Regina Keenan |
On November 13, 2014, the Florida Supreme Court issued an opinion in Citrus County Hospital Board v. Citrus Memorial Health Foundation, Inc. (SC13-411) affirming Citrus Memorial Health Foundation, Inc. v. Citrus County Hospital Board, 108 So. 3d 675 (Fla. 1st DCA 2013). The case evaded much attention due to the nearing holiday season.
In 1990, the legislatively created Citrus County Hospital Board (Hospital Board) contracted to turn the operation and management of Citrus Memorial Hospital to Citrus Memorial Health Foundation, Inc. (Foundation), a separate non-profit legal entity, until the year 2033.
After the Foundation shifted majority control of its board of directors, and therefore the hospital, away from the Hospital Board, disputes arose between the two entities.
In 2011, the Florida Legislature intervened by enacting the Special Law, chapter 2011-256, Laws of Florida. This law provided a single, comprehensive special charter for the Hospital Board and required, among other things, that the Hospital Board approve all members of the board of directors of the Foundation, approve certain borrowing and debts of the Foundation, and authorized the Hospital Board order audits of the Foundation at the Foundation’s expense.
The Foundation challenged this law. The Hospital Board disputed the Foundation’s standing, but the Court determined the Foundation, as a private entity, had standing to challenge the constitutionality of the Special Law. The Foundation was not created by the Legislature and is not a State agency or local government. Instead, the Court held that the Foundation is a separate, private corporation created for the specific purpose of taking control of the public hospital by contract as authorized and contemplated by the Florida Legislature in section 155.40, Florida Statutes (2013).
Finally, the Court agreed that the Special Law effectively rewrote the contracts between Citrus County Hospital Board and Citrus Memorial Health Foundation, Inc. to such an extent that it impaired the contracts in violation of Art. I, s. 10, Fla. Const.