
    RAPIDES GENERAL HOSPITAL v. Sandra ROBINSON, Secretary of DHHR and Harvey Fitzgerald, Undersecretary of DHHR.
    No. CA 84 1145.
    Court of Appeal of Louisiana, First Circuit.
    March 18, 1986.
    Rehearing Denied April 29, 1986.
    Writ Denied June 20, 1986.
    
      James A. Cobb, Jr., New Orleans, and Charles S. Weems, III., Alexandria, for plaintiff.
    Frank H. Perez, Joseph A. Donchess, and Charles L. Patín, Jr., Roy A. Mongrue, Jr., Atty. Gen. Office, Baton Rouge, for defendants.
    Before COVINGTON, C.J., and LOT-TINGER, EDWARDS, COLE, SHORTESS, CARTER, SAVOIE, LANIER, CRAIN and ALFORD, JJ.
   COLE, Judge.

On August 7,1984, Rapides General Hospital, the plaintiff, brought suit against Sandra Robinson, Secretary Department of Health and Human Resources and Harvey Fitzgerald, Undersecretary, Department of Health and Human Resources, the defendants herein. The plaintiff sought an order commanding the defendants to comply with an agreement entered into between the Secretary of the U.S. Department of Health and Human Services and the State of Louisiana, known as a Section 1122 agreement. Further, the plaintiff sought to restrain the defendants from complying with any orders from Governor Edwin W. Edwards that attempt to change the existing 1122 program, including Executive Order EWE 84-13, the moratorium on 1122 application approvals. In addition, the plaintiff sought an order recalling and vacating the 1122 approval granted to the Pineville Regional Medical Center.

A temporary restraining order was issued by the trial court granting the relief sought by the plaintiff and requiring the defendants to show cause on September 7, 1984 why the temporary order should not be made permanent. On August 9, 1984, an intervention was granted to the Lafayette General Hospital which, in addition to the relief sought by the initial plaintiff, sought an order recalling and vacating the 1122 approval granted to the Lafayette Regional Medical Center. An additional temporary restraining order and show cause order as to the relief sought by the inter-venor was granted by the trial court.

On August 9, 1984, the defendants filed a motion to vacate the stay orders and a hearing on the motion was held. The next day the trial court rendered judgment dismissing the plaintiffs and intervenor’s suits. As a basis the trial court found they possessed “no right and/or cause” of action pursuant to the rationale expressed by the court in Lifemark Corp. v. Guissinger, 416 So.2d 1279 (La.1982). The trial court also decreed all stay orders previously issued were recalled, vacated and set aside. The plaintiffs then sought supervisory writs which were denied by this court and thereafter by the Supreme Court. The plaintiffs now bring this devolutive appeal.

The statutory and regulatory background of Section 1122 of the Social Security Act has been well documented. The court in Psychiatric Institutes of America, Inc. v. Heckler, 596 F.Supp. 1311 (E.D.La. 1984), provides,

“Prior to 1972, the Department of Health, Education and Welfare, now the Secretary, reimbursed hospitals and other health care facilities for the cost of providing service to Medicare, Medicaid and other federal beneficiaries. The amounts which were reimbursed included the costs attributable to building and equipping those facilities. In 1972, to assure that federal assistance for capital expenditures was not used to support unnecessary capital expenditures and to assure that federal reimbursements for capital expenditures were consistent with state plans, Congress enacted Section 1122 of the Social Security Act, 42 U.S.C. §§ 1320a-l et seq.2
Section 1122 provides that interested states may enter into an agreement with the Secretary whereby the State agrees to review certain capital expenditures proposed by or on behalf of health care facilities located within the State. This review is made under the auspices of a state designated planning agency (DPA). The Secretary has entered into such an agreement with the State of Louisiana.”at 1313. [Footnote omitted.]

The subject agreement between the Secretary (U.S.) and the State of Louisiana was renewed to become effective on July 1, 1984.

I.

EXECUTIVE ORDER EWE 84-13

On July 30, 1984, in a letter to Mr. Harvey J. Fitzgerald, Undersecretary of the Department of Health and Human Resources, Governor Edwin W. Edwards stated, “Effective August 1, 1984, and for an indefinite period of time, I am ordering the implementation of a moratorium on the 1122 Program.” Thereafter, on August 1, 1984, Governor Edwards signed and affixed the Great Seal of the State of Louisiana to Executive Order EWE 84-13.

It is the contention of the plaintiffs this executive order is ultra vires for two specific reasons. First, they argue nowhere in the agreement between the State of Louisiana and the Federal Department of Health and Human Services does a provision allow for a moratorium or a “breach” of the contractual obligations which the agreement provides. Second, they argue because the executive order directs, “No application for any type health care facility or service under the federal 1122 Program shall be approved for an indefinite period of time..,” it disregards properly promulgated rules of the Louisiana Department of Health and Human Resources, Division of Policy Planning and Evaluation, which serves as the Designated Planning Agency for the State of Louisiana. Therefore, the plaintiffs contend an executive order in this context is a “rulemaking” which must comply with the Louisiana Administrative Procedure Act, La.R.S. 49:951 et seq., which they allege it clearly does not. •

In determining whether the governor possesses the power to declare a moratorium in this instance and whether that power must be exercised through the channelized provisions of the LAPA we note initially the court in Lifemark Corp. v. Guissinger, supra, stated, “We expressly decline to address at this time the issue of the applicability of the Administrative Procedure Act to the Section 1122 process.” — p. 1282, fn 8.

The enabling statute empowering the federal secretary to enter into a 1122 agreement with a state, 42 U.S.C. § 1320a-1(b), provides in pertinent part:

“The Secretary, after consultation with the Governor (or other chief executive officer) and with appropriate local public officials, shall make an agreement with any State which is able and willing to do so-” (Emphasis ours.)

In conjunction with the above statute the record establishes it is the continuing practice of the State of Louisiana to have the office of the Governor, through its Department of Health and Human Resources, to maintain yearly the 1122 agreement.

The executive authority of the Governor emanates from Article IV, Section 5(A), Louisiana Constitution of 1974, which provides:

“The governor shall be the chief executive officer of the state. He shall faithfully support the constitution and laws of the state and of the United States and shall see that the laws are faithfully executed.”

It is the exercise of this executive authority which forms an 1122 agreement. In an analogous context it has been recognized in Harris v. Trustees of La. Public Facilities, 356 So.2d 1039 (La.App. 1st Cir. 1977), writ denied, 357 So.2d 558 (La.1978), the acceptance by the governor of the beneficial interest in a public trust is not a legislative function but is a ministerial function which is properly exercised by the governor.

In Durrett Hardware & Furniture Company v. City of Monroe, 199 La. 329, 340, 5 So.2d 911, 915 (1942), our Supreme Court states,

“Under our system of government providing for a distribution of powers between the legislative, executive and judicial departments, it is of vital importance that no one department unduly interfere with or hinder any other department while the latter is acting or assuming to act within the scope of the particular powers reserved to it.”

We have determined it is the duty of the office of the governor to oversee the 1122 program. Therefore, if the governor, through an executive order, places a moratorium on the 1122 agreement indicating the State of Louisiana is no longer “willing to do so ...,” the order may not be set aside by a coordinate branch of our state government.

Because the decision to order a moratorium suspending the contractual obligations of the State of Louisiana with the United States Secretary of Health is not subject to limitation or control from the other government branches, no judicial review can be obtained. Specifically, it is a well recognized principle of law a statute such as the LAPA can not adversely affect authority granted pursuant to our state constitution. See La. Consumers’ League, Inc. v. La. Public Serv., 351 So.2d 128, 131 (La.1977), wherein it was held: “This constitutional grant of rule-making power to the Commission precludes the legislature from enacting statutes which would restrict the Commission’s ability to adopt its own rules, regulations, and procedures. Accordingly, the rule-making provisions of the Administrative Procedure Act are not applicable to the Commission.” Surely, the constitutional grant of power to our Governor must be of comparable significance.

II.

JUDICIAL REVIEW OF APPROVED APPLICATIONS # 5011 and # 5013

In the same July 30, 1984 letter to Mr. Harvey Fitzgerald which instituted the moratorium, Governor Edwards directed Mr. Fitzgerald to approve eight applications, two of which were # 5011, the Lafayette Nursing Home, and # 5013, the Pine-ville Nursing Home. Subsequently, certificates of approval were granted these eight applications by the Designated Planning Agency (DPA) of the DHHR.

It is the contention of the plaintiffs the grants of the certificates of approval which are the subject matter of this case were invalid for several reasons. The plaintiffs allege judicial review may be sought to discern this invalidity. We note the plaintiffs are opponents of the approved proposals.

In Lifemark when faced with the threshold issue of whether plaintiffs were entitled to oppose a certificate of approval issued to the proponent of the application, NME, the court found:

“Since federal law does not contemplate a procedure for the opponents of proposals that have been approved and Louisiana has not established one, we must conclude that plaintiffs are not entitled to oppose the certificate of approval issued to NME. Therefore, the trial judge erred in recalling and vacating the certificate of approval issued by DPA to NME.” — at 1281.

Thereafter, in Psychiatric Institutes of Am. v. Guissinger, 464 So.2d 7 (La.App. 1st Cir.1984), writs denied, 467 So.2d 530, 534 (La.1985), a three judge panel of this court discussing the appeal taken by an opponent of an approved certificate held,

“It is not clear from Lifemark whether this plaintiff, denied earlier access and now precluded from judicial review, should be given no opportunity at all to express his opposition. We interpret Lifemark to hold that the law does not require the establishment of such appeal procedures for opponents of proposals that have been validly approved. Thus, where the approval is invalid, judicial review is available in state court2 on that narrow procedural issue: whether the DPA and hearing officer followed their own procedures.” —at 11. (Footnote omitted.)

As a basis for requiring judicial review the Psychiatric Institutes of America court points out the following: “In this case, the plaintiff questions his denial of access to discussions of need when regulations, if properly followed, require public hearings guaranteeing equal time to those in favor of and those opposed to an application. Louisiana Register, Yol. 8 at 414, § B.4 (August 20, 1982).” — at 11.

In the present instance the petition of Rapides General Hospital admits, “Plaintiff appeared at the public hearing held on June 19, 1984 in regard to the project listed as No. 5 above.” This is the Pineville Nursing Home application, # 5013, which they are opposing. The petition of Lafayette General Hospital admits, “Plaintiff appeared at the public hearing held on June 19, 1984 in regard to the project listed as No. 8 above.” This is the Lafayette Nursing Home application, #5011, which they are opposing. Therefore, the basis for judicial review which existed in Psychiatric Institutes of America is not present in this case. The plaintiffs in this instance had access to the hearings. However, this court is of the opinion the preclusion set forth by our Supreme Court in Lifemark is an absolute one and exceptions should not be judicially created by this intermediate court.

The Lifemark court noted,
“For example, the DPA is required to complete its review of an application within sixty to ninety days of receiving it and, if the DPA fails to render its decision within the allotted time, the application is deemed approved for Section 1122 purposes. 42 C.F.R. § 100.106(A)(4).”— at 1281, fn 5.

Thus, it is evident the court recognized the DPA did not have to follow any procedural scheme and an application would still be deemed “validly” approved.

Further, to preclude review of only valid approvals is a meaningless act. How might one tell if an approval is valid or invalid prior to review? If preclusion were applied only to valid approvals it would never take place. There is no need to preclude the review of a valid approval. When the court in Lifemark stated “plaintiffs are not entitled to oppose the certificate of approval issued to NME,” the meaning is clear. See Hollingsworth v. Schweiker, 664 F.2d 526 (5th Cir.1981) and Wilmington United Neighborhoods v. United States Department of Health, Education and Welfare, 615 F.2d 112 (3d Cir.1980), cert. denied, 449 U.S. 827, 101 S.Ct. 90, 66 L.Ed.2d 30 (1980); and, compare with Humana Hospital Corp., Inc. v. Blankenbaker, 734 F.2d 328 (7th Cir.1984).

Assuming judicial review is available to the opponents of an approved application for limited purposes, this review may not take place until the exhaustion of all administrative remedies. In Psychiatric Institutes of America, the court finds this point to be reached when the hearing officer has rendered a decision and cites Life-mark for this proposition. The court reasons that being the case all administrative remedies had been exhausted for an opponent of an approved application and judicial review may occur. However, this is arguably an erroneous interpretation of Life-mark. The point when the hearing officer has rendered a decision should only be the exhaustion point for disapproved applicants, not opponents, and this is all Life-mark has determined. An approved applicant must still undergo review by the federal secretary. The process is described in Psychiatric Institutes of America, Inc. v. Heckler, supra, as follows:

“The DPA submits the state’s finding as to whether the proposal is consistent with applicable standards, criteria and plans to the Secretary of HHS. After receiving this finding from the State, the Secretary makes a determination whether to withhold capital-related Medicare and Medicaid reimbursement from the facility. Section 1122(d)(1) requires the Secretary of HHS to withhold Medicare and Medicaid funds from a health care facility if the Secretary determines that either of two circumstances is present: (1) the facility has failed to give notice to the DPA of its intent to incur an obligation for a capital expenditure at least 60 days before incurring that obligation; or (2) the DPA, in accordance with certain procedural requirements, finds that the proposal is inconsistent with the applicable plans, criteria or standards (unless that finding is modified by a state hearing officer or state court).
The authority to make this initial federal determination under Section 1122 has been delegated to the Department’s Regional Health Administrator (RHA). Once the RHA has made its determination, Section 1122(f) gives any person the right to request the Secretary to reconsider the determination of the RHA. The authority to reconsider Section 1122 determinations has been delegated to the Administrator, Health Resources and Services Administration (Administrator). Section 1122(f) precludes further administrative or judicial review after the determination of the RHA is reconsidered by the Administrator. 42 U.S.C. 1320a-1(f).” — at 1314. [Footnote omitted.]

There is a divergence of viewpoint among the federal circuit courts of appeals as to whether the federal secretary is required to review the application for state procedural defects. Compare Humana Hospital Corp., Inc. v. Blankenbaker, supra, mandating review; and, Hollingsworth v. Schweiker, supra, indicating where there are procedural defaults by the state DPA, the problem should be solved in later contract negotiations or by suit to enforce the 1122 agreement. If such a review is required by the federal secretary then administrative remedies have not been exhausted and an opponent of an approved application may not yet seek judicial review. In the present case the record does not indicate whether the federal secretary has concluded his duties.

We determine the trial court was correct in this instance.

DECREE

The judgment of the trial court dismissing this suit is affirmed. Costs of this appeal are to be borne equally by Rapides General Hospital and Lafayette General Hospital.

AFFIRMED.

LOTTINGER, J., concurs.

CRAIN, J., concurs and assigns written reasons.

CARTER, J., concurs for reasons assigned by CRAIN, J.

SAVOIE and LANIER, JJ., dissent.

SHORTESS, J., dissents and assigns reasons.

CRAIN, Judge,

concurring.

GRANTING THE 1122 CERTIFICATES

Lifemark v. Guissinger, 416 So.2d 1279 (La.1982) considered and answered two questions. First, can opponents of an 1122 certificate recipient judicially oppose the issuance of that certificate (supposedly by either appeal or separate court action)? The answer was no. Secondly, can these same opponents, if they have also been denied a certificate, obtain judicial review of that denial without exhausting administrative remedies? The answer was also no.

The second question is not before this court in this case. These parties were denied 1122 certificates in April of 1984 and made no request for judicial review of these denials. However, it appears clear from the administrative procedures established that had they proceeded they would have been entitled to a fair administrative hearing and some form of judicial review if they remained unsuccessful. Bowen v. Doyal, 259 La. 839, 253 So.2d 200 (1971).

The first question is before this court. These parties seek judicial revocation of 1122 certificates granted to other parties who are not even made parties to this proceeding. The Louisiana Supreme Court said this could not be done in Lifemark. An exception to Lifemark was made by this court in Psychiatric Institutes of America, Inc. v. Guissinger, 464 So.2d 7 (La.App. 1st Cir.1984), writs denied, 467 So.2d 530, 534 (La.1985) (hereafter PIA). There it was stated that* opponents of an 1122 certificate have judicial access if the approval was invalid, only to question whether the DPA (and the hearing officer if it went that far) followed their own procedures.

The correctness of PIA must be seriously questioned. A careful reading of Life-mark reveals that the Supreme Court specifically considered the question of whether an opponent of an 1122 recipient can question an invalid certificate issued without compliance with procedural rules, and decided they could not. The Supreme Court noted that under 42 C.F.R. § 100.106(a)(4), the DPA has 60 to 90 days to review an application. If DPA does not render its decision within that time period the application is deemed approved for 1122 purposes. Obviously, an application which received approval in this fashion could be invalid, and if so it would have received approval without the DPA following the correct procedures, completion of review within 60 to 90 days. Yet the Supreme Court noted that in this situation no judicial access would be available to opponents. Thus, in this case if DPA had simply done nothing the 1122 applicants would have received approval and these opponents would have no judicial remedy. A distinction between failure to do and doing incorrectly has no basis.

It appears obvious that the court in Life-mark considered the federal legislation and Louisiana’s implementation thereof and decided that access to the court in 1122 cases is statutorily limited to applicants. Some concern is expressed that this violates La. Const. Art. 1, Sec. 22 which provides:

All courts shall be open, and every person shall have an adequate remedy by due process of law and justice, administered without denial, partiality, or unreasonable delay, for injury to him in his person, property, reputation, or other rights.

However, the Louisiana Supreme Court has recognized that, “This provision, like the fourteenth amendment to the United States Constitution, protects fundamental interest to a greater extent than interests that are not considered of fundamental constitutional importance.” Everett v. Goldman, 359 So.2d 1256, 1268 (La.1978). “Fundamental rights include such rights as free speech, voting, interstate travel and other fundamental liberties.” Everett, 359 So.2d 1266. Certainly the right to prohibit someone else from receiving certification for reimbursement of social security funds does not fall within those interests considered of fundamental constitutional importance. Mere economic competitive interests has never been raised to this classification. Consequently, where the right asserted is not entitled to special constitutional protection “access to the courts may be restricted if there is a rational basis for that restriction.” Everett, 359 So.2d 1268. The rational basis as stated by the court in Life-mark, is “a streamlined procedure to avoid delays in the construction of needed facili-ties_ (Providing a hearing to opponents of a proposed capital expenditure would make this objective unreachable for any number of opponents could seek a hearing on any number of grounds with the result that a capital expenditure found to be necessary would be delayed indefinitely.” Lifemark Corp., 416 So.2d 1281.

Even if PIA has any validity it is not available to these plaintiffs. The requirements of PIA are invalid approval and then judicial access only to determine if correct procedures were followed. An invalid approval using correct procedures furnishes no judicial relief. We are all assuming here (because no evidence was taken) that the approvals were invalid in that the recipients could not show need according to the established criteria. However, opponents have not cited one instance where DPA violated its procedures in dealing with the recipients of 1122 certificates. To the point where approval was granted the procedures had been followed and at that point it would have been procedurally correct for the applicants to have been granted 1122 certificates if they met the criteria. Consequently, the PIA requirements are not present.

THE MORATORIUM

a) Standing

The other question involved in this case is the moratorium. In attacking the moratorium plaintiffs’ procedural posture is not the same as with the opposition to the 1122 recipients. Although their petition is entitled “Petition for Judicial Review under the Administrative Procedure Act” which would connote an appeal from an administrative ruling, that is not their posture. They apparently have filed applications themselves for 1122 certificates but have not pursued them. They have not been denied certificates because of the moratorium. Consequently, they are not appealing a denial of 1122 certificates because of the moratorium. They are, in effect, persons (or entities considered to be persons by legal definition) attacking what they allege to be an illegal, ultra vires act by the Governor. Consequently, they must meet the same criteria for standing to make such attack as any other citizen. As such, plaintiffs likely have judicial access because of a real and actual interest in the performance of DHHR with reference to 1122 applications which is distinct from the interest of the public at large. Presumably, their inability to obtain a certificate for expansion because of the alleged unlawful act of the Governor affects their peculiar economic interests sufficiently to sustain their right to question the moratorium. Bussie v. Long, 286 So.2d 689 (La.App. 1st Cir.1973), writ refused, 288 So.2d 354 (La.1974). The right to question the moratorium is entirely separate and distinct from the right to oppose the certification of the 1122 applicants, and the two actions cannot be lumped together. The question of the ability of the Governor to legally suspend the 1122 program is not in any way connected to the question of plaintiffs’ standing to judicially question the granting of the 1122 certificates. Plaintiffs have standing to question the moratorium, but the power of the Governor to institute the same must be considered alone, without consideration to who has or has not been granted a certificate prior to the moratorium.

b) Cause of Action

We have to go no further than the manner in which the 1122 program was established to determine the ability of the Governor to impose the moratorium. The 1122 program is a procedure for health care providers to obtain reimbursement from the federal government for the services they furnish to persons entitled to federal benefits such as medicare and medicaid. It is established by 42 U.S.C., Sec. 1320a-l et seq. The state has to be willing to enter into the agreement. If it is willing to do so the federal secretary enters into the 1122 agreement with the state. In Louisiana this agreement is entered into by the Governor through DHHR. There is no statute enacted by the Louisiana Legislature which mandates the state to enter into the agreement, nor is there any statute which mandates the state remain in the agreement. Nor is there any such federal requirement. In fact the state, under terms of the agreement, can unilaterally terminate it on 30 day notice in writing to the Secretary. That which it is the perogative of the Governor to enter into, it must surely be the perogative of the Governor to withdraw from. If the Governor can withdraw from the agreement, he can certainly suspend it. The appropriate party to complain of a suspension of the agreement would be the federal secretary since the agreement does not provide for suspension. We have no evidence that the Secretary has registered any complaint.

It is argued that somehow the Governor must comply with the Louisiana Administrative Procedure Act to suspend the program. If the LAPA applies to agency review of applications under the 1122 program, (and it is not necessary for us to decide that question) it certainly does not apply to the suspension of the entire program. The action of the Governor is neither an adjudication nor rule making. It is the elimination, at least for a limited period of time, of a program which is not statutorily mandated. If a Governor cannot do this then the Governor’s office is captive to its own agencies. It is one matter to require agencies (and the Governor) to administer programs according to railes which assure fair treatment. It is quite another to attempt to use the rules to keep the program itself in existence. With respect to the moratorium even though the plaintiffs have a right of action, they have no cause of action.

I do not believe the plaintiffs have standing to question the granting of the 1122 certificates. I am of the opinion the plaintiffs can judicially question the Governor’s right to impose a moratorium, but that he has that power.

I concur in the result for these reasons.

SHORTESS, Judge,

dissenting.

The result that the majority reaches in this case by implication would overrule bedrock constitutional principles as embodied in Marbury v. Madison, 1 Cranch 137, 2 L.Ed. 60 (1803) and U.S. v. Nixon, 418 U.S. 683, 94 S.Ct. 3090, 41 L.Ed.2d 1039 (1974) at the United States Supreme Court level and State ex rel Kuklman v. Rost, 47 La.Ann. 53, 16 So. 776 (1895), State v. Broom, 439 So.2d 357 (La.1983) and Henry v. Edwards, 346 So.2d 153 (La.1977) at the Louisiana Supreme Court level.

The facts are not in dispute since the trial court dismissed appellants’ suit on an exception of no right/cause of action. When dealing with these exceptions the reviewing court is bound by the rule of law restated by the Supreme Court in Sanborn v. Oceanic Contractors, Inc., 448 So.2d 91, 92 (La.1984):

It is well settled that the exception of no cause of action must be decided upon the face of plaintiff’s petition alone, and that all well-pleaded allegations of fact are to be considered as true. The reviewing court must determine whether the law affords a remedy under the circumstances alleged, under any theory of the case. (Emphasis mine.)

The actions alleged to have been taken by the Governor cannot be subject to any misunderstanding insofar as this appeal is concerned because attached to appellants’ pleadings are letters dated July 30, 1984, signed by the Governor. Therein he (1) established the moratorium effective August 1, 1984; superceded the State Health Plan by ordering the DPA to revise, override its findings and approve eight nursing home proposals prior to the effective date of the moratorium (See Appendix A) and (2) discussed his authority under federal law and regulations and directed DNNR to follow specified guidelines in setting up a revised State Health Plan (See Appendix B). '

In my opinion appellants have alleged ultra vires acts and have a right/cause of action.

STATE LAWS AND REGULATIONS

The contract between the State and national government clearly describes the functions which the DPA is to perform. It incorporates the rules promulgated in Vol. 9, No. 11, of the November 20, 1983, Louisiana Register, including required minimal guidelines such as open hearings and appeals with public notice, with “the same amount of time will be allowed to those in favor and those opposed to the applications.”

The DPA is required to consider whether proposals conform with the State Plan, population needs, and availability of alternative, less costly, or more effective methods of providing services, with no bed needs computations allowed to exceed State Health Plan projections in effect at the time of review. The DPA is required to comply with the Secretary’s rules and any modification of the agreement may be done by mutual written consent of the State and the Secretary.

Appellants alleged they were informed by the DPA in April, 1984, that their expenditures did not conform to the DPA’s criteria, standards and plans; that they appeared in opposition to competing proposals in June, 1984; and that they learned, before the DPA made its independent determination, the Governor intervened on July 30, 1984, superceded the State plan, ordered the DPA to override its earlier findings and approve competitors’ applications (simultaneously he ordered the State plan changed to conform with these applications). Thus, legally and factually, this case is inapposite to Lifemark and PIA.

Appellants have alleged that the Governor took this action, even though he admitted that Fitzgerald had told him that the plan showed no need for these facilities; that elected officials and “citizens” felt a need greater than the plan allowed; that the plan needed to be changed to reflect their need; that he found existing needs for beds unmet contrary to the State Health Plan; that he was aware that these applications had some deficiencies based upon present program applications related to bed need in those localities; that he felt “pressures and entreaties from local officials and others” more important than present 1122 rules, regulations and criteria; that he directed DHHR to determine the need for acute care general hospital Medical/Surgical beds separately, excluding other specialties, and to determine the need for all specialties separately despite the fact that the plan required grouping them together. See Appendix A.

Appellants alleged that when they attempted to protest these events and appeal their own proposals, they were met with the moratorium. Earlier, appellants had been able to oppose their competitors’ plans at the DPA hearings. Under our holding in PIA, they may not have had any further administrative or judicial review. But the DPA did not grant the applications. The Governor superceded DPA with the moratorium and approved the competitors in question here and six others. Accordingly, questions have been raised about the due process issue of fundamental fairness of judging competing proposals on totally different standards, criteria and plans, while rejecting one as nonconforming to the plan but rejecting the entire plan as non-conforming to the hospital’s need for the other. This case, unlike Lifemark or PIA, raises far more fundamental separation of powers questions about the Governor’s use of executive authority to supercede the whole legal regulatory scheme duly enacted by the Legislature.

The contract between Louisiana and the Secretary of DHHS also made the Division of Policy, Planning and Evaluation in the Office of Management and Finance of DHHR the sole designated agency “for the purposes of carrying out the Section 1122 reviews.” The agreement clearly describes the functions which DPA is to perform and mandates guidelines for use in finding expenditure proposals in conformity. The Act creating DHHR sets out the same lines for delegation of power.

JUDICIAL REVIEW OF EXECUTIVE ACTION

The Louisiana Supreme Court, in the landmark case of State ex rel. Kuhlman v. Rost, applied the judicial review concepts in Marbury v. Madison to acts of the legislative and executive branches. The courts have no authority to review the wisdom of the governor’s actions, but issues relating to its legality or validity and his authority to grant it are legitimate subjects of judicial review. State ex rel. Summit Fidelity and Surety Company v. Police Jury of Rapides Parish, 131 So.2d 623, 627-8 (La. App. 3rd Cir.1961); affirmed, 244 La. 713, 154 So.2d 373 (1963); and State v. United Bonding Insurance Company of Indianapolis, Indiana, 244 La. 716, 154 So.2d 374 (1963).

One of the closest analogies to this case involved the item veto. The Supreme Court ruled that “the Governor may not use his item-veto power to usurp constitutional powers conferred on the Legislature.” The Court used the appropriateness test to prevent the Governor from vetoing limiting conditions without also limiting the item of expenditure which it modified to avoid gubernatorial usurpation of legislative powers by, in effect, creating “new” appropriation items wholly different in nature and purpose from that intended by the Legislature. Henry v. Edwards, 346 So.2d at 157-158.

In State v. Broom, 439 So.2d at 360-362, the Supreme Court held that lawmaking is a legislative function that is nondelegable to the executive branch without the dual protections of legislatively defined standards and safeguards, plus close monitoring, to insure protection from arbitrary and unreasonable agency decision-making. On rehearing, the Court emphasized that the Louisiana Constitution specifically confined each branch’s powers in contrast to the United States Constitution. “So long as the regulation or action of the official or board authorized by state law does not in effect determine what the law shall be, or involve the exercise of primary and independent discretion, but only determines within prescribed limits some fact upon which the law by its own terms operates, such regulation is administrative and not legislative in its nature_” 439 So.2d at 367; State v. Rodriguez, 379 So.2d 1084 (La.1980); and Schwegmann Brothers Giant Supermarkets v. McCrory, Commissioner of Agriculture, 237 La. 768, 112 So.2d 606 (1959), appeal dismissed, 361 U.S. 114, 80 S.Ct. 207, 4 L.Ed.2d 154 (1959). The Governor has suspension and veto power, along with his affirmative authority, in the APA, LSA-R.S. 49:968, 970, while the Legislature may use its oversight functions and concurrent resolutions to nullify or suspend any administrative rule or regulation, also in the APA. LSA-R.S. 49:968-969. State v. Broom, 439 So.2d at 368, on rehearing.

The Louisiana Supreme Court found the weight of opinion to be that administrative agencies are bound by their own rules, with the best single authority for this principle, United States v. Nixon. Central Louisiana Electric Company, Inc. v. Louisiana Public Service Commission, 377 So.2d 1188, 1194-95 (La.1979).

[SJo long as the Attorney General’s regulations remained operative, he denied himself the authority to exercise the discretion delegated to the Board even though the original authority was his and he could reassert it by amending the regulations.... [I]t is theoretically possible for the Attorney General to amend or revoke the regulation defining the Special Prosecutor’s authority. But he has not done so. So long as this regulation remains in force the Executive Branch is bound by it, and indeed the United States as the sovereign composed of the three branches is bound to respect and to enforce it. (Emphasis mine.) (Citations omitted.)

U.S. v. Nixon, 94 S.Ct. at 3100-02.

U.S. Supreme Court cases have consistently held that all presidential executive orders must find support in the Constitution either in a clause directly granting presidential power or directly through permissible congressional delegation of legislative powers. “It is clear that if the President had authority to issue the order he did, it must be found in some provision of the Constitution.” Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 72 S.Ct. 863, 96 L.Ed. 1153 (1952). Where an executive order is issued pursuant to delegation of legislative power:

due process of law requires that it shall appear that the order is within the authority of the Executive, and if that authority depends on determinations of fact, those determinations must be shown. Again, when congressional legislation is the authority for an Executive Order, congressional statutes will take precedence over the Executive Order when they clash. A federal court states: “It is elementary law that executive regulations promulgated for the purpose of carrying a statute into effect must be within the framework of the Act and may not be inconsistent with the statute.”

Warner Const. Co. v. Krug, 80 F.Supp. 81, 84 (D.C.Dist.Col.1948); Panama Refining Co. v. Ryan, [293 U.S. 388] 55 S.Ct. 241 [79 L.Ed. 446] (1935); and McGann Mfg. Co. v. United States, 98 F.Supp. 225 (M.D.Pa. 1951), cited in Chester J. Antieau, Modern Constitutional Law: The States and the Federal Government,- § 13:25 (1969).

When I examine the Constitution and judicial interpretations thereof, I find that the Governor may have the power under the Constitution, laws and rules to change the rules and procedures to reassert the exercise of discretion he and the Legislature had delegated to the DPA. But as long as said rules remained in place, he and the executive branch were bound by them. The Governor possesses no executive authority beyond that given by the Louisiana Constitution and/or statutes. To supercede them in the way he allegedly did here is investing in the executive uncontrolled legislative powers and presents a classic collision of constitutional powers.

DUE PROCESS STANDARDS

The key to due process is that a fair procedure is used, that it follow regulatory guidelines, either utilizing the APA in fact or by analogy and that it be flexible and adequate under the circumstances. In the Matter of Rollins Environmental Services, Inc., 481 So.2d 118 (La.1985); Wilson v. City of New Orleans, 479 So.2d 891 (La. 1985); Save Ourselves, Inc. v. Louisiana Environmental Control Commission, 452 So.2d 1152 (La.1984); Cameron Telephone Company v. Louisiana Public Service Commission, 440 So.2d 694 (La.1988) cert. denied, 466 U.S. 959, 104 S.Ct. 2171, 80 L.Ed.2d 554 (1984); and Mayor and Council of Morgan City v. Ascension Parish Police Jury, 468 So.2d 1291 (La.App. 1st Cir.1985).

What it all boils down to is that Section 1122 reviews are predicated on need. If an application in one area is accepted, it is very likely that others in that same area will be rejected, for the original need will have been met. Fundamental fairness dictates and requires that expenditure proposals be judged on the basis of the same standards, criteria or State Health Plans. Appellants have alleged it was not done in this case. I would give them standing so they can attempt to prove what they have alleged.

I respectfully dissent.

“APPENDIX A”

July 30, 1984

Mr. Harvey J. Fitzgerald, Undersecretary

Department of Health & Human Resources Post Office Box 3776

Baton Rouge, Louisiana 70821

Dear Harvey:

Effective August 1,1984, and for an indefinite period of time, I am ordering the implementation of a moratorium on the 1122 Program. After 90 days, I will review with you the need for the continuance of this moratorium. During this time, the Health Planning Bureau shall devote itself to rewriting the State Health Plan and its Rules and Regulations. This should be done in conjunction with the Statewide Health Coordination Council. Seek comments and suggestions from health care providers and other interested and affected groups. The final document shall be a product developed in accordance with the Federal Law governing the 1122 Program, and shall be submitted to me for final review and changes prior to adoption and publication. Beginning on August 1,1984, and until this moratorium is lifted, the state shall not approve any applications for any type of health care facility or service. The only exceptions allowed will be group homes for the mentally retarded, and in cases that are necessary to keep existing health care facilities and services in compliance with State and Federal Laws or in cases not requiring additional beds, services and/or additional capital expenditures.

The new State Health Plan should be clear, concise and easily readable and understandable to the average citizen.

Another issue of extreme concern to me that must be addressed, and is considered a problem, relates to the need of additional nursing home beds. Elected officials and citizens throughout the state have written to me and personally confronted me with-various problems concerning the availability of nursing home beds, high occupancy, waiting lists, long distances to travel to existing nursing homes and various other problems. You and I have discussed these problems on several occasions. In many cases, you informed me that the plan did not show a need. However, these people are frustrated, as their need is apparently greater than the plan allows. If the problems lie within the plan, and I suspect that they do, correct it.

Where changes are required in the State Health Plan, assess the impact on state needs and the fiscal impact on the state budget. Contrary to the bed need as determined by the State Health Plan, I find existing needs that are unmet throughout the state, high occupancy rates in existing facilities and hardships that are caused by this.

As Governor, I am using Executive Authority to supersede the State Health Plan and to order you to approve the nursing home applications listed below that are to be located throughout the state. You are to override the findings of the State Health Plan in the review of the following applications and to approve the facilities for reimbursement under the 1122 Program and the Social Security Act. These approvals are to be effective prior to the moratorium scheduled for August 1, 1984.

1. Caddo Nursing Home, Inc., Shreveport, La. # 5064

2. Bossier Nursing Home, Inc., Bossier City, La. # 5066

3. Ouachita Nursing Home, Inc., Monroe, La. # 5067

4. Logansport Nursing Home, Logans-port, La. # 5075

5. Pineville Nursing Home, Pineville, La. # 5013

6. Southfield Care Center, Inc., Le-eompte, La. # 5056

7. Baton Rouge Total Care Center, Inc., Baton Rouge, La. # 6009

8. Lafayette Nursing Home, Lafayette, La. # 5011

I am aware that these applications may have some deficiencies, based upon present program applications, especially when related to bed need in these particular localities. It is that very problem which points to the need for a review of the entire 1122 Program, since I have information from legislators and other local officials that there is specific need for these facilities in the eight designated areas, notwithstanding that data of a general area may indicate otherwise. Pressures and entreaties from local officials and others in these specific areas weigh heavily in support of approving those facilities, notwithstanding that data for the area in general may indicate otherwise under present 1122 Rules and Regulations and criteria emanating therefrom.

You are therefore directed on my behalf to recommend to the Secretary of DHHS that reimbursement for these facilities be included under the Social Security Act.

The foregoing is in conformity with and relates to our in-depth conference regarding overall health care facilities development matters which was held at the Mansion on July 23, 1984. As I understand, these actions are consistent with my authority under the law, and that the respite that this action provides will allow you and staff the opportunity to provide the state with a plan that more realistically addresses the current needs and goals for the future. Furthermore, it is my understanding that this action will not put any health service programs or funding in jeopardy. Unless you provide representations to me contrary to the above, then proceed as outlined.

Sincerely,

/s/Edwin W. Edwards EDWIN W. EDWARDS

“APPENDIX B”

July 30, 1984

Mr. Harvey J. Fitzgerald, Undersecretary

Department of Health & Human Resources

Post Office Box 3776

Baton Rouge, Louisiana 70821

Dear Harvey:

This follows our conversation of July 23, 1984, regarding certain aspects of the State Health Plan and the Division of Policy Planning and Evaluation. This also refers to a letter of July 16,1984, addressed to me by Mr. James J. Wyllie, Jr., a copy of which you have.

It is my understanding that the State Health Plan allows one standard to be applied to one group of specialty beds and another more restrictive standard is applied to another group of specialty beds, thus restricting the number of acute care general hospital Medical/Surgical beds allowed under the State Health Plan. I further understand that all hospital beds belong to some specialty group and one specialty does not necessarily relate to the services of another specialty: however, they may be grouped together in order to determine the need of one segment of that specialty group.

42 U.S.C. § 1320A-l(b) authorizes the Secretary of DHHS to establish a contract with the Governor relative to Section 1122. 42 CPR § 100.104 dictates that the Secretary of DHHS will contract with a state only after consultation with the Governor. The contract is then established between the Governor and the Secretary of DHHS.

The State Health Plan is established through statutory authority, and Public Law 96-79 gives the Governor final authority over the State Health Plan. Therefore, in questions concerning the State Health Plan, it is the Governor’s responsibility to interpret the meaning and direction of the State Health Plan. The Division of Policy Planning and Evaluation through the Department of Health and Human Resources is charged with the administration of the 1122 Program and has no jurisdiction over the State Health Plan.

I hereby direct DHHR to determine the need for acute care general hospital Medical/Surgical beds separately, excluding other specialties in order to determine acute care general hospital Medical/Surgical bed need, and to determine the need for all specialties separately and independently from the needs of other specialties. This interpretation applies to all applications currently under review and to all future applications.

The foregoing is in accordance with my understanding of the Health Planning Law, its Rules and Regulations as you have indicated to me in our recent conference. Furthermore, conflicting direction provided in the current State Health Plan along with inconsistent 1122 decisions made during the previous Administration is the catalyst that has raised the need for clarity, direction and interpretation along with Mr. Wyllie’s letter requesting some. It is my understanding and intent that the use of my authority in providing clear and definitive direction will not jeopardize the State’s participation in Federal Programs relating to health care services and that this will establish one consistent application of the plan.

Sincerely,

/s/ Edwin W. Edwards EDWIN W. EDWARDS

EWE:skm 
      
      . This motion was tantamount to the filing of the peremptory exception raising the objections of no right of action and no cause of action.
     
      
      . The order can be read in the Louisiana Register, Volume 10, Number 9, page 649.
     
      
      . Although plaintiffs contend no provision in the 1122 agreement allows for a moratorium it can be inferred from "willing to do so ...,” the Governor of a state is provided with discretion. Regardless, the Governor of Louisiana must act in what he regards as the best interests of the state during his interaction with the federal sovereign. The power to allow a moratorium stems from this executive authority. Further, it must be noted the 1122 program was never intended to usurp the power of a state to plan for its health needs, but to augment that power. See Wilmington United Neighborhoods v. U.S., 615 F.2d 112, 120 (3rd Cir.1980).
     
      
      . It can be argued this state does not have to accede to the requirement that the Secretary consult with the Governor. However, through its practices the legislature has acquiesced in this requirement. In the context of the state budget such an acquiescence has been deemed to be a delegation of power assuming constitutional proportions. See La. Ass’n of Planning & Development v. Treen, 435 So.2d 1003 (La.App. 1st Cir.1983).
     
      
      . It is clear the Governor’s authority is plenary in certain areas. See Bryant v. Louisiana State Pardon Board, 378 So.2d 180 (La.App. 1st Cir. 1979). Arguably, a different result would be in order if the DHHR were an agency under the control of another elected official and not under the Governor’s direct control.
     
      
      . It is noted in the defendant’s brief,
      "It must be further pointed out that hundreds of executive orders have issued without following the Administrative Procedure Act. Neither the Governor nor the legislature ever took any action to indicate that executive orders should follow the procedures of the Administrative Procedure Act. Indeed, Act 687 of 1982 added La.R.S. 49:215 to specifically set forth the procedures to be followed by the Governor under his constitutional authority to see that the laws are faithfully executed. Practically speaking, a decision holding that executive orders must conform to the Administrative Procedure Act will subject all existing executive orders to court challenge.”
     
      
      . The pertinent text of this letter provides:
      "Another issue of extreme concern to me that must be addressed, and is considered a problem, relates to the need of additional nursing home beds. Elected officials and citizens throughout the state have written to me and personally - confronted me with various problems concerning the availability of nursing home beds, high occupancy, waiting lists, long distances to travel to existing nursing homes and various other problems. You and I have discussed these problems on several occasions. In many cases, you informed me that the plan did not show a need. However, these people are frustrated, as their need is apparently greater than the plan allows. If the problems lie within the plan, and I suspect that they do, correct it. Where changes are required in the State Health Plan, assess the impact on state needs and the fiscal impact on the state budget. Contrary to the bed need as determined by the State Health Plan, I find existing needs that are unmet throughout the state, high occupancy rates in existing facilities and hardships that are caused by this.
      As Governor, I am using Executive Authority to supersede the State Health Plan and to order you to approve the nursing home applications listed below that are to be located throughout the state. You are to override the findings of the State Health Plan in the review of the following applications and to approve the facilities for reimbursement under the 1122 Program and the Social Security Act. These approvals are to be effective prior to the moratorium scheduled for August 1, 1984.
      1. Caddo Nursing Home, Inc. Shreveport, La. # 5064
      2. Bossier Nursing Home, Inc., Bossier City, La. #5066
      3. Oauchita Nursing Home, Inc., Monroe, La. # 5067
      4. Logansport Nursing Home, Logansport, La. # 5075
      5. Pineville Nursing Home, Pineville, La. #5013
      6. Southfield Care Center, Inc., Lecompte, La. #5056
      7. Baton Rouge Total Care Center, Inc., Baton Rouge, La. # 6009
      8. Lafayette Nursing Home, Lafayette, La. #5011
      I am aware that these applications may have some deficiencies, based upon present program applications, especially when related to bed need in those particular localities. It is that very problem which points to the need for a review of the entire 1122 Program, since I have information from legislator's and other local officials that there is specific need for these facilities in the eight designated areas, notwithstanding that data of a general area may indicate otherwise. Pressures and entreaties from local officials and others in these specific areas weigh heavily in support of approving these facilities, notwithstanding that data for the area in general may indicate otherwise under present 1122 Rules and Regulations and criteria emanating therefrom."
     
      
      . It appears that under our holding in National Medical Enterprises, Inc. v. Guissinger, 432 So.2d 367 (La.App. 1st Cir.1983) even if we held there is a right and cause of action, the most we could do is remand for the parties who were granted 1122 certificates to be made party defendants.
     
      
      . Other Governor's executive orders or actions reviewed by the Supreme Court include: Woodard v. Reify, 244 La. 337, 152 So.2d 41 (1963); Albritton v. Grace, 233 La. 273, 96 So.2d 565 (1957); and Chappuis v. Reggie, 222 La. 35, 62 So.2d 92 (1952). Other executive actions reviewed by the First Circuit include: Johnson v. Odom, 470 So.2d 988 (La.App. 1st Cir.1985), writ denied, 476 So.2d 355 (La.1985); Thoreson v. State Department of Civil Service, 433 So.2d 184 (La.App. 1st Cir. 1983), writs denied, 440 So.2d 726, 727 (La.1983); Tanner v. City of Baton Rouge, 422 So.2d 1263 (La.App. 1st Cir. 1982), writ denied, 429 So.2d 128 (La.1983), citing with approval Messina v. Rapides Parish Police Jury, 373 So.2d 745 (La.App. 3rd Cir. 1979), writ denied, 376 So.2d 1268 (La.1979); McCastle v. Rollins Environmental Services of Louisiana, Inc., 415 So.2d 515 (La.App. 1st Cir. 1982), writ denied, 420 So.2d 449 (La.1982); Harris v. Trustees of Louisiana Public Facilities Authority, Public Facilities Corporation, 356 So.2d 1039 (La.App. 1st Cir.1977), writ denied, 357 So.2d 558 (La. 1978); Roussel v. Noe, 274 So.2d 205 (La.App. 1st Cir.1973), writ denied, 281 So.2d 743 (La. 1973); Bussie v. McKeithen, 259 So.2d 345 (La.App. 1st Cir.1971), writ refused, 261 La. 451, 259 So.2d 910 (1972) (taxpayer standing); and Faciane v. Bosco, 236 So.2d 601 (La.App. 1st Cir.1970), writ denied, 256 La. 757, 238 So.2d 357 (1970).
     
      
      . Any changes had to be made according to law and, in particular, 42 U.S.C. § 1320a-l et seq., 42 C.F.R., Part 100, the Agreement Between the Secretary of Department of Health and Human Resources, and the State of Louisiana to carry out the provisions of Section 1122 of the Social Security Act, and Rules in Vol. 9, No. 11, November 20, 1983, Louisiana Register.
      
     