Wednesday, June 21, 2017

Pennsylvania High Court Magnifies Protz

In September 2015, I penned As Florida Waits, Commonwealth Court Holds Pennsylvania Statute Unconstitutional. That reference to Florida waiting for its Supreme Court to address any of the then pending constitutional workers' compensation challenges. Those cases have finally been addressed, See Westphal is Over, Questions Remain and Castellanos is Decided by Supreme Court. I have heard criticism of the Florida decisions, some directed at outcome and other directed at the extent or clarity of explanation. Courts are here to make decisions, and that usually will mean that someone is not happy. I therefore tend to find the criticism of explanation or clarity more interesting.

The Pennsylvania Commonwealth Court Protz decision in 2015 found fault with Pennsylvania's legislature's process in adopting impairment guides. It is worth noting that the concept of impairment guides is not some ancient and inexorable truth. In fact the first American Medical Association Guides were conceived in the 1950s and the first publication was 1971. That is not ancient history (watch it there you Generation X, Y, Millennials, Centennials, etc., some of us were alive "way back" in 1971).

In Protz, the injured worker underwent an Impairment Rating Evaluation or "IRE." The IRE physician assigned a rating (PIR) using the AMA Guides 6th Edition, which at that time was "the most current edition." That is critical because the Pennsylvania legislature required by statute that all IRE be performed using "the most current edition." As time passed, following that statutory enactment, the Guides changed. The Guides that were "the most current edition" when the legislation was passed (4th Edition) were no longer "the most current edition" when Ms. Protz underwent her IRE.

The fundamental legal issue analyzed here is called "delegation." In American government there is a tremendous amount of "delegation," where the legislative branches (federal and state) have authority over a variety of issues and powers and they delegate that power and authority to others. This is the "administrative process," and is the foundation of a vast spectrum of executive branch agencies. Each is created by an "enabling statute," and those statutes delegate specific authority. This case is about a derivation of that commonality, more exceptional, delegation of government authority to a private organization. 

Ms. Protz challenged the PIR assigned, asserting that the doctor should not have used the Guides 6th Edition, but should instead have relied upon the Guides 4th Edition which was in effect when the legislature adopted the Guides. The Commonwealth Court agreed with that argument in 2015, and instructed the Pennsylvania workers' compensation judge to reconsider her case using the Guides 4th Edition.

The jurisdiction of the Pennsylvania Supreme Court was invoked shortly thereafter, and now about 18 months later the Court has rendered its decision. Its decision is broader than that of the Commonwealth Court, and the implications are worthy of consideration by anyone with an interest in American workers' compensation. Arguably, the Supreme Court's analysis could be more persuasive on other states than the Commonwealth Court analysis.

It may be important, in a general sense, to consider delegation broadly first. The Pennsylvania Supreme Court was careful to temper its analysis with the precursor that delegation is in fact permissible. This is a critical point. How that delegation occurs, and the extent of that delegation must fit within constitutional parameters, but it is not per se improper. 

What is prohibited by the "non-delegation doctrine" is not delegation per se, but "incorporating, sight unseen, subsequent modifications to such standards without also providing adequate criteria to guide and restrain the exercise of the delegated authority." (Slip opinion at P. 16).

What is perhaps curious, in light of those statements, is that the Pennsylvania Supreme Court nonetheless concluded that the Pennsylvania statute is unconstitutional. As I discussed in As Florida Waits, Commonwealth Court Holds Pennsylvania Statute, North Dakota's Supreme Court was presented a near identical issue and concluded that language requiring “use of the ‘most recent’ or ‘most current’ edition of the AMA Guides should be interpreted to mean the most recent edition at the time of the statute’s enactment.” (Babitsky, §3.04) (McCabe v. North Dakota Workers’ Compensation Bureau, 567 N.W. 2d 201 (N.D. 1997). That Court's conclusion was based upon statutory construction and traditional analysis.

Indeed, the Pennsylvania Court noted that analysis. It said that legislatures are not presumed to "intend to violate the Constitution" of the nation or state. Therefore, the Court reminded that "if a statute is reasonably susceptible of two constructions, one that would render it of doubtful constitutionality and one that would not, we must adopt the latter." But, the Pennsylvania Court did not adopt the latter, that is the construction adopted by North Dakota's high court.

The Pennsylvania Court engaged in a brief analysis of what "most recent" would or could mean. It then concluded that it "must construe the 'most recent edition' requirement to mean the most recent edition in force at the time of the IRE" and rejected the possible alternative of "most recent" at the time of legislative adoption, which the North Dakota Court chose. The Pennsylvania Court rejected the interpretation that would have rendered the statute constitutional. There will perhaps be those who will be critical of the Court's espousal of a construction standard, followed by a seemingly contrary result. Or, perhaps some will believe at least that such an outcome might have been more thoroughly explained.

The Pennsylvania Court next turned to "severability," a concept that will perhaps confound many. This is a legal maxim by which a problem with part of a statute or rule might be deemed improper, and that portion alone would be removed leaving the remainder alive and vibrant. Think of a mole or a wart, which a dermatologist might remove specifically, leaving the body around it untouched and unaffected. Many state statutes have severability clauses that suggest and support that outcome. The Pennsylvania statute has such a clause.

But, the Court concluded that removing the "offending language" in this instance "would render the remainder of the Section 306(a.2) incomprehensible." The Guides, according to the Court are "critical context" to language in the statute that would otherwise be "hollow phrases." Thus, the Court concluded that this statute is a "paradigmatic (a "model" or "paradigm" example) example of a law containing valid provisions that are inseparable from void provisions." So, the Court concluded that both baby and bathwater must be disposed of together. That this is the outcome, from the election not to adopt a different interpretation of the language ("adopt the latter," see above) may be seen by some as troublesome and confusing.

Coincidentally, the Court noted elsewhere (slip opinion, P. 8) that a trial court "must explain the grounds of its decision in a reasoned opinion which will serve as precedent to guide decisions in future cases." See A Kentucky Constitutional Decision for some thoughts on the value of predictability and precedent. Some may ask whether such an admonition applies equally to appellate courts. Seemingly, appellate courts should hold themselves to the same standards to which they purport to hold trial courts. 

Ultimately, the IRE process in Pennsylvania is no more. The authority for that process, the entirety of Section 306(a.2) is unconstitutional completely. The infirm portion of the statute cannot be severed from the rest to allow any portion of that process to be used. 

Aside from that direct effect, the case "holding," there are critical points that are also worthy of note.

First, this decision is not an indictment of the American Medical Association, its process or intentions. The Court suggests some "parade of horribles" hypotheticals as to egregious conduct by which the Association could act inappropriately. Those examples may seem to some to be pure hyperbole and even insulting; some might suggest they were unnecessary to the opinion. The Court seems to desire to illustrate thereby the potential for bad behavior, thus bolstering the reason for delegation to be constrained by the law. In this regard, the analysis may make sense, but could likely have been explained better.

The Court was critical of the General Assembly delegation to the AMA without required "procedural mechanisms" that are "considered essential" protections of process under the law. The Court was critical that this statute (Section 306(a.2)) did not require "the AMA hold hearings, accept public comments, or explain the grounds for its methodology in a reasoned opinion." Such requirements, the Court said, would allow for "judicial review." These foundations are therefore a critical element in Pennsylvania delegation. 

Having assured the reader that the Court ascribed no ill will to the AMA, the Court then quoted critical comments from a 2004 article which the Court apparently found persuasive. Whether that article was part of the record (admitted in evidence) in this case, and had been subjected to the kind of inquiry that is legally required for such evidence remains unclear. If that article was not evidence, it is difficult to understand how those criticisms could be relied upon by the Court, having never been tested by cross-examination or other due process. Appellate courts are known to rely on information outside the record, such as articles and even Wikipedia (not subject to cross-examination and amenable to alteration and editing by virtually anyone with Internet access), but are contrarily critical of any trial judge who might do so. 

Second, delegation is not unconstitutional. There will be some who may jump from this Court decision to a simple and contrary conclusion. But, the careful reader will discern that such a conclusion is an oversimplification. The Court has not said that; it has said that this delegation is unconstitutional. Delegation is constitutional in Pennsylvania (and other courts have agreed regarding various states). In Pennsylvania, the appropriateness of this delegation is dependent upon the law including "concrete measures to channel" discretion, and "safeguards to protect against arbitrary, ad hoc decision making."

Delegation is constitutional when it does not extend unfettered discretion, affords a method of review and monitoring. One might argue that delegation is constitutional in Pennsylvania in the context of the Assembly adopting the AMA Guides, "most recent" edition, if the Court had adopted the statutory construction adopted by North Dakota's high court. That delegation, arguably, would pass the tests espoused by the Pennsylvania Court. 

Finally, there may be misconception that delegation is only appropriate when it conveys authority to another government entity, the kind of delegation that is discussed above and which is responsible for the formation of a vast spectrum of executive branch agencies. There is suggestion in Protz of that government versus private distinction. The Court noted that "private entities are isolated from the political process, and, as a result shielded from political accountability." But, recognizing that Pennsylvania precedent is hostile to  the delegation to private entities, the Court cautioned these precedents "have not unequivocally supported the . . . view that the General Assembly cannot, under any set of circumstances, delegate authority to a private person or entity."

The key point, according to the Court, is not whether the delegation is to a public agency or a private entity. The key point is "traditional constitutional requirements (i.e., 'policy choices' and 'adequate standards') are necessary whenever the General Assembly delegates its authority 'to any other branch of government or to any other body or authority." (emphasis in original). The issue the Court focuses upon is not the "if" of delegation, but the "how."

So, there will now be many discussions and debates about Protz. Does this analysis suggest broader issues? Some will suggest that there are implication for legislative adoption of treatment guidelines, pharmaceutical formularies, or medical service reimbursement schedules, to name a few examples. Will constitutional challenges similar to Protz seek to undo these and other delegations? Will it matter if some, such as the Medicare reimbursement constraints, are the product of our federal government and all of the due process that would seemingly entail? Will this Pennsylvania determination, interpreting the Pennsylvania constitution, lead to similar challenges and outcomes in other states? 

Fasten your seat belts, it may be a bumpy ride ahead!





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