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

On September 12, 2017, the Supreme Court of Ohio heard 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, 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 eliminated 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 substantively 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.

Read the oral argument preview of the case here.

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.)

Full Disclosure

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

 Arguing Counsel

Stephen P. Carney, Deputy Solicitor, Columbus, for Appellant State of Ohio Department of Health

Jennifer L. Branch, Gerhardstein & Branch Co. LPA, Cincinnati, for Appellee Capital Care Network of Toledo

State’s Argument

This case is about a surgical clinic that failed to meet a reasonable health and safety requirement that applies to all surgical clinics. The Court should uphold the order revoking the Clinic’s license. The Court can do so by relying solely on the administrative rule, which requires all clinics to have a patient transfer agreement with a hospital in case of emergencies. The Clinic did not satisfy the rule, it did not challenge the rule’s validity, and has always conceded the rule is in play. And both the rule and the statute form the basis of the Adjudication Order in this case. But even if the Court reaches the statute, the constitutional challenges to that statute must fail.  The statute is constitutional.

Obviously, during that period of time in which the Clinic had no written transfer agreement at all, it did not satisfy the rule. But the written transfer agreement with the University of Michigan also did not satisfy the rule because it did not meet the 30 minute rule of reasonableness the Director of Health testified to at the hearing.  He testified that he used that rule of reasonableness both before and after the enactment of the transfer agreement statute. And that interpretation is entitled to administrative deference. Even though the rule has no express geographic component, and does not contain the word “local” as the statute does, there must be some sensible limit for the sake of patient safety.

And as for the option of calling 911 in case of emergency, that is unsatisfactory because there is no guaranteed continuity of patient care, there isn’t necessarily an agreement for information sharing, and there is no guaranteed hospital admission, as there would be with a transfer agreement.

This is not an abortion case, and the appeals court was wrong in finding that it was, sua sponte. The written transfer agreement rule is a neutral rule that applies to 200 surgical clinics across the state, and is not abortion-specific. As then-Justice Sandra Day O’Connor said years ago, abortion sometimes distorts ordinary law.

There is an abortion-specific area of law, namely the undue burden test. The Clinic could have raised an undue burden challenge. But the Clinic expressly told the court below that it was not raising an undue burden challenge, and did not present any evidence of undue burden. And the Clinic should be held to that. When a party says, I’m not raising this claim, that should end the matter.  Furthermore, as the most recent undue burden test in Hellerstedt shows, that test is intensely fact-specific. A big factual record is needed. In this case, there is nothing at all. The appeals court rightly acknowledged at the start of the case that the rule was at issue, but then the court never returned to it. Nor is a remand on this issue justified, since the Clinic chose not to raise undue burden in the first place. The rule is at issue in this case, and undue burden is not. The normal rules of law should not be distorted just for abortion clinics.

As for the single-subject argument, it is irrelevant to the rule. Here, the only statute that is technically under attack on this basis is the written transfer agreement statute. But it is fair to look at the other two statutes involved, although they are not formally at issue, because they provide context here, which is the operation of state government. Standing alone, had the written transfer agreement statute just been put in the budget without these others serving as the glue, that might be a much harder case. But the others do provide the necessary context. And again, relying solely on the rule eliminates this entire line of argument.

Capital Care’s Argument

Capital Care’s license has been unlawfully revoked by the state of Ohio, even though during the entire twelve years the Clinic was operating as of the date of its hearing, it had never needed to transfer a patient on an emergency basis to any hospital. Capital Care now challenges the written transfer agreement statute on single subject grounds, as an undue burden to a women’s right to an abortion, and as an unlawful delegation of the state’s licensing authority.

The rule in this case was only relevant for that brief period of time when Capital Care had no written transfer agreement—after the University of Toledo had informed the clinic it could no longer have an agreement with the clinic, until it entered into the Ann Arbor agreement. That gap in coverage was not the reason Capital Care’s license was revoked. The Department of Health allowed the Clinic to operate during this period. Furthermore, during that gap period calling 911 in case of an emergency was an acceptable response. The gap period was rendered moot when Capital Care acquired the Michigan transfer agreement.

The director said in the proposed revocation order that the Michigan transfer agreement violated the statute because it was not with a local hospital, which is what the statute required. The only reason ever given in the proposed revocation notice was that the Michigan agreement violated the statute. The administrative hearing was about the statute, not the rule. Every single person at that hearing knew that the rule had nothing to do with the Michigan agreement. Had the director wanted to revoke the Michigan agreement because of the rule, the hearing would have been totally different, with different evidence presented.

After the hearing, the report and recommendation and findings of fact and conclusions of law both said the Michigan transfer agreement violated the statute. And the adjudication order from the Director says the Michigan transfer agreement was rejected because it did not comply with R.C. 3702.303.

As for undue burden, it is correct that Capital Care made a strategic decision not to challenge the statute below on this basis. But while the case was pending, the U.S. Supreme Court decided the Hellerstedt case, and now the test is to weigh the burden on a women’s access to abortion with the state’s alleged benefit. It was totally appropriate for the Sixth District to base its decision on a new, intervening decision from the U.S. Supreme Court.  Additionally, the state itself had argued below that the transfer agreement statute was not an undue burden. And contrary to the state’s argument, there was plenty of evidence in the record on this point, as the Sixth District delineated in its decision.  But if the Court wants further development on this issue, the case could be remanded for that purpose.

The written transfer agreement violates the Ohio Constitution’s single subject rule. It was offered as a one page rider to a 2700 page bill, with no debate, discussion, or transparency. In this case there was absolutely no connection with the written transfer agreement statute and the purpose of this budget bill.

Finally, the state has impermissibly turned over to hospitals its delegated authority to issue a license. Here, all eight private Toledo hospitals that were contacted refused to enter into a written transfer agreement with Capital Care, and the University of Toledo Hospital could not, because of the public hospital ban statute. In the situation in Baird, the Director of the Department of Health had the final decision in issuing a license; that is no longer the case. The Director used to be able to grant a waiver, waiving the entire transfer agreement rule and request an alternative policy for getting the patient to the hospital. Since the written transfer agreement statute was enacted, the Director can no longer do that.  The waiver power comes from a regulation, which states there can only be a waiver if a requirement is not statutory, which the written transfer agreement now is.  That puts all of the power to license abortion providers in the hands of the local hospitals and doctors—in Toledo none of them would step forward and enter into a contract with this Clinic.

What Was On Their Minds

Rule Versus Statute

Was the rule raised as an alternative ground for revocation by the state, asked Justice French? If the statute is unconstitutional, what does that do to the administrative rule?

How was the rule actually violated, asked Justice DeWine? Later he read from the adjudication order, noting that it said it was based on the statute and the rule, asking, how is the rule not a basis of the order? If the rule was moot, how is it a basis of the order?

What does the rule say, asked Justice O’Donnell? Was the reason for the revocation the fact that there was a hiatus in having any transfer agreement, or because the agreement was with an out-of-state facility? Does the statute mandate a local facility?

Written Transfer Agreements

What is in these, asked Justice O’Donnell? What do they say? Do they specify a time required for transfer? Or a distance? What is the source of any such requirement?

Didn’t the University of Toledo Hospital terminate its agreement with the Clinic before the public hospital ban went into effect, asked Justice DeWine?

Are there any other ambulatory surgical facilities precluded from entering into a written transfer agreement with hospitals, public or private, asked Chief Justice O’Connor? Or only abortion clinics? (Only abortion clinics, said the Clinic’s counsel.)

Calling 911

What is the difference between calling 911 without a transfer agreement and having a transfer agreement with a local facility, asked Chief Justice O’Connor? Is the Clinic now precluded from calling 911?

Abortion-Specific or Not?

The Sixth District Court of Appeals said this is an abortion case, noted Justice O’Neill. Does the state agree with that? (The state did not.)

The Thirty Minute Transfer Time

Where is it stated that transfer time has to be 30 minutes, asked Chief Justice O’Connor? What is the support for that? Could there just be a reasonableness standard?

Location, Location, Location

What is the rational basis for saying you can have a relationship with an Ohio hospital, but not with one that is 7, 12, 14 more miles away, asked Justice O’Neill, commenting that Toledo is just on the Michigan border. Ann Arbor is 52 miles. What is the rational basis for the state of Ohio saying 52 miles is just too far in this age when helicopters go at 150 mph? Why is Ann Arbor too far away to protect these patients?

What’s the alternative for women in this area, asked Chief Justice O’Connor?

The Gap Period

Was the violation because of the period in which the Clinic had no written transfer agreement, asked Justice DeWine? Was that a sufficient reason to revoke its license? If not, why does the order say that it is?

According to the rule, the Clinic didn’t fill in the gap with a valid transfer agreement, commented Chief Justice O’Connor. Is the state looking at this like there never was a cure to the violation of the rule? Or would the health department not have held that gap against Clinic because they were negotiating for a new written transfer agreement? Did the Department ever give the Clinic any reassurance on that score?

Single Subject Rule

Isn’t it a pretty broad statement in a single subject challenge to say the common purpose pertains to the operation of state government, asked Chief Justice O’Connor?

What is in the record showing a manifestly gross or fraudulent violation, asked Justice Fischer?

Undue Burden

What is the undue burden on a woman seeking an abortion as consequence of this rule, asked Chief Justice O’Connor? Didn’t the trial court find undue burden? Is the state saying the appeals court should not have considered this issue? (yes, the state is.)

Did the Court in Hellerstedt create a new test or were they really looking back at Casey which has existed since 1992, asked Justice French?  And isn’t it the Clinic’s burden to show undue burden? Later she commented that although Hellerstedt looked at weighing the benefits versus the burdens, it was still relying on Casey. Did the Clinic at any time at the administrative level or before the courts say it was raising substantive due process?

How it Looks From the Bleachers

To Professor Emerita Bettman

I admit I can’t see straight on this one. Yes, the Adjudication Order mentions the rule, but the case is really about compliance with the statute. The trial court lists the issue for appeal as cited by both parties as failing to have a written transfer agreement with a local hospital. And “local” is only in the statute,  not the rule.

The state admitted that it isn’t holding noncompliance during the gap period against the Clinic, but I’m not so sure how clearly some of the justices heard that. If a majority decides that the license was revoked because of noncompliance with the rule during that gap period, then I don’t see the point of why the Court agreed to hear this case at all. Furthermore, the trial court specifically found that the gap period was not a basis for the license revocation.

If the court considers the rule more broadly, as an alternative basis for revocation, I think the Clinic has a strong argument that it met the rule with the Michigan transfer agreement, which did not require any particular time or distance or a local hospital at the time. While the Director testified that he used a 30 minute parameter for the rule, and the statute was later amended to specify a 30 mile rule, at the time of the revocation hearing, there were no interpretative guidelines on that point. Nor did the rule have a locality requirement. The Chief seemed to get this.

Once the case got into the court system, it is totally clear that it was based on the statute, both at the trial and the appellate level. I also think the Sixth District was well within its rights, and in fact obligations, to consider an intervening abortion decision from the U.S. Supreme Court on undue burden.  Whether there is enough of a record on that point is debatable.  But remand for further development seems unlikely because Capital Care chose not to raise undue burden initially.

I think Chief Justice O’Connor and Justice O’Neill are ready to buy the Clinic’s argument that the written transfer agreement statute is unconstitutional, but whether anyone else is on board is dubious. Justices French and DeWine seemed totally unsympathetic to the Clinic’s argument, and Justice Kennedy, who was asked to recuse from this case because of the timing of a speech she gave at a Greater Toledo Right to Life Breakfast, refused to do so, and clearly isn’t going to support the Clinic here.  Justice O’Donnell asked mostly clarifying questions, but never has been sympathetic to abortion rights.

I think the only chance the Clinic has of winning, at least on the statute, is on the single subject challenge. I found the state’s argument on this point close to incomprehensible, and as the Chief wryly noted, if “operation of state government” is the common purpose, might there be anything broader?  If the court wants to punt, that would be the way to do it—that’s what the Court did with the voucher decision, Simmons-Harris v. Goff.  But that still leaves the rule hanging out there.

And I must say, that when Chief Justice O’Connor asked the deputy solicitor what the alternatives would be for women in the Toledo area seeking an abortion, he answered Detroit and Ann Arbor, apparently without irony.

To Student Contributor Mark Tassone

As this student contributor sees it, the State missed an opportunity to legitimize the locality requirement. In the emergency-medical field, patients have what is known as “The Golden Hour.” This refers to the hour between the advent of a medical emergency and the administration of advanced medical care (i.e., that of a hospital facility). And the sooner patients receive medical care during this hour, the better their likelihood of recovery becomes. Outside of this hour, patient survival falls dramatically. It is the opinion of this contributor that The Golden Hour is the likely source of the thirty-minute rule created by the former Director of the Department of Health as well as the thirty-mile limit imposed by the current version of the statute. I make these statements as a former emergency medical technician.

This is a tough case to call. Based on my own observations, it seemed as if Justices French and DeWine are leaning toward the State. The Chief Justice seemed slightly more receptive to Capital Care. However, I am reluctant to say that the Chief Justice will ultimately side with Capital Care. I do believe that Justice O’Donnell will side with Capital Care. Nevertheless, in predicting the outcome, I am doubtful that the Court will rule in Capital Care’s favor. The State’s strongest argument rests on the validity of the rule. And that argument seems sound. This contributor believes that the Court will attempt to skirt the issues of this case by preserving the State’s decision to revoke the license under the administrative rule. Despite the compelling arguments of undue burden from Capital Care, I am doubtful that this Court will reach such a finding when the issue was explicitly waived and a factual analysis was not made. Therefore, I believe the Court will choose the path of least resistance: the Court will side with the State.