Birchansky v. Clabaugh, No. 18-3403 (8th Cir. 2020)
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Plaintiffs, health care providers and their patients, filed suit against Iowa's Department of Public Health and its Health Facilities Council, alleging that Iowa's Certificate of Need laws violate the Fourteenth Amendment's Due Process, Equal Protection, and Privileges and Immunities Clauses.
The Eighth Circuit held that plaintiffs' Privileges and Immunities Clause claim was foreclosed by the Slaughter-Houses cases. Applying rational basis review to the Certificate of Need (CON) regime and capital expenditures exemption, the court held that Iowa's CON requirement is rationally related to a legitimate state interest in full-service hospital viability. Furthermore, Iowa's decision to exempt competitors who are non-hospital CON-holders is rationally related to its interest in protecting the viability of full-service hospitals. Therefore, the court affirmed the district court's orders dismissing plaintiffs' Privileges and Immunities claim and granting summary judgment in favor of the state defendants on the remaining claims.
Court Description: [Erickson, Author, with Colloton and Shepherd, Circuit Judges] Civil case - Constitutional law. In action alleging Iowa's Certificate of Need Requirement for new or changed outpatient surgery centers and its capital expenditure exemptions violated plaintiffs' Fourteenth Amendment rights, the district court did not err in dismissing plaintiffs' Privileges and Immunities Clause claim for failure to state a claim as the claim is foreclosed by the Slaughter-Houses cases, 83 U.S. 36 (1872); this court would apply the "rational basis" standard of review and not the "strict scrutiny" standard of review to the challenged Certificate of Need regime and capital expenditures exemption; the court has previously held that insulating existing entities from new competition in order to promote quality services and protect infrastructure investment can survive rational review - see Kansas City Taxi Cab Drivers Ass'n, 742 F.3d 807, 809 (8th Cir. 2013); the court holds Iowa's Certificate of Need requirement is rationally related to a legitimate state interest in full-service hospital viability; Iowa's decision to exempt competitors who are non-hospital Certificate of Need holders is rationally related to the same interest, and the district court's order granting defendants summary judgment is affirmed.
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