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In re Path at Stone Summit, Inc.

Supreme Court of Vermont

June 30, 2017

In re PATH at Stone Summit, Inc. Concerned Neighbors, Appellants

         On Appeal from Green Mountain Care Board

          A. Jay Kenlan, Rutland, for Appellants.

          William H. Sorrell, Attorney General, and Bridget C. Asay, Solicitor General, and Benjamin D. Battles, Assistant Attorney General, Montpelier, for Appellee.

          PRESENT: Dooley, Skoglund, Robinson and Eaton, JJ., and Davenport, Supr. J. (Ret.), Specially Assigned

          ROBINSON, J.

         1. Neighbors are a group of property owners in the neighborhood of PATH at Stone Summit, Inc.'s proposed therapeutic community residence in Danby. They appeal the Green Mountain Care Board's decision that the proposed project could proceed without a certificate of need under 18 V.S.A. § 9434(a)(5). We conclude that the appeal is not properly before this Court because Neighbors failed to timely file a petition to become interested parties. Accordingly, we dismiss Neighbors' appeal.

         ¶ 2. To better explain the events that gave rise to this appeal, we review the relevant aspects of the Board's certificate of need (CON) process. The Legislature has charged the Board with regulating the development of health care projects across the state. 18 V.S.A. §§ 9431-9446. Under 18 V.S.A. § 9434, those seeking to develop a "new health care project" cannot begin development before obtaining a CON from the Board. The definition of "new health care project" includes several triggers, any one of which renders a project a "new health care project" subject to the CON requirement. 18 V.S.A. § 9434. The provision relevant to this appeal requires a CON for a project that has "an annual operating expense which exceeds $500, 000.00 for either of the next two budgeted fiscal years." Id. § 9434(a)(5). If the applicant agrees that a CON is necessary for the project, the applicant may file a CON application with the Board without further process. Id. § 9440(c)(2)(B). Otherwise, the applicant must file a letter of intent, which the Board reviews to determine whether the applicant must seek a CON for the project. Id. § 9440(c)(2)(A), (c)(3). The Board requires the letter of intent to include, at a minimum, a summary of the proposed project, its projected expenses, and any additional information necessary to determine if a CON is necessary. Certificate of Need Rule 4.301(2), Code of Vt. Rules 80 280 004 [hereinafter CON Rule], []. [1]

         ¶ 3. If the Board concludes that a CON is necessary, the applicant must file an application before beginning development of the project. 18 V.S.A. § 9440(c)(3). If the Board determines that a CON is not required, "a health care facility may commence the proposed project without risk of penalty or sanction." CON Rule 4.301(4). To the extent the "project changes from that described in the letter of intent, the health care facility shall notify the Board, which shall notify the health care facility of any further necessary process." Id. "If the Board subsequently determines that a no jurisdiction determination was based on partial, incorrect, inaccurate or misleading information, the Board may rescind its determination, assert jurisdiction over the project, and may impose sanctions." CON Rule 4.301(5); see also 18 V.S.A. § 9445 (describing Board's enforcement powers).

         ¶ 4. When the applicant files a letter of intent, the Board must post public notice of the letter on its website within five business days of receiving the letter. 18 V.S.A. § 9440(c)(2)(A). Pursuant to CON Rule 4.301(2)[2], the applicant is also required to provide public notice of the letter of intent.[3] Petitions to intervene as interested parties must be filed within twenty days of the Board's public notice of the letter. 18 V.S.A. § 9440(c)(7).[4] The Board grants interested party status to those "who demonstrate that they will be substantially and directly affected by the new health care project under review." Id. Under § 9440(f), "[a]ny applicant, competing applicant, or interested party aggrieved by a final decision of the Board" may appeal the decision pursuant to § 9381. Section 9381 allows parties to appeal Board decisions to this Court after they exhaust all administrative remedies. Id. § 9381(b).

         ¶ 5. In this case, pursuant to 18 V.S.A. § 9440(c)(2)(A), PATH filed a letter of intent with the Board on March 22, 2016. The letter explained that PATH was proposing to open a residential treatment center for adults between the ages of eighteen and twenty-nine who are struggling with mental health issues such as depression, anxiety, bipolar disorder, substance abuse, and personality disorders. It explained PATH's approach to treatment, described the facility PATH would rent in Danby, listed the staff that PATH would employ and the compensation they would receive, and explained what fees PATH would charge its residents. It stated that PATH would initially accept six residents, but would reach its full capacity of eight residents by year three. PATH also attached the projected operating costs over the next three years. It estimated the total expenses for the first year to be $413, 373, the second year to be $449, 871, and the third year to be $462, 219.

         ¶ 6. Neighbors do not dispute the Board's representations that PATH posted notice of the letter in regional newspapers on March 28 and the Board posted notice on its website. Although the specific date of the Board's notice is not in the record, Neighbors have not argued that the Board failed to post the notice within five business days of receiving the letter of intent, as required by 18 V.S.A. § 9440(c)(2)(A), or that Neighbors requested interested party status within twenty days of the Board's posting.

         ¶ 7. On April 7, the Board's senior policy analyst notified PATH that it did not need to apply for a CON. The letter stated, "[b]ased on the representations contained in the documents and spreadsheet submitted . . . the annual operating expenses for the first three years are under the $500, 000 threshold that triggers review." The policy analyst added that, "if there are changes in the future in the type or scope, annual operating expenses or planned expansions, please notify the [Board] immediately so that we may determine whether further review is required."

         ¶ 8. On May 12, the Board's general counsel contacted PATH's lawyer, stating that the Board had received an inquiry into the accuracy of PATH's expenses. The general counsel explained that "PATH's cost projections appear reasonable and inclusive of all anticipated expenses." However, given the proximity of PATH's operating expenses to the statutory threshold, she requested that PATH review its projections and either confirm that those expenses remained below the $500, 000 threshold or begin a CON application.

         ¶ 9. On May 13, two Danby residents emailed the Board Chair about PATH's letter of intent, arguing that the Board should not allow the project to go forward because PATH had underestimated its expenses and because the project presented a risk to the neighborhood. The email included a detailed list of perceived errors in the narrative accompanying PATH's letter of intent, arguing that "PATH has intentionally underestimated ...

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