Yakima Valley Memorial Hospital (Memorial) sued the Washington State Department of Health (Department) after it promulgated certificate of need (CON) regulations, arguing that the CON requirement violated the U.S. Constitution's "dormant" Commerce Clause by unreasonably burdening interstate commerce, as the regulation prevented Memorial from performing elective percutaneous coronary interventions (PCI).
Memorial also claimed that the Department's methodology for defining "need" was anticompetitive and preempted by § 1 of the Sherman Act because it allowed incumbent CON holders to expand their capacity and preclude new providers' entry into the market. The Ninth Circuit dismissed the antitrust claims because there was no concerted action. The court held that the PCI regulations were a unilateral licensing requirement rather than an agreement in restraint of trade.
More interesting, however, the court held that Congress's 1986 repeal of the National Health Planning and Resources Development Act of 1974 (NHPRDA) removed the congressional imprimatur authorizing Washington state's CON program to engage in regulation that the Commerce Clause would otherwise forbid. The Ninth Circuit held that such congressional authorizations must be "unmistakably clear" and "unambiguous." Thus, the repeal of the NHPRDA, without a savings clause, eliminated the requisite clear statement of congressional authorization for Washington's CON regulations. Congressional silence was not sufficient to sustain a Commerce Clause imprimatur.
Where a law only incidentally burdens interstate commerce, it "will be upheld unless the burden imposed on interstate commerce is clearly excessive in relation to the putative local benefits." Because the PCI regulations burdened the free flow of commerce to Memorial's financial detriment, Memorial had standing to show that the PCI regulations' burden on interstate commerce was excessive in relation to the local benefit.