Consumer rights

In the major consumer rights case of the Term, Rush Prudential HMO v. Moran (2002), a narrowly divided Court upheld a state law allowing patients to sue HMOs. In 1996 Debra Moran, a member of the Rush Prudential HMO, went to her primary care physician seeking treatment for a severe pain in her shoulder. The doctor recommended surgery, but the HMO denied the request. Eventually, with her doctor's support, Moran underwent a complex surgery by a physician outside the Rush Prudential network, and the HMO refused to pay the $95,000 bill, claiming that she could have been just as successfully treated by a cheaper procedure. An independent doctor agreed with Moran and her doctor's prognosis, and the necessity for the surgery, but the HMO still refused to pay. She sued under an Illinois law that guaranteed members of medical insurance plans (HMOs) an independent second opinion, to be paid for by the plan, if the HMO denied the patient medical benefits, and then required payment for services approved by the independent arbiter.

The HMO challenged the statute—which is similar in substance to that in 41 other states and the District of Columbia—as null because the matter had been pre-empted by Congress in a 1974 law, the Employment Retirement Income Security Act (ERISA), that made regulation of employee benefit plans the exclusive province of Congress under the Commerce Clause. Patient and physician groups had attacked the HMO practices as limiting patient and doctor options, and for relegating medical decisions to non-medical book-keeping types.

The majority found that states had not been pre-empted by ERISA. An HMO, explained Justice Souter, is both an insurer as well as a medical provider, and as such could be regulated under state law. Nothing in ERISA mandated that it be an all-or-nothing choice, either federallyStates could regulate those portions of insurance and medical care that were not specifically addressed in ERISA.

The minority, in a dissent by Justice Thomas, declared that the patchwork of over forty separate state laws eviscerated the uniformity that Congress had intended in ERISA, a uniformity that Congress deemed necessary to ensure a balance of fairness to employees on the one hand and employers and benefit companies on the other.

Insurance companies had wanted the Court to nullify the law, not just on account of the liability it imposed on them, but because since many companies operate in several states, they did not want to deal with a patchwork of state laws. Even if the substance of the Illinois law were to be adopted by Congress and then imposed on all states, the insurance companies would then be dealing with a uniform practice. Such a provision was, in fact, part of a federal patients' rights act then stalled in Congress.

Second Amendment. In a non-decisional case, the Court refused to hear two cases convicted of violating federal gun law. The denial of cert in these case would not have been at all unusual except for the fact that the Bush Administration had entered an amicus brief putting forth a new interpretation of the Second Amendment. Although agreeing that the convictions should stand, the administration informed the Court that it has reversed a decades old policy on the Second Amendment. Until now, administrations both Democratic and Republican have adhered to the position that the amendment protects a collective right—of the people—to bear arms, and that this collective right is linked to the power of the state to create a militia, the position enunciated by the Supreme Court in one of the few Second Amendment cases it has ever decided, United States v. Miller(1939). Now, according to Attorney General John Ashcroft, the official administration policy will be to interpret the Second Amendment as guaranteeing an individual right to own firearms, without any qualifying militia condition, subject only to reasonable restrictions. What impact, if any, this statement will have is difficult to tell, and the Court did not comment upon it in its denial of certiorari for these cases. But conservative state and lower court judges may seize upon it should gun ownership groups start challenging state or federal gun laws. If they did, at least some of those cases would certainly reach the Court, and involve it in one of the fiercest public policy debates of our times.

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