Erecting a New Hospital as “Construction of a Health Care Facility”: A Comprehensive Commentary on St. Joseph’s Hospital of Buckhannon v. Stonewall Jackson Memorial Hospital Co.

Erecting a New Hospital as “Construction of a Health Care Facility” Under West Virginia’s Certificate-of-Need Law:
Commentary on St. Joseph’s Hospital of Buckhannon, Inc. v. Stonewall Jackson Memorial Hospital Co.

I. Introduction

This decision from the Supreme Court of Appeals of West Virginia clarifies a core feature of the state’s certificate-of-need (CON) regime: when does a health care provider’s building project trigger CON review? Specifically, the Court holds that the phrase “construction … of a health care facility” in West Virginia Code § 16‑2D‑8(a)(1) includes the erection or building of a new structure for the provision of health services, even where the provider is merely relocating existing services and even where the project costs less than the capital expenditure “minimum” established elsewhere in the statute.

The dispute arises from a conflict between two rural providers:

  • St. Joseph’s Hospital of Buckhannon, Inc. (St. Joseph’s), a 25‑bed critical access hospital (CAH) whose federal designation, and thus financial viability, depends on being at least fifteen “mountainous miles” away from other hospitals.
  • Stonewall Jackson Memorial Hospital Co. (Stonewall), a 70‑bed hospital in Weston seeking to construct a new hospital building roughly four miles from its existing site—placing it only about twelve mountainous miles from St. Joseph’s and thereby threatening St. Joseph’s CAH status.

After denying Stonewall’s CON application in 2022 on substantive grounds, the West Virginia Health Care Authority (the Authority) later concluded, in response to Stonewall’s “request for a determination of reviewability” (RDOR), that no CON review was required for Stonewall’s proposed relocation and new construction. The Authority relied on an unwritten internal “relocation” guideline and on 2023 legislative amendments that raised the relevant capital expenditure threshold from $5 million to $100 million.

The Intermediate Court of Appeals of West Virginia (ICA) affirmed, reading ambiguity into § 16‑2D‑8(a)(1) and deferring to the Authority’s unwritten interpretation. On further appeal, the Supreme Court reversed, holding that the statute is clear: building a new hospital facility is “construction … of a health care facility” and therefore automatically requires a CON, irrespective of project cost or the provider’s existing status.

Beyond the specific dispute between these hospitals, the opinion has three broad implications:

  1. It authoritatively defines “construction … of a health care facility” in the CON statute.
  2. It limits the Authority’s ability to narrow statutory obligations through unwritten guidelines.
  3. It reinforces the judiciary’s primacy in statutory interpretation and underscores that administrative decisions do not enjoy stare decisis in the same way judicial decisions do.

II. Summary of the Opinion

The core holding is captured in new Syllabus Point 7:

In West Virginia Code section 16‑2D‑8(a)(1) (2023), the phrase “construction . . . of a health care facility” includes the erection or building of a structure for offering or providing health services.

The Court’s key conclusions are:

  • Plain meaning of “construction … of a health care facility”: The statute unambiguously covers the erection or building of a new hospital structure. Stonewall’s project to build a new hospital building, even as a relocation of existing services, squarely falls within § 16‑2D‑8(a)(1).
  • No cost threshold embedded in § 16‑2D‑8(a)(1): Because this subsection does not use the terms “capital expenditure” or “expenditure minimum,” the $100 million threshold in § 16‑2D‑2(10) and (15) does not apply to the “construction … of a health care facility” requirement.
  • Authority’s unwritten “relocation” guideline invalid: The Authority’s practice of exempting “complete relocation” of existing facilities from CON review (if under the capital expenditure minimum) is inconsistent with the plain statutory text and therefore beyond its authority.
  • No administrative stare decisis: Prior administrative applications of that unwritten guideline do not bind the agency or the courts. Agencies may change course, and their interpretations cannot override clear statutory language.
  • Reversal and remand: The ICA’s judgment and the Authority’s July 12, 2023 RDOR decision are reversed. The matter is remanded to the Authority to conduct proceedings consistent with the Court’s holding—i.e., treating Stonewall’s project as subject to CON review under § 16‑2D‑8(a)(1).
  • Issues not reached: The Court does not address whether the project triggers CON review as a “substantial change to the bed capacity” under § 16‑2D‑8(a)(5), nor does it resolve whether West Virginia should continue to follow Chevron-like deference after Loper Bright, because the statute here is unambiguous and no formal rule is involved.

III. Detailed Analysis

A. Factual and Procedural Background

1. The parties and the CAH context

St. Joseph’s is a small rural hospital in Buckhannon. In 2014 it obtained federal “critical access hospital” (CAH) designation under 42 U.S.C. § 1395i‑4 and associated regulations. CAH status entitles St. Joseph’s to cost‑based Medicare (and often Medicaid) reimbursement rather than fixed prospective payments, which for many rural hospitals is the difference between solvency and closure.

To maintain CAH status, a facility must be:

“located more than a 35‑mile drive (or, in the case of mountainous terrain or in areas with only secondary roads available, a 15‑mile drive) from a hospital[.]” 42 U.S.C. § 1395i‑4(c)(2)(B)(i); see also 42 C.F.R. § 485.610(c)(1).

The parties agree that, under the “mountainous miles” standard, St. Joseph’s CAH status depends on being at least fifteen miles from the nearest hospital.

Stonewall operates a 70‑bed hospital in Weston, about sixteen miles from St. Joseph’s existing location—just beyond the critical 15‑mile threshold. Its current building dates from 1972 and suffers from accessibility and layout constraints. Stonewall proposes to construct a new, modern hospital building near the intersection of Interstate 79 and U.S. 33 for approximately $56 million, relocating its operations to that new site. That new site is only about twelve mountainous miles from St. Joseph’s.

Thus, if Stonewall is allowed to build and operate at the new location, St. Joseph’s risks losing its CAH status, with potentially severe financial consequences for the hospital and the rural community it serves.

2. The 2021 CON application and 2022 denial

Under West Virginia’s CON regime, certain health care projects cannot be “acquired, offered, or developed” without prior approval from the Authority. In 2021, Stonewall submitted a full CON application for its new hospital facility. St. Joseph’s intervened and demonstrated:

  • The new site would be less than fifteen mountainous miles from St. Joseph’s,
  • St. Joseph’s would consequently lose its CAH status, and
  • The loss would likely jeopardize St. Joseph’s long‑term financial stability and services to the community.

In June 2022, the Authority denied the CON, concluding that the project did not constitute a “superior alternative” under § 16‑2D‑12’s minimum review criteria, given the serious adverse impact on St. Joseph’s and its patients. The ICA later affirmed that denial in a memorandum decision, and Stonewall did not appeal to the Supreme Court.

3. The 2023 legislative amendments

While Stonewall’s appeal of the 2022 denial was still pending before the ICA, the Legislature amended the CON statutes in March 2023. The key change for this dispute concerned the definitions of “capital expenditure” and “expenditure minimum” in § 16‑2D‑2(10) and (15):

  • Pre‑2023: Certain capital expenditures “made by or on behalf of a health care facility” above $5 million triggered CON review.
  • Post‑2023: The expenditure minimum was raised to $100 million (and, via inflation adjustment, higher in subsequent years).

Importantly, these definitions are used in some CON triggers, such as those explicitly referring to “capital expenditures,” but § 16‑2D‑8(a)(1) (the provision at issue here) does not contain those terms.

4. The RDOR strategy and the Authority’s “relocation” guideline

After the 2023 amendments, Stonewall did not file another CON application. Instead, it submitted a Request for Determination of Reviewability (RDOR) under § 16‑2D‑7, which allows a party to ask the Authority to decide whether a proposed health service is subject to CON or exemption processes.

Stonewall’s argument:

  • The project cost ($56 million) was below the new $100 million expenditure minimum.
  • Thus, under the amended definitions, its project was not subject to CON review as a “capital expenditure.”
  • It characterized the project as a “relocation” and “replacement” of existing services, not the establishment of a new facility.

St. Joseph’s again intervened, contending that regardless of cost, Stonewall’s plan involved the construction of a health care facility within the meaning of § 16‑2D‑8(a)(1), which has no embedded cost threshold.

On July 12, 2023, the Authority issued an RDOR decision finding no CON required. It:

  • Re‑characterized the project as the “renovation, replacement and relocation” of Stonewall’s facility within its service area.
  • Invoked an unwritten internal guideline under which the “complete relocation of existing health care facilities within the same service area” does not require CON review unless the cost exceeds the capital expenditure minimum.
  • Concluded Stonewall’s “replacement and relocation” project—costing “well below $100,000,000.00”—was not subject to CON review.

5. The ICA’s decision

St. Joseph’s appealed the RDOR decision to the ICA, arguing that § 16‑2D‑8(a)(1) unambiguously required a CON for “construction … of a health care facility” and that the Authority could not rewrite that statute via unwritten practice.

The ICA:

  • Admitted that “Stonewall clearly plans to construct … a health care facility.”
  • Nevertheless found § 16‑2D‑8(a)(1) “ambiguous when applied to a relocation plan like Stonewall’s.”
  • Interpreted “establishment” in the phrase “construction, development, acquisition, or other establishment of a health care facility” as legally significant, suggesting the provision targeted new facilities or entities.
  • Concluded that the Authority’s reading—excluding relocation of existing facilities from § 16‑2D‑8(a)(1) unless the capital expenditure minimum is exceeded—was “reasonable.”
  • Affirmed the Authority’s RDOR decision, applying Chevron-like deference to the Authority’s interpretation.

St. Joseph’s sought review by the Supreme Court, raising not only the interpretation of § 16‑2D‑8(a)(1) but also the propriety of Chevron-style deference in West Virginia, especially in light of the U.S. Supreme Court’s later decision in Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), which overruled Chevron at the federal level.

B. Legal Issues Presented

The Supreme Court’s opinion addresses three central legal questions:

  1. Interpretation of § 16‑2D‑8(a)(1): Does “the construction … of a health care facility” cover building a new hospital building for an existing provider relocating within the same service area, regardless of project cost?
  2. Interaction with the capital expenditure threshold: May the Authority effectively import the $100 million “expenditure minimum” into § 16‑2D‑8(a)(1) to exclude relocation projects below that threshold from CON review?
  3. Role of administrative practice and deference:
    • Is the Authority’s longstanding unwritten “relocation” guideline entitled to deference or “statutory stare decisis”?
    • Can such a guideline curtail otherwise clear statutory obligations?

Secondary issues, which the Court explicitly declines to decide, include:

  • Whether Stonewall’s project separately triggers CON review as a “substantial change to the bed capacity” under § 16‑2D‑8(a)(5).
  • Whether West Virginia should continue to follow the Chevron-based deference framework articulated in Appalachian Power Co. v. State Tax Department post‑Loper Bright.

C. Statutory Framework

1. Core CON trigger: § 16‑2D‑8(a)(1)

Section 16‑2D‑8(a)(1) provides:

“[T]he following proposed health services may not be acquired, offered, or developed within this state except upon approval of and receipt of a certificate of need …:

(1) The construction, development, acquisition, or other establishment of a health care facility[.]”

Notably:

  • This subsection does not mention “capital expenditure” or an “expenditure minimum.”
  • It is phrased in broad, categorical terms: if the project involves “construction … of a health care facility,” a CON is needed.

2. Definitions: “health care facility” and “health services”

Section 16‑2D‑2(16) defines “health care facility” as:

“a publicly or privately owned facility, agency or entity that offers or provides health services, whether a for‑profit or nonprofit entity and whether or not licensed, or required to be licensed, in whole or in part[.]”

Section 16‑2D‑2(18) defines “health services” as:

“clinically related preventive, diagnostic, treatment or rehabilitative services[.]”

Together, these definitions encompass both:

  • The organization/entity providing health services, and
  • The physical “facility”—i.e., the building or place—where those services are provided.

3. Capital expenditure definitions and thresholds

Section 16‑2D‑2(10) defines “capital expenditure” (in relevant part) as certain expenditures “made by or on behalf of a health care facility,” and § 16‑2D‑2(15) defines “expenditure minimum.” The 2023 amendments raised that minimum from $5 million to $100 million and require annual adjustment by the Health Care Authority under § 16‑2D‑3(a)(3).

These definitions matter only where a substantive CON trigger expressly refers to “capital expenditures” or “expenditure minimums.” Section 16‑2D‑8(a)(1) does not.

4. Other relevant provisions

  • § 16‑2D‑8(a)(5) (not decided here) deals with a “substantial change to the bed capacity of a health care facility with which a capital expenditure is associated.”
  • § 16‑2D‑7 authorizes RDORs: written requests to determine whether a proposed health service must go through the CON or exemption process.
  • § 16‑2D‑12 sets minimum review criteria, including consideration of whether a proposal is the “superior alternative” and its impact on access and cost.
  • § 29A‑5‑4(g) (Administrative Procedures Act) establishes the standard of judicial review for agency decisions, requiring reversal if, among other things, the decision is “in violation of … statutory provisions” or “in excess of the statutory authority or jurisdiction of the agency.”

D. The Court’s Holding and Legal Reasoning

1. Standard of review and judicial role

The Court begins with the familiar principles:

  • De novo review of statutory and rule interpretation (Syl. Pt. 1, Appalachian Power Co. v. State Tax Dep’t, 195 W. Va. 573, 466 S.E.2d 424 (1995)).
  • Judicial primacy in statutory construction: “The judiciary is the final authority on issues of statutory construction, and we are obliged to reject administrative constructions that are contrary to the clear language of a statute.” (Syl. Pt. 5, CNG Transmission Corp. v. Craig, 211 W. Va. 170, 564 S.E.2d 167 (2002)).
  • Agency decisions are reviewed under § 29A‑5‑4(g); they must be reversed or modified if, for example, they violate statutory provisions or exceed statutory authority.

2. No administrative stare decisis for the Authority

Stonewall argued that because the Authority had historically applied its unwritten relocation guideline, this practice should exert a kind of binding “statutory stare decisis.” The Court rejects this argument by reaffirming:

“The doctrine of stare decisis does not normally apply to administrative decisions.” Syl. Pt. 5, Chesapeake & Potomac Tel. Co. of W. Va. v. Pub. Serv. Comm’n of W. Va., 171 W. Va. 494, 300 S.E.2d 607 (1982).

Agencies engaged in regulation “must at all times be free to take such steps as may be proper in the circumstances, irrespective of the past decisions,” and may change their understanding of conditions over time. Prior administrative determinations therefore do not freeze the law for agencies, let alone bind the courts.

The Court adds a second, related constraint: under Rowe v. W. Va. Dep’t of Corrections, 170 W. Va. 230, 292 S.E.2d 650 (1982), while the Legislature may delegate rulemaking power to agencies, an agency “may not issue a regulation which is inconsistent with, or which alters or limits its statutory authority.” That principle applies a fortiori to unwritten guidelines. To the extent the Authority’s relocation guideline carved out projects that the statute itself subjects to CON review, it was ultra vires.

3. The plain meaning approach and legislative intent

The Court reiterates long‑standing canons:

  • “The primary object in construing a statute is to ascertain and give effect to the intent of the Legislature.” (Syl. Pt. 1, Smith v. State Workmen’s Comp. Comm’r, 159 W. Va. 108, 219 S.E.2d 361 (1975)).
  • Where a statutory provision is “clear and unambiguous and plainly expresses the legislative intent,” courts do not interpret it but give it “full force and effect.” (Syl. Pt. 2, State v. Epperly, 135 W. Va. 877, 65 S.E.2d 488 (1951)).
  • “Where the language of a statutory provision is plain, its terms should be applied as written and not construed.” (DeVane v. Kennedy, 205 W. Va. 519, 529, 519 S.E.2d 622, 632 (1999)).
  • Undefined words and terms are given their “common, ordinary and accepted meaning.” (Syl. Pt. 6, in part, State ex rel. Cohen v. Manchin, 175 W. Va. 525, 336 S.E.2d 171 (1984)).

Applying these canons, the Court examines the terms “construction” and “health care facility” in § 16‑2D‑8(a)(1).

4. “Construction” in § 16‑2D‑8(a)(1)

The Court relies on its prior decision in Eggleston v. West Virginia Department of Highways, 189 W. Va. 230, 429 S.E.2d 636 (1993), which itself consulted dictionary sources:

  • Webster’s Third New International Dictionary: “the act of putting parts together to form a complete integrated object.”
  • Oxford English Dictionary: “[t]he action of framing, devising, or forming, by putting together of parts; erection, building.”

The Legislature has not defined “construction” in Chapter 16‑2D, but has done so elsewhere. In § 5‑22‑3(c)(1) (public construction contracting), “construction” includes:

“the act, trade or process of building, erecting, constructing, adding, repairing, remodeling, rehabilitating, reconstructing, altering, converting, improving, expanding or demolishing of a building, structure, facility, road or highway[.]”

Although that definition arises in a different context, it reinforces the ordinary meaning that “construction” includes building or erecting a structure (and, more broadly, significant physical alterations).

The Court therefore concludes that, in the CON statute, “construction” at minimum covers:

  • The erection or building of new structures; and
  • By logical extension, major structural modifications such as remodeling, reconstruction, or expansion.

5. “Health care facility” as including the physical structure

Stonewall attempted to argue that a “health care facility” is fundamentally an organization or entity rather than a physical building, and that relocating an existing entity to a new building did not amount to constructing a new “health care facility” under § 16‑2D‑8(a)(1).

The Court rejects this reasoning. While § 16‑2D‑2(16) encompasses entities and agencies, the word “facility” also has a natural, commonly understood physical meaning. The Court consults multiple general dictionaries (Cambridge, New Oxford, Merriam‑Webster) and notes that “facility” means:

  • a place, especially including buildings, where a particular activity occurs;
  • an establishment set up to fulfill a function or provide a service; or
  • something like a hospital “that is built, installed, or established to serve a particular purpose.”

In the context of the word “construction” in § 16‑2D‑8(a)(1), it is clear that the Legislature used “health care facility” to include the building or physical facility in which health services are rendered. Thus, constructing a hospital building is “construction … of a health care facility,” even if the operating entity is pre‑existing.

6. The new Syllabus Point and application to Stonewall

On the basis of this textual analysis, the Court formulates Syllabus Point 7:

In West Virginia Code section 16‑2D‑8(a)(1) (2023), the phrase “construction . . . of a health care facility” includes the erection or building of a structure for offering or providing health services.

Applying this definition, the Court notes it is undisputed that:

  • Stonewall proposes to erect a new hospital building; and
  • That building will provide health services to patients.

Under the plain statutory language, Stonewall’s project therefore requires a certificate of need. The Authority’s contrary RDOR ruling exceeded its statutory authority and conflicted with § 16‑2D‑8(a)(1).

7. Rejection of the ICA’s “ambiguity” and “newness” analysis

The ICA attempted to ground ambiguity in the phrase “construction, development, acquisition, or other establishment of a health care facility,” focusing on “establishment” and suggesting that the statute targets newly established facilities or entities. Because Stonewall was an existing provider, the ICA reasoned, § 16‑2D‑8(a)(1) might not cover its relocation and new building.

The Supreme Court implicitly rejects this reasoning as contrary to the statute’s grammar and structure:

  • The four verbs—“construction, development, acquisition, or other establishment”—are joined by “or,” indicating alternative ways in which a “health care facility” can come into being or be expanded, not a requirement that all carry some special “new-entity” connotation.
  • Even if “establishment” might, in some contexts, connote newness, that does not override the plain meaning of “construction” in this phrase.
  • The ICA’s reading effectively read “construction” out of the statute when the project involved an existing entity, which the Court will not do.

8. No capital expenditure threshold in § 16‑2D‑8(a)(1)

The Authority and Stonewall tried to tie the applicability of § 16‑2D‑8(a)(1) to the capital expenditure threshold in § 16‑2D‑2(10) and (15), arguing that relocation projects under the expenditure minimum should not be subject to CON review. The Court firmly declines to read any such limitation into § 16‑2D‑8(a)(1), noting:

  • The subsection does not use the words “capital expenditure” or “expenditure minimum.”
  • Other subsections, like § 16‑2D‑8(a)(5), do contain explicit capital expenditure language, indicating that when the Legislature intends to tie CON triggers to cost thresholds, it does so expressly.
  • Courts must read statutes “according to [their] unvarnished meaning, without any judicial embroidery.” (Syl. Pt. 3 in part, W. Va. Health Care Cost Rev. Auth. v. Boone Mem’l Hosp., 196 W. Va. 326, 472 S.E.2d 411 (1996)).

By the same logic, an agency also cannot “embroider” the statute by adding extra‑textual limitations through internal guidelines. The Authority’s relocation policy effectively amended § 16‑2D‑8(a)(1) to add a cost threshold where none exists, which is impermissible under Rowe and Snuffer (In re Snuffer, 193 W. Va. 412, 456 S.E.2d 493 (1995) (Cleckley, J., concurring): agency interpretations cannot “go[] beyond the meaning that the statute can bear”).

9. Deference and the shadow of Chevron and Loper Bright

The ICA’s reasoning rested in part on Chevron-type deference, as adopted in West Virginia in Appalachian Power, under which courts defer to reasonable agency interpretations of ambiguous statutes. After the ICA’s decision, the U.S. Supreme Court decided Loper Bright Enterprises v. Raimondo, overruling Chevron.

St. Joseph’s invited the Court to reconsider its own Chevron-like deference doctrine in light of Loper Bright. The Court explicitly notes:

  • Appalachian Power and its progeny applied Chevron concepts to state law.
  • Loper Bright overruled Chevron.

However, the Court finds it unnecessary to address whether to overrule or modify West Virginia’s deference jurisprudence for three reasons:

  1. Section 16‑2D‑8(a)(1) is clear and unambiguous; deference is inapplicable under Chevron even at the federal level in such a case.
  2. No formally promulgated regulation or written rule is at issue, only an unwritten internal guideline.
  3. The Court can resolve the case entirely on plain‑meaning grounds and limits on agency authority under existing West Virginia precedent.

Thus, the Court leaves for another day any broader re‑examination of agency deference in West Virginia after Loper Bright.

E. Use and Influence of Precedents

The opinion is built on a network of prior decisions that define the relationship between statutes, agencies, and courts.

1. Appalachian Power Co. v. State Tax Dep’t, 195 W. Va. 573 (1995)

  • Supplies Syllabus Point 1: interpreting a statute or rule is a purely legal question reviewed de novo.
  • Originally adopted Chevron-like deference for ambiguous statutes interpreted by agencies.
  • In this case, it is used only for its de novo standard; the deference portion is sidestepped but implicitly placed in tension with Loper Bright.

2. CNG Transmission Corp. v. Craig, 211 W. Va. 170 (2002)

  • Provides Syllabus Point 5: courts are the “final authority” on statutory construction and must reject administrative interpretations that conflict with clear statutory language.
  • This principle is central: the Authority’s unwritten guideline cannot limit § 16‑2D‑8(a)(1)’s plain meaning.

3. Chesapeake & Potomac Tel. Co. v. PSC, 171 W. Va. 494 (1982), and Central W. Va. Refuse, Inc. v. PSC, 190 W. Va. 416 (1993)

  • Establish and reaffirm that stare decisis “does not generally apply” to administrative regulatory decisions.
  • Used to reject Stonewall’s attempt to treat the Authority’s past practice as binding, “statutory” stare decisis.

4. Rowe v. W. Va. Dep’t of Corrections, 170 W. Va. 230 (1982)

  • Provides Syllabus Point 3: while the Legislature may delegate rulemaking power, an agency may not issue a regulation “which is inconsistent with, or which alters or limits its statutory authority.”
  • Applied here to an unwritten guideline that narrows the scope of § 16‑2D‑8(a)(1); the Authority crossed the line by effectively amending the statute through practice.

5. Statutory construction cases: Smith, Epperly, DeVane, Cohen, General Daniel Morgan Post, Boone Memorial

  • Smith v. State Workmen’s Comp. Comm’r, 159 W. Va. 108 (1975): primary goal is legislative intent.
  • State v. Epperly, 135 W. Va. 877 (1951); DeVane v. Kennedy, 205 W. Va. 519 (1999): plain language must be applied as written.
  • State ex rel. Cohen v. Manchin, 175 W. Va. 525 (1984); General Daniel Morgan Post No. 548, V.F.W., 144 W. Va. 137 (1959): undefined terms get their ordinary meaning.
  • W. Va. Health Care Cost Rev. Auth. v. Boone Mem’l Hosp., 196 W. Va. 326 (1996): courts must avoid “judicial embroidery” by reading in limitations the Legislature did not include.

Collectively, these cases form the doctrinal backbone of the Court’s insistence on a strict textual reading of § 16‑2D‑8(a)(1), unencumbered by unwritten agency practices or extra‑textual policy considerations.

6. Eggleston v. W. Va. Dep’t of Highways, 189 W. Va. 230 (1993)

  • Provides authoritative dictionary‑based definition of “construction” as “erection, building.”
  • Used to justify adopting a similar ordinary meaning in the CON context.

7. In re Snuffer, 193 W. Va. 412 (1995) (Cleckley, J., concurring)

  • Cited for the proposition that agency interpretations must not “go beyond the meaning that the statute can bear.”
  • Used to criticize the Authority’s relocation guideline as exceeding statutory bounds.

8. Jenkins v. City of Elkins, 230 W. Va. 335 (2012)

  • Reiterates the importance of judicial statutory stare decisis—courts generally adhere to their own prior statutory interpretations.
  • Distinguishes that concept from any supposed binding effect of agency interpretations.

F. Impact and Implications

1. For West Virginia’s CON regime

This decision squarely answers an important question: Does building a new physical facility for an existing provider’s services require a CON? After this case, the answer is unequivocally yes, whenever the project constitutes “construction … of a health care facility” under § 16‑2D‑8(a)(1), regardless of project cost and regardless of whether the provider is newly established or longstanding.

Consequences include:

  • Relocation projects are subject to CON review when they involve erecting or building new facilities. Providers can no longer rely on the Authority’s past practice of exempting such relocations below the capital expenditure threshold.
  • Cost thresholds apply only where the statute says so. The 2023 (and later) increases in the capital expenditure minimum narrow CON jurisdiction for provisions tethered to expenditures, but they do not silently repeal or shrink § 16‑2D‑8(a)(1).
  • Facilities other than hospitals are affected. Because “health care facility” is broadly defined, the decision likely covers construction of ambulatory surgical centers, diagnostic centers, and other health facilities when they involve building new physical locations.
  • RDORs cannot be used to circumvent clear CON triggers. An RDOR is a mechanism to clarify coverage, not to nullify unambiguous statutory requirements.

2. For health care providers and strategic planning

Providers contemplating significant physical changes to their footprint must now factor in:

  • CON risk for relocation: Relocating a facility—even within the same service area—will require CON review if it involves new construction.
  • Community impact considerations: As the Authority’s 2022 decision in this case shows, CON reviews consider community‑wide implications, including potential harm to other providers and access to care. Projects that threaten the viability of rural or safety‑net hospitals may face substantial scrutiny.
  • Compliance and timing: Because CON proceedings can be lengthy and contested, project timelines and financing plans must account for regulatory delay and opposition from competitors.

3. For rural hospitals and CAH‑designated facilities

This decision indirectly reinforces the position of CAH hospitals like St. Joseph’s. While the Court does not decide whether Stonewall’s project should ultimately be approved on the merits, it ensures that:

  • Such projects cannot evade CON scrutiny simply by invoking relocation and project cost below the expenditure minimum.
  • The Authority must formally weigh the effect on CAH status and rural access to services within the CON framework, rather than bypassing that process entirely.

In practical terms, any hospital relocation that would place a new facility within the 15‑mile CAH radius will now necessarily go through a full CON review, giving potentially affected CAH providers a formal avenue to contest or shape the outcome.

4. For administrative law in West Virginia

The opinion has significant administrative law ramifications beyond health care:

  • Unwritten guidelines are legally fragile. Where a statute is clear, agencies cannot rely on informal practices or internal guidance to circumvent or limit legislative commands. Regulated entities relying on such unwritten policies act at risk if those practices are later recognized as inconsistent with the statute.
  • No administrative “statutory stare decisis”. Agencies may—and sometimes must—change their interpretive positions when they recognize conflicts with statutory text, without being bound by past regulatory decisions. Conversely, courts are bound by their own prior statutory interpretations unless persuaded to overrule them.
  • Foreshadowing possible change to deference. By invoking Loper Bright but declining to reach the deference question, the Court signals that West Virginia’s Chevron-like deference doctrine may be reconsidered in an appropriate future case. For now, however, the opinion emphasizes that deference has no role when statutes are clear and no formal regulations are at issue.

IV. Complex Concepts Simplified

1. Certificate of Need (CON)

A CON is a state‑issued approval required before a health care provider can develop certain services or construct certain facilities. The idea is to:

  • Avoid unnecessary duplication of expensive services or facilities;
  • Control health care costs; and
  • Ensure that changes serve community health needs.

If a project falls under one of the triggers in § 16‑2D‑8 (like “construction … of a health care facility”), the provider must apply for a CON and show that the project meets criteria such as need, cost‑effectiveness, and impact on access.

2. Critical Access Hospital (CAH)

A CAH is a small rural hospital that meets federal criteria intended to preserve access in remote areas. Benefits include:

  • Cost‑based Medicare (and often Medicaid) reimbursement;
  • Flexibility in bed size and services; and
  • Enhanced financial viability in rural settings.

One key requirement is distance: the CAH must be at least thirty‑five driving miles from another hospital, or fifteen miles in mountainous or secondary‑road areas. If another hospital opens or moves closer within that radius, the CAH risks losing its designation and the associated financial benefits.

3. Capital Expenditure “Expenditure Minimum”

In some parts of the CON statute, projects are subject to review based on their cost. The “expenditure minimum” is a dollar threshold above which certain capital expenditures by or for a health care facility must go through the CON process. The Legislature raised this minimum from $5 million to $100 million in 2023.

However, this threshold matters only when a particular CON trigger, such as § 16‑2D‑8(a)(5), explicitly refers to capital expenditures. Section 16‑2D‑8(a)(1) does not; it focuses on the nature of the project (“construction … of a health care facility”), not its cost.

4. Request for Determination of Reviewability (RDOR)

An RDOR allows a provider to ask the Authority, in advance, whether a proposed project is subject to CON or qualifies for an exemption. It is essentially a threshold jurisdictional ruling. But it cannot undo or ignore clear statutory triggers: if the project plainly falls within a CON category, the Authority must say so.

5. Stare Decisis vs. Administrative Practice

Stare decisis is the judicial principle that courts should generally follow their own prior decisions, especially those interpreting statutes, to promote consistency and predictability.

However:

  • Courts are bound by their own precedents unless and until they overrule them.
  • Administrative agencies are not similarly bound by their past decisions. They can change their interpretation or policy as conditions or understanding change, so long as they remain within statutory bounds.

Thus, the Authority’s past leniency on relocation projects does not bind either the Authority itself (if it recognizes inconsistency with the statute) or the courts. That prior practice cannot justify a reading of the law that contradicts its text.

6. Plain Meaning and Legislative Intent

Courts often begin with the “plain meaning” of statutory text:

  • If the language is clear, courts apply it as written, assuming that reflects the Legislature’s intent.
  • If the language is ambiguous—reasonably susceptible to more than one meaning—courts then use other tools (legislative history, purpose, canons) and sometimes defer to agency interpretations.

Here, the Court finds no ambiguity: ordinary dictionary meanings of “construction” and “facility,” as used in context, clearly cover the building of a new hospital structure.

7. Agency Deference (Chevron and Loper Bright)

Under the (now‑overruled) federal Chevron doctrine, courts deferred to reasonable agency interpretations of ambiguous statutes. West Virginia adopted a similar approach in Appalachian Power.

In Loper Bright, the U.S. Supreme Court ended Chevron deference for federal agencies. West Virginia’s approach to agency deference may evolve, but in this case:

  • The statute is clear; even under Chevron, no deference would be warranted.
  • The contested interpretation is in an unwritten guideline, not a formal rule.

Accordingly, the Court simply applies the statute’s plain meaning and reserves any reconsideration of deference for a future case that squarely presents that issue.

V. Conclusion

St. Joseph’s Hospital of Buckhannon v. Stonewall Jackson Memorial Hospital Co. is a significant clarification of West Virginia’s certificate‑of‑need law and an important marker in the state’s administrative law.

Substantively, it establishes that:

  • The erection or building of a new physical health care facility, even for relocation of existing services, is “construction … of a health care facility” under § 16‑2D‑8(a)(1); and
  • Such projects always require CON review, regardless of project cost or the provider’s pre‑existing status.

Institutionally, the decision:

  • Reaffirms the judiciary’s role as the final arbiter of statutory meaning.
  • Rejects the notion that unwritten agency practices can override clear statutory language or bind courts through “statutory stare decisis.”
  • Reminds agencies that they must operate within, not beyond, the authority conferred by the Legislature.

In the immediate case, the Court does not determine whether Stonewall’s project should ultimately be approved; it simply requires that the project undergo the statutory CON review process. On remand, the Authority must apply the substantive CON criteria to Stonewall’s proposed new hospital, fully considering its impact on St. Joseph’s CAH status and on access to care in the region.

In the broader legal context, this opinion signals that West Virginia’s courts will strictly enforce the text of the CON statute and will be skeptical of efforts—whether by agencies or regulated entities—to narrow or bypass that text through informal guidance or creative characterization of projects. For health care providers, it underscores that significant bricks‑and‑mortar changes to facilities are likely to remain firmly within the CON regime, regardless of legislative adjustments to capital expenditure thresholds.

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