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MEIER v. ANDERSON

July 26, 1988

LOUIS A. MEIER, M.D., et al.
v.
RICHARD ANDERSON, et al.



The opinion of the court was delivered by: CAHN

 In this case, the plaintiffs present a constitutional challenge to a provision of Pennsylvania's Health Care Services Malpractice Act (the Act), Pa. Stat. Ann. tit. 40, §§ 1301.101 et seq. (Purdon Supp. 1987). Specifically, the plaintiffs question the constitutionality of the provision establishing the Medical Professional Liability Catastrophe Loss Fund (the CAT Fund), Pa. Stat. Ann. tit. 40, §§ 1301.701(d), (e) and (f) (Purdon Supp. 1988). The parties have filed cross motions for summary judgment.

 I. FACTS

 The CAT Fund was established as an integral component of a complete overhaul of the medical malpractice insurance industry in Pennsylvania. In the early to middle 1970's, insurance companies began to withdraw from the Pennsylvania medical malpractice insurance market because of the severe losses many companies were suffering due to an increase in successful medical malpractice claims. In order to forestall a complete evacuation of the market, the Commonwealth legislature enacted the Act. Although the immediate goal of the Act is to assure the availability of malpractice insurance for Pennsylvania doctors, the ultimate goal is to ensure that all victims of medical malpractice will be adequately and justly recompensed. Pa. Stat. Ann. tit. 40, § 1301.102 (Purdon Supp. 1987).

 A key element in attaining both of these goals is a provision which sets a limit on the liability of an insurance company in the event of a malpractice award against one of its insureds. Pa. Stat. Ann. tit. 40, § 1301.701(a)(1), (b) (Purdon Supp. 1988). Health care providers, for their part, are required to carry malpractice insurance in an amount equal to this limit. To ensure full recovery by malpractice victims, the Act provides that malpractice victims can recover amounts awarded in excess of the limit from the CAT Fund. Pa. Stat. Ann. tit. 40, § 1301.701(d) (Purdon Supp. 1987).

 To finance the CAT Fund, an annual surcharge is set at a certain percentage of each health care provider's insurance costs. This percentage is set so as to reimburse the CAT Fund for all claims and expenses paid out in the year prior to the levy and to maintain a fifteen million dollar balance in the CAT Fund account. Pa. Stat. Ann. tit. 40, § 1301.701(e)(1) (Purdon Supp. 1988). Since 1984, when it was 52 percent, this percentage rose steadily to 87 percent in 1986, and has dropped to 70 percent in 1988. The Act provides that any health care provider's failure either to maintain the mandatory insurance or pay the CAT Fund surcharge shall result in the revocation or suspension of that health care provider's license to practice medicine. Pa. Stat. Ann. tit. 40, § 1301.701(f) (Purdon Supp. 1987).

 The plaintiffs in this case, Louis Meier, M.D., Andrew Szebenyi, M.D., and Nelson Erlick, D.P.M., concede that they fall within the Act's definition of health care providers. *fn1" Consequently, in compliance with the Act's requirements, each plaintiff has in the past maintained adequate malpractice insurance and has paid the associated surcharge. *fn2" However, Dr. Szebenyi has not yet made his 1987 CAT Fund payment and, by permission of the Attorney General and the CAT Fund Director, need not do so until the constitutional issues raised herein are resolved. On the other hand, Dr. Meier's request to make quarterly payments on his CAT Fund levy has been denied. Dr. Erlick has made the required payments for 1987.

 II. DISCUSSION

 A. Equal Protection

 The right to practice one's chosen profession, including medicine, is protected by both the due process clause and the equal protection clause of the fourteenth amendment. Schware v. Board of Bar Examiners, 353 U.S. 232, 238-39, 1 L. Ed. 2d 796, 77 S. Ct. 752 (1957). However, "it is long settled that states have a legitimate interest in regulating the practice of medicine." Eatough v. Albano, 673 F.2d 671, 676 (3d Cir.), cert. denied, 457 U.S. 1119, 73 L. Ed. 2d 1331, 102 S. Ct. 2931 (1982); see also Bigelow v. Virginia, 421 U.S. 809, 827, 44 L. Ed. 2d 600, 95 S. Ct. 2222 (1975).

 The plaintiffs contend that the CAT Fund violates the equal protection clause because it unreasonably discriminates between health care providers as defined in the Act, and other professionals such as chiropractors who are not subject to similar requirements. Their argument, therefore, at least in part, is that the statute is underinclusive. *fn3" In support of this contention, the plaintiffs suggest that the right to practice one's chosen profession is fundamental, and, therefore, that the CAT Fund should be strictly scrutinized to determine whether the distinction between health care providers and other professionals is "'tailored' narrowly to serve legitimate objectives." San Antonio Indep. School Dist. v. Rodriguez, 411 U.S. 1, 16-17, 36 L. Ed. 2d 16, 93 S. Ct. 1278 (1973).

 The plaintiffs err, however, in classifying the right to practice one's chosen profession as a fundamental right. To be fundamental, a right must be "explicitly or implicitly guaranteed by the Constitution." Rodriguez, 411 U.S. at 33. The right to practice one's profession is neither explicitly nor implicitly enumerated in the Constitution, and cannot, therefore, be considered a fundamental right. See Massachusetts Bd. of Retirement v. Murgia, 427 U.S. 307, 313, 49 L. Ed. 2d 520, 96 S. Ct. 2562 (1976) ("[A] standard less than strict scrutiny 'has consistently been applied to state legislation restricting the availability of employment opportunities.'") (quoting Dandridge v. Williams, 397 U.S. 471, 485, 25 L. Ed. 2d 491, 90 S. Ct. 1153 (1970)); Harper v. Lindsay, 616 F.2d 849, 854 (5th Cir. 1980). Moreover, because health care providers are neither a suspect nor quasi-suspect class, a rational relation test is the appropriate test of the CAT Fund's constitutionality. Eatough, 673 F.2d at 676; McCoy v. Commonwealth Bd. of Medical Educ. & Licensure, 37 Pa. Commw. 530, 391 A.2d 723, 728 (1978); see also Brandwein v. California Bd. of Osteopathic Examiners, 708 F.2d 1466, 1470 (9th Cir. 1983); Rabino v. Commonwealth State Registration Bd. for Professional Eng'rs, 69 Pa. Commw. 191, 450 A.2d 773, 775 (1982); Kennedy v. Hughes, 596 F. Supp. 1487, 1492-93 (D. Del. 1984).

 To pass constitutional muster under the rational relation test, a statute must be rationally related to the achievement of a legitimate state interest. Vance v. Bradley, 440 U.S. 93, 97, 59 L. Ed. 2d 171, 99 S. Ct. 939 (1979); Murgia, 427 U.S. at 312; Malmed v. Thornburgh, 621 F.2d 565, 573 (3d Cir.), cert. denied, 449 U.S. 955, 66 L. Ed. 2d 219, 101 S. Ct. 361 (1980). The statute will be overturned only if "the varying treatment of different groups or persons is so unrelated to the achievement of any combination of legitimate purposes that [the court] can only conclude that the legislature's actions were irrational." Eatough, 673 F.2d at 676 (quoting Bradley, 440 U.S. at 97). The great deference given to legislatures under this standard is underscored by the courts' willingness to uphold a statute "if any state of facts reasonably may be conceived to justify it," McGowan v. Maryland, 366 U.S. 420, 426, 6 L. Ed. 2d 393, 81 S. Ct. 1101 (1961), even if the ultimately reasonable justification did not in fact underlay the legislative decision. Flemming v. Nestor, 363 U.S. 603, 612, 4 L. Ed. 2d 1435, 80 S. Ct. 1367 (1960). Plaintiffs' "equal protection challenge must fail unless the [Commonwealth] could not reasonably believe that the exempted [professionals] are different in relevant respects from" health care providers subject to the Act's requirements. New York State Club Ass'n, Inc. v. City of New York, 487 U.S. 1, 56 U.S.L.W. 4653, 4657, 101 L. Ed. 2d 1, 108 S. Ct. 2225 (1988).

 The constitutionality of the mandatory malpractice insurance component of the Act, Pa. Stat. Ann. tit. 40, § 1301.701(a) (Purdon Supp. 1987), has already been sustained. McCoy, 391 A.2d at 729. Although the CAT Fund presents a slightly different set of facts, I find that its constitutionality, using the analytical framework set out above, is beyond question. As stated earlier, the immediate goal of the Act is to provide insurance for health care providers, and the ultimate goal of the Act is to provide full and adequate compensation to medical malpractice victims. Pa. Stat. Ann. tit. 40, § 1301.102 (Purdon Supp. 1987); McCoy, 391 A.2d at 729. To be upheld, the CAT Fund's distinction between "health care providers" and non-health care providers must be rationally related to the achievement of either goal.

 The CAT Fund attempts to achieve these goals by establishing a fund from which malpractice victims can recover amounts in excess of an insured's policy limit. Pa. Stat. Ann. tit. 40, § 1301.701(d) (Purdon Supp. 1987). In addition, the CAT Fund provides compensation for injuries inflicted by a physician who is retired or has relocated and is no longer covered by malpractice insurance. Id. The defendants argue that the distinction made by the Act is justified by the higher risks associated with surgery and other medical procedures than those associated with the practice of chiropractors and other professionals not covered by the Act. See Affidavit of Joseph Vacondios. Therefore, they imply, it is rational to target "health care providers" because it is their risky activities that are primarily responsible for increasingly numerous and large malpractice claims.


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