaced under the governing authorities.”

The Appeals Court has not yet scheduled arguments for the case titled Duke University Health System v. North Carolina Department of Health and Human Services.

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