RALEIGH, N.C.—Today, the North Carolina Court of Appeals held that the state’s anti-competitive law preventing medical competition is constitutional. In doing so, it affirmed a lower court’s decision and dismissed the Institute for Justice’s (IJ) lawsuit challenging the state’s so-called certificate of need (CON) law. The plaintiff, Dr. Jay Singleton, will appeal the decision.
For years, Dr. Singleton has wanted to provide low-cost eye surgeries in his own vision center. But the CON law bans him from doing so unless he obtains a certificate proving his services are “needed” in his community. There has not been a new CON available for over a decade. That’s because “need” is not based on what will save patients time or money, but on how many nearby providers already exist—providers who, under the law, get to weigh in on whether they want more competition. As a result, Dr. Singleton is forced to perform most of his surgeries at the far more expensive hospital down the street—the sole entity in his area with a certificate.
In April 2020, with IJ’s help, Dr. Singleton brought a lawsuit challenging the CON law as an irrational monopoly under several parts of the North Carolina Constitution. The court’s decision today holds that Dr. Singleton was required to apply for a CON before bringing his monopoly claim, and that his irrationality arguments belong in the legislature, not in court.
“The court’s decision fails to engage with Dr. Singleton’s constitutional claims,” said IJ Attorney Josh Windham. “Requiring him to apply for a CON—which does not exist—before he can bring a monopoly challenge is absurd. And turning a blind eye to a law that harms patients while padding the pockets of established players is a total abdication of the court’s duty to ensure that laws serve the public. We plan to appeal.”
The decision comes on the heels of a global pandemic that forced several states, including North Carolina, to suspend their CON laws so that doctors could enter the market and save lives. Now, with the pandemic waning, the state’s CON law is back in full force, which means that unless the state declares a “need,” doctors are banned from providing new services that could help real patients.
“All I want is a chance to compete so that I can offer my patients more affordable care,” said Dr. Singleton. “It’s unfortunate that the court was so willing to rubberstamp this harmful and anti-competitive law, but I’m excited to continue pressing my rights—if necessary, all the way to the North Carolina Supreme Court.”
This case is part of IJ’s effort to ensure that state courts provide meaningful protections for economic liberty, and that they reject laws that merely shield incumbent businesses from competition. IJ currently has similar cases challenging protectionist restrictions on doctor dispensing in Texas, telehealth in South Carolina, and lactation care in Georgia.