Yakima Valley Memorial Hospital v. Washington State Department of Health

In 1974 Congress passed the National Health Planning and Resources Development Act, which required that states implement certificate-of-need programs. Under such programs, healthcare providers had to be preapproved by the state before establishing a facility or offering a certain service. In 1986 Congress repealed the National Health Planning and Resources Development Act without providing a savings clause. In 2007 the state of Washington passed a law establishing a certificate-of-need program for elective percutaneous coronary interventions (PCIs). The Washington State Department of Health (the department) (defendant) promulgated regulations under which certificates were issued based on the number of procedures a hospital was likely to perform and on geographic need. The Yakima Valley Memorial Hospital (the hospital) (plaintiff) was unable to qualify for a certificate of need and sued the department in federal district court. The hospital argued that the PCI certificate-of-need program violated the Commerce Clause in Article I of the United States Constitution. The hospital argued that the PCI certificate-of-need program created an unreasonable burden on interstate commerce by affecting the hospital’s ability to serve out-of-state patients and hire out-of-state doctors. The hospital also alleged that the program violated antitrust restraint-of-trade laws under the Sherman Act. The department moved to dismiss on the grounds of standing and failure to state a claim. The district court found that the hospital had standing but failed to state a claim under the Commerce Clause and the Sherman Act. In analyzing the Commerce Clause challenge, the district court held that Congress had authorized certificate-of-need programs. The hospital appealed.