Gazelka v. St. Peter’s Hosp.

• Decision Date: 19 June 2018
• Docket Number: DA 17-0507
• Citation: Gazelka v. St. Peter’s Hosp., 420 P.3d 528, 2018 MT 152, 392 Mont. 1 (Mont. 2018)
• Parties: Jessica GAZELKA, Plaintiff and Appellant, v. ST. PETER’S HOSPITAL, Defendant and Appellee.
• Court: Montana Supreme Court

392 Mont. 1

420 P.3d 528

2018 MT 152

Jessica GAZELKA, Plaintiff and Appellant,

v.ST. PETER’S HOSPITAL, Defendant and Appellee.

DA 17-0507

Supreme Court of Montana.

Submitted on Briefs: March 14, 2018

Decided: June 19, 2018

For Appellant: John M. Morrison, Morrison, Sherwood, Wilson & Deola, PLLP, Helena, Montana, Lawrence A. Anderson, Attorney at Law, P.C., Great Falls, Montana

For Appellee: Randy J. Cox, Thomas J. Leonard, Randy J. Tanner, Boone Karlberg P.C., Missoula, Montana

Justice Laurie McKinnon delivered the Opinion of the Court.

¶1 Jessica Gazelka appeals from an order of the First Judicial District Court, Lewis and Clark County, granting St. Peter’s Hospital (the Hospital) partial summary judgment. We affirm on alternate grounds and address the following issue:

Does Montana’s Preferred Provider Agreements Act violate the Equal Protection Clause of the Montana Constitution?

FACTUAL AND PROCEDURAL BACKGROUND

¶2 This is the second appeal in this case and we previously set forth a detailed factual background in Gazelka v. St. Peter’s Hospital , 2015 MT 127, 379 Mont. 142, 347 P.3d 1287. Pertinent to this appeal, in 2010 and 2011, Gazelka sought and received treatment from the Hospital for various injuries and symptoms. The Hospital billed Gazelka directly because she did not have health insurance when she received the treatments at issue. However, almost all of Gazelka’s treatment costs were either covered by another party’s insurance or significantly discounted by the Hospital’s 50% financial-need discount.

¶3 Gazelka filed suit in District Court, arguing that the statutes authorizing the Hospital’s billing practices violate the Equal Protection Clause of Article II, Section 4, of the Montana Constitution. The Montana Preferred Provider Agreements Act (MPPAA), §§ 33-22-1701 to -1707, MCA, permits Preferred Provider Agreements (PPAs) in Montana. A PPA is an agreement between an insurer and a healthcare provider reducing the amount of money a provider will accept as satisfaction for an insured person’s treatment. Thus, two patients may ultimately pay different amounts for treatment depending on whether the patient is insured or uninsured and, if insured, depending on the terms of a particular PPA. If a patient is uninsured, she pays the amount the provider charged, less any discount she may receive through a provider’s financial assistance program. Uninsured persons are not parties to and do not benefit from PPAs. If a patient is insured, she or her insurer pays the amount the provider agreed to accept as satisfaction for that treatment pursuant to the negotiated PPA. Providers frequently have PPAs with multiple insurers, and therefore one insurer’s PPA may be more favorable to a patient, requiring her or her insurer to pay less.

¶4 Gazelka contended that the MPPAA unconstitutionally discriminates against uninsured patients and patients insured by the insurers that did not negotiate the most favorable PPA. She noted that the patients insured by the insurer that negotiated the most favorable PPA pay less for the same treatment than all other patients. Thus, Gazelka asked the District Court to find that the MPPAA violates the Equal Protection Clause of Article II, Section 4, and moved for partial summary judgment. The Hospital responded with its own motion for partial summary judgment, arguing that the MPPAA is constitutional. The District Court agreed with the Hospital, concluded that the MPPAA creates similarly situated classes but does not violate Gazelka’s right to equal protection, and granted the Hospital’s motion for partial summary judgment. Gazelka appeals. We affirm the District Court’s decision on alternate grounds, as we determine that Gazelka failed to identify similarly situated classes.

STANDARD OF REVIEW

¶5 We review a grant of summary judgment de novo. Goble v. Mont. State Fund , 2014 MT 99, ¶ 14, 374 Mont. 453, 325 P.3d 1211. Summary judgment is appropriate when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. M. R. Civ. P. 56(c)(3). If there are no genuine issues of material fact, we review a district court’s conclusion that the moving party is entitled to judgment as a matter of law for correctness. Mont. Cannabis Indus. Ass’n v. State , 2016 MT 44, ¶ 11, 382 Mont. 256, 368 P.3d 1131, cert. denied , ––– U.S. ––––, 136 S. Ct. 2523, 195 L.Ed.2d 844 (2016).

¶6 This Court exercises plenary review of constitutional issues. Mont. Cannabis Indus. Ass’n , ¶ 12. A statute is presumed constitutional unless it "conflicts with the constitution, in the judgment of the court, beyond a reasonable doubt." Powell v. State Comp. Ins. Fund , 2000 MT 321, ¶ 13, 302 Mont. 518, 15 P.3d 877. The party challenging the statute’s constitutionality bears the burden of proving the statute is unconstitutional beyond a reasonable doubt. Goble , ¶ 15. If any doubt exists, it must be resolved in favor of the statute. Mont. Cannabis Indus. Ass’n , ¶ 12.

DISCUSSION

¶7 Montana’s equal protection guarantee embodies "a fundamental principle of fairness: that the law must treat similarly-situated individuals in a similar manner." McDermott v. State Dep’t of Corr. , 2001 MT 134, ¶ 30, 305 Mont. 462, 29 P.3d 992. "The function of the equal protection clause ‘is to measure the validity of classifications created by state laws.’ " ISC Distribs. v. Trevor , 273 Mont. 185, 195, 903 P.2d 170, 176 (1995) (quoting ARA Servs. Inc. v. Sch. Dist. , 590 F.Supp. 622, 629 (E.D. Pa. 1984) (quoting Parham v. Hughes , 441 U.S. 347, 358, 99 S.Ct. 1742, 1749, 60 L.Ed.2d 269 (1979) )). Article II, Section 4, of the Montana Constitution provides:

The dignity of the human being is inviolable. No person shall be denied the equal protection of the laws. Neither the state nor any person, firm, corporation, or institution shall discriminate against any person in the exercise of his civil or political rights on account of race, color, sex, culture, social origin or condition, or political or religious ideas.

Mont. Const. art. II, § 4. By its own terms, Article II, Section 4, protects against two distinct types of unequal treatment.¹ First, it generally provides that "[n]o person shall be denied the equal protection of the laws." Mont. Const. art. II, § 4. The provision then more specifically provides that "[n]either the state nor any person, firm, corporation, or institution shall discriminate against any person in the exercise of his civil or political rights on account of race, color, sex, culture, social origin or condition, or political or religious ideas." Mont. Const. art. II, § 4. The second, more specific guarantee clearly applies to both public and private action; neither the state nor a private party may discriminate against a person in the exercise of his civil or political rights based on an included class. The first, more general guarantee, however, does not name a specific actor. We have never before directly considered whether state action is required for a plaintiff’s Article II, Section 4, general equal protection claim.

¶8 The 1972 Constitutional Convention’s Bill of Rights Committee intended Article II, Section 4, to eradicate "public and private discriminations based on race, color, sex, culture, social origin or condition, or political or religious ideas." Montana Constitutional Convention, Committee Proposals, February 22, 1972, p. 628; Verbatim Transcript, March 7, 1972, p. 1642. The Delegates designed the provision to provide more protection than the federal Equal Protection Clause. Montana Constitutional Convention, Committee Proposals, February 22, 1972, p. 628; Verbatim Transcript, March 7, 1972, p. 1642. The second, more specific equal protection guarantee of Article II, Section 4, effectuates those intentions, and our precedent consistently recognizes that Article II, Section 4, provides even more protection than the federal Equal Protection Clause. See, e.g. , Snetsinger v. Mont. Univ. Sys. , 2004 MT 390, ¶ 58, 325 Mont. 148, 104 P.3d 445 (citing Cottrill v. Cottrill Sodding Serv. , 229 Mont. 40, 42, 744 P.2d 895, 897 (1987) ).

¶9 The United States Constitution contains a comparable, general, Equal Protection Clause, which provides, "No State shall ... deny to any person within its jurisdiction the equal protection of the laws." U.S. Const. amend. XIV, § 1. The provision specifically provides that states cannot deny people equal protection of the laws. "[T]he action inhibited by the [Equal Protection Clause] is only such action as may fairly be said to be that of the States. Th[e Fourteenth] Amendment erects no shield against merely private conduct, however discriminatory or wrongful." Shelley v. Kraemer , 334 U.S. 1, 13, 68 S.Ct. 836, 842, 92 L.Ed. 1161 (1948). See also Am. Mfrs. Mut. Ins. Co. v. Sullivan , 526 U.S. 40, 50, 119 S.Ct. 977, 985, 143 L.Ed.2d 130 (1999) (quoting Blum v. Yaretsky , 457 U.S. 991, 1002, 102 S.Ct. 2777, 2785, 73 L.Ed.2d 534 (1982) ). Thus, in order to assert a viable federal equal protection claim, a plaintiff must demonstrate that state action, not merely private conduct, denied him equal protection of the laws. See , e.g. , Burton v. Wilmington Parking Auth. , 365 U.S. 715, 721-22, 81 S.Ct. 856, 860, 6 L.Ed.2d 45 (1961).

¶10 In a similar manner, we consistently state that "the principal purpose of Montana’s Equal Protection Clause is to ensure that Montana’s citizens are not subject to arbitrary and discriminatory state action ." Powell , ¶ 16 (emphasis added) (citing Davis v. Union Pac. R.R. Co. , 282 Mont. 233, 240, 937 P.2d 27, 31 (1997) (citing Godfrey v. Mont. Fish & Game Comm’n , 193 Mont. 304, 306, 631 P.2d 1265, 1267 (1981) ("The principal purpose of the [federal and state] Equal Protection Clause[s] ... is to ensure that persons who are citizens of this country are not the subject of arbitrary and discriminate state action."))). See also Mont. Cannabis Indus. Ass’n , ¶ 15 ; Timm v. Mont. Dep’t of Pub. HHS , 2008 MT 126, ¶ 30, 343 Mont....