No. SCAP-12-0000018, Thursday, January 17, 2013, 9 a.m.

(AMENDED 11/28/12)

LIBERTY DIALYSIS-HAWAII, LLC, a Delaware limited liability company, Petitioner/Appellant-Appellant/Cross-Appellee, vs. RAINBOW DIALYSIS, LLC, a Delaware limited liability company, Respondent/Appellee-Appellee/Cross-Appellant, and STATE HEALTH PLANNING & DEVELOPMENT AGENCY, DEPARTMENT OF HEALTH, STATE OF HAWAI`I, an administrative agency of the State of Hawai`i, Respondent/Appellee-Appellee.

The above-captioned case has been set for argument on the merits at:

Supreme Court Courtroom
Ali`iolani Hale
417 South King Street
Honolulu, HI 96813

Attorneys for Petitioner/Appellant-Appellant/Cross-Appellee:

Michael L. Lam and Lisa K. Johnson of Case Lombardi & Pettit

Attorneys for Respondent/Appellee-Appellee/Cross-Appellant:

Ellen Godbey Carson, Dianne Winter Brookins, and John Rhee of Alston Hunt Floyd & Ing

Attorneys for Respondent/Appellee-Appellee:

Heidi M. Rian and Ann V. Andreas, Deputy Attorneys General

NOTE: Order granting Application for Transfer, filed 09/28/12.

NOTE: Order granting motion to continue oral argument from 01/03/13 to 01/17/13, filed 11/28/12.

COURT: MER, CJ; PAN, SRA, SSM, & RWP, JJ.

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Brief Description:

Respondent/Appellee-Appellee/Cross-Appellant Rainbow Dialysis, LLC’s (Rainbow) applied, pursuant to Hawai`i Revised Statutes chapter 323D, for a Certificate of Need (CON) to provide dialysis services on Maui. On May 3, 2010, Respondent/Appellee-Appellee State Health Planning & Development Agency (SHPDA), through its Administrator Ronald E. Terry, filed a Decision on the Merits, approving Rainbow’s application and imposing various conditions.

Petitioner/Appellant-Appellant/Cross-Appellee Liberty Dialysis-Hawaii, LLC (Liberty) sought reconsideration of SHPDA’s Decision on the Merits. Prior to the hearing on Liberty’s reconsideration request, Liberty filed a motion to disqualify Administrator Terry from the SHPDA’s five-member Reconsideration Committee, on the ground that he could not sit in review of his own decision. Liberty also filed a motion to disqualify a second Reconsideration Committee member, Anne Trygstad, on the ground that she had a conflict of interest. The Reconsideration Committee denied Liberty’s motions. On February 17, 2011, the Reconsideration Committee issued its Decision

Liberty appealed the reconsideration decision to the Circuit Court of the First Circuit, raising numerous points of error. The circuit court concluded that the Reconsideration Committee erred in failing to disqualify Administrator Terry, but held that the error was harmless. The circuit court affirmed the reconsideration decision in its entirety.

Liberty timely appealed the circuit court’s Final Judgment to the Intermediate Court of Appeals. Upon Liberty’s application, the appeal was transferred to the Supreme Court. Liberty argues that the circuit court abused its discretion in considering Rainbow’s argument that the failure to disqualify Administrator Terry was harmless because the argument was untimely. Liberty also argues that the failure to disqualify Administrator Terry was not harmless. Finally, Liberty argues that the Reconsideration Committee erred in refusing to disqualify Trygstad, and in placing the burden of proof on Liberty rather than Rainbow. Rainbow cross-appealed, and argued that the circuit court erred in determining that Administrator Terry should have been disqualified.