In Kennestone Hospital, Inc. v. Emory University, the Supreme Court of Georgia was asked to decide whether a state agency erroneously denied Windy Hill Hospital’s application for a “certificate of need” to offer certain health-care services.[1] The court did not resolve that question, however, because it concluded that two other questions needed to be addressed first: (1) Does a certificate of need (CON), when granted, confer a private or public right to the grantee? And (2) did the appellate court properly defer to a state agency’s interpretations of the agency’s regulations?[2]

Certificate-of-Need Laws

Under Georgia’s CON laws,[3] as relevant here, a hospital desiring to offer new or different health services must obtain a certificate of need from the state’s Department of Community Health.[4] The Department adopted regulations to implement the CON program to ensure quality, efficient, and non-duplicative health-care services.[5]

Windy Hill Hospital’s Background and Current CON Application

Windy Hill Hospital began operations as a general acute hospital before Georgia’s CON laws were enacted.[6] When the laws took effect, the Hospital was grandfathered in and didn’t need to apply for a CON.[7] It later sought to convert its beds from short-stay use to long-stay use, and it asked the Department’s predecessor agency about the CON laws’ application.[8] In a June 1996 letter, the agency informed the Hospital that it could make its desired change without the need for a CON.[9] Decades later, and relevant to this case, the Hospital wanted to convert back to short-term care, and it hoped it could simply “revert” to its previous status without the need for a CON.[10]

The Department’s Decision

The Department denied the Hospital’s request after considering two regulations which had been adopted after the Hospital switched from short-term to long-term care in 1996.[11] Under these regulations, the Hospital would be permitted to switch to short-term care if it previously “ha[d] been approved through the Certificate of Need process.”[12] But the Department concluded that the Hospital had never gone through a CON process and obtained a CON.[13] According to the Department, the 1996 letter discussed above was not itself a “CON process,” but rather was a determination that the Hospital had—permissibly—sidestepped the process.[14]

Trial and Appellate Decisions

The trial court reversed the Department’s decision on two grounds. First, the court held that the Hospital’s back-and-forth with the Department’s predecessor in 1996 did constitute a “CON process” under the applicable regulations.[15] Second, the court held that the Department had violated the Hospital’s constitutional right against the impairment of “vested rights” by retroactive laws.[16] Here, the court concluded that the Hospital had a vested right to provide both short-term and long-term care; that the Department’s application of the “CON process” regulations impaired the Hospital’s right; and that, because those regulations were adopted after the Hospital had switched from short-term to long-term care in 1996, they retroactively impaired the Hospital’s right.[17]

The appellate court reversed. It held that the Hospital did not have any vested right to offer short-term care and that, even if it did, it had relinquished that right in 1996 when it transitioned to long-term care.[18] In reaching its decision, the appellate court deferred to the Department’s interpretation of its regulations.[19]

Georgia Supreme Court

The Georgia Supreme Court granted review to determine (1) whether a CON authorization is a private or public right, and (2) whether the appellate court applied the proper standard to review the Department’s regulations.[20]

The court, in a unanimous decision authored by Justice Andrew Pinson,[21] noted that the distinction between private and public rights is rather easy to make, but it has been made overly complicated.[22] The U.S. Supreme Court admits that it “has not ‘definitively explained’ the distinction,” and that “its precedents applying the public-rights doctrine have ‘not been entirely consistent.’”[23] According to the Georgia Supreme Court, public rights are “those ‘shared by the People in common,” or “those interests that enjoy legal protection but belong to ‘the whole community, considered as a community.’”[24]

A private right, however, belongs to “‘an individual as an individual.’”[25] Traditionally, these rights refer to “an individual’s common law rights in property and bodily integrity, as well as in the enforcement of contracts.”[26] These are sometimes referred to “core” private rights.[27]

With these definitions established, the Georgia Supreme Court held that a CON authorization confers a private right because the “right to use one’s property [at a particular location] in a particular way . . . is an individual property right . . . .”[28] This understanding “is firmly rooted in the common law, under which the right to private property was said to comprise ‘the free use, enjoyment, and disposal of all his acquisitions, without any control or diminution, save only by the laws of the land.’”[29] Further, the rights authorized by a CON are conferred to individuals, not to the public at large.[30] The court noted that, absent the CON laws, hospitals would be free to offer any services they wanted on their property. The right to offer those services “would simply be part of the bundle of common law property rights held by the property owners.”[31] The same rationale applies to things like a landowner’s right to a nonconforming use.[32] Finally, that CONs are part of a comprehensive regulatory scheme doesn’t “change the nature of the [private] rights that are conferred.”[33] Nor does the public purpose of the CON laws, alone, change the result, for “presumably every law serves a public purpose.”[34]

Moving to the standard for reviewing agency regulations, the court repeated its approach: first, construe the text “in light of its full legal and historical context and otherwise apply the traditional tools of statutory construction to figure out what the rule means.”[35] If a court then finds a clear meaning—which will be the case most of the time—that’s the end of the matter.[36] But if a “genuine ambiguity” remains, a court “must” then decide “whether to defer” to the agency’s interpretation, taking into consideration factors such as “whether the agency promulgated the rule ‘to fulfill the function given it by the legislative branch,’” whether “the rule has ‘undergone the scrutiny afforded a statute during the legislative process or the adoption process through which all rules and regulations must pass,’” and whether “the agency’s interpretation resolves the ambiguity on ‘terms that are reasonable in light of the statutory text.’”[37] And because it wasn’t clear that the appellate court had applied this framework, the Georgia Supreme Court remanded the case.[38]


Although the Georgia Supreme Court did not resolve the ultimate questions in this case, it did clarify two important issues that arise often in administrative-law cases. Other courts may take note.



[1] 897 S.E2d 772, 774 (Ga. 2024).

[2] Id. at 775.

[3] Ga. Code Ann. 31-6-40 (West 2019).

[4] CON laws cover many health-care offerings. See generally Certificate-of-Need Laws: Why They Exist and Who They Hurt, State Pol’y Net. (Apr. 1, 2021),

[5] Kennestone Hospital, 897 S.E2d at 775.

[6] Id. at 776.

[7] Id.

[8] Id.

[9] Id. at 776-77.

[10] Id. at 777.

[11] Id.

[12] Id. (quoting Ga. Comp. R. & Regs. rr. 111-2-2-.20(1)(d) & 111-2-2-.36(2)(d)).

[13] Id.

[14] Id.

[15] Id.

[16] Id. at 778 (see Ga. Const. art. I, § I, ¶ X).

[17] Id. at 775 (applying Ga. Const. art. I, § I, ¶ X).

[18] Id. at 778.

[19] Id.

[20] Id. at 775.

[21] Id. at 785.

[22] Id. at 779.

[23] Id. at 779 n.3 (citing Oil States Energy Servs. v. Greene’s Energy Grp., 138 S. Ct. 1365, 1373 (2018)).

[24] Id. at 780 (quoting Deal v. Coleman, 751 S.E.2d 337, 345 (Ga. 2013); Sons of Confederate Veterans v. Henry County Bd. of Comm’rs, 880 S.E.2d 168, 176 (Ga. 2022)).

[25] Id. (quoting Sons of Confederate Veterans, 880 S.E.2d at 176).

[26] Id. (internal punctuation and citations omitted).

[27] Id.

[28] Id. at 781.

[29] Id. (quoting 1 William Blackstone, Commentaries *138).

[30] Id.

[31] Id. at 782 (citation omitted).

[32] Id.

[33] Id.

[34] Id. at 783 (citation omitted).

[35] Id. at 784 (citation omitted).

[36] Id. at 783.

[37] Id. at 784 n.8 (citations omitted).

[38] Id. at 785.

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