Update: On February 6, the Supreme Court handed down a merit decision in this case.  Read the analysis here.

Read the analysis of the oral argument here.

On September 12, 2017, the Supreme Court of Ohio will hear oral argument in the case of Capital Care Network of Toledo v. State of Ohio Department of Health (2016-1348). At issue in this case is the permissibility of requiring an abortion clinic to have a written transfer agreement with a hospital to keep its license to operate.

Case Background

Appellee Capital Care is a free-standing, ambulatory outpatient surgical facility (“ASF”) that provides abortions. All ASF’s in Ohio must be licensed by Appellant Department of Health (“Department”). To obtain a license, an ASF must have a written transfer agreement (“WTA”) with a hospital or obtain a variance.  This is to have a plan for patients who might need emergency care.

In August of 2012, Capital Care entered into a WTA with the University of Toledo Hospital. But in April of 2013, the hospital notified Capital Care that it would not renew the WTA when it expired on July 31, 2013. On August 2, 2013, the Director of the Department of Health (“the Director”) sent a notice of proposed revocation of Capital Care’s license for failure to comply with O.A.C. 3701-83-19(E), (“the rule”), which required all ASF’s to have a WTA with a hospital.

Meanwhile, in June of 2013, the legislature passed H.B. 59, its biennial budget bill, which went into effect September 29, 2013. Pursuant to R.C. 3702.303(A) (“the statute” or “transfer agreement statute”) which codified the written transfer agreement rule, all ASF’s were required to have a WTA with a local hospital, or receive a variance. The statute differed from the rule with this locality requirement. Two related statutory changes enacted in the same bill were a change in the variance requirements, giving the Director less control than before in granting variances, and a ban on public hospitals entering into WTA’s with abortion clinics. The enactment of the written transfer agreement statute, combined with the new variance statute, completely eliminates the Director’s authority to grant a waiver of the WTA requirement. Before these statutory changes, the Director could grant a waiver or variance for any reason he saw fit.

Capital Care’s attempts to get another transfer agreement in the Toledo area were unavailing, and it operated without any WTA from July 31, 2013 until January 20, 2014. At that time it entered into a WTA with the University of Michigan in Ann Arbor, 52 miles away.

By letter of February 18, 2014, the Director sent Capital Care a second notice of proposed revocation, finding that its new WTA failed to comply with the locality requirement of the transfer agreement statute.

Capital Care timely requested an administrative hearing. As of the date of the hearing, the Department had not issued any guidelines to define the meaning of “local.” The matter was heard by a hearing examiner, who issued a report and recommendation on June 10, 2014, revoking Capital Care’s license.  Over Capital Care’s objections, on July 29, 2014, the then Interim Director of Health issued a final Adjudication Order approving the hearing examiner’s decision. The parties sharply disagree about whether the Interim Director based his decision only on the statute or on both the rule and the statute.

Capital Care appealed to the Lucas County Court of Common Pleas which reversed the Interim Director’s decision as not being in accordance with law. The court found that the three new licensing statutes violated the one-subject rule of the Ohio Constitution, Article II, Section 15(D), and the transfer agreement statute violated federal undue burden standards because the licensing scheme as applied to Capital Care created an unconstitutional delegation of licensing authority. The State filed a notice of appeal on July 10, 2015.

On June 27, 2016, after this appeal had been briefed and argued, but not yet decided by the Sixth District, the U.S. Supreme Court decided Whole Woman’s Health v. Hellerstedt, which held that requiring abortion facilities to meet governmental standards that do not promote patient health is an undue burden on women’s right to an abortion.

In a September 12, 2016 decision written by Judge Arlene Singer and joined by Judges Mark Pietrykowski and James Jensen, the Sixth District affirmed the lower court, holding that the licensing provisions at issue violated the Ohio Constitution’s single-subject rule, were an unlawful delegation of the state’s licensing authority and constituted an undue burden on a woman’s right to obtain an abortion.

Votes to Accept the Case

Yes: Justices O’Donnell, Kennedy, French, Fisher, and DeWine

No: Chief Justice O’Connor and Justice O’Neill

Full Disclosure

Professor Emerita Bettman has been retained as a paid appellate consultant for Capital Care in the Supreme Court of Ohio appeal.

Key Precedent

Fourteenth Amendment of the United States Constitution (“No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”)

Ohio Constitution, Article II, Section 15(D)

(“No bill shall contain more than one subject, which shall be clearly expressed in its title. No law shall be revived or amended unless the new act contains the entire act revived, or the section or sections amended, and the section or sections amended shall be repealed.”)

O.A.C. 3701-83-19(E) (Transfer agreement rule)

(“Each ASF shall have a written transfer agreement with a hospital for transfer of patients in the event of medical complications, emergency situations, and for other needs as they arise.)

R.C. 3702.303 (Written transfer agreement statute)

(“(A) Except as provided in division (C) of this section, an ambulatory surgical facility shall have a written transfer agreement with a local hospital that specifies an effective procedure for the safe and immediate transfer of patients from the facility to the hospital when medical care beyond the care that can be provided at the ambulatory surgical facility is necessary, including when emergency situations occur or medical complications arise. A copy of the agreement shall be filed with the director of health.)

(C) The requirement for a written transfer agreement between an ambulatory surgical facility and a hospital does not apply if either of the following is the case:

(2) The director of health has, pursuant to the procedure specified in section 3702.304 of the Revised Code, granted the facility a variance from the requirement.”)

R.C. 3702.304 (Variance statute) (sets forth requirements to obtain variance from written transfer agreement)

R.C. 3727.60 (public hospital provision) (forbids any public hospital from entering into a written transfer agreement with an abortion clinic and forbids any public hospital from allowing any physician with staff privileges to use those privileges to enable an abortion clinic in getting a variance.)

Planned Parenthood of Southeastern PA v. Casey, 505 U.S. 833 (1992) (State regulation may have an incidental effect on the availability of medical care. Such an incidental effect is not enough to invalidate a statute. “Only where state regulation imposes an undue burden on a woman’s ability to make this decision does the power of the State reach into the heart of the liberty protected by the Due Process Clause.”)

State of Ohio v. Talty, 2004-Ohio-4888 (The Court will not reach constitutional issues unless absolutely necessary.)

Women’s Med. Prof’l Corp. v. Baird, 438 F.3d 595 (6^th Cir. 2006) (A trial court must make factual findings of an undue burden. Further, the Ohio Department of Health Director’s ability to issue a waiver eliminates the possibility of a third-party veto and an unlawful delegation of authority.)

State ex rel. Ohio Civ. Serv. Emps. Assn. v. State, 2016-Ohio-478 (The single-subject rule is intended to prevent logrolling. However, separation of powers requires deference to the General Assembly by liberally interpreting the term “subject”.)

Whole Woman’s Health v. Hellerstedt, 136 S. Ct. 2292 (2016) (Requiring abortion facilities to meet governmental standards that do not promote patient health is an undue burden. Further, the resulting need for women to travel long distances for abortions is an undue burden.)

State’s Argument

The transfer agreement rule at issue in this case was not displaced by the transfer agreement statute. This case can and should be resolved solely on the basis of Capital Care’s noncompliance with the rule, and therefore the Court need not reach any of the constitutional challenges to the transfer agreement statute.  The locality requirement of the statute is an implied requirement of the rule. The statute merely codifies that requirement. The then-Director testified at the administrative hearing that he reviewed transfer agreements under a thirty-minute standard, both before and after the statute was enacted, and the Ann Arbor WTA did not meet that standard. The trial court found the thirty-minute standard reasonable. Capital Care has never questioned the validity of the rule. Thus, the rule, and Capital Care’s violation of the rule, should stand.

If the Court does reach the constitutional challenges, all three challenges must fail.  Only the transfer agreement statute was challenged in this case, although the appeals court held that it and the two related statutes—the variance statute and the public hospital ban—were all invalid.

The Court should defer to the General Assembly in assessing the subject of a bill in accordance with the single-subject rule of the Ohio Constitution. A common purpose or relationship among different parts of a bill is enough to survive judicial scrutiny. The Court should not consider the subject matter of the variance statute and the public hospital provision because Capital Care never challenged their constitutionality, but they do provide relevant context for the single-subject challenge to the transfer agreement statute.  The three statutes together involve operation and management of state government. The focus here should be on operations, not dollars. And the WTA provision in the bill was reasonably related to the budget because it instructs the Director of the Department of Health in how to delegate the operations of his subordinates.

The court-raised undue burden argument should not be reached. The state never invited review of this issue, and continues to argue that consideration of this issue is inappropriate.  If it is considered, this argument fails. A factual and legal showing of an undue burden must be demonstrated for a statute to be struck down on Due Process grounds. Capital Care never claimed that an undue burden existed; in fact, it specifically disclaimed the existence of an undue burden. Moreover, the record is insufficient to establish an undue burden. Finally, the WTA statute should not be subjected to undue burden analysis because it is not an abortion law; rather, the law is neutral in application to all ASFs, placing it outside the bounds of Casey and Whole Woman’s Health. No remand should be permitted to develop this issue because Capital Care could have raised an undue burden claim from the beginning, but chose not to.

The unconstitutional delegation of licensing authority determination by the lower courts is both misguided and antiquated. No federal circuit court has ever invalidated an abortion statute based on unlawful delegation. The General Assembly was justly exercising its police power by enacting the WTA statute for the general welfare. Nor is there any true vesting of power to a third party: hospitals and doctors simply supply a service. Supplying a service is in no way an exercise of legislative power. Finally, because the Director of the Department of Health can still grant a variance, third-party entities have no veto power regarding the licensing of abortion clinics.

Capital Care’s Argument

Even though Capital Care argued at the administrative hearing that it satisfied the transfer agreement rule, which it did, the Adjudication Order was based solely on the statute: specifically, the statute’s use of the word “local”. Therefore, the State cannot dodge constitutional review by justifying the decision to revoke Capital Care’s license under the administrative rule alone. Further, the fact that an additional statute had to be enacted in June of 2015, defining “local” as within thirty miles, demonstrates that the WTA statute does not equate to the administrative rule. Nor is it appropriate for the State to justify the revocation of Capital Care’s license on alternative grounds so late in the appeals process.

The written transfer agreement, variance, and public hospital ban statutes were enacted as a result of “log rolling,” in violation of the Ohio Constitution’s single-subject requirement. These statutes were intentionally buried in H.B. 59 due to their controversial nature and detrimental impact on abortion facilities, with little or no chance for discussion and debate. There is no common nexus between those provisions and the budget-related items in H.B. 59.

The Sixth District was correct in striking down the revocation of Capital Care’s license on constitutional due process grounds because the Director was not acting in accordance with law. The appeals court appropriately addressed this issue based on the Whole Women’s Health decision from the U.S. Supreme Court, which came out after briefing and argument.  The Director’s Order created an undue burden on the rights of women in Northwest Ohio to receive an abortion. Additionally, there was adequate evidence in the record for the Sixth District to determine that an undue burden existed, while the health benefits of the licensing provisions were scant at best. Finally, the Sixth District did not undertake undue burden analysis sua sponte; on the contrary, the State raised the issue. But Capital Care would not object to a remand to develop the record on undue burden if the Court deems that appropriate.

The WTA statute, the variance statute, and the public hospital ban equate to an unconstitutional delegation of authority. While the same issue was examined by a federal appeals court in Baird, the variance provisions have changed. The Director, at the time of Baird, could issue a waiver. This is no longer the case. Now hospitals and doctors hold a final veto power in the licensing of abortion clinics.

 State’s Proposed Proposition of Law No. 1

Ohio’s administrative rule, O.A.C. 307-83-19(E), validly requires ambulatory surgical clinics to have written transfer agreements with hospitals in cases of ‘medical complications, emergency situations, and for other needs.’ The Director acted in accordance with that law when finding that an agreement with a non-local hospital is not adequate for ‘emergency situations.

State’s Proposed Proposition of Law No. 2

The General Assembly did not violate the one-subject clause by using the budget bill to streamline the rules for a state agency to grant ambulatory-surgical facility licenses.

State’s Proposed Proposition of Law No. 3

A challenged law can be found to be an ‘undue burden’ on abortion rights only if a plaintiff makes a factual and legal showing of such a burden, and a court cannot sua sponte find such a burden when the issue is not raise. Ohio’s transfer-agreement requirement is a valid health-and-safety regulation that applies to all outpatient surgical clinics, and it is not an undue burden.

State’s Proposed Proposition of Law No. 4

Ohio law does not unconstitutionally delegate authority in requiring all ambulatory surgical facilities to have written transfer agreements with local hospitals in case of emergencies or other needs, and besides, the ultimate decision remains with the Ohio Department of Health.

Capital Care’s Proposed Counter Proposition of Law No. 1

An Adjudication Order revoking an ASF’s license because the ASF did not meet the requirements of an unconstitutional law must be reversed irrespective of whether the ASF also did not meet the requirements of an irrelevant administrative rule that the Adjudication Order did not rely on for the revocation. When an Adjudication Order revoking an ASF license is not based on a rule, the rule cannot be used to justify the Order.

Capital Care’s Proposed Counter Proposition of Law No. 2

When no common purpose or discernible relationship exists between the provisions in a bill, the enactment violates the single-subject rule of the Ohio Constitution Article II Section 15(D). The inclusion of the ambulatory surgical facility written transfer agreement licensing provisions R.C. 3702.303, 3702.304, and 3727.60 in the 2013 budget bill violates the single-subject rule.

Capital Care’s Proposed Counter Proposition of Law No. 3

It was entirely appropriate for the Sixth District to address the constitutionality of the licensing provisions, upon which the Adjudication Order was based, given that these provisions are contrary to law because they have the effect of creating an undue burden for Northwest Ohio women to access abortion under Whole Woman’s Health v. Hellerstedt[.] (Citation omitted)

Capital Care’s Proposed Counter Proposition of Law No. 4

The combination of R.C. 3702.303, which requires ambulatory surgical facilities to obtain a written transfer agreement from a local hospital, and R.C. 3702.304, which requires a doctor to agree to admit patients, and R.C. 3727.60, which bans public hospitals from entering transfer agreements with an abortion facility, create an unconstitutional delegation of the Director of the Department of Health’s authority to license ambulatory surgical facilities that provide abortions.

Student Contributor: Mark Tassone