Petition — State Board of Medicine v. Jones

Supreme Court brief1977

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IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1976

no. “6-92

STATE BOARD OF MEDICINE and DEPARTMENT

OF HEALTH AND WELFARE of the State of

Idaho, and IDAHO MEDICAL ASSOCIATION

and IDAHO HOSPITAL ASSOCIATION, Petitioners,

V-.

A. CURTIS JONES, JR., M.D., ROY J.

ELLSWORTH. M.D., ROBERT B. MONTGOMERY,

M.D., ST. LUKE'S HOSPITAL, LTD., and

COMMUNITY HOSPITAL OF IDAHO FALLS,

IDAHO, and KENNETH E. DROULARD, M.D.,

and J. R. FARBER, M.D., Respondents.

PETITION FOR A WRIT OF CERTIORARI TO

THE IDAHO SUPREME COURT

WAYNE L. KIDWELL RICHARD C. FIELDS

Attorney General of Moffatt, Thomas,

Idaho Barrett & Blanton

PETER E. HEISER, JR. P. O. Box 829

Chief Deputy Attorney Boise, Idaho 83701

General of Idaho

State Capitol PAUL S. STREET

Boise, Idaho 83702 Moffatt, Thomas,

Barrett & Blanton

EUGENE C. THOMAS P. O. Box 829

Moffatt, Thomas, Boise, Idaho 83701

Barrett & Blanton

Special Assistant

Attorneys General Counsel for Petitioners

of Idaho

P. O. Box 829

Boise, Idaho 83701

INDEX

Page

GebeSaees BSIGPicccceccceeacvecuceseosese F

DUBESGELSCEIOR sc cccccecccccceccecséeceee

Questions presented... .ceccccecccces

Statutes IMVOL VAG. ccccccccccscececes

StAtCeMeNnt.cccccccccccccccccesesccove

Reasons for Granting This Writ...... 1

1. The Decision Below Conflicts

With the Decisions of This

Court Interpreting the Standard

of Review Required By the Equal

Protection Guaranty and the

Standard of Review Employed

Constitutes an Invasion of

the Legislature's Fact Finding

PUMCEIOM. ccocccccescecoceceoe 16

2. The Decision Below Conflicts

With the Decisions of This

Court Holding That Inquiry

Will Not be Made Beyond the

Stated Purpose of a Statute

Into Legislative Motivation

or Wisdom When the Consti-

tutionality of a Statute is

CROLIGRGEE. cocccccesecscecsoces JG

3. The Petition Presents Fed-

eral Questions of National

Importance to the States in

Their Attempts to Deal With

the Medical Malpractice

Imeurance CeisiS. cccccceccecs 21

ComOlusiORec cccccccccecsocececsceoes 24

APPENdixX..cccccccccccccccccccccccccAPp.l

OuUIwW WwW dN

CITATIONS

CASES:

Ada County v. Wright, 60 Idaho 394,

92 P.2d 134 7S

City of Charlotte v. Local] 660,

Intern. Ass'n. of Fire-

fighters, U.S. (1976),

96 S.Ct. 2036, 48 L. Ed.2d 636....

City of New Orleans v. Dukes,

U.S. (1976), 96 S.Ct.

a Pom, 8 FO rare

Gillesby v. Board of County

Commrs. of Canyon Cty., 17

Idaho 586, 107 P. 71 (1910).......

Katzenbach v. Morgan, 384 U.S.

641

(1969) ..ccccccccccccccccccccce

Jones v. Power County, 27 Idaho

656, 150 BP. 35 (1915S) .cccccccdcces

Leonardson v. Moon, 92 Idaho 796,

GBR Pode SES CAPSS) oe ccesccscceseoces

Marshall v. U.S., 414 U.S. 417

tt «<0 66666666666606666606066080

McGowan v. Maryland, 336 U.S.

420.

Page

ll,

15,

ll,

CITATIONS

Page

CASES:

Mourning v. Family Publications

Service, Inc., 411 U.S. 356

Ole) arr rr TTT?) 15,

Oregon v. Mitchell, 400 U.S. 112

CRETE? o ccceccceeeseeseeeseeeeeeees

Reed v. Reed, 404 U.S. 71

EROUAD © 00 06 000666 6660066000006086084 10,

Robbins v. Joint Class A School

Dist. No. 331, 72 Idaho 500,

2664 P.28 11064 (1952) eccocccccecseoes

Silver v. Silver, 280 U.S. 117

ERD 00000065 6eebee ee be eeseeeeeee

State ex rel. Nielson v. Lindstrom,

68 Idaho 226, 191 P.2d 1009.......

United States v. O'Brien, 391 U.S.

367 OO SST 15,

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1976

No.

STATE BOARD OF MEDICINE and DEPARTMENT

OF HEALTH AND WELFARE of the State of

Idaho, and IDAHO MEDICAL ASSOCIATION

and IDAHO HOSPITAL ASSOCIATION, Petitioners,

Vv.

A. CURTIS JONES, JR., M.D., ROY J.

ELLSWORTH, M.D., ROBERT B. MONTGOMERY,

M.D., ST. LUKE'S HOSPITAL, LTD., and

COMMUNITY HOSPITAL OF IDAHO FALLS,

IDAHO, and KENNETH E. DROULARD, M.D.,

and J. R. FARBER, M.D., Respondents.

PETITION FOR A WRIT OF CERTIORARI TO

THE IDAHO SUPREME COURT

The State Board of Medicine and the

Department of Health and Welfare of the

State of Idaho and The Idaho Medical Associ-

ation and Idaho Hospital Association,

petitioners herein, pray that a Writ of

Certiorari issue to review the Judgment

of the Supreme Court of Idaho, entered

in the shove-entities case on October

15, 1976.

OPINIONS BELOW

The opinion of the Supreme Court

of Idaho is reported at 555 P.2d 398,

and is printed in the Appendix at page

2. The memorandum opinion of the District

Court of the Fourth Judicial District

of the State of Idaho is unreported and

is printed in the Appendix at page 45.

The Declaratory Judgment entered by the

District Court of the Fourth Judicial

District of the State of Idaho is printed

in the Appendix at page 52.

JURISDICTION

The Judgment of the Supreme Court

of Idaho (Appendix page 1), was filed

on October 15, 1976. The opinions became

final by the issuance of a remittitur

by the Idaho Supreme Court on November

5, 1976. The jurisdiction of the Court

is invoked under 28 U.S.C. § 1257(3).

QUESTIONS PRESENTED

1. Does the equal protection guarantee

of the U.S. Const. amend. XIV, §l, as

construed by this Court in Reed v. Reed,

404 U.S.71 (1971), require use of a “means-

focus" test involving a factual review

of the means by which the legislative

classification achieves the statutory

purpose?

2. May a court inquire beyond the stated

legislative purpose into the motives of

the legislature in reviewing a statute

challenged under the due process guarantee

of U.S. Const. amend. XIV, §1?

3. Is it a denial of equal protection

and due process as guaranteed by U.S.

Const. amend.XIV, §1, to place restrictions

On medical malpractice actions?

STATUTES INVOLVED

U.S. Const. amend. XIV, § l:

"All persons born or naturalized

in the United States, and subject

to the jurisdiction thereof, are

citizens of the United States and

the state wherein they reside. No

state shall make or enforce any law

which shall abridge the privileges

or immunities of citizens of the

United States; nor shall any state

deprive any person of life, liberty

or property, without due process

of law: nor deny to any person within

its jurisdiction the equal protection

of the laws."

Idaho Const., art. l, § 2:

"All political power is inherent

in the people. Government is instituted

for their equal protection and benefit,

and they have the right to alter,

reform or abolish the same whenever

they may deem it necessary; and no

special privileges or immunities

shall ever be granted that may not

be altered, revoked, or repealed

by the legislature."

Idaho Const., art. l, § 13:

"In all criminal prosecutions, the

party accused shall have the right

to a speedy and public trial; to

have the process of the court to

compel the attendance of witnesses

in his behalf, and to appear and

defend in person and with counsel."

Idaho Const., art. l, § 18:

"Courts of justice shall be open

to every person, and a speedy remedy —

afforded for every injury of person,

property or character, and right

and justice shall be administered

without sale, denial, delay, or prejud-

ice."

Idaho Const., art. 2, Section 1:

"The powers of the government of

this state are divided into three

distinct departments, the legislative,

executive and judicial; and no person

or collection of persons charged

with the exercise of powers properly

belonging to one of these departments

shall exercise any powers properly

belonging to either of the others,

except as in this constitution ex-

pressly directed or permitted."

Idaho Const. art III, §19, set forth

in the Appendix at page 55.

Title 39, Chapter 42, Idaho Code,

set forth in the Appendix at page

58.

STATEMENT

In response to the medical malpractice

insurance crisis, the 1975 Idaho Legislature

enacted Title 39, Chapter 42, Idaho Code.

(Appendix pages 58 through 67). The purpose

of the act is set forth in Section 39-

4202, Idaho Code, as follows:

"It is the declaration of the legis-

lature that appropriate measures

are required in the public interests

6 *

to assure that a liability insurance

market be available to physicians,

and to licensed hospitals providing

health care in this state and that

the same be available at reasonable

cost, thus assuring the availability

of such hospitals and physicians

for the provision of care to persons

in the state. It is, therefore,

further declared that a limitation

upon and required underwriting of

the potential liability of such license

providers of health care is in the

public interest and that all exposure

to civil liability of such providers

of health care on account of any

error, omission, neglect or other

wrongdoing in the provision of care

- be limited and codified in

and by this act." (Appendix page

58)

This legislative declaration was arrived

at after extensive legislative hearings.

To fulfill the legislative purpose,

the Act contains the following limitations

on medical malpractice actions:

Professional liability of physicians

is limited to compensatory damages not

previously paid up to a maximum amount

of $150,000 per claim or $300,000 per

occurrence. Hospital liability is similarly

limited.

(Section 39-4204 and Section

39-4205, Idaho Code, Appendix pages 59-

60.)

2. Medical malpractice actions are

limited to the common law theory of negligence.

(Section 39-4210, Idaho Code, Appendix

pages 66-67.)

3. Plaintiff's attorney fees in

medical malpractice actions in excess

of 40% of the recovery are presumed unreasonable

and uncollectible. (Section 39-4213, Idaho

Code, Appendix pages 66-67)

4. Physicians and hospitals are

required to carry medical malpractice

liability insurance within the limitations

of liability. (Section 39-4206, Idaho

Code, Appendix pages 60-61)

A declaratory judgment action was brought

in the district court of the State of

Idaho challenging the above stated limitations

on malpractice actions as being unconstitut-

ional in violation of the state and federal

guarantees of due process and equal protect-

ion of the law. In a memorandum decision,

the District Court held the Act not in

violation of the federal and state equal

protection and due process guarantees,

but held it unconstitutional in violation

of Article ‘i Section 18 of the Idaho

Constitution, which guarantees access

to the courts. (Appendix page 51)

An appeal from the district court

decision to the Idaho Supreme Court was

perfected, which put in issue the equal

protection and due process challenges

to the limitations. On October 15, 1976,

the Idaho Supreme Court filed a decision °

reversing the district court, but remanding

the case for a further factual hearing

to enable application of the equal protection

and due process tests which were considered

by the court to be the same guarantees

requiring the same standard of review

under U.S. Const. amend. XIV, § 1, and

Idaho Const. art. l, §§ 2, 13 and 18.

The Idaho Supreme Court in its remand

also posed the question to the Court below

of whether the legislation under considera-

tion was a type of “local or special law"

prohibited by art. 3, Section 19, Idaho

Constitution. (Appendix page 55.) That

question must be answered in the negative

on the basis of existing case law determined

by the Idaho Supreme Court. It has long

been held in Idaho that so long as an

act extends the same privileges to all

belonging to the same class, and there

is no discrimination inherent in the act

as to that class, and the provisions of

the act give all persons belonging to

the class an equal opportunity, the act

is not in effect local or special as prohib-

ited by the Idaho Constitution. Gillesby

v. Board of County Commrs. of Canyon County,

17 Idaho 586, 107 P. 71 (1910); Jones

v. Power County, 27 Idaho 656, 150 P.

35 (1915]; State ex rel. Nielson v. Lindstrom,

68 Idaho 226, 191 P.2d 1009 (1948); Robbins

v. Joint Class A. School Dist. No. 33l,

72 Idaho 500, 244 P.2d 1104 (1952); Leonardson

v. Moon, 92 Idaho 796, 451 P.2d 542 (1969).

Local or special laws, as prohibited in

Idaho, are such as apply to one individual,

to individuals out of a single class simi-

larly situated, or to a special locality.

Ada County v. Wright, 60 Idaho 394, 92

P.2d 134 (1939). A statute is general

if its terms apply to, and its provisions

operate upon, all persons and subjects

in a like situation says the Idaho Supreme

Court. Jones v. Power County, supra,

27 Idaho at 665, 150 P. at 37. Thus,

it is clear from the face of the legislation

under consideration that it is not of

a local or special nature prohibited by

the Idaho Constitution. |

In applying the equal protection test,

the court held that in Reed v. Reed, 404

U.S. 71 (1971), this court created a new

constitutional test labeled the "means-

focus" test to be applied to statutory

Classifications involving invidious discrim-

ination. (Appendix pages 15-16) This

new test requires judicial scrutiny of

the means by which the legislation effects

its purpose.

The traditional equal protection test

of reviewing the challenged legislation

Classification to determine if it had

a rational basis as articulated in McGowan

v. Maryland, 366 U.S.420 (1961), 425-426,

was rejected. The court failed to discuss

this court's applications of the rational

basis test subsequent to the Reed case

as found in Marshall v. U.S., 414 U.S.

417 (1974), and City of Charlotte v. Local

660, Intern. Ass'n. of Firefighters,

U.S. , (1976) 96 S.Ct. 2036 48 L.Ed2d

636. (1976), and City of New Orleans v.

Dukes, U.S. (1976) 96 S.€t. 2513,

49 L.Ed 2d 511, (June 25, 1976). The

fact that the Reed case involved a sex

based claim of discrimination was also

not addressed.

The court below found insufficient facts

in the record for application of the means-

focus test and remanded the case for a

factual hearing on the following questions:

"Is there indeed a medical malpractice

crisis in Idaho? Are physicians

and hospitals in Idaho being charged

excessive, grossly unfair premiums

for medical malpractice insurance

(and if so, what is the position

of the Director of the Department

of Insurance of the State of Idaho

in relation to duties imposed upon

him, see, I.C. § 41-201 et.seq.),

or are the monumental increases in

medical malpractice insurance premiums

reasonably attributable to the costs

of doing business in the medical

malpractice insurance field? Is

medical malpractice insurance unavailable

at reasonable rates in the absence

of legislative enactments? Is the

threat cof unavailability of health

care to the people of Idaho a reality

or not? Has there been, as suggested,

an increased rash of claims and sizable

recoveries or settlements in favor

of persons alleged to have suffered

as the result of medical malpractice

in Idaho? Finally and most importantly,

if there is indeed a medical malpractice

insurance crisis in Idaho, what is

the effect or will be the effect

of the limits of recovery and the

other provisions of the subject Act

with respect to forestalling or abating

the crisis? In the absence of any

factual information bearing on these

questions, if indeed there are answers,

no decision can be made by this Court

in the area of the equal protection

challenge to the Act." (Appendix

pages 32-34)

Petitioners submit that these same questions

were asked and answered in the lengthy

legislative hearings on this matter.

Unfortunately, Idaho keeps no published

record of such legislative hearings.

The questions posed by the Idaho Supreme

Court on remand constitute an attempt

of the judicial branch of the Idaho government

to invade the exclusive province of the

judiciary by holding judicial “legislative

history" hearings so as to form a written

record of investigation into that which

the Idaho Legislature has already determined.

Such judicial intrusion into an exclusive

legislative province is forbidden by Idaho

Const., art. 2, Section l, and has never

been permitted by this Court in reviewing

a due process challenge.

In applying the due process test, the

court below recognized that ordinarily

the due process guarantee requires

application of a "minimal scrutiny

test." However, the due process question

was remanded to the district court for a

fact finding hearing consistent with the

equal protection remand on the following

grounds:

"Questions of due process arising

in challenges to legislation ordinarily

result in a minimal scrutiny test,

and this Court and others have at

times engaged in speculative inquiry.

in order to identify any conceivable

rational relationship which would

legitimize the legislative action.

Nevertheless, it is argued, and we

agree, that there is considerable

doubt if the purpose of the limitations

as declared in the Act is in fact

the true object of legislatiye

concern. Also, there is doubt as

to the relationship between the

challenged limitations and the

legitimate public purposes that

this Act may be said to serve. We

therefore deem it prudent to refrain

from a decision on the question of

due process without the production

of a more factually revealing,

evidentiary record.” (Appendix

page 23)

In essence, the Idaho Supreme Court

directed the district court to hold a

hearing on the "true object of legislative

concern" on remand. By inquiring behind

the stated legislative purpose in applying

the due process test, the court below is

in conflict with the constitutional rule

of construction, the courts will not

inquire into the wisdom or motivation of

the legislature. Mourning v. Family

Publications Service, Inc., 411 U.S. 356

(1973); United States v. O'Brien, 391

U.S. 367 (1968); Katzanbach v. Morgan,

384 U.S. 641 (1966).

This pétition was filed prior to the

commencement of any proceedings on remand.

REASONS FOR GRANTING THIS WRIT

1. |THE DECISION BELOW CONFLICTS WITH

' THE DECISIONS OF THIS COURT INTER-

PRETING THE STANDARD OF REVIEW

REQUIRED BY THE EQUAL PROTECTION

GUARANTY AND THE STANDARD OF

REVIEW EMPLOYED CONSTITUTES AN

INVASION OF THE LEGISLATURE'S FACT

FINDING FUNCTION.

By remanding the case to the district

court for a fact finding hearing for

application of the means-focus test, the

Idaho Supreme Court misinterpreted the

equal protection test set forth in this

court's decisior in Reed v. Reed, 404

U.S. 71 (1971), and applied an equal

protection test in conflict with this .

court's most recent application of the

equal protection guarantee in City of

New Orieans v. Dukes, U.S. ae

(1976), 96 S.Ct. 2513, 2516-2517, 49

L.Ed. 2d 511, wherein it was held:

"Unless a classification trammels

fundamental personal rights or is

drawn upon inherently suspect

distinctions such as race, religion,

or alienage, our decisions presume

the constitutionality of the statutory

discriminations and reguire only

that the classification challenged

be rationally related to a legiti-

mate state interest.

The use of the means-focus test is

also in direct conflict with this court's

decisions in Marshall y. United States,

414 U.S. 417 (1974), and City of Charlotte

v. Local 660 Intern. Ass'n. of Firefighters,

__—*U.S. ss (1976), 96 S.Ct. 2036, 48

L.Ed. 2d 636.

By applying the means-focus test, the

Idaho Supreme Court has subjected the

parties to this action to the time, cost

and expense of conducting a fact finding

hearing on the very issues that were

presented to the legislature. Thus the

Idaho Supreme Court, under the guise of

the equal protection guarantee, is

setting itself up as a “superlegislature"

to determine if the Idaho legislature

chose the appropriate means to deal with

the medical malpractice insurance crisis.

The decision below did not limit use

of the means-focus test to the case at

bar, but makes it applicable to any

equal protection challenge inyolving

“invidious" discrimination. In all such

cases, a fact finding hearing must be

held to determine the constitutionality

of the law in question. Obviously,

underlying facts change, resulting in

the possibility of a determination of

violation of the equal protection

guarantee at any point in time regardless

of prior adjudication. If the limitations

on malpractice actions successfully

eliminate the crisis, does the law

become unconstitutional because there is

no crisis? The means-focus test will

result in the unending questioning and

re-testing of legislation.

2. THE DECISION BELOW CONFLICTS WITH

THE DECISIONS OF THIS COURT HOLDING

THAT INQUIRY WILL NOT BE MADE

BEYOND THE STATED PURPOSE OF A

STATUTE INTO LEGISLATIVE MOTIVATION

OR WISDOM WHEN THE CONSTITUTIONALITY

OF A STATUTE IS CHALLENGED.

In reviewing the act in question under

the due process guarantee, the Idaho.

Supreme Court violated a fundamental

principal of constitutional law of this

court by looking beyond the stated

legislative purpose and inquiring into

the motivation of the legislature.

Invitations to make such inquiries have

been uniformly rejected by this court.

Mourning v. Family Publications Service,

Inc., 411 U.S. 356 (1973); United

States v. O'Brien, 391 U.S. 367 (1968);

Katzenbach v. Morgan, 384 U.S. 641

(1966). Oregon y. Mitchell, 400 U.S. 112

(1970). As noted by Justice Harlan, in

his concurring opinion in Oregon v,

Mitchell, 400 U.S. 112, 205 (1970):

"It is suggested that the proper

basis for the doctrine enunciated

in (Katzenbach y) Morgan lies in

the relative factfinding competence

of Court, Congress, and state legis-

latures. (Citation, post, omitted.)

In this view, as I understand it,

since Congress is at least as well

qualified as a state legislature to

determine factual issues, and far

better qualified than this Court,

where a dispute is basically factual

in nature the congressional finding

of fact should control, subject

only to review by this Court for

reasonableness." ‘

Justice Black, writing for the majority

in an opinion joined in by Justice

Douglas, Brennan, White, and Marshall,

stated in Oregon v. Mitchell, supra, at

247-248:

"The nature of the judicial process

makes it an inappropriate forum for

the determination of complex factual

questions of the kind so often in-

volved in constitutional adjudication.

Courts, therefore, will oyerturn a

legislative determination of a factual

question only if the legislature's

finding is so clearly wrong that it

may be characterized as ‘arbitrary,'

‘irrational,' or ‘unreasonable.'"

(Citations omitted.)

— eh es

To permit such an inquiry under the

pretense of application of the due

process guarantee will result in neyer-

ending inquiries into legislators'

voting records, occupations, ambitions,

friendships and a myriad other factors,

all of which are irreleyant to the

impact of the legislation. To force

litigants into such an inquiry whenever

a due process question is raised would

limit the availability of the guarantee

and discourage its use.

3. THE PETITION PRESENTS FEDERAL

QUESTIONS OF NATIONAL IMPORTANCE .TO

THE STATES IN THEIR ATTEMPTS TO

DEAL WITH THE MEDICAL MALPRACTICE

INSURANCE CRISIS.

Petitioners urge this court to grant

their petition because of the national

importance of a decision in the area of

state attempts to meet and deal with a

very real the medical malpractice

insurance crisis. It is undisputed that

the nation is currently undergoing a

crisis in the field of medical mal-

practice insurance, which is manifested

by skyrocketing premium rates and

limited availability.+ The statute

involved in this action is one state's

attempt to deal with the problem. It is

the first decision by a state court in

this field to directly raise federal

questions.

This court was presented with a similar

national problem which individual states

were seeking to meet in Silver v. Silver,

280 U.S. 117 (1929), wherein a constitu-

ttional challenge was raised against

automobile guest statutes. This court

held:

lsymposium on Medical Malpractice, 1975

Duke L.J. 1177 (1975), particularly, An

Analysis of State Legislative Responses

to the Medical Malpractice Crisis, 1975

Duke L.J. 1417 (1975); U. S. Department

of Health, Education and Welfare, Report

of the Secretary's Commission on Medical

Malpractice (1973); Curran, Medical

Malpractice: A Genuine National Crisis,

292 New England J. Med. 1223 (1975).

"The use of the automobile as an

instrument of transportation is

peculiarly the subject of regula-

tion. We cannot assume that there

are no evils to be corrected or

permissible social objects to be

gained by the present statute. We

are not unaware of the increasing

frequency of litigation in which

passengers carried gratuitously in

automobiles, often casual guests or

licensees, have sought the recovery

of large sums for injuries alleged

to have been due to negligent

operation. In some jurisdictions

it has been judicially determined

that a lower standard of care

should be exacted where the carriage

in any.type of vehicle is gratuitous.

* * * Where there has been a

serious increase in the evils of

vexatious litigation in this class

of cases, where the carriage is by

automobile, is for legislative

determination, and, if found, may

well be the basis of legislative

action further restricting the

liability. Its wisdom is not the

concern of courts." 280 U.S. at

122-123

This petition presents this Court the

opportunity to declare that state attempts

to meet medical malpractice insurance

problems are similarly a matter for

State legislative action and to declare

that such attempts will not be saddled

with extraordinary standards of review.

The granting of this petition would thus

serve to guide the indiyidual states in

meeting the health care needs of their

citizenry.

CONCLUSION

For the foregoing reasons this petition

for writ of certiorari should be granted.

WAYNE L. KIDWELL

Attorney General of

Idaho

State Capitol

Boise, Idaho

PETER E. HEISER, JR.

Chief Deputy Attorney

General of Idaho

State Capitol

Boise, Idaho

EUGENE C. THOMAS

Moffatt, Thomas,

Barrett & Blanton

Special Assistant

Attorney General of

Idaho.

P. 0. Box 829

Boise, Idaho

RICHARD C. FIELDS

Moffatt, Thomas,

Barrett & Blanton

P. O. Box 829

Boise, Idaho 83701

PAUL S. STREET

Moffatt, Thomas,

Barrett & Blanton

P. O. Box 829

Boise, Idaho 83701

APPENDIX

—— ee

IN THE SUPREME COURT OF THE STATE OF IDAHO

No. 12093

A. CURTIS JONES, JR., )

M.D., ROY J. ELLSWORTH, )

M.D., ROBERT B. MONT- )

GOMERY, M.D., ST. LUKE'S)

HOSPITAL, LTD. and

COMMUNITY HOSPITAL OF

IDAHO FALLS, IDAHO,

— ~~ ee

Plaintiffs-Respondents)

)

and KENNETH E. DROULARD,)

M.D. and J.R. FARBER, )

M.D.,

)

Plaintiff Intervenors-)

Respondents, )

)

Vv.

STATE BOARD OF MEDICINE )

and DEPARTMENT OF HEALTH)

AND WELFARE of the )

State of Idaho, )

)

Defendant-Appellants, )

)

and

)

IDAHO MEDICAL ASSOCI-

ATION and IDAHO HOSPITAL

ASSOCIATION,

)

Defendant Intervenors-)

Appellants,

STATE OF IDAHO, and

MONROE G. GALLAHER,

)

; )

and )

)

Intervenor-Appellant.

Boise June 1976

term

Filed: Oct. 15 1976

R.H. Young, Clerk

Peer oe

Appeal from the District Court of the

Fourth Judicial District, State of Idaho,

Ada County. Honorable Alfred C. Hagan,

District Judge.

Appeal from declaratory judgment hold-

ing Hospital-Medical Liability Act (medical

malpractice legislation) unconstitutional. ,

Reversed and remanded for further proceed-

ings.

Eugene C. Thomas, Spec. Asst. Attorney

General, Moffatt, Thomas, Barrett &

Blanton, Boise, for Defendant~-Appellants.

Paul S. Street, Moffatt, Thomas,

Barrett & Blanton, Boise, for Defen-

dant Intervenors~-Appellants.

Richard C. Fields, Moffatt, Thomas,

Barrett & Blanton, Boise, for Inter-

venor-Appellant.

Paul S. Boyd, Boise, for Plaintiffs-

Respondents.

Lloyd J. Webb, Webb, Pike, Burton &

Carlson, Twin Falls, for Plaintiff-

Intervenors~-Respondents.

SHEPARD, J.

This is an appeal from a judgment ‘

which held the 1975 Hospital-Medical Liabil-

ity Act unconstitutional. The action was

brought for declaratory judgment by certain °

physicians and hospitals against the State

Board of Medicine and the Idaho Department

of Health and Welfare. We reverse and re-

mand for further proceedings.

The Act in question, Title 39, Ch. 42,

Idaho Code, was enacted as a result of an

alleged “medical malpractice insurance

crisis." Among other physicians it places

limitations on the remedies and recovery of

medical malpractice actions in Idaho against

physicians and acute care health facilities

licensed in the state. Therein a ceiling

is set on recoverable damages for actions

against physicians of $150,000 per claim

and $300,000 per occurrence, I.C. Section

39-4204. The Act also sets a ceiling on

recoverable damages for actions against

acute care hospitals of $150,000 per claim

and $300,000 per occurrence or the amount

of $10,000 multiplied by the total number

of beds in the hospital, I.C. Section

39-4205. The Act limits the grounds for

malpractice actions to those of common law

negligence and requires that recovery should

be restricted to compensatory damages not

satisfied from collateral sources, I.C.

Section 39-4210. We note parenthetically

that the term “compensatory damages" is not

defined by the Act and it is appellants'

argument that such provision was only in-

tended to exclude punitive damages. The

Act also requires all physicians and hospi-

tals in Idaho to obtain malpractice insur-

ance as a condition of licensure, I.C.

Sections 39-4206, 4208, 4209.

Plaintiff-respondents are licensed

physicians and hospitals in Idaho who are

alleged to be affected by the provisions of

the Act. Respondents below alleged that be-

cause of the constitutional doubts raised

as to various portions of the Act, they

have been compelled to maintain malpractice

insurance coverage in excess of the specific

liability limitations set forth in the Act.

The cost of this seemingly unnecessary cov-

erage, they contend, has necessarily had to

be passed on to their patients. They also

allege that uncertainty as to the validity

of the limitations set forth in the Act

has compounded a crisis in medical mal-

practice insurance as indicated by excess-

ive insurance costs and a reluctance of

insurers to offer coverage competitive or

otherwise to health care providers. Accord-

ingly, pursuant to I.C. Section 10-1201 et.

seq., plaintiff-respondents sought to have

their status and legal obligations under

the Act resolved by declaratory judgment.

They contended that the limitations found

in I.C. Sections 39-4204, 4205 and 4210 are

in violation of the due process and equal

protection clauses of the Fourteenth Amend-

mend and Art I, Sections 2, 13 and 18 of

the Idaho Constitution. They also sought

invalidation of the conditions of licensure

found in I.C. Sections 39-4206, 4208 and

4209.

Appellant-defendants are the State

Board of Medicine and the Department of

Health and Welfare who are charged with

hospital and physician licensing and general

health care regulation. I.C. Sections

54-1805, et.seq., I.C. Sections 39-1303,

1305. In response to plaintiff-respondents'

complaint, they admitted all allegations but

denied the constitutional invalidity of the

challenged limitations. The parties stipu-

lated submission of the controversy on the

merits and the only formal factual matter

submitted was the affidavit of the Director

of the Department of Insurance.

Below petitions to intervene were filed

and admitted on behalf of the Idaho Medical

Association and the Idaho Hospital Associa-

tion. They are appellant-intervenors on

this appeal. In addition, the American

Trial Lawyers Association and the Idaho

Trial Lawyers Association, the California

Trial Lawyers Association, the Washington

Trial Lawyers Association, the American

Medical Association and the State Depart-

ment of Insurance appear as amici curiae.

As to the due process and equal pro-

tection violations asserted by plaintiff-

respondents below, the district court held

that it would presume constitutionality and

utilize the restrained view test stating

that “the limitation of liability feature

of the Act obviously bears a reasonable

relationship to the objectives sought to be

advanced by the Act itself, i.e., the avail-

ability of liability insurance." The dis-

trict court, however, went on to hold that

the ability of citizens to seek redress for

a breach of duty is a fundamental right pre-

served by Art. I, Section 18 of the Idaho

Constitution, which the court said requires

"a full and complete remedy for every injury

of person.” The district court reasoned:

"In my opinion, Art. I, Section 18

of the Idaho Constitution prohibits

the limitation of liability for in-

juries otherwise recoverable under

a right or cause of action and recog-

nized by the common law at least at

the time of the adoption of the Idaho

Constitution in 1890. The clause pro-

vides relief for ‘every’ injury.

Particularly does this clause pro-

hibit limitation of liability where

no substitute procedure or remedy,

judicial or administrative, is pro-

vided.* * *

"By way of Section 18, the Idaho Con-

stitution recognizes those common law

causes of action as existing in 1890

as the ability of an individual to seek

redress for a breach of a duty owed as

a basic right. These basic rights must

be preserved even in time of economic

stress concerning a great segment of

the public, otherwise the door would

be open for the dissolution and diminu-

tion of these basic rights to the dis-

interest of the individual members of

the public under the contention and

allegation of general public necessity.

"It is thus the conclusion of this

Court that the limitation of liability

feature of the Hospital-Medical Lia-

bility Act violates Art. I, Section 18

of the Idaho Constitution and is there-

fore unconstitutional."

The court further held that that portion

of the Act requiring the acquisition of

malpractice insurance as a condition of

licensure of physicians and hospitals was

also invalid. The district court made no

holding regarding the constitutionality of

I.C. Section 39-4210 limiting malpractice

action to common law negligence and re-

covery thereon to compensatory damages.

Here, appellants assign error to the

holding of the lower court as it relates

to Art I, Section 18, and all parties here

have argued as to whether the Act violates

the due process and equal protection guaran-

tees of both the Idaho and federal consti-

tutions. Therefore we review the issues

pertaining to due process and equal pro-

tection. See, Grayot v. Summers, 75 Idaho

125, 269 P.2d 765 (1954); Taggart v. Latah

Co., 78 Idaho 99, 298 P.2d 979 (1956).

In addition, respondents and inter-

venors assert that the restricted liabil-

ity provisions of the Act are in violation

of Idaho Constitution Art. I, Section 7

(right to trial by jury) and Art. II,

Section 1 and Art. V, Section 13 (pro-

hibition against legislative encroachment

upon judicial functions). Those issues

were not reached below and are not reached

here.

At the outset we consider the asser-

tion that the district court erred in its

finding that that portion of the Act plac-

ing a limitation on damages recoverable in

medical malpractice actions contravenes

Art. I, Section 18 of the Idaho Constitu-

tion. That section provides:

"Courts of justice shall be open to

every person, and a speedy remedy

afforded for every injury of person,

property or character, and rights and

justice shall be administered without

sale, denial, delay or prejudice."

The holding of the trial court was predica-

ted upon its opinion that by this provision

the Idaho Constitution effectively adopted

the common law as it existed in 1890 and

thereby preserved the common law right of

action for medical malpractice. See,

Nelson v. Harrington, 40 N.W. 228 (Wis.

1888). It is argued that the rights to

recovery for injury to person, property or

character which existed at the time of the

adoption of our constitution remain invio-

late and while the legislature may alter

common law remedies and attach conditions

precedent to the exercise of those common

law rights, it must provide substitute pro-

cedures or remedies in lieu thereof or it

cannot deny a remedy which existed at com-

mon law. See, Newlan v. State, 96 Idaho

711, 535 P.2d 1348 (1975) (dissenting

opinion). We hold that the trial court

erred in its reasoning and its application

of Art I, Section 18 of the Idaho Consti-

tution.

To adopt that argument would be to

hold that the common law as of 1890 governs

the health, welfare and safety of the citi-

zens of this state and is unalterable with-

out constitutional amendment. Nothing in

Art. I, Section 18 either explicitly or im-

plicitly prohibits legislative modification

of common law actions. Art. I, Section 18,

contains no reference whatsoever to the

common law. The only adoption of the com-

mon law in this jurisdiction is found in

Art. XXI, Section 2 of the state constitu-

tion and I.C. Section 73-116. Those pro-

visions clearly contemplate the inherent

power of the legislature to modify the

common law with few exceptions. See, State

v. McCoy, 94 Idaho 236, 486 P.2d 247 (1971)

(dictum). In Newlan v. State, supra, it

was held that while the 120-day notice re-

guirement restricts the period in which a

Claim may be brought, such does not deny

access to the courts.

Art. II, Section 6 of the Colorado

Constitution is identical to the Idaho

Constitution, Art. I, Section 18. In re-

jecting the contention that that constitu-

tiona) language preserved all preexisting

common law actions for injury to person or

property, that court said in Vogts v.

Guerette, 351 P.2d 851 (Colo. 1960):

"The common law of England was not

adopted in the state of Colorado by

our Constitution, as it was originally

approved by the people, or by (any)

subsequent constitutional enactment.

The common law prevails in this state

* * * by legislative enactment. It

may be repealed without violating our

Constitution, by our General Assembly

at any time it chooses to do so. * * *

The legislature may at any time by a

legislative act repeal any part of the

common law either expressly or by

passage of an act inconsistent there-

with on any particular subject." at 855

(quoting Colorado State Board of Pharmacy

v. Hallett, 296 P. 540, 541 (Colo. 1931)).

See also, O'Quin v. Walt Disney Productions

Co., 493 P.2d 344 (Colo. 1972); Ward v.

Kidd, 87 Idaho 216, 392 P.2d 183 (1964).

II.

We turn now to the due process and

equal protection arguments which were made

below and which have been reargued on

appeal. There is, however, a threshold

issue necessary of resolution, i.e., what

standard or standards of review are to be

applied in our scrutiny of the legislation

under the due process and equal protection

categories of constitutional inquiry. The

single test utilized by the trial court

was whether or not the limitations on

recovery bear "a reasonable relationship

to the objective sought to be advanced by

the Act." See, Employment Security Agency

v. Joint A School Dist. No. 151, 88 Idaho

384, 400 P.2d 377 (1965). However conven-

ient that analysis may be, it fails to

consider the distinct standards with

respect to questions of due process and

equal protection which are continuing

to emerge in the United States Supreme

Court and which have been applied with

some elaboration in recent decisions of

this Court.

The opinions dealing with questions of

due process and equal protection are admit-

tedly ambiguous and fluctuate in response

to changing attitudes respecting the

judiciary's role in the examination of

social and economic legislation. As one

example we have seen the highly interven-

tionist attitude on the part of the United

States Supreme Court founded upon what has

been described as a concept of "substantive

due process" give way to an extreme ,

Holmesian abstention from inquiry into the

economic implications of regulatory legis-

lation. See, McCloskey, "Economic Due

Process in the Supreme Court: An Exhuma-

tion and Reburial," 1962 Sup.Ct. Rev. 34.

At the same time in the area of equal

protection we have seen a constitutional

provision described by Mr. Justice Holmes

as "the last resort of constitutional

arguments" reach an historic high water

mark as a tool for attacking invidiously

discriminatory classifications. See,

Tussman and tenBrock, "The Equal Protection

of the Laws," 37 Cal.L.Rev. 341 (1949);

"Developments in the Law of Equal Protec-

tion," 82 Harv.L.Rev. 1067 (1969).

We deem it clear that the United

States Supreme Court has departed from any

consideration of the substantive aspects of

due process as they were formerly applied

in the early part of the century. See,

Nebbia v. New York, 291 U.S. 502 (1934);

Olsen v. Nebraska ex rel. Western Ref. &

Bond Ass'n., 313 U.S. 236 (1941); Ferguson

v. Skrupa, 372 U.S. 726 (1963). Idaho has

seen a like departure from the substantive

utilization of the due process provisions

of our constitution. A possible exception

is contained in Berry v. Summers, 76 Idaho

446, 283 P.2d 1093 (1955) and Berry v.

Koehler, 84 Idaho 170, 369 P.2da 1010 (1961),

in which the Court continues to hold that

the due process clause of our state consti-

tution , Art. I, Sec. 13, protects the

right to pursue a useful occupation.

Nevertheless, we deem the differences

between the standard applied under Idaho's

due process clause and the standard applied

under the federal due process clause to be

negligible.

In Nebbia the United States Supreme

Court retreated from consideration of the

substantive aspects of due process indica-

ting that the sole question of inquiry is

to determine whether "the means selected*

* *have a real and substantial relation to

the objective sought to be obtained." At

525. The rule has been restated in terms

of whether the regulation is reasonable in

relation to the subject and is adopted in

the interest of the community. West Coast

Hotel Co. v. Parrish, 300 U.S. 379 (1937).

See also, Berry v. Koehler, 84 Idaho 170,

369 P.2d 1010 (1961). See also the refer-

ence to that level of analysis by the term

"rational basis test" in the opinion of

Justice Stone, U.S. v. Carolene Products,

304 U.S. 144 (1938). It is apparent that

the practical effect of the application

of that test of legislation is to sub-

stantially remove the courts from inquiry

into the ends sought to be served by a

legislative action.

It is argued here that there remains

one additional test of substantive due

process which in essence suggests that in

abolishing common law rights the legis-

lature must provide a reasonable substi-

tute for that which has been taken away..,

As later discussion will indicate, we "

do not agree and hold that the sole

standard applicable to the due process

provisions of the federal and state

constitutions is whether the challenged

law bears "a rational relationship to’

the preservation and promotion of the

public welfare." Berry v. Koehler,

supra, at 177.

We turn now to the standards appli-

cable to equal protection challenges

under the opinions of this and the United

States Supreme Court. This Court has

recognized and followed the utilization

of a two-tier examination. Thompson v.

Hagan, 96 Idaho 19, 523 P.2d 1365

(1974); Newlan v. State, supra; Stucki

v. Loveland, 94 Idaho 621, 495 P.2d

571 (1972); State v. Cantrell, 94 Idaho

653, 496 P.2d 276 (1972). But see,

Thompson v. Engelking, 96 Idaho 793,

537 P.2d 635 (1975). If the classifi-

cation involves a fundamental right

or a suspect classification such as

race, the state bears a heavy burden to

justify the classification by a compel-

ling state interest. That has been termed

the strict scrutiny test.

In other classifications, parti-

cularly in the areas of social welfare

legislation, a restrained standard of

review is applied. Such standard is

set forth in McGowan v. Maryland, 366

U.S. 420, 425-426 (1961):

"The constitutional safeguard

(of equal protection) is offended

only if the classification rests

on grounds wholly irrelevant to the

achievement of the state's objec-

tive. State legislatures are

presumed to have acted within their

constitutional power despite the

fact that, in practice, their law

results in some inequality. A

statutory discrimination will

not be set aside if any statement

of facts may be reasonably

conceived to justify it.”

See also, Danbridge v. Williams, 397 U.S.

471 (1970), wherein it was stated:

"If the classification has some

‘rational basis' it does not offend

the constitution simply because

the classification ‘is not

made with mathematical nicety

or because in practice it results

in some inequality.'" (Quoting

Lindsley v. Natural Carbonic Cas

Co., 220 U.S. 61, 78 (1911).

We deem it clear then that the

scrutiny to be applied in the restrained

view of an equal protection claim is

similar to that applied to claims which

are grounded in due process. They appear

to be distinguished only by the fact that

with respect to due process there must be

a preliminary showing that the interest

involved is a cognizable liberty or

property interest. And, with respect to

questions of equal protection, it must be

shown that the statute under attack

creates a discriminatory classification.

As a result the trial court in the case at

bar applied a single test in deciding

equal protection and due process questions

raised in the instant case.

However, the opinions of the United

States Supreme Court in Reed v. Reed,

404 U.S. 71 (1971), and Eisenstadt v.

Baird, 405 U.S. 438 (1972), would seem to

declare a new category of inquiry as to

questions of equal protection. See also,

Levy v. Louisiana, 391 U.S. 68 (1968);

Glona v. American G & L Insurance Co.,

391 U.S. 73 (1968); and Weber v. Aetna

C & S Co., 406 U.S. 164 (1972).

As above noted, the Supreme Court in

Nebbia enunciated a new standard for

examination in response to questions posed

in terms of due process. In Reed, the |

Court has apparently revived that standard,

however, now clothed in principles of

equal protection. Quoting from the long-

neglected case of F. S. Royster Guano Co.

v. Virginia, 253 U.S. 412 (1920), the

court in Reed stated:

"The Equal Protection Clause of

that amendment does, however,

deny to the states the power to

legislate that different treat-

ment be accorded to persons placed

by a statute into different classes

on the basis of criteria wholly

unrelated to the objective of the

statute. A classification ‘must

be reasonable, not arbitrary,

and must rest upon some ground of

difference having a fair and sub-

stantial relation to the object

of the legislation, so that all

persons similarly circumstanced

shall be treated alike.'" at

75-76.

It is our opinion that this poses a

different and higher standard than the

traditional restrained analysis of equal

protection. The standard set forth in

Reed focuses upon the relationship between

the subject legislation and the object or

purpose to be served thereby. This new

intermediate standard of equal protection

review has been described as "means-focus"

because it tests whether the legislative

means substantially furthers some speci-

fically identifiable legislative end.

See, Gunther, "In Search of Evolving

Doctrine on the Changing Court; A Model

for a Newer Equal Protectior.," 86 Harv.L.

Rev. 1 (1972).

The "means scrutiny" test enunciated

in Reed has been followed by recent

decisions of this Court in which statutes

of a blantantly discriminatory nature

have been held to be unconstitutional as

a denial of equal protection. See,

Thompson v. Hagan, supra, invalidation of

the Idaho automobile guest statute; Mesmer

v. Ker, 96 Idaho 75, 524 P.2d 536 (1974),

invalidation of the airplane guest statute;

Harrigfeld v. District Court, 95 Idaho

540, 511 P.2d 822 (1973), invalidation

of statutory discrimination between males

and females in designation of the age of

majority; Sterling H. Nelson & Sons, Inc.,

v. Bender, 95 Idaho 813, 520 P.2d 860

(1974), invalidating different statutorily

imposed weight limitations for haulers

of processed versus unprocessed commodi-

ties. We deem it also clear that those

opinions did not intend to replace the

traditional restrained view standard of

equal protection tests of legislation

except in those special cases involving

invidiously discriminatory classifications.

It is enough to say at this juncture that

with respect to certain statutes which

create obviously discriminatory classifi-

cations this Court will examine the means

by which those classifications are

utilized and implemented in light of the

asserted leglative purpose. However, the

burden of showing the absence of a reason-

able relationship under the means-focus

test remains with the one who assails the

classification. Lindsley v. Natural

Carbonic Gas Co., 220 U.S. 61 (1911);

Munn v. Illinois, 94 U.S. 113, 132 (1877).

Iil.

We now examine the question of

whether the provisions of the Act before

us are in violation of the guarantees of

due process of law found in the Fourteenth

Amendment of the United States Constitu-

tion and Art. I, §13, of the Idaho Consti-

tution. Respondents have contended that

the Act constitutes a denial of due pro-

cess in three respects: (1) It deprives

respondents of their constitutional right

to pursue a recognized profession; (2) it

limits medical malpractice actions with-

out a corresponding quid pro guo; and

(3) the recovery provisions are arbitrary,

without rational basis and against public

policy.

Section 6 of the Act, I.C. §39-4206,

provides:

"Every acute care hospital and

physician licensed to provide

health care in this state shall,

as a condition of securing and

maintaining such licensure,

unless the requirement there-

fore has been waived as pro-

vided in section 1l of this

act, secure liability insurance

underwriting the exposure to

loss referred to in sections

4 and 5 of this act (the

physician or hospital liabil-

ity limitation sections) and

shall file an appropriate

certificate of insurance as

hereinafter provided, confirm-

ing the existence of such

insurance with at least such

limits of liability at all

times during which licensure

remains valid.* * *"

Additional sections specify the proced-

ures for insurance certification, I.C.

§§39-4208, 39-4209, and permit the

Director of the Department of Insurance

to waive liability insurance requirements

"upon a showing by any physician or acute

care hospital of inability to comply with

the liability insurance requirements of

this act, despite reasonable and good

faith efforts to do sc." I.C. §39-4211.

Respondents contend that those statu-

tory requirements constitute an unreason-

able limitation upon their constitutional

right to pursue a recognized profession.

See, Berry v. Summers, 76 Idaho 446, 283

P.2d 1093 (1955); Berry v. Koehler, 84

Idaho 170, 369 P.2d 1010 (1961); State v.

Smith, 81 Idaho 103, 337 P.2d 938 (1959);

State v. Armstrong, 38 Idaho 493, 225 P.

491 (1923). The principle of law set

forth in the Berry cases was not intended

to prohibit the state from pursuing its”

legitimate regulatory activities including

the mandatory licensing of professional

health care providers. Those opinions

merely recognize that the pursuit of an

occupation is a liberty and property

interest to which the due process protec-

tions of the state and federal constitu-

tions attach and may not be prohibited by

the legislature unless necessary to pro-

tect the health, safety or welfare of the

citizenry. This recognition does not

impede the power of the legislature to

regulate callings that are related to the

public health so long as such regulations

are not arbitrary or unreasonable.

The power to require doctors and

hospitals to obtain licenses before prac-

ticing medicine or providing health care

is clearly within the state's police

power. Here such licenses are required to

be conditioned upon obtaining medical mal-

practice insurance, a requirement not

unlike that imposed prior to the issuance

of motor vehicle registrations, I.C. §49-

232, nor unlike the bonds which are

required as a condition of pursuing

numerous trades and professions such as

barber college, bank tellers, commodity

buyers, pesticide applicators, court

reporters, weighmasters, well drillers,

outfitters and guides, checkscalers and

cemetery maintenance commissions. See,

I.C. §§54-507, 26-406; 22-1406, 22-2211,

1-1102; 71-403; 42-23; 36-5408; 38-1215;

27-114. We hold that such requirements of

obtaining medical malpractice insurance as

a condition to licensure bear a rational

relationship to the health and welfare of

the citizens of the state by providing

protection to patients who may be injured

as a result of medical malpractice and to

this extent does not violate the guaran-

tees of due process of law. Cf. Pollock

v. Methodist Hospital, 392 F.Supp. 393

(D.C. La. 1975).

It is also argued that legislation

such as the Act in question here which

abolishes a common law right without

providing a reasonable substitute or guid

pro quo therefore is violative of due

process. We note at the outset that such

argument could have little value or appli-

cation to the hsopitals in this case.

There liability, and conversely the right

te an action against a hospital, was not

a creation of the common law; at least,

certainly not the common law in existence

in 1890. See, Bell v. Presbytery of

Boise, 91 Idaho 374, 421 P.2d 745 (1966).

The idea that due process imposes a guid

pro quo requirement seems to have result-

ed from dictum in New York Central Rail-

road v. White, 243 U.S. 188, 201 (1917).

See also, Lasky v. State Farm Insurance

Co., 296 So.2d 9, 17 (Fla. 1974), Opinion

of the Justices, 304 A.2d 881, 835 (N.H.

1973); Pinnick v. Cleary, 271 N.E.2d 592,

605-607 (Mass. 1971). However, it appears

to have been nothing more than a make-

weight argument. In Pinrick upon which

other state cases have relied, the court

at the outset stated:

"We intimate no opinion as to

whether and if so in what cir-

cumstances, the as te of

this test [quid pro quo] is con-

stitetionsl lt Seuetxed at 605,

f.n. 16.

Moreover, in Montgomery v. Daniels, 340

N.E.2d 444, 453 (N.Y. 1975), the New

York Court of Appeals indicating that a

serious question exists as to whether this

‘adequate substatute test' is any test at

all" analyzed the authority of White as

follows:

"In Munn v. Illinois, 94 U.S.

113, 134, 24 L.Ed. 77, the

court had been unequivocal in

its statement that: ‘A person

has no property, no vested

interest, in any rule of the

common law. That is only one

of the forms of municipal law,

and is no more sacred than any

other. Rights of property which

have been created by the common

law cannot be taken away without

due process; but the rule itself

as a rule of conduct, may be

changed at the will, or even at

the whim, of the legislature;

unless prevented by constitu-

tional limitations. Indeed

the great office of statutes

is to remedy defects in the

common law as they are devel-

oped and to adapt it to the

changes of time and circum-

stances.' In Arizona Employers

Liability Cases, 250 U.S. 400,

421, 39 S.Ct. 553, 556, 63 L.Ed.

1058, the court later repeated

those principles in the follow-

ing language: '‘'But [common law

taught rules] are no more than

rules of law, deduced by the

courts as reasonable and just,

under the conditions of our

civilization***, They are not

placed by the Fourteenth

Amendment, beyond the reach

of the state's power to alter

them, as rules of future conduct

and tests of responsibility,

through legislation designed

to promote the welfare.' Finally,

in Silver v. Silver, 280 U.S. Save

122, 50 S.Ct. 57, 58, 74 L.Ed.

221 (1929), the court in a

further dictum appeared totally

to have undercut its earlier

dictum in the White case by

citing 'the rule that the con-

stitution does not forbid the

creation of new rights, or the

abolition of old ones recognized

by the common law, to attain a

permissible legislative object.'"

We agree with this analysis that the

United States Supreme Court in White did

not intend to engraft upon the tradition-

al due process test an additional standard

when the challenged statute involves

alteration of some prior existing common

law doctrine.

It is additionally argued that the

Act is unreasonable and arbitrary since

there is no relation between the monetary

limitations placed on a recovery and any

particular injury which has resulted from

medical malpractice. It is asserted that

the limitation is clearly an arbitrary

amount selected for no reason other than

political convenience and has no rela-

tionship to any legitimate public inter-

est. We do not necessarily agree. The

question here is only whether there is a

rational relationship to a legitimate

legislative purpose.

The legislative purpose of the Act

as set forth in I.C. §39-4202 is:

"Declaration of Necessity and

Purpose:* * *to assure that

a liability insurance market

be available to* * *physi-

cians and licensed hospitals

* * *and the same be available

at a reasonable cost, thus

assuring the availability of

such hospitals and physicians

for the provision of care to

persons in this state.”

Therefore the appellants contend and

argue that the recovery limitation

served to create a stable insurance

market with reasonable rates, thereby

securing a climate for continuous health

care services to the people of this state.

Questions of due process arising in

challenges to legislation ordinarily

result in a minimal scrutiny test, and

this Court and others have at times

engaged in speculative inquiry in order

to indentify any conceivable rational

relationship which would legitimatize the

legislative action. Nevertheless, it is

argued, and we agree, that there is con-

siderable doubt if the purpose of the

limitations as declared in the Act is in

fact the true object of legislative con-

cern. Also, there is doubt as to the

relationship between the challenged

limitations and the legitimate public

purposes that this Act may be said to

serve. We therefore deem it prudent to

refrain from a decision on the question

of due process without the production of

a more factually revealing evidentiary

record. Since, as will appear, it is

essential that this case be remanded for

the determination of questions pertinent

to the equal protection challenges, it

is appropriate that both the equal pro-

tection and due process challenges be

considered in light of a better factual

record.

We emphasize, however, that the

remand on the due process question is

limited to the production of facts and

we do not depart from what we have here-

tofore discussed and upheld as the

traditional standard for consideration of

questions of due process.

IV.

We turn now to consideration of the

argument that those portions of the Act

limiting recovery in medical malpractice

actions create a classification which is

discriminatory and in violation of the

egual protection clauses of the Four-

teenth Amendment and Art. I, §2 of the

Idaho Constitution. The classification

which is there created distinguishes be-

tween those who are damaged as a result

of medical malpractice in amounts exceed-

ing $150,000.00 as contrasted with others

likewise damaged by medical malpractice

but those damages are less than $150,000.

Thus, those who are damaged in excess of

the statutory limitation are denied full

recovery. The standard which is to be

used for review here is largely determin-

ative of whether this classification is

invidiously discriminatory so as to be

prohibited by the guarantees of equal

protection.

It is initially argued that the

limitations upon recovery for medical

malpractice infringe upon a fundamental

right, thus necessitating the application

of the "strict scrutiny test” standard. .

We disagree and deem it clear that the

challenged classification is not “suspect”

as that has been identified by the United

States Supreme Court. Newlan v. State,

supra. We also disagree with the asser-

tion that such classification involves

fundamental rights as contemplated by

Art. I, §18, of the Idaho Constitution.

Rather, we believe that the standard

to be applied in testing the classifica-

tion created by the challenged legisla-

tion is one of lesser scrutiny. Appel-

lants argue that the classification

created by the legislation must be judged

by the standard set forth in McGowan v.

Maryland, supra, which broadly states

that a" statutory discrimination will not

be set aside if any state of facts can be

conceived to justify it." (Emphasis

supplied). See also, Evans v. Idaho

State Tax Commission, 95 Idaho 54, 501 P.

2d 1054 (1972). On the other hand, res-

pondents assert that the classification

created by the legislation must be tested

by the standard of Reed v. Reed, supra,

i.e., according to whether it “rests on

some ground of difference having a fair

and substantial relation to the object of

the legislation." See also, Thompson v.

Hagan, supra. When the test set forth in

McGowan has been utilized, the result has

Ordinarily been the removal of the court

from any but the most cursory review of

the challenged legislation. It invites

courts to conceive purposes which would

justify statutes. The validity or in-

validity of discriminatory classifica-

tions may under that test depend solely

upon the extent of the imagination of the

reviewing court and/or its adherence to

the theory of judicial restraint. See,

e.g-, Gossaert v. Cleary, 335 U.S. 464

(1948); Kotch v. Board of River Port

Pilots Commissioners, 330 U.S. 552 (1947).

While we recognize and agree with the

concept of judicial restraint as it

cautions against substituting “judicial

opinion of expediency for the will of the

legislature,” Purity Extract & Tonic Co.

v. Lynch, 226 U.S. 192 (1912), neverthe-

less, blind adherence and over-indulgence

results in abdication of judicial respon-

sibility. It is appellant's position

in the case at bar that since the legis-

lature has declared the purpose of the

subject Act and since that declaration is

said and presumed to be founded on a ra-

tional factually based legislative deter-

mination, this Court is foreclosed from

additional inquiry into the Act. We

disagree.

This Court has found it necessary to

look beyond the minimal scrutiny test of

McGowen in reviewing classifications al-

leged to be violative of equal protection.

In so doing, we have relied upon the

standard set forth in F.S. Royster Guano

Co. v. Virginia, supra, as quoted in

Reed. That test scrutinizes the means

by which the challenged legislation is

saii to affect its articulated and other-

wise legitimate purpose. See, State v.

Cantrell, supra; Evans v. Idaho State Tax

Commission, supra, upholding challenged

legislation and Kerr v. Dept. of Employ-

ment, 97 Idaho 385, 545 P.2d 473 (1976);

Thompson v. Hagan, supra; Mesmer v. Ker,

supra; Harrigfeld v. District Court,

supra; and Sterling H. Nelson & Sons v.

Bender, supra, where statutes have been

overturned as violative of equal protec-

tion.

In the usual and ordinary case where

a statutory classification is to be tested

in the context of equal protection, judi-

cial policy has been, and continues to be,

that the legislation should be upheld so

long as its actions can reasonably be

said to promote the health, safety and

welfare of the public. Nevertheless,

where the discriminatory character of a

challenged statutory classification

is apparent on its face and where there

is also a patent indication of a lack of

relationship between the classification

and the declared purpose of the statute,

then a more stringent judicial inquiry is

required beyond that mandated by McGowen.

That common thread runs through all the

cases in which the Royster-Reed test has

been applied by this Court.

Here it is apparent from the face of

the Act that a discriminatory classifica-

tion is created based on the degree of

injury and damage suffered as a result of

medical malpractice. Rather obviously

although the Act is said to be designed

to insure continued health care to the

citizens of Idaho it cannot do other than

confer an advantage on doctors and hospi-

tals at the expense of the more seriously

injured and damaged persons. In the

absence of any record we are without in-

formation as to the factual basis under-

lying the purported correlation between

limitation of claimant recovery ard the

promotion of health care for the people

of Idaho. We therefore deem it essential

that the purposes of the Act and the re-

lationship of the legislatively designed

means to accomplish those purposes must

be examined.

Does the statute reflect any reason- -

ably conceived public purpose, and does

the establishment of the classification

have a fair and substantial relation to

the achievement of the objective and

purpose?

Since appellants have argued their

case in terms of the McGowen standard,

we are unable to ascertain how the

Classification between various victims

of malpractice relate to the asserted

purpose of assuring medical care to the

people of Idaho, notwithstanding the

declaration found in I.C. §39-4202. It

is asserted, however, that because of

the increasing number of medical mal-

practice claims premium rates for

medical malpractice insurance have dra-

matically increased and that Idaho's here-

tofore principal medical malpractice in-

surance carrier has withdrawn any coverage

of 500 of the state's 900 doctors. It is

argued that by limiting the amount of

recovery it was intended to create a more

stable basis for prediction of malpractice

losses and thereby encourage the entry in-

to Idaho of new insurance carriers at

lower, more reasonable and more competi-

tive rates. We are unable to judge the

accuracy or completeness of these asser-

tions on the record presented here.

It is argued that the Act is a nec-

essary legislative response to a "crisis

in medical malpractice insurance” in

Idaho, but the record does not demonstrate

any such "crisis". Further, there is no

evidentiary basis presented here to

either support or refute the relationship

between the limitations created by the

Act and the abatement of the alleged

crisis. As heretofore stated, the sole

evidentiary record is found in the affi-

davit of the Directory of the State De-

partment of Insurance.

Although that affidavit is conclu-

sory in stating that the Act was a “res-

ponse to the medical malpractice insurance

crisis” which crisis is indicated by in-

creased premium rates and unavailability

of insurance carriers, and that the Act

was designed to stabilize the medical

malpractice insurance market by providing

a predictable level of recovery, other

matters are contained therein which cast

doubt on the validity of these conclu-

sions. Simultaneous with the passage of

the Act in question here, there was en-

acted additional legislation authorizing

creation of a temporary joint under-

writing association (JUA) of liability in-

surance carriers in the field of medical

malpractice insurance. Chapter 163,

(1975) Idaho Sees. Laws 427. The forma;

tion of that association was contingent

upon a finding by the Director of the De-

partment cf Insurance that medical mal-

practice insurance was unavailable under

the standards of I.C. §41-1405 ina

voluntary market. I.C. §41-4103(3).

Attached to the affidavit of the Director

of the Department of Insurance are the

findings of the hearing held by him to

consider the necessity of forming the

underwriting association. Therein it is

indicated that although two insurance

carriers are withdrawing from the mal-

practice field in Idaho, seven remain,

one of whom is offering to insure physi-

cians left uninsured by the recent with-

drawals. It is further found that the

rates offered by the remaining companies

"are based on competent actuarial con-

siderations and appear to be adequate

but not excessive or unfairly discrimin-

atory". (Emphasis supplied). And, the

Director concluded that it was thus un-

necessary to activate the underwriting

association stating:

"Medical malpractice insurance

including coverage above $300,000,

is available in Idaho under standards

described in Section 41-4105, Idaho

Code, for physicians in the volun-

tary market on a reasonably compe-

titive basis."

In the affidavit those conclusions were

extended to include hospitals as well as

physicians. At the very least the

findings of the Director resulting from

that hearing present a differing and con-

flicting view of the alleged "crisis" upon

which the Act is said to have been predi-

cated.

The question was raised concerning

the instability of the reinsurance market

and its effect upon Idaho's primary car-

riers. It is apparent that reinsurance

occupies a vital position for continued

stability of medical malpractice insur-

ance. U.S. Department of Health and Wel-

fare Report to the Secretary's Commission

on Medical Malpractice 39 (1973); Kendall

and Haldy, “The Medical Malpractice In-

surance Market,” Appendix to the Report,

at 546-548. Nevertheless, the only record

before us are the hearsay declarations of

the Director of the Department of Insu-

ance that he has been informed by one in-

surer that it had in turn been informed

by its reinsurer that it could no longer

contract reinsurance in amounts usually

requested of the $1,000,000. excess policy.

Such cannot be considered persuasive evi-

dence of a general instability in the

medical malpractice reinsurance market

which affects Idaho's carriers. In the

HEW Report, supra, it is indicated that

the degree of influence that the reinsur-

ance market exercises on the primary mal-

practice market depends directly upon the

size of the primary insurance carriers.

The report makes two additional findings

of significance, i.e., that it is highly

doubtful that any established carrier

has not entered the malpractice field

because of weakness in the reinsurance

market and that to the extent medical

Malpractice insurance is available in

the primary market, it is also available

in the reinsurance market.

We would be remiss if we did not note

the problems of the primary malpractice

market vis-a-vis the reinsurance market

which in the opinion of the Director of

the Department of Insurance as set forth

in his affidavit, are due to "extremely

high losses" resulting from malpractice

liability claims "combined with the ab-

normally low earnings from investments".

We are troubled by the clear inference

resulting therefrom that the "crisis" in

response to which the subject Act was

adopted results in part from economic

fluctuations and resultant unsuccessful

investment practices.

Attached to the original complaint

in the case at bar is a statement alleged-

ly presented to the legislature as an ex-

planation of the need for the enactment of

the subject legislation. It states in

part:

"The rapidly increasing frequency

and size of malpractice claims and

judgments against physicians and

hospitals nationwide, coupled with

stock market reverses, have led to

skyrocketing premiums for malpractice

liability insurance and even potential

inability to purchase such insurance."

Although appellants argue that such state-

ments cannot be considered by this Court

for any purpose, we disagree. I.R.C.P.

10(c); 2A Moore's Federal Practice, §10.06

(2d Ed., 1975); 5 Wright & Miller, §1327

(1969); Barron & Holtzoff Federal Practice

& Procedure, §325(1960). See also,

Simpson v. Southwest Railroad Co., 128

F.Supp. 532 (D.C. Ga. 1955), affirmed on

other grounds, 231 F.2d 59 (5th Cir.

1956), cert. denied, 352 U.S. 828 (1956?.

One further problem is posed by the

affidavit of the Director of Insurance

in determining the relationship between

the means (restriction on claims) as re-

lated to the objective of the Act. There-

in it is stated that the $150,000-300,000

limitation placed upon malpractice re-

coveries “would have covered all claims

to date”. The implication arising

therefrom is that no judgment or settle-

ment in a medical malpractice action in

Idaho has to the knowledge of the Director

exceeded the recovery limits of the Act.

In these regards the affidavit of

the Director of the Departement of

Insurance sheds no light and provides no

assistance to this Court, but rather as

indicated poses additional unsolved

problems in our application of the test

to the classification created by the Act

and the challenge that such classification

is violative of equal protection.

While we are as aware as any other

member of the public of assertions of

growing problems in the medical mal-

practice insurance field, the record here

presents no factual basis for understand-

ing the nature and scope of the alleged

medical malpractice crisis nationally or

in Idaho. It is thus impossible for this

Court to assess the necessity for this

legislation and whether or not the limi-

tations on medical malpractice recovery

set forth in the Act bear a fair and sub-

stantial relationship to the asserted pur-

pose of the Act.

Is there indeed a medical malpractice

insurance crisis -in Idaho? Are physicians

and hospitals in Idaho being charged ex-

cessive, grossly unfair premiums for medi-

cal malpractice insurance (and if so,

what is the position of the Directory of

the Department of Insurance of the State

of Idaho in relation to duties imposed

upon him, See, I.C. §41-201 et. seq.),

or are the monumental increases in medi-

cal malpractices insurance premiums

reasonably attributable to the costs of

doing business in the medical malpractice

insurance field? Is medical malpractice

insurance unavailable at reasonable rates

in the absence of legislative enactments?

Is the threat of unavailability of health

care to the people of Idaho a reality

or not? Has there been, aS suggested, an

increased rash of claims and sizable re-

coveries or settlements in favor of per-

sons alleged to have suffered as the result

of medical malpractice in Idaho? Finally,

and most importantly, if there is indeed a

medical malpractice insurance crisis in

Idaho, what is the effect or will be the

effect of the limits of recovery and the

other provisions of the subject Act with

respect to forestalling or abating the

crisis? In the absence of any factual

information bearing on these questions,

if indeed there are answers, no decision

can be made by this Court in the area of

the equal protection challenge to the

Act.

In an effort to find some answer

outside the parameters of the record in

this case we have examined some of the

growing body of literature on medical mal-

- practice insurance. Therein we find gen-

eral agreement that there is a growing pro-

blem in medical malpractice insurance

which is manifested by increasing rates

and a threat of curtailment of health

care. Four dominant factors appear of

prominent concern although the overall

causes of the problem appear intricate,

highly interrelated and difficult of as-

certainment. The HEW Report, supra, at

24, attributes the root cause of medical

malpractice problems to an increase in

patient injuries. While those iatrogenic

injuries (those induced during treatment)

May or may not be caused by negligence,

their numerical increase is a reality:

The second causal factor is the increase

in number of malpractice claims. .We are

aware of no statistics evidencing such

an increase in number of claims in Idaho

and on a national basis the statistics

vary considerably. The Insurance Services

Organization estimates nationally an in-

crease in claims of 12%. In contract, an

estimate of 225% annual increase between

1970 and 1975 was made by St. Paul Fire

& Marine Insurance Co. That same data,

however, indicates a 130% increase be-

tween 1969 and 1974. Downey, “Medical

Malpractice Bares Its Fangs at Hospitals,

and Its Venom May Prove Deadly", Modern

Health Care, 21-23 (June 1975). The HEW

Report, supra, at 12, characterizes medi-

cal malpractice incidences as being "a

relatively rare event" and suggests that

claims are even more unusual. On the

basis of 1970 data from 26 of the largest

medical malpractice insurance carriers

(representing 90% of the industry nation-

ally) it is estimated that a malpractice

incident was reported in one out of every

- 158,000 patient visits and a claim was

made for only one of every 226,000 visits.

Rudolph Myers and Mirabella, “Medical

Malpractice Insurance Claims Files Closed

in 1970", HEW Report, Appendix. This

same report also indicates that fewer

than one court trial was held for every

ten claims closed in 1970. One commenta-

tor states that the number of claims made

against physicians is not excessive given

the actual number of serious medical

errors which occur and the extent to which

patients and their attorneys perceive

meritorious grievances. Mechanic, "Some

Social Aspects of the Medical Malpractice

Dilemma," 1975 Duke Law Journal 1179.

A third factor exerting an effect

upon medical malpractice insurance is the

dollar amount cf damages awarded in ver-

dicts and the rise in that dollar amount

in recent years. Downey, supra, at 27.

The HEW Report, supra, at , Lound in

1970 that the median recovery was $3,000

and "less than 1% of all cases closed

(in 1970) were for amounts in excess of

-$100,000." On the other hand, St. Paul

Fire & Marine Insurance Co. reports that

the average payment for malpractice claims

nationally increased from $6,705 in 1969

to $12,535 in 1974. Congressional Quart-

erly 709 (April 5, 1975). Of large sig-

nificance, of course, is that in 1970

medical malpractice insurance losses in

Idaho (including expenses as well as

actual awards and settlements) constituted

less than one-tenth of 1% of the national |

total.

A final factor indicated by the lit-

erature has been the difficulty in pro-

_viding medical malpractice insurance at

reasonable rates. Rate-setting in medi-

cal malpractice insurance has been

described as an "actuarial nightmare”.

Therein it is stated:

"The basic objective of any insurance

company is to sell insurance at a rate

which is competitive and which will

result in a profit for the com y-

In order to do this companys employ

actuaries to predict future losses

that must be paid from present pre-

miums.***Rates must produce a suf-

ficient premium volume to (1) cover

the losses that will occur during

the period. (2) cover the adminis-

trative expenses of running the

business, and (3) provide a small

margin for the unknown contingencies

which may become a profit if not used”.

HEW Report, supra, at 41-42.

While the objective in setting medi-

cal malpractice insurance premiums may

be stated simply, the actuarial principles

utilized to develop those rates are comp-

licated. The relatively small size of

the market and the fluctuations in the

number of claims and the size of the a-

wards “have deprived the rate-maker of

his basic ingredients for rate making

frequency and average claim cost". See,

Roddis & Steward, "The Insurance of Medi-

cal Loss", 1975 Duke Law Journal 1281.

There is no method by which we can gauge

the reasonableness of the means in limit-

ing Idaho malpractice awards without some

understanding of the actuarial problems

facing insurers as they specifically and

directly relate to Idaho. Parenthetically

we note that a Detroit based group calling

themselves the “Physicians Crisis Commit-

tee" has recently stated that the rate

making of one of the major malpractice

insurance carriers bears no relationship

to actuarial principles or calculations.

That company it is said has exploited the

crisis in malpractice insurance by in-

creasing its rates in such a way that

its after tax earnings on investments were

nearly 32% in 1975 as contrasted with 113

in 1965. "MD's say carrier makes 32%

after tax profits," Medical World News

21 (May 3, 1976).

Perhaps the most vexing problem in

malpractice rate setting nationally has

been the protracted period of time that

passes prior to the reporting and settle-

ment of malpractice claims. See, HEW

Report, supra, at 22; Comment, “Recent

Medical Malpractice Legislation--A First

Checkup", 50 Tulane Law Review 655 (1976);

Comment, "The ‘Claims Made' Dilemma in

Professional Liability Insurance," 22

UCLA Law Review 925 (1975). What has~™

been described as the "long tail" on mal-

practice losses is the period during which

doctors and hospitals may be exposed to

liability for iatrogenic injuries follow-

ing actual patient contact. In part, this

results from some statutes of limitations

which may not begin to run until several

years after the incident which caused the

injury. As a result a claim may be far

removed in time from the point at which

the patient received the actual treatment.

In Idaho this problem has been significant-

ly restricted by I.C. §5-219 which sets a

limitation of court action for medical mal-

practice within two years “following the

occurrence, act or omission complained of"

or one year following "discovery" of a

foreign object left in the body. See,

Billings v. Sister of Mercy of Idaho, 86

Idaho 485, 389 P.2d 244 (1964); Cook v.

Soltman, 96 Idaho 187, 525 P.2d 969 (1974)

and further restricted by Johnson v. Gorton,

94 Idaho 595, 495 P.2d 1 (1972); Stoner v.

Carr, 97 Idaho 641, 550 P.2d259 (on re-

hearing) (1976); but see Renner v. Edwards,

93 Idaho 836, 475 P.2d 530 (1970); Johnson

v. Stoddard, 96 Idaho 230, 526 P.2d 835

(1974). In light of the above case law

in Idaho it appears that the actuarial

problem resulting from time lag may be

less in Idaho than on a national scale.

In the case at bar the Act has been

described by the appellants as a “local

response to a national problem". The

above discussed literature casts some light

on the existence of a so-called "crisis" and

some of the problems inherent in that crisis.

The record before us contains no attempt

to relate any findings of national scope

to Idaho and this Court lacks the ability

to extrapolate any such relation from the

national literature. Since Idaho has only

-5% of the general practitioners, .2% of

the surgeons and .8% of the hospitals,

all as contrasted with national totals,

any limitation on the liability of

physicians or hospitals in this state may

have only the most remote effect upon a

nationwide medical malpractice insurance

crisis. See, Kendall & Haldey, supra, at

525-527.

It is necessary, therefore, that the

case at bar be remanded to the district

court for additional evidence, findings

and conclusions consistent with this

opinion. The respondents are not relieved

from their burden to show the unconstitution-

ality of the assailed classifications con-

tained in the legislation. See, State v.

O'Bryan, 96 Idaho 548, 531 P.2d 1193 (1975);

Cummings v. J.R. Simplot Co., 95 Idaho 465,

511 P.2d 282 (1973); Leonard v. Moon, 92

Idaho 796, 451 P.2d 542 (1969); Idaho

Telephone Co. v. Baird, 91 Idaho 425,

423 P.2d 337 (1967).

Vv.

Since the case at bar will be reman-

ded, one further issue is necessary of

discussion albeit such was not before the

district court. Following disposition

below but prior to consideration here, an

opinion of the Illinois Supreme Court had

under consideration that state's medical

malpractice statute and declared it uncon-

stitutional in aspects pertinent to the

case at bar here. Wright v. Central

Dupage Hospital Assn., _ N.E.2d , slip

opinion No. 48075 (Ill., May 24, 1976).

That Illinois Act contained a maximum

liability recovery of $500,000 "on account

of injuries by reason of medical, hospital

or other healing art malpractice.” That

monetary limitation was found to be viola-

tive of Art. IV, sec. 13, of the Illinois

Constitution, prohibiting “special privi-

lege" legislation. Art. III, sec. 19, of

the Idaho Constitution provides in perti-

nent part:

"The legislature shall not pass local

or special laws in any of the follow-

ing enumerated cases, that is to say:

* * * releasing or extinguishing,

in whole or in part, the indebted-

ness, liability or obligation of any

person or corporation in this state

or any other municipal corporation

therein. * * *"

The respondents-intervenors have argued

that the recovery limitation in the Idaho

malpractice Act is likewise unconstitu-

tional as offensive to Art. III, sec. 19,

of the Idaho Constitution.

That provision of the Idaho Constitu-

tion was patterned after those which occur-

red in many state constitutions in the

late nineteenth century following a proli-

feration of special and local laws in post-

Civil War legislatures. Clow & Marcus,

"Special and Local Legislation," 24 Ky .Law

Journal 351, 355-358 (1936). The general

purpose of such constitutional provisions

was "to prevent legislation bestowing

favors on preferred groups or localities."

State ex rel. Idaho State Park Board v.

City of Boise, 95 Idaho 380, 383, 509 P.2a

1301 (1973).

It has been indicated that the distinc-

tion between general and special legislation

is that a law is general if "all persons

Subject to it are treated alike as to privi-

leges, protection and in every other

respect." Wanke v. Ziebarth Const. Co.,

69 Idaho 64, 202 P.2d 384 (1948). Stated

in other terms, "A-statute is general if

its terms apply to, and its provisions

Operate upon, all persons and subject

matter in like situations." Jones v. Power

County, 27 Idaho 656, 150 P. 35 (1915);

In re Bottjer, 45 Idaho 168, 260 P. 1095

(1927). "It is well settled that a law is

not special in character, 'if all persons

subject to it are treated alike, under

Similar circumstances and conditions, in

respect to both the privileges conferred

and the liabilities imposed.'" State v.

Horn, 27 Idaho 782, 793, 157 P. 275 (1915).

See also, In re Crane, 27 Idaho 671, 151 P.

1006 (1915); Ada County v. Wright, 60 Idaho

394, 92 P.2d 134 (1939); State v. Lindstrom,

68 Idaho 226, 191 P.2d 1009 (1948).

Clearly it is arguable.at least that

the Act in question here is special in that

it selects from a class of persons other-

wise subject to liability for their negli-

gent acts, physicians and hospitals, and

releases or extinguishes, in part at

least, their otherwise liability contrary

to the interdiction of special laws in

Art. III, sec. 19. The limitations of

Art. III, sec. 19, are not, however,

absolute in their application.

In our constitution, local and special

laws are prohibited only in regard to the

matters therein specifically mentioned.

Butler v. City of Lewiston, 11 Idaho 393,

83 P. 234 (1905); State ex rel. Idaho Park

Board v. City of Boise, supra. In that

fashion, our constitution differs from

that of California in that Idaho's contains

no catch-all restriction against special

laws where a general law would apply. In

California, the standard applicable to

their special legislation clause is

equated with that standard utilized under

the equal protection clause of the federal

constitution. Los Angeles County v.

Southern California Telephone Co., 196 P.2d

773 (Cal. 1948), appeal dismissed, 336 U.S.

929 (1949); Carleson v. Superior Court for

County of Sacramento, 100 Cal.Rptr. 635

(Cal.App. 1972); Russell v. Carleson, 111

Cal.Rptr. 497 (Cal.App. 1973). See also,

McCarty v. Goldstein, 376 P.2d 691 (Colo.

1962); People v. Sprengle, 490 P.2d 65

(Colo. 1971); Clow & Marcus, supra. We

hold the equal protection clause of the

federal constitution and Art. III, sec. 19,

of the Idaho Constitution, were adopted to

serve distinctly different identifiable

purposes. While it might be constitutional

in the sense of equal protection for our

legislature to single out persons or

corporations for preferred treatment, such

would nevertheless be regarded as in conf-

lict with Art. III, sec. 19. See, Jackson

v. Gallet, 39 Idaho 382, 228 P. 1068

(1924); State Water Conservation Board v.

Enking, 56 Idaho 722, 58 P.2d 779 (1936);

Wiggin v. City of Lewiston, 8 Idaho 527,

69 P. 286 (1902); Board of County Commis-

Ssioners of Lemhi County v. Swensen, 80

Idaho 198, 327 P.2d 361 (1958).

If as asserted by appellants here the

Act in question is found to have been

enacted in response to a problem of state-

wide concern in Idaho and by alleviation

of that problem it is found to serve the

health and welfare of the people of the

state of Idaho, and the means adopted in

the Act are held to be reasonably related

to the solution of those problems, then

the Act will survive the challenge that it

is offensive to Art. III, sec. 19, of the

Idaho Constitution. Therefore, the

challenges posed to the Act as offensive

to Art. III, sec. 19, are likewise remanded

to the district court for additional evi-

dence, findings and conclusions by that

court.

There is also remanded to the district

court for its consideration the challenge

to sec. 10 of the Act which limits the

grounds for malpractice action to common

law negligence and requires that recovery

shall be restricted to compensation damages

not satisfied from collateral sources.

I.C. sec. 39-4210. Also to be considered

by the trial court are those questions

presented by the enactment of Chapter 278,

[1976] Idaho Sess. Laws, p. 953, establi-

shing panels for review of medical malprac-

tice actions. See, Wright v. Central

Dupage Hospital Assn., supra.

Judgment of the trial court is

reversed and remanded for further procee-

dings consistent with this opinion. No

costs allowed.

McFADDEN, C.J., and BISTLINE, J.,

concur. DONALDSON and BAKES, JJ., concur

except as to Part I in which they concur

in the result.

IN THE DISTRICT COURT OF THE FOURTH

JUDICIAL DISTRICT OF THE STATE OF

IDAHO, IN AND FOR THE COUNTY OF ADA

A. CURTIS JONES, JR., M.D.

ROY J. ELLSWORTH, M.D.,

ROBERT B. MONTGOMERY, M.D.,

and BERNARD A. BODMER, M.D.,

ST. LUKE'S HOSPITAL, LTD. and

COMMUNITY HOSPITAL OF IDAHO

FALLS, IDAHO,

Civil No.

55527

Plaintiffs,

and

KENNETH E. DROULARD, M.D.,

and J. R. FARBER, M.D.,

Plaintiff

Intervenors,

vs.

STATE BOARD OF MEDICINE and

DEPARTMENT OF HEALTH AND

WELFARE of the State of Idaho,

Civil No.

55586

Defendants,

and

MEMORANDUM

IDAHO MEDICAL ASSOCIATION DECISION

and IDAHO HOSPITAL ASSOCIATION

Defendant

Intervenors,

me me ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee ee

APPEARANCES :

For the Plaintiff PAUL S. BOYD

Attorney at Law

For the Plaintiff-Intervenors &

Idaho Trial Lawyers Association

American Trial Lawyers Association

BRUCE O. ROBINSON

LLOYD J. WEBB

Attorneys at Law

For the Defendants EUGENE C. THOMAS

Special Assistant

Attorney General

For the Defendant-Intervenors

PAUL S. STREET

RICHARD C. FIELDS

Attorneys at Law

For the State of Idaho &

Intervenor Monroe C. Gollaher

WAYNE L. KIDWELL

Attorney General

RUDOLPH D.BARCHAS

Deputy Attorney

General

ROBERT M. JOHNSON

Assistant Attorney

General

Before this Court is the question of

the constitutionality of Senate Bill No.

1186, Chapter 162, 1975 Session Laws,

codified as title 39, Chapter 13, Idaho

Code, and referred to as the "Hospital-

Medical Liability Act." The actions are

for declaratory judgment of unconstitu-

tionality of the act. The original two

actions have been consolidated; The State

Board of Medicine, Department of Health

and Welfare of the State of Idaho and

Monroe C. Gollaher, Director of the

Department of Insurance, State of Idaho

have intervened and several amicus curiae

briefs have been received, all on stipu-

lation of the parties. The parties have

in effect stipulated for submission of

the controversy on the merits, on the

record through a motion for declaratory

judgment, argued September 16, 1975. The

only formal factual matter submitted is

the affidavit of Monroe C. Gollaher,

Director of Department of Insurance for

the State of Idaho, submitted for consid-

eration by stipulation.

The act imposes limits of civil lia-

bility upon licensed physicians and

licensed acute care hospitals in the

amount of $150,000.00 accruing as a

result of injury to or death of any one

patient arising out of the course of

treatment. Limits are also imposed on

claims accruing to two or more persons

arising from a single occurrence. It is

to the limitation of liability feature of

the act that the claim of unconstitution-

ality is directed. The main constitu-

tional attacks are violation of due

process of law and equal protection of

the laws under the United States and

Idaho Constitutions, and the allegation

of violation of Article I, Section 18 of

the Idaho Constitution.

This Court will accede to the public

policy decision of the legislature enact-

ing Senate Bill 1186 and will not attempt

to substitute its judgment therefore,

under the restrained review test of the

two-tier equal protection of laws analysis

acknowledged by the Idaho Supreme Court

in Thompson v. Hagan, 96 Idaho 19, 523

P.2 1365, Stucki v. Loveland, 94 Idaho

621, 495 P.2 571, and Newlan v. State,

535 P.2d 1348. The presumption of con-

stitutionality under the due process and

equal protection arguments as far as the

restrained review test will be indulged

in by this Court. An inquiry into the

legitimacy of the legislative action as

necessary to the public welfare will not

be made at this level. The limitation of

liability feature of the act obviously

bears a reasonable relationship to the

objectives sought to be advanced by the

act itself, i.e., the availability of

liability insurance. The main question

is whether the price to be paid by the

public is worth the remedy. The legis-

lature has answered this question in the

affirmative and a presumption of validity

must be given, at least by this Court to

that decision under the restrained review

test.

As concerns tne fundamental right test,

or the second tier of the two-tier

criteria, under the classification of

fundamental rights enunciated in Newlan,

and cases cited therein, this legislation

does not fall within the “suspect”

Classification under the various Supreme

Court decisions classifying fundamental

rights under the United States Constitu-

tion. Therefore the equal protection of

laws and due process arguments advanced

by Plaintiffs will be rejected.

However, the ability of citizens or the

public to seek regress for a breach of a

duty is a fundamental right in the broad

classification despite the fact the

United States Supreme Court has not so

classified the same in equal protection

cases There are other constitutional

considerations. Article 1, Section 18 of

the Idaho Constitution states:

"JUSTICE TO BE FREELY AND SPEEDILY

ADMINISTERED.-- Courts of justice shall

be open to every person, and a speedy

remedy afforded for every injury of

person, property or character, and

right and justice shall be administered

without sale, denial, delay, or :

prejudice.”

Under the act, in the event of an

injury or injuries which exceed the

statutory limits of liability, a person

or persons would not be afforded a full

remedy, but only a remedy to the extent

of the imposed limits. The above clause

requires a full and complete remedy for

every injury of person.

Article 1, Section 18 is a variant of

Chapter 40 of the Magna Carta. (See

discussion in dissenting opinion in

Newlan v. State supra. See also Howard,

"The Road from Runnymede," University

Press of Virginia, 1968.) An issue

comparable to the one before this Court

was considered by the California Supreme

Court in Werner v. Southern California

Associated Newspapers, 216 P.2d 825,

wherein limitation of liability was held

constitutional in libel cases.

But the California Constitution does

not contain a provision specifically

allowing a remedy for every injury of

person, property or character.

In my opinion, Article 1, Section 18 of

the Idaho Constitution prohibits the

limitation of liability for injuries

otherwise recoverable under a right or

cause of action and recognized by the

Common Law at least at the time of the

adoption of the Idaho Constitution in

1890. The clause provides relief for

"every" injury. Particularly does this

clause prohibit limitation of liability

where no substitute procedure or remedy,

judicial or administrative, is provided.

While it can be argued the-act provides a

substitute by the procision requiring

insurance to the extent of the limited

liability, the act in Section 11 also

allows a waiver of this requirement if

insurance is unobtainable.

By way of Section 18, the Idaho Constitu-.

_tion recognizes those Common Law causes

of action as existing in 1890 as the

ability of an individual to seek redress

for a breach of a duty owed as a basic

right. These basic rights must be pre-

served even in times of economic stress

concerning a certain segment of the

public, otherwise the door would be open

for the dilution and diminution of these

basic rights to the disinterest of

individual members of the public under

the contention and allegation of general

public necessity.

It is thus the conclusion of this Court

the limitation of liability feature of

the Hospital-Medical Liability Act

violates Article 1, Section 18 of the

Idaho Constitution and is therefore

unconstitutional.

This opinion may serve as formal Findings

of Fact and Conclusions of Law. Counsel

for Plaintiffs may prepare a form of

Declaratory Judgment for signature.

Dated and signed this 23rd day of

September, 1975.

Alfred C. Hagan

District Judge

IN THE DISTRICT COURT OF THE FOURTH

JUDICIAL DISTRICT OF THE STATE OF

IDAHO, IN AND FOR THE COUNTY OF ADA

A. CURTIS JONES, JR., M.D.

ROY J. ELLSWORTH, M.D.,

ROBERT B.-MONTGOMERY, M.D.,

and BERNARD A. BODMER, M.D.,

ST. LUKE'S HOSPITAL, LTD. and

COMMUNITY HOSPITAL OF IDAHO

FALLS, IDAHO,

Civil No.

55527

Plaintiffs,

KENNETH E. DROULARD, M.D.,

and J. R. FARBER, M.D.,

Plaintiff

Intervenors,

vs.

)

and )

)

STATE BOARD OF MEDICINE and Civil No.

DEPARTMENT OF HEALTH AND ) 55586

WELFARE of the State of Idaho,)

)

Defendants, )

)

and )

) DECLARATORY

IDAHO MEDICAL ASSOCIATION ) JUDGMENT

and IDAHO HOSPITAL ASSOCIATION)

Defendant

Intervenors,

and

STATE OF IDAHO &

MONROE G. GOLLAHER,

Intervenor.

This matter having come on regularly

before the Court upon the complaint of

plaintiffs and plaintiff intervenors, and

the responsive pleadings of defendants and

defendant intervenors and by their respec-

tive counsel of record aad the matters

being consolidated by agreement of the

parties and pursuant to the order of the

court; and the matter having been set for

hearing and arguments, both oral and

written having been submitted, and all

parties having rested and submitting the

matter to the Court, and further

The Court, being fully advised in the

premises, having on September 23, 1975,

rendered its Memorandum Decision and

directing and ordering that such opinion

serve as Formal Findings of Fact and

Conclusions of Law, to which reference

is hereby made;

NOW, THEREFORE, IT IS HEREBY ORDERED,

ADJUDGED AND DECLARED:

1. That the statute here under con-

sideration, entitled "Hospital-Medical

Liability Act", approved by the Legislature

of the state of Idaho as Senate Bill No.

1186, Chapter 162, 1975 Session Laws,

codified as Title 39, Chapter 13, Idaho

Code, is unconstitutional and null and

void, and thus does not apply to plain-

tiffs, A. Curtis Jones, M.D., Roy J.

Ellsworth, M.D., Robert B. Montgomery,

M.D., Bernard A. Bodmer, M.D., St. Lukes

Hospital, Ltd. and Community Hospital of

Idaho Falls, Idaho, or Kenneth E.

Droulard, M.D. and J. R. Farber, M.D.,

Plaintiff-Intervenors, and hence does not

prohibit the caid A. Curtis Jones, Jr.,

M.D., Roy J. Ellsworth, M.D., Robert B.

Montgomery, M.D. and Bernard A. Bodmer,

M.D., St. Lukes Hospital, Ltd., and

Community Hospital of Idaho Falls, Idaho,

or Kenneth E. Droulard, M.D. and J. R. Idaho Const., Art. 3, Section 19:

Farber, M.D. or each of them from the

practice of medicine and surgery or The legislature shall not pass local

operating and doing business as an acute or -special laws in any of the fol-

care hospital licensed as such in this . ’ lowing enumerated cases, that is to

state, without first having complied say:

with any requirement of the Hospital- Regulating the jurisdiction and duties

Medical Liability Act, or any order or : ; of justices of the peace and constables.

demand of the State Board of Medicine and For the punishment of crimes and mis-

the Department of Health & Welfare of demeanors.

the State of Idaho, made pursuant to the Regulating the practice of the courts

requirements of the Hospital-Medical - of justice.

Liability Act. Providing for a change of venue in

civil or criminal actions.

2. That if it was the intention of the Granting divorces.

Legislature of the State of Idaho to pro- Changing the names of persons or

hibit plaintiffs and plaintiff-intervenors places.

from the practice of medicine and surgery | Authorizing the laying out, opening,

and to operate as acute care hospitals altering, maintaining, working on, or

without first having acquired medical vacating roads, highways, streets,

malpractice insurance as a condition of alleys, town plats, parks, cemeteries,

licensure, then said Act is unconsti- or any public grounds not owned by the

tutional as violative of Article I, state.

Section 18 of the Idaho Constitution as Summoning and impaneling grand and

against plaintiffs and plaintiff-inter- trial juries, and providing for their

venors, as being a denial of the right compensation.

of an individual to seek redress for a | Regulating county and township busi-

breach of duty owed as a basic right, and ness, or the election of county and

is therefore, as against plaintiffs and township officers.

plaintiff-intervenors, unenforceable, For the assessment and collection of

null and void. taxes.

; ; - 7 Providing for and conducting elections,

Dated and signed this 29th day of or designating the place of voting.

September, 1975. Affecting estates of deceased persons,

‘ , minors, or other persons under legal

Alfred C. Hagan | disabilitieis.

District Judge Extending the time for collection of

taxes.

‘Giving effect to invalid deeds, leases

or other instruments.

Refunding money paid into the state

treasury.

Releasing or extinguishing, in whole

Or in part, the indebtedness, liability

or obligation of any person or corpora-

tion in this state or any municipal

corporation therein.

Declaring any person of age, or

authorizing any minor to sell, lease

or incumber his or her property. |

Legalizing as against the state the

unauthorized or invalid act of any

officer.

Exempting property from taxation. |

Changing county seats, unless the law

authorizing the change shall require

that two-thirds of the legal votes cast

at a general or special election shall

designate the place to which the county

seat shall be changed; provided, that

the power to pass a special law shall -

cease as long as the legislature shall

provide for such change by general law;

provided further, that no special law

shall be passed for any one county

oftener than once in six years.

Restoring to citizenship persons con-

victed of infamous crimes.

Regulating the interest on money.

Authorizing the creation, extension

or impairing of liens.

Chartering or licensing ferries, bridges

or roads.

Remitting fines, penalties or for-

feitures.

Providing for the management of common

schools.

Creating offices or prescribing the

powers and duties of officers in coun-

ties, cities, townships, election

districts, or school districts, except

‘as in this constitution otherwise pro-

vided.

Changing the law of descent or suc-

cession. .

Authorizing the adoption or legitimi-

zation of children.

For limitation of civil or criminal

actions.

Creating any corporation.

Creating, increasing or decreasing

fees, percentages, or allowances of

public officers during the term for

which said officers are elected or

appointed.

TITLE 39, CHAPTER 42, IDAHO CODE:

39-4201. Title.--This act shall be

known as the ‘Hospital-Medical

Liability Act.” [1975, ch.162, §1,

p. 422.]

39-4202. DECLARATION OF NECESSITY

AND PURPOSE.--It is the declaration

of the legislature that appropriate

measures are required in the public

interest to assure that a liability

insurance market be available to

persons licensed to practice medicine

and surgery, persons licensed to

practice osteopathic medicine and

surgery, all of whom are hereinafter

referred to as physicians, and to

licensed hospitals providing health

care in this state and that the same

be available at reasonable cost,

thus assuring the availability of

such hospitals and physicians for

the provision of care to persons in

the state. It is, therefore, further

declared that a limitation upon and

required underwriting of the potential

liability of such licensed providers

of health care is in the public

interest and that all exposure to

Civil liability of such providers of

health care on account of any error,

omission, neglect or other wrongdoing

in the provision of care or performance

of its, his or her function as an

acute care hospital or physician be

limited and codified in and by this

act.

39-4203. LIABILITY LIMITED.--

Licensed physicians and licensed

acute care hospitals proyiding

health care in this state shall have

a limit of liability, as such, to

any one (1) claimant for or on

account of any one (1) occurrence or

to two (2) or more claimants on

account of any one (1) occurrence,

as hereinafter provided; and further,

there shall be no civil liability of

any kind of such hospitals or

physicians for any error, omission,

neglect or other wrongdoing in the

provision of care or performance of

its, his or her function as an acute

care hospital or physician other

than or beyond the limit of liability

as provided herein. [1975, ch. 162,

§3, p.422.]

39-4204. PHYSICIAN'S LIABILITY.--The

limit of civil liability for damages

of a licensed physician, as aforesaid,

to or on the account of injury to or

death of any one (1) patient arising

out of any treatment or tourse of

treatment shali be one hundred fifty

thousand dollars ($150,000), and to

or on account of injury or death of

two (2) or more patients arising out

of any one (1) occurrence shall be an

aggregate of three hundred thousand

dollars ($300,000); provided, however,

the provision of the above aggregate

limit is not to be construed as

extending or enlarging such exposure

or liability to or on account of any

one (1) patient. [1975, ch. 162, §4, .

p. 422.)

60 5

39-4205. HOSPITAL LIABILITY.--The

limit of civil liability for damages

of a licensed acute care hospital,

as aforesaid, to or on account of

injury to or death of any one (1)

patient arising out of any treatment

or course of treatment shall be one

hundred fifty thousand dollars

($150,000), and to or on account of

injury or death of any two (2) or

more patients arising out of any one

(1) occurrence shall be an aggregate

of three hundred thousand collars

($300,000) or the total of the

number of patient hospital beds in

the facility multiplied by ten

thousand dollars ($10,900), whichever

figure be greater; provided, however,

the provision of the above aggregate

limit is not to be construed as

extending or enlarging such exposure

or liability to or on account of

any one (1) patient. [1975, ch. 162,

§5, p. 422.]

39-4206. INSURANCE.--Every acute

care hospital and physician licensed

to provide health care in this state

shall, as a condition of securing

and maintaining such licensure,

unless the requirement therefor has

been waived or provided in section

39-4211, secure liability 39-4204

and 39-4205 and shall file and

appropriate certificate of insurance

as hereinafter provided, confirming

the existence of such insurance with

at least such limits of liability at

all times during which licensure

remains valid. The liability of any

such physician or hospital which has

complied with or obtained a waiver

of insurance requirements of this

act at the time of provision of any

health care from which a claim for

liability arises shall be limited as

provided in this act, but any such

physician or hospital in violation

of this act in providing such are in

this state under the authority and

image of a licensed physician or

hospital without having complied

with or obtained a waiver of insurance

requirements of this act shall, as

respects any claim arising from such

are or conduct, have unlimited

liability upon any legal theory

recognized at common law. [1975,

ch. 162, §6, p. 422.)

39-4207. SELF-INSURANCE, DEDUCTIBLES

AND ALTERNATIVE COMPLIANCE ALLOWED. --

(a) Any otherwise acceptable plan,

fund or policy of insurance securing

or underwriting exposure to liability

under this act may provide a deductible

or self-insurance arrangement to the

extent of the first five thousand

dollars ($5,000) of exposure on any

one (1) claim or for an undivided

portion equal to one-half (1/2) of

the first ten thousand dollars

($10,000) of exposure on any one (1)

claim, without prejudice to the

sufficiency of such underwriting or

other provisions for securing

financial responsibility for liability

recognized hereunder; and provided

further, any physician or hospital

so complying shall not be deemed out

of compliance by reason of such a

self-insurance, deductible or like

arrangement.

(b) Amy such physician or hospital

may also comply with insurance

requirements of this act by filing

a cash or other bond in an amount

and form approved by the director of

the department of insurance which

approval shall be granted upon a

showing and the director's determina-

tion of the operational, actuarial

and legal sufficiency thereof,

assuring the required financial

responsibility of such licensee and

the timely, competent processing of

claims in connection therewith.

{1975, ch. 162, §7, p. 422.]

39-4208. CERTIFICATE OF INSURANCE-

PHYSICIANS.-Any physician licensed

to practice medicine in this state

shall, at the time and as a condition

of securing or renewing such license,

place on file with the Idaho board

of medicine a certificate of insurance

from a licensed insurance company

authorized to do business in this

state, certifying that liability

insurance of the scope and limits

required by this act is in effect

for such licensee and shall remain

in effect for such period of licensure

unless notification of cancellation

is first given to the board at least

thirty (30) days in advance of

cancellation. In compliance with

this section any organized professional

society made up of licensed physicians,

any association or entity made up of

licensed acute care hospitals or the

state board of medicine, or any

combination thereof, may apply to

the director of the department of

insurance for authorization to

provide such certification based

upon a reciprocal program organized .

and operated under chapter 41, title

29 [chapter 29, title 41], Idaho

Code, and such authorization may be

provided with respect to all or any

part of the required security and

certification specified by this act,

it being specifically provided that

any combination of valid certificates

may be accepted as compliance with

the insurance requirements of this

statute; provided the director of

the department of insurance shall

grant such authorization only upon a

determination made to his satisfaction

that such proposal is legally,

actuarially and financially sound

and is supported by competent manage-

ment and administration to assure

good standards of practices, including,

but not limited to, competent claims

processing and administration.

{[1975, ch. 162, §8, p. 422.]

39-4209. CERTIFICATE OF INSURANCE--

HOSPITALS.--Any acute care hospital

licensed as such in this state

shall, at the time and as a condition

of securing or renewing and as a

condition of continuing such license,

place on file with the director of

the department of health and welfare

of the state of Idaho a certificate

of insurance from a licensed insurance

company authorized to do business in

this state, certifying that liability

insurance of the scope and limits

required by this act is in effect

for such licensee and shall remain

in effect for such period of licensure

unless notification of cancellation

is first given to the department at

least thirty (30) days in advance of

cancellation. In compliance with

this section any organized pro-

fessional society made up of licensed

physicans, any association or

entity made up of licensed acute

care hospitals or the state board of

medicine, or any combination thereof,

may apply to the director of the

department of insurance for authoriza-

tion to provide such certification

based upon a reciprocal program

organized and operated under chapter

41, title 29, [chapter 29, title

41], Idaho Code, and such authorization

may be provided with respect to all

or part of the required security and

certification specified by this act,

it being specifically provided that

any combination of valid certificates

may be accepted as compliance with

the insurance reguirenfents of this

statute; provided, the director of

the department of insurance shall

grant such authorization only upon a

determination made to his satisfac-

tion that such proposal is legally,

actuarially and financially sound

and is supported by competent manage-

ment and administration to assure

good standards of practices, including,

but not limited to, competent claims

processing and administration.

{[1975, ch. 162, §9, p. 422.]

39-4210. REMEDIES LIMITED--NEGLIGENCE.

--In furtherance of the policies of

this act and in the interest of the

accomplishment of its goals, it is

hereby provided that licensed physicans

and hospitals which are, at the time

of provision of such care, in compli-

ance with or have obtained a waiver

of insurance requirements of this

act as provided herein shall not be

liable to any patient, his heirs or

representative on account of pro-

fessional malpractice or any other

theory of civil liability arising

out of the provisions of health care

to or on behalf of such patient

except upon the common law ground of

negligence proximately causing such

damages, and in those cases recovery

shall be limited to compensatory

damages not previously paid or

satisfied by any other person or

from any other source. ‘Common law

and statutory defenses recognized by

the law of Idaho shall continue in

full force and effect and such

claims shall be resolved in keeping

with the general rules of law and

civil procedure applicable to such

claims and causes, except as expressly

in this act otherwise provided.

[1975, ch. 162,§10, p. 422.]

39-4211. WAIVER OF INSURANCE REQUIRE-

MENT.--Upon a showing by any physician

or acute care hospital of inability

to comply with the liability insurance

requirements of this act, despite

reasonable and good faith efforts to

do so, the director of the department

of insurance shall issue his order

waiving such liability insurance

requirements as to that physician or

hospital for a period not to exceed

the term of the license sought to be

secured or maintained. Such order

or waiver may be filed in lieu of the

certificate of insurance otherwise

required by sections 39-4208 or 39-4209

in order to secure or maintain such

license. There shall be limit as to

the number of successive orders of

waiver which may be issued to any

physician or hospital, so long as a

new showing is made as provided

herein prior. to issuance of each

such order. [1975, ch. 162, §1ll, p.

422.]

39-4212. RULE MAKING AUTHORITY.--

The director of the department of

insurance may promulgate rules,

regulations and standards for the

administration and implementation of

the portions of this act concerning

the actuarially sound underwriting

or other securing of the limited

liability provided by this act,

including without limitation pro-

visions for the form and scope of

policies or certificates of insurance

or like documentation contemplated

by this act, and provisions and

procedures for the showing required

to obtain a waiver of the insurance

requirements of the act. [1975, ch.

162, §12, p. 422.]

39-4213. CLAIMANTS' CONTINGENT

ATTORNEY FEES.--In the event any

Claimant or claimants seeking recovery

for damages on account of medical

malpractice against any hospital or

physician enters into a contingent

fee contract pursuant to which the

attorney or aitorneys representing

such person or persons shall be

compensated, it shall be unlawful

for such attorney or attorneys to

charge or collect an unreasonably

large fee; further, such a fee,

including reimbursed expenses, which

in the aggregate equals or exceeds

forty per cent (40%) of amounts

recovered or collected shall be

presumed to be unreasonable and

uncollectible. [1975, ch. 162, §13,

p. 422.]

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.