## Facts

- Sarasota County Public Hospital, operating as Memorial Hospital (Memorial), filed a certificate of need (CON) application with the Department of Health and Rehabilitative Services (HRS) to construct a satellite acute-care hospital in Sarasota.
- HCA Doctors Hospital (Doctors) filed a CON application in the same review cycle to construct a replacement acute-care hospital in Sarasota.
- Both projects involved acute-care hospitals offering similar services in close geographic proximity, and neither proposal would increase the total number of licensed beds.
- HRS issued notices of intent stating it would approve Doctors’ application and deny Memorial’s application.
- In its notice, HRS cited concerns that Memorial’s project would be expensive to construct and would duplicate services that would be available from Doctors’ proposed facility in the same vicinity.
- Memorial filed a petition for a formal administrative hearing, seeking comparative review of the two applications.
- HRS dismissed Memorial’s petition (adopting the view that the applications were not subject to comparative review based on how the projects were categorized), which effectively denied Memorial an evidentiary hearing on the approval of Doctors’ application and denial of its own.
- Memorial appealed the dismissal order to the District Court of Appeal, Second District.

## Issues

1. Whether Memorial had a sufficient substantial interest to obtain a formal administrative hearing to challenge HRS’s intent to approve Doctors’ CON and deny Memorial’s CON for similar acute-care facilities in the same area.
2. Whether HRS could avoid comparative review of the two functionally similar projects by treating them as belonging to different statutory or regulatory categories.

## Decision

- The court reversed HRS’s order dismissing Memorial’s petition.
- The court held Memorial had standing because HRS’s action—approving Doctors’ application and denying Memorial’s—directly and adversely affected Memorial’s interests as a competitor seeking to provide the same type of acute-care services in the same service area.
- The court rejected HRS’s attempt to foreclose comparative review through categorical treatment of the projects where, in substance, the applications were competing proposals for similar acute-care facilities in close proximity.
- The court remanded for further proceedings, including a formal administrative hearing in which the applications could be evaluated comparatively.

## Legal Principles

- A CON applicant has standing to request a formal administrative hearing when the agency’s action on a competing application in the same service area will directly affect the applicant’s ability to provide similar regulated services.
- When two CON proposals in the same review cycle seek similar services for the same general patient population in close proximity, the agency must treat them as competing for purposes of comparative consideration required by the CON framework.
- An agency may not defeat comparative evaluation and hearing rights by labeling substantively similar projects under separate review categories when the practical effect is to approve one competitor and deny another without a comparative hearing.
- Under Florida administrative law, when an agency decision determines substantial interests, the affected party is entitled to the procedural protections of a formal administrative hearing.

## Conclusion

Sarasota County Public Hospital v. Department of Health holds that a hospital whose CON application is denied has standing to demand a formal administrative hearing when the agency approves a competing hospital’s similar acute-care project in the same area, and the agency cannot avoid comparative review by categorizing the competing projects in a way that prevents an evidentiary comparative hearing.


Sarasota County Public Hospital v. Department of Health, 553 So. 2d 189 (1989)