Michigan Supreme Court; Docket #126530-1
Opinion by Justice Young; 5-2 (Justices Cavanaugh and Markman concurring in part; dissenting in part: Kelly and Weaver concurring in result only)
Official Michigan Reporter Citation: 475 Mich. 363, Link to Opinion 
STATUTORY INDEXING:
Providers Entitled to Charge Reasonable Amount for Services [3157]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this deeply divided opinion, Justice Young, joined by Chief Justice Taylor and Justice Corrigan, found that petitioners, the Michigan Chiropractic Council and the Michigan Chiropractic Society, did not have standing to challenge an opinion of the Commission of the Office of Financial and Insurance Services in which it determined no-fault insurers do not violate the No-Fault Act by offering their insureds a “Preferred Provider Option” for a reduced insurance premium. Justice Young also found that even if petitioners do have standing, the matter is not ripe for review because there was no evidence their members suffered an injury by being reimbursed at a less than reasonable rate. In this case, two no-fault insurance providers, Farmers Insurance Exchange and Mid-Century Insurance Company, began offering their policyholders a Preferred Provider Option (PPO) under which, for a reduced premium, their policyholders agreed to treat with certain medical care providers if they sustained an injury in a motor vehicle accident. When the Commissioner refused to withdraw approval of the endorsement, petitioners appealed to the circuit court, which held the Preferred Provider Option was not authorized by law. The Court of Appeals affirmed, finding the Preferred Provider Option violated the No-Fault Act. The Supreme Court granted leave to appeal, directing the parties to address the issue whether petitioners had standing to challenge the Preferred Provider Option. In reversing, Justice Young first held petitioners did not have standing to challenge the Preferred Provider Option on behalf of the policy holders or on behalf of chiropractic providers. In so ruling, Justice Young adopted the holding from Kowalski v Tesmer, 543 US 125 (2004), where the United States Supreme Court declared that allowing actions to be brought by third parties should be disfavored. These actions, the US Supreme Court stated, should be disfavored because the party who holds the right has the appropriate incentive to challenge governmental action and to do so with necessary zeal. Moreover, if third parties are encouraged to bring claims, courts may be asked to decide abstract issues even though other institutions may provide a more appropriate forum and judicial intervention may be unnecessary to protect individual rights. Furthermore, in order to determine if a third party is an appropriate party to litigate an action, Justice Young then applied the test for standing set out in Lee v Macomb County Board of Comm’rs, 464 Mich 726; 629 NW2d 900 (2001), in which the following three factors are considered: 1) whether the plaintiff has suffered a concrete injury in fact; 2) whether there is a causal connection between the injury and the complained of conduct which can be attributed to the defendant; and 3) whether the injury can be redressed by a favorable decision. Upon application of these factors, Justice Young concluded that petitioners lacked standing to bring this action. In this regard, Justice Young stated:
“. . . [W]e adopt the traditional federal test for third-party standing as articulated in Tesmer. A party seeking to litigate the claims of another must, as an initial matter, establish standing under the test established in Lee. . . . Second, the party must have a ‘close relationship’ with the party possessing the right in order to establish third-party standing. Last, the litigant must establish that there is a ‘hindrance’ to the third party’s ability to protect his or her own interests.
As applied to the facts of this case, petitioners cannot meet the requirements of third-party standing and cannot litigate the rights of appellants’ insureds. Assuming arguendo that petitioners could satisfy the Lee elements, and assuming without deciding that petitioners share a sufficiently ‘close relationship’ with appellants’ insureds, there is absolutely no evidence that any obstacle or hindrance prevents appellants’ insureds from protecting their own interests through litigation. Therefore, we hold that petitioners do not have standing to assert that the rights of appellants’ insureds were violated by appellants’ managed care endorsement.”
Justice Young next held that even if petitioners had standing, the matter was not ripe for review. In so holding, Justice Young noted there was no evidence petitioners’ members have been reimbursed at less than a reasonable amount and further, whether petitioners have charged a reasonable amount is a matter which must be left to the jury. In this regard, Justice Young declared:
“Petitioners’ allegation that appellants’ policy endorsement violates the rights of their members in violation of MCL 500.3157 is not yet ripe for review. Nothing in the record before us indicates that petitioners’ members have in fact been reimbursed at less than a reasonable amount. The lack of ripeness is further buttressed by the particularly fact-intensive nature of petitioners’ claim. MCL 500.3157 provides that chiropractors ‘may charge a reasonable amount’ for services rendered. Petitioners have the burden of establishing the reasonableness of their members’ charges in order to impose liability on the insurer. Moreover, questions surrounding the reasonableness of petitioners’ members’ charges are factual in nature and must be resolved by the jury.”
Justice Markman concurred in part and dissented in part and contended that although petitioners did not have third party standing with regard to the policy holders, the issue regarding whether petitioners had standing with regard to the individual chiropractic providers should not have been decided without additional briefing.
Justice Cavanagh concurred in part and dissented in part and noted that one of the insurers violated the no-fault act by seeking to reduce the use of chiropractic services by improperly determining rates to be paid. This allegation was sufficient to confer standing on petitioners in regard to individual chiropractic providers.
Justice Kelly concurred in the result only and wrote separately to express her concern with the test for standing under Lee v Macomb County Board of Comm’rs.
Justice Weaver, concurring in the result only, wrote separately to express her alarm that the majority transformed “prudential doctrines of mootness and ripeness into consitutionally based doctrines that affect the jurisdiction of this Court.”
