Georgia Supreme Court Upholds Anti-Competitive Law

October 18, 2017 | By JEFF MCCOY

On Monday, the Georgia Supreme Court issued its opinion in Women’s Surgical Center v. Berry, a case that challenged Georgia’s anti-competitive Certificate of Need (“CON”) laws. Certificate of Need laws, which PLF has successfully challenged in six other states, force entrepreneurs to prove that there is a “need” for additional services in a market before opening a new business to compete with existing ones. Women’s Surgical Center specializes in providing innovative and relatively inexpensive medical care. It wished to expand its facilities and its practice, but Georgia’s law allowed competing medical practices to object to the expansion, triggering a hearing by the Department to determine whether there is a “need” in the community for the applicant’s proposed new services.

Women’s Surgical argued that the laws violated various state and federal constitutional provisions. As Pacific Legal Foundation argued in its friend of the court brief, the CON laws violate both the Due Process Clause and the Anti-Monopoly Clause of the Georgia Constitution. Unfortunately, the Georgia Supreme Court interpreted the clauses narrowly and upheld the CON law.

After stating that the Anti-Monopoly Clause only applies to anti-competitive contracts (and not statutes), the court rejected Women’s Surgical’s due process claim. PLF argued that the Due Process Clause in Georgia’s Constitution was intended to offer greater protection for economic liberty than federal judges have granted to that right under the federal Constitution. Despite the distinct history of the Georgia Constitution, the Court refused to give serious scrutiny to the CON law.

The Court nonetheless provided some hope for those who support economic liberty. In footnote 7, the Court argued that the case was unique because Women’s Surgical, being a healthcare provider, operates in a market “dominated by government regulation.” The Court cautioned that nothing in its opinion “should be understood to support sweeping economic regulation of this sort beyond this unique context.” Ultimately, the Court should have recognized that healthcare is not a unique industry, and that increasing supply of healthcare will help consumers like customers in any other industry. Still, the Court’s words may allow Georgia citizens to fight anti-competitive laws in future cases.