On February 17, 2026, California Hospital Association (CHA) and Office of Health Care Affordability (OHCA) representatives were before the Superior Court of San Francisco as CHA contested the court’s tentative ruling sustaining OHCA’s demurrer. A demurrer is a motion that does not address factual allegations in a case, but rather challenges a plaintiff’s legal basis for a suit. In December, the OHCA filed a demurrer to the petition for writ of mandate filed by the CHA. OHCA’s filing argued that CHA’s petition (1) lacked “a concrete and particularized injury” to support its standing and (2) failed to allege an abuse of discretion by OHCA. To have standing to bring a case, a party must have a sufficient connection to harm allegedly caused by the defendant’s action; a party cannot bring legal action simply because they do not like a defendant’s actions. In its demurrer, OHCA outlined the historical public record of OHCA’s deliberations and considerations in developing the statewide and sector-specific hospital cost targets as well as its ongoing development of enforcement mechanisms. OHCA challenged CHA’s beneficial interest standing for failing to demonstrate individual member hospitals have been or will be injured by OHCA’s cost targets. OHCA further argued that CHA should be denied public interest standing as a substitute for beneficial interest standing because 1) CHA can later make these claims if a member hospital is harmed by the cost targets, 2) to proceed will require the court to become entangled with the agency attempting to fulfill its mandate, and 3) CHA is not working in the public interest, but in advocacy for their membership. Finally, OHCA claimed CHA failed to show “arbitrary and capricious conduct” by the agency in development of the cost targets. In its response to OHCA’s filing, CHA stated, among other claims, that complying with the cost targets results in an injury in fact, since it would “cause CHA’s members to suffer concrete, particularized, and imminent harms.”
The tentative ruling issued by the Honorable Joseph M. Quinn sustained the state’s demurrer, finding that CHA had failed to establish standing in bringing the petition. The California Code of Civil Procedure section 1085 states, “A cause of action for traditional mandamus has two essential elements: (1) A clear, present and usually ministerial duty on the part of the respondent…; and (2) a clear, present and beneficial right in the petitioner to the performance of that duty.” Petitioners must show adequate interest as well as injury that is “(a) concrete and particularized, and (b) actual or imminent.” (Limon v. Circle K Stores, Inc. (2022) 84 Cal.App.5th 671, 696.) The court held CHA failed to demonstrate beneficial interest, lacking an injury in fact and “that all injury pled by Petitioner is hypothetical and conjectural.” The court declined to invoke public interest standing determining that CHA failed to show “sharp duties and weighty public policy considerations” to support their claim. The court did not address OHCA’s claims about CHA’s inability to show arbitrary and capricious conduct by OHCA, since the question of standing alone was sufficient to sustain the writ. The Court’s ruling included leave to amend, meaning that, although CHA’s petition is flawed, the Court is leaving open the possibility of CHA fixing the defects in a future, amended petition. CHA requested and the court granted 30 days to amend its petition to establish standing.
The Source staff will continue to follow this case. For more background, please go to our case page.
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