Clark v. Attorney Gen.
| Docket Number | SJC-13238 |
| Decision Date | 15 June 2022 |
| Parties | LORY-SAN CLARK & another [1] v. ATTORNEY GENERAL & others. [2] |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Heard: May 2, 2022.
Civil action commenced in the Supreme Judicial Court for the county of Suffolk on February 7, 2022. The case was reported by Lowy, J.
Thaddeus Heuer (Andrew London & Seth Reiner also present) for the plaintiffs.
Adam Hornstine, Assistant Attorney General (Anne Sterman & Michael MacKenzie, Assistant Attorneys General, also present) for the defendants.
Matthew R. Perry for the interveners.
M. Patrick Moore, Jennifer Grace Miller, & Ryan P. McManus, for America's Health Insurance Plans, Inc., & another, amici curiae, submitted a brief.
Present: Budd, C.J., Gaziano, Lowy, Cypher, Kafker, Wendlandt, & Georges, JJ.
An initiative petition signed by at least ten registered voters, entitled "Initiative Petition for a Law to Implement Medical Loss Ratios[3] for Dental Benefit Plans," was submitted to the Attorney General and numbered by her as Initiative Petition 21-13. On September 1, 2021, the Attorney General certified to the Secretary of the Commonwealth (Secretary) that Initiative Petition 21-13 was in proper form for submission to the people; that it was not, either affirmatively or negatively, substantially the same as any measure that had been qualified for submission or submitted to the people at either of the two preceding biennial State elections; and that it contained only subjects that were related or mutually dependent and that were not excluded from the initiative process pursuant to art. 48, The Initiative, II, § 2, of the Amendments to the Massachusetts Constitution.
In accordance with the requirements of art. 48, the Attorney General prepared a "fair, concise summary" of the measure proposed by Initiative Petition 21-13 and transmitted that summary to the Secretary with the September 1 certification letter. The proponents of Initiative Petition 21-13 then filed it with the Secretary. Following receipt of the summary and certification from the Attorney General, the Secretary prepared blank signature collection forms and provided them to proponents for circulation to members of the public. On December 22, 2021, the Secretary's elections division sent a letter informing the proponents of Initiative Petition 21-13 that a sufficient number of certified signatures had been submitted pursuant to art. 48, The Initiative, II, § 3, art. 74 of the Amendments, and art. 48, The Initiative, V, § 2, art. 81 of the Amendments. The Secretary submitted Initiative Petition 21-13 to the clerk of the House of Representatives on January 28, 2022. See 2022 House Doc. No. 4378.
Thereafter, two registered voters commenced an action in the county court challenging the Attorney General's certification of Initiative Petition 21-13. They allege that the measure is not in compliance with the requirement that an initiative petition "contain[] only subjects . . . which are related or which are mutually dependent," art. 48, The Initiative, II, § 3, art. 74, and request that the Secretary be enjoined from placing the measure on the ballot. Five registered voters who are licensed dentists, along with the Committee on Dental Insurance Quality, of which they are members and which was organized by them to sponsor Initiative Petition 21-13, moved to intervene as defendants, and their motion was allowed. A single justice reserved and reported the case to the full court on a statement of agreed facts. We conclude that Initiative Petition 21-13 does not contain unrelated subjects and that the Attorney General's certification therefore complied with art. 48.[4]
The proposed law.
If passed into law, Initiative Petition 21-13 would establish a new G. L. c. 176X (proposed chapter), which would apply to all dental benefit plans in place on or after January 1, 2024, and which would be effectuated by regulations promulgated by October 1, 2023. The proposed chapter would be comprised of four sections. Section 1 would create definitions for various terms used therein, and § 4 specifically would exclude from the chapter's requirements "dental benefit plans issued, delivered or renewed to a self-insured group or where the carrier is acting as a third-party administrator."
Section 2 of the proposed chapter would create a framework in which the commissioner of insurance (commissioner), through the adoption of relevant regulations, would review and approve dental benefit policies, rate changes, and plan profitability as reflected by a medical loss ratio (MLR). Dental insurance carriers would be required to submit to the commissioner financial information, including "the current and projected [MLR] for plans" and "the components of projected administrative expenses." The commissioner would be required to adopt regulations under which dental insurance carriers must file annual base rates and group rating factors for their plans, which would be disapproved if rate changes were "excessive, inadequate, or unreasonable" or group rating factor changes were "discriminatory or not actuarially sound."
Section 2 sets forth three situations in which the commissioner would be required to presumptively disapprove an insurance carrier's rates as "excessive": first, if the insurer's administrative expense loading component[5] increases by a greater percentage than the dental services consumer price index[6] for the most recent calendar year; second, if a carrier's contribution to surplus[7] exceeds 1.9 percent; and third, if a carrier fails to meet a minimum MLR[8] of eighty-three percent. Insurance carriers would be required to refund to covered individuals and groups excess premiums in the amount necessary to return the plan's MLR to eighty-three percent, unless the commissioner determines that issuance of refunds would financially impair the insurance carrier. If the commissioner disapproves of a proposed rate change, the insurance carrier may contest this decision at a hearing.
Section 3 of the proposed chapter would require dental insurance carriers timely to submit detailed annual financial statements to the Division of Insurance (division), [9] which would make such statements available to the public. If a carrier's risk-based capital ratio -- the amount of capital retained as a basis of support for the degree of risk associated with its company operations and investments, measured across all medical and dental plans -- were to exceed 700 percent, a public hearing would be held at which the carrier would be required to submit testimony on its over-all financial condition, the continued need for surplus, and how, and in what proportion to the total surplus, it planned to dedicate the surplus to reducing costs or improving quality for consumers. The division would be required to issue a report on the results of such a hearing.
Discussion.
We review de novo the Attorney General's certification of an initiative petition as compliant with art. 48. See Weiner v. Attorney Gen., 484 Mass. 687, 690 (2020), citing Abdow v. Attorney Gen., 468 Mass. 478, 487 (2014). "At the same time, we acknowledge the firmly established principle that art. 48 is to be construed to support the people's prerogative to initiate and adopt laws" (quotations and citation omitted). Weiner, supra.
"Article 48, The Initiative, II, § 3, art. 74, requires the Attorney General to certify that a proposed measure 'contains only subjects . . . which are related or which are mutually dependent' before the measure can be placed on the ballot." Weiner, 484 Mass. at 691. The plaintiffs argue that the provisions of Initiative Petition 21-13 address two distinct policy goals that are unrelated, namely, the creation of a mandatory minimum MLR for dental benefit plans (§ 2) and insurer transparency through mandatory comprehensive financial disclosures (§ 3). As discussed infra, we disagree.
"There is no single 'bright-line' test for determining whether an initiative meets the related subjects requirement." Hensley v. Attorney Gen., 474 Mass. 651, 657 (2016), citing Abdow, 468 Mass. at 500. "We have said that 'the related subjects requirement is met where one can identify a common purpose to which each subject of an initiative petition can reasonably be said to be germane'" (quotation omitted). Weiner, 484 Mass. at 691, quoting Hensley, supra. Nevertheless, "[t]his purpose 'may not be so broad as to render the relatedness limitation meaningless'" (quotation omitted). Weiner, supra, quoting Carney v. Attorney Gen., 447 Mass. 218, 225 (2006), S.C., 451 Mass. 803 (2008).
Accordingly, "relatedness cannot be defined so broadly that it allows the inclusion in a single petition of two or more subjects that have only a marginal relationship to one another, which might confuse or mislead voters, or which could place them in the untenable position of casting a single vote on two or more dissimilar subjects." Abdow, 468 Mass. at 499. "At the same time, if we construe the relatedness requirement too strictly, we risk limiting initiative petitions to a single subject, a requirement rejected by the constitutional convention that approved art. 48." Weiner, 484 Mass. at 691, citing Abdow, supra. We balance these considerations by asking two questions:
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