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Murby v. Children's Hospital Corp.

Superior Court of Massachusetts, Suffolk, Business Litigation Session

May 9, 2016

Gustave H. Murby et al. [1]
Children's Hospital Corporation dba Boston Children's Hospital et al. [2] No. 133543

          Filed Date May 10, 2016


          Kenneth W. Salinger, Justice of the Superior Court.

         Plaintiffs oppose the plans by Boston Children's Hospital to construct a new clinical building at its downtown Boston campus because the project as currently designed would destroy Prouty Garden. Plaintiffs have shown that the sixty-year-old, half-acre Prouty Garden is a quiet sanctuary for Hospital patients and their families and plays a valuable therapeutic role for many ailing children. Plaintiffs believe that the Hospital should be able to expand its clinical space without building on the site of Prouty Garden. That issue is not before the Court, which has no power to decide whether Prouty Garden is too important to be replaced by a new clinical building.

         In this lawsuit, Plaintiffs claim that the Hospital has illegally begun site preparation and other construction required for the proposed Boston Children's Clinical Building (which both sides call the " BCCB") without first obtaining approval from the Massachusetts Department of Health (" DPH"). They ask the Court to enter a preliminary injunction that would bar the Hospital and its construction contractors from continuing any construction related to the BCCB project or doing anything else that could damage or destroy Prouty Garden.

         For the reasons discussed below, the Court concludes that it must DENY this request for a preliminary injunction because Plaintiffs have not met their burden of proving that they are likely to succeed on the merits of their legal claims. Plaintiffs are entitled to press their claims: they have standing to enforce the determination of need (" DoN") statute, and this action is not barred on the grounds that Plaintiffs failed to exhaust their administrative remedies or that DPH has primary jurisdiction over this matter. On the merits, however, Plaintiffs have not shown that the Hospital is acting illegally by moving forward with its current construction work before receiving DoN approval for the BCCB project from DPH.[3]

         1. Legal Standards

         " A preliminary injunction is an extraordinary remedy never awarded as of right." Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 24 (2008). To the contrary, " the significant remedy of a preliminary injunction should not be granted unless the plaintiffs had made a clear showing of entitlement thereto." Student No. 9 v. Board of Educ., 440 Mass. 752, 762 (2004).

         Plaintiffs are asking the Court to enforce the requirements of the determination of need law, which requires hospitals and other health care facilities to obtain approval from DPH before making substantial capital expenditures to construct or substantially change some facility. See G.L.c. 111, § § 25B-25G. As a result, to obtain preliminary injunctive relief Plaintiffs must prove that (1) they are likely to succeed on the merits of their claims, and (2) the requested relief will promote or at least will not adversely affect the public interest. See LeClair v. Town of Norwell, 430 Mass. 328, 331-32 (1999). Unlike in lawsuits involving purely private interests, " a showing of irreparable harm is not required" because Plaintiffs are " acting as private attorneys general to enforce a statute or a declared policy of the Legislature." Fordyce v. Town of Hanover, 457 Mass. 248, 255 n.10 (2010) (public bidding statutes); accord LeClair, supra (designer selection statute); Edwards v. City of Boston, 408 Mass. 643, 646-47 (1990) (uniform procurement act).

         Plaintiffs are not entitled to preliminary injunctive relief if they cannot prove that they are likely to succeed on the merits of their claims. See Fordyce, supra, at 265 (vacating preliminary injunction on this ground); Wilson v. Commissioner of Transitional Assistance, 441 Mass. 846, 858-59 (2004) (same). " The burden of showing a likelihood of success on the merits is on the party seeking the preliminary injunction." Berrios v. Dept. of Pub. Welfare, 411 Mass. 587, 598 (1992), quoting Robinson v. Secretary of Admin., 12 Mass.App.Ct. 441, 451 (1981). The Hospital is not required to prove that the current construction activities challenged by Plaintiffs are lawful. Instead, to obtain a preliminary injunction the Plaintiffs must demonstrate they are likely to succeed in proving that those activities are unlawful.

         2. Findings of Fact

         The Court makes the following findings of fact based on the affidavits, verified complaint, and exhibits submitted by the parties, and on reasonable inferences drawn from that evidence.

         The Hospital plans to build a new Boston Children's Clinical Building on its existing property in the Longwood Medical Area of Boston, at the corner of Shattuck Street and Meadow Lane. If approved and built, the BCCB will be located in the area currently occupied by the Wolbach Building, the Prouty Garden, the Library and the Ida C. Smith Building, and portions of the Bader East and Farley Buildings. Thus, construction of the BCCB will require demolition of the Wolbach Building and destruction of Prouty Garden.

         The proposed new building will be twelve stories tall and contain approximately 445, 000 square feet of floor space. The BCCB will expand and upgrade the Hospital's inpatient units, provide additional surgical capacity and allow the Hospital to replace and relocate outdated operating rooms, and include a new neonatal intensive care unit and an interdisciplinary cardiac care unit, among other new facilities. As for green spaces, the BCCB will have an outdoor rooftop garden, terrace gardens on inpatient floors, internal winter gardens, and an outdoor garden at ground level. The Hospital's plans for this new building have been approved by the Boston Redevelopment Authority, the Boston Zoning Commission, and the Secretary of the Executive Office of Energy and Environmental Affairs.

         In December 2015, the Hospital filed an Application for a Determination of Need with DPH concerning its proposal to build the BCCB. The Hospital has informed DPH that it plans to spend more than $1 billion on the BCCB project, including roughly $850 million in new construction and $220 million in renovations to existing buildings. The Hospital spent roughly $8 million of this amount before making its DoN filing to pay for planning work by its architects, engineers, and construction contractors. This DoN application is still pending. In February 2016 DPH directed the Hospital to provide an independent cost analysis of the Application in accord with G.L.c. 111, § 25C(h). The four-month period for review of the Application is stayed until that analysis is completed and submitted to DPH.

         The DoN statute requires DPH review and approval for any " substantial capital expenditure" to construct any health care facility. See G.L.c. 111, § 25C. At present, any non-exempt capital expenditure by an acute care hospital like Boston Children's Hospital that exceeds $17, 826, 988 will constitute a " substantial capital expenditure" and thus be subject to DoN review.

         Before filing its DoN application, the Hospital requested an advisory opinion from DPH as to whether the Hospital may demolish the Wolbach Building and clear that site without first obtaining a DoN. The Hospital explained that demolition of Wolbach will be unusually time consuming because the Boston Landmarks Commission and the Massachusetts Historical Commission are requiring the Hospital to preserve and reuse the entrance facade, stairs, and several other building elements. The Hospital acknowledged that all expenditures associated with preserving parts of the Wolbach building and demolishing the rest will have to be included in the costs subject to DoN review for the proposed BCCB. But the Hospital represented that it planned to demolish the Wolbach Building whether or not the BCCB is approved because Wolbach is outdated, deteriorating, and no longer suitable for continued administrative use of the Hospital.

         In November 2015, DPH issued a formal advisory ruling stating that " the proposed demolition of the Wolbach Building may go forward without DoN review, " because that work will be required even if the Wolbach site is never used for a project that is subject to the DoN statute. DPH ordered that " [i]f the Hospital does include the Wolbach Building site in its DoN project" to construct the planned new clinical building, then " the Hospital must include the cost ...

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