Morris v. Metriyakool

v MORRIS METRIYAKOOL v DETROIT MEMORIAL HOSPITAL JACKSON (Calendar 9, 9, Argued 68208. March Nos. Docket Nos. 10) 1,1984. March . Decided brought Delores M. Morris an action in the Macomb Circuit M.D., against Metriyakool, Hospi- Court S. and South Macomb tal, court, alleging malpractice. George The R. Dene- weth, J., granted the defendants’ motion for dismissal on the plaintiff agreed ground that the had to submit claims or dis- putes arising out of her treatment to arbitration. The Court of (J. Gillis, J., concurring result; Appeals, Cynar, J. H. in the n Bronson, P.J., concurring part dissenting part), af- firmed, holding malpractice arbitration act to be constitu- 46598). (Docket plaintiff appeals. tional No. The brought malpractice Diane Jackson an action for medical in the Wayne against Hospital Circuit Court Detroit Memorial Bloom, court, Burdick, J., and William J. D.D.S. The Irwin H. granted judgment the defendants’ motion for accelerated on the ground plaintiff agreed that the had to arbitrate such claims. Burns, P.J., Appeals, The Court of T. M. and Bronson and Pannucci, JJ., reversed, holding malpractice that the arbitra- prescribes convening panel tion act of an arbitration biased, unconstitutionally thereby denying a claimant due (Docket 54337). process appeal. No. The defendants Levin, opinions by Kavanagh joined by by Justice Justice Williams, Ryan joined Chief Justice Justice Justice Brickley, Supreme Court held: malpractice deprive The arbitration act does not a claimant right impartial of the constitutional to an decisionmaker. Kavanagh Justice wrote: malpractice person provides

1. The arbitration act References for Points in Headnotes 2d, Physicians, Surgeons, 61 Am Jur Healers 374- [1-8] §§ Other 376. Validity relating statutory provisions and construction of state recovery limitations on amount of in medical claim pretrial panel. and submission of such claim 80 ALR3d 583. Mich agree may disputes arising to arbitrate claims or from health provider. agreement care or treatment a health-care may prerequisite care; executed, not be made a to health if revoked; patient and the must be so informed. The act additionally provides that where arbitration is elected the panel composed attorney, physician arbitration is to be of an a hospital or a administrator or a licensee of the health-care profession against physician, if involved the claim is not a and person profession a who is not a licensee of the health-care involved, attorney, representative hospital an or a of a or an company. insurance composition panel 2. The of the arbitration does not offend guarantees process. general by due More than a concern physicians hospital and administrators with the cost and avail- ability malpractice physician insurance or the fact that and hospital panel part administrator members a are of a class by involving parties which is affected a decision in a case other probability by must be shown to render the of actual bias the panel high constitutionally cases, too to be tolerable. In these shown, grounds no actual bias was and there are no sufficient panels to allow a conclusion that the would not act with honesty integrity. agreement 3. The form of an strictly arbitration is controlled by provisions act, agreements conforming of the to the provisions presumed cases, valid. In these the forms used approved by Agreement were the Commissioner of Insurance. voluntary. agreement made, arbitrate is Once the is avoiding agreement burden of party seeking rests with the avoidance. The merely burden is not altered because the con- tract rights. entails eschewal of sixty-day constitutional The period fully protects sign rescission agreement, those who allowing patient being to obtain desired treatment without bound to its terms. It cannot be considered a contract of adhesion. Williams, Chief concurring, Justice presence stated that the physician of a provider or a health-care on the arbitration panels in by these cases was not shown to have resulted in such presumption bias as to overcome the of consti- tutionality malpractice arbitration act. Ryan, joined by Justice Brickley, Justice wrote: malpractice The arbitration act does not violate the Due Process Clause of the compo- federal or state constitutions. The sition of a medical panel arbitration does not implicating involve state action the Due Process Clauses. Arbi- agreements prescribed by tration the act are not contracts of adhesion, fraud, do not involve constructive and are enforce- able. agree dispute arising 1. The decision whether to to submit a provision pa- out of the of health is care arbitrate, patient dispute

tient’s. If the decides to must be panel attorney, heard a which includes an a doctor or representative provider, person of a health-care who is attorney. screening neither a doctor nor an The of candidates is informal, parties. hearing, although proce- done both durally litigation, panel much like civil and the decision of the appealed. be person’s process rights 2. A due are violated where there is deprivation private person who'may fairly the state or a (state action), constitutionally cogniza- treated as the state of a life, liberty, property process ble or interest without due of law. State action will be found where the state commands or encour- action, ages private private person performs where a tradition- ally exclusively governmental functions, or where the state and private mutually dependent symbiotic entities have cases, relationship. In these the state has neither commanded arbitration; rather, encouraged system nor it has created a provides private for enforcement of a decision to arbi- agreement comports statutory trate where the with the form. private. The choice whether to arbitrate is The resolution of a private, dispute traditionally govern- exclusively civil is not a function; mental and a decision to arbitrate as allowed malpractice symbiotic arbitration act does not create a relation- ship provider. between the state and-the health-care agreements 3. The arbitration in this case were not contracts They parties unequal of adhesion. were not made between bargaining power; plaintiffs accept reject were free to agreements the offers to arbitrate or to revoke the later. The agreements, standardized, by, while were not written nor de- for, signed Rather, the exclusive benefit of the defendants. provisions Legislature essential were determined provide malpractice litigation. agree- a fair alternative to The necessary care; prerequisite ments were not a to health nor they any negative were consequences offered under threat of if refused. representative 4. The inclusion of a doctor or of a health-care provider composition panels in the of the arbitration in these cases and the failure of the defendants to disclose the attitudes general, profession of doctors in the biases of the medical general against malpraсtice plaintiffs, or the effect of malpractice malpractice arbitration awards on insurance rates 418 Mich 423 composition was not constructive fraud. The was disclosed to accompanied in literature which the arbitration agreement, duty possible and the defendants had no to disclose biases. affirmed; Morris Jackson is reversed. Cavanagh, dissenting, statutory Justice would hold that the requirement malpractice panel that a medical arbitration in- provider unconstitutionally deprives clude a per- health-care agreement son who enters dispute arising into an to arbitrate a right out of hearing medical care of the to a fair before an

impartial decisionmaker because of state action without due process agreement of law. Parties to an arbitration have no control over its terms. The state mandates the terms of the agreement procedures arbitrating and the to be followed in agreement, including appearance under the compo- before and panel. Although sition of the may acqui- the state person’s dispute resolution, esce in a choice of methods for procedures cannot resolving disputes mandate abridge rights. judgment constitutional He would affirm the Appeals the Court of Jackson, and would reverse and re- mand to the trial court in Morris. App 110; (1981)

107 Mich 309 NW2d 910 affirmed. (1981) App 110 Mich 312 NW2d 212 reversed. Kavanagh, Physicians Surgeons — Malpractice — — 1. Arbitration Due Process. provision arbitration act that an arbitra- panel composed tion attorney, of an a licensee of the health- profession care hospital administrator, involved in a claim or a person and a who is not a profession licensee of the health-care involved, attorney, representative an or a hospital of a or an company, deprive insurance does not a claimant of the constitu- right (US impartial tional Const, to an XIV; decisionmaker Am 1, §17; Const 600.5044[2]; art MCL 27A.5044[2]). MSA Physicians Surgeons Malpractice — — 2. — Arbitration Agreement Validity. — Form of agreement

The form of an malpractice arbitrate under the controlled, strictly arbitration act is agreements and conform- ing provisions (MCL to the presumed of the act are valid 500.3060, 600.5041, 600.5042; 24.13060, 27A.5041, MSA 27A.5042). Morris v Malpractice — Surgeons — Physicians Arbitration. and 3. voluntary a agreement and cannot made to arbitrate is An made, care; agreement is the the prerequisite health once avoidance, seeking avoiding party it with rests burden of merely agreement not because altered and the burden (MCL 600.5041, rights of constitutional entails eschewal 27A.5042). 27A.5041, 600.5042;MSA Ryan, — Surgeons Malpractice — Physicians — Due Arbitration 4. and Process. not the Due Process malpractice act does arbitration The violate composition constitutions; a of federal Clause of the panel malpractice not involve state does arbitration medical (US Const, XIV; implicating the Clauses Am Due Process action 1, 1963, §17; seq.; et MSA 27A.5040 et 600.5040 Const art MCL seq.). Surgeons Malpractice — — Physicians — Arbitration Due 5. and — State Process Action. nor encour- malpractice act neither commands The arbitration arising provision ages disputes out of the of arbitration rather, care; system provides enforcement of a a health agreement private to arbitrate where arbitration decision form, comports statutory and that does not amount to with the (US Const, XIV; process purposes Am Const state action for due 1, 17; seq.; seq.). et MCL et MSA 27A.5040 600.5040 § art Malpractice Surgeons — — — Physicians Arbitration 6. Contracts of Adhesion. comported requirements agreements Arbitration malpractice arbitration act were not contracts adhe- sion; power, parties unequal bargaining were not for, agreements by, designed not nor the exclusive were written providers, acceptance offer beneñt of the health-care (MCL prerequisite not care to arbitrate was to health seq.; seq.). MSA 600.5040et 27A.5040 et Malpractice Physicians Surgeons — — — 7. Arbitration Fraud. Constructive representative of a of a health-care inclusion doctor or provider composition malpractice in the of medical panels providers to disclose and the failure of the health-care possible professionals general against biases of medical malpractice malpractice or the arbi- effect was con- tration awards on insurance rates 418 Mich composition panel structive fraud where the was dis- patients they signed agreements closed to the before providers and arbitrate where the health-care were not shown (MCL duty possible seq.; a to have disclose biases 600.5040 et seq.). 27A.5040 et MSA Dissenting Opinion J. Cavanagh, Physicians Surgeons Malpractice — — — 8. and Due Arbitration Process. requirement malpractice panel that a medical arbitration provider deprives unconstitutionally a include health-care person agreement dispute who an entеrs into to arbitrate a arising right hearing out of medical care to fair before impartial an decisionmaker because of state action without due (US process Const, XIV; 1963, 1, §17; of law Am Const art MCL seq.; seq.). 600.5040et MSA 27A.5040 et

Lopatin, Miller, Freedman, Bluestone, Erlich, Silverman) Rosen & Bartnick Steven G. (by for plaintiffs Morris and Jackson.

Kitch, Suhrheinrich, Smith, Saurbier & Drut- Ducastel), chas, P.C. A. Donald (by for defendant Stephen M. Kel- South Macomb Hospital, and (by ley Drutchas), Gregory G. for defendants De- troit Memorial Hospital and Bloom.

Schureman, Frakes, Glass & Wulfmeier (by Ed- Reynolds, Jr.), ward C. for defendant Metriyakool. Amici Curiae: Nancy Baerwaldt, A. Commissioner of Insur- Dodge McCauley, Nederlander,

ance, & P.C. McCauley), T. Victor Adamo and Patrick B. (by for Physicians Insurance Company Michigan. Kerr, Russell & Weber A. Stewart Kerr (by Beyer) Daniel G. Wayne County Medical Soci- ety and Michigan State Medical Society. Kavanagh, J. These cases concern Kavanagh, significant malpractice most claims. The presented arbitra is whether the issue tion seq.; et MSA MCL 600.5040 act of deprives plaintiffs seq., of constitu 27A.5040 et impartial rights We decisionmaker. to an tional hold that it does not. treated in Novem-

Plaintiff Diane Jackson was Hospital 1977, ber, Memorial at defendant Detroit Bloom for a dental Dr. William J. defendant plaintiff agreed malady. time, to At to submit disputes (except "any for claims or arbitration disputes may rendered) charges for which services over or in in the future out of connection arise * * * by to me this the health care rendered with hospital, indepen- employees and those its its agreed who staff and consultants have dent doctors brought August, plaintiff 1979, to arbitrate”. malpractice against in the action for defendants Wayne Court. Defendants moved for accel- Circuit agreement judgment, to on basis of erated arbitrate. constitutional hearing, After a the court found the act finding and, duress, mistake, or no agreement, incompetency in the execution of granted defendants’ motion. Appeals holding reversed, The Court of 27A.5044(2) 600.5044(2);

MCL constitutional MSA violates process guarantee of due " 'forcing litigant his or claim to submit her composed way a tribunal in such a that a high probability exists tribunal will be that such mandating against biased without claimant detailing explicitly the use of an arbitration form panel’s makeup’ ”. the nature Jackson Hospital, App 202, Detroit 110 Mich Memorial (1981), quoting 204; 312 v Metri- NW2d yakool, App 110, 134; 309 107 Mich NW2d (1981) dissenting part J., in concur- and (Bronson, 418 Mich Kavanagh, ring part). The Court also held that the arbitra- agreement tion is not a contract of adhesion and present that, facts, on the it is not unconscionable. applied appeal, plain- Defendants for leave to sought cross-appeal, tiffs leave to which we granted. 412 Mich 885 plaintiff us, In the second case before Delores M. Morris was admitted to defendant South Macomb Hospital on November 1976. At the time of her plaintiff agreement admission, executed an similar by plaintiff to the one executed Jackson to arbi- any against hospital trate claims defendant Metriyakool arising defendant Dr. S. out of her hysterectomy. Subsequently, plain- treatment tiff brought against alleging negli- suit defendants gence surgical procedure, in the which caused her develop peritonitis, negligence failing to promptly

diagnose and treat the condition. Defen- plaintiff’s dants each moved to submit arbitration in accordance with the claims to

agreement. plaintiff’s complaint trial court dismissed prejudice, prejudice right but without to her to file a claim for arbitration. Appeals rejected plaintiff’s argu-

The Court of composition panel ment that the of the arbitration unconstitutionally was biased. It also held that the unconstitutionally unconscionably act does not or deprive patient meaningful opportunity a of a to relinquish decide whether to access to a court and jury a trial. The Court further held that agreement Judge was not a contract of adhesion. holding dissented from the of constitu- Bronson tionality. Metriyakool, supra. granted Morris v We plaintiff’s application appeal. for leave to 412 Mich provides arbitration act that a patient "may, agreement offered, if execute an to Morris v Kavanagh, arising controversy, dispute, or issue a arbitrate by a care treatment health health care or out of 27A.5041(1), 600.5041(1); provider”, or MSA MCL 27A.5042(1). 600.5042(1); hospital, MSA MCL a agreement executing patient a such an A days provider may it within 60 revoke health-care 600.5041(3); MSA execution, MCL after 27A.5041(3), hospital, or, in the case of a within 600.5042(3); discharge, days MSA after MCL 27A.5042(3), options stated in the which must be agreements provide agreement. must All such immediately type 12-point above boldface agreement signatures parties’ space receipt prerequisite is not a arbitrate 600.5041(5), 600.5042(4); MSA care. MCL health 27A.5042(4). 27A.504K5), arbitration, the act have elected For those who composed requires panel of an a three-member chairperson, physician, attorney, a shall be who respondent’s specialty, preferably medical from the person health- is a licensеe and a who representa- profession lawyer, involved, a or a care hospital company. an MCL tive of a insurance 27A.5044(2). 600.5044(2); the claim is MSA Where hospital only, hospital against a a administrator physician. substituted for the If the claim against provider than a health-care other profession physician, a licensee of health-care involved shall be substituted. Hospital Dr.

Defendants Detroit Memorial appeal holding unconstitutionally presence Bloom from created member panel. they argue First, that because biased regu- compel only arbitration, state does not but it, lates state action is not involved. process requirement "fair

A basic is a due Murchison, in a fair 349 US trial tribunal”. In re 432 418 423 Mich Kavanagh, 133, 623; 136; 75 S Ct 99 L Ed 942 (1955); Withrow Larkin, 35, 421 46; 1456; US S 95 Ct 43 L Ed 2d (1975). 712 Essential to this is a notion fair and decisionmaker. Crampton v Dep’t of impartial State, 347, (1975). 351; 395 Mich 235 NW2d 352 Clause, Const, The Due Process XIV; US Am Const 1963, 1, 17, Dow v State of art limits action. § Michigan, 192, 202; 396 Mich 240 NW2d 450 (1976). Private abridging conduct rights individual implicate does not the Due Process Clause unless significant state, to some extent in of its any manifestations, has been found to have become it, Wilmington see Burton v involved in Parking Authority, 715; 81 6 856; US S Ct L Ed 2d 45 (1961), or to Flagg compelled conduct, have Bros, Brooks, Inc v 164; 1729; US 98 S Ct (1978). 56 L Ed See also Jackson v Metro- 2d Co, politan Edison 345; US 95 Ct 42 L S 2dEd

We however, find unnecessary, to determine here whether the state has significantly involved in challenged because, itself action if even we so, were find we have compo- concluded that sition of the arbitration panel does not offend guarantees of due process. holding unconstitutional,

In the act the Court of Appeals in Jackson agreed Judge Bronson’s dissent Morris partial the arbitration panel presents high too probability to be actual bias constitutionally tolerable. partial his dissent Morris, Judge creating found the statute Bronson panel unconstitutional because member had an panel such interest in the great outcome that there is too risk he will impartial. Judge not be Bronson cited two affidavits submitted in from mal- practice insurance underwriters. averred They 433 Morris v by Kavanagh, J. Opinion would physician administrator any hospital that out- in the interest substantial have a direct and and the cost because of cases come arbitrated insurance malpractice availability of that also said Judge Bronson affected. would be health-care supported in is question the act believe they indicates that professionals, He system. type fare under this they will better еxist attitudes anti-plaintiff that also concluded "Their 'function among numbers of doctors. large to make expected be and frame of reference’ colleagues.” professional them of their partisans Morris, dissenting J., 129 (Bronson, App 107 Mich concurring part). in in part and part of actual on the of a showing No bias claimed, particular panel parties is from motions for accelerated having appealed having been judgment panel and no arbitration prevent party convened. That does not from claiming high the risk of actual bias is too constitutionally system tolerable. of law "[0]ur has endeavored to always prevent proba- even Murchison, supra, bility unfairness.” 349 US end, 136. "In pursuit of this various situations have been identified which experience teaches the probability of actual part bias on the the judge or high decisionmaker is too to be consti- Withrow, supra, tutionally tolerable.” 421 US 47. Included in those situations of a decision- maker who has a direct or pecuniary substantial interest in the outcome of the controversy. E.g., v Berryhill, Gibson 411 1689; US L S Ct (1973); Ed 2d 488 see Crampton, supra, Mich 351-355.

Such a pecuniary interest is claimed here —the decisionmaker’s interest in lower in- premiums surance will influence his decision to- 418 Mich Kavanagh, malprac- and size of reducing the number wards affidavits, the underwriters In their tice awards. administra- hospital physicians averred that malprac- in the medical have a vested interest tors others; the claims made made against tice claims and the premiums the rate of insurance do aifect for all insurance. Premium rates availability doctors, averred, determined generally they settlements, claims, judg- all the number of hospitals Michi- against physicians ments on insur- The effect of an arbitration award gan. ance rates is thus said to be direct and substantial. plaintiff aggravated,

This situation is contends Jackson, composition advisory the of the com- mittee, pool of candidates from which selects the panel all members of the arbitration which provides: The statute chosen. advisory

"An committee is created within appointed by the bureau of insurance and shall be 18 commission and shall consist of members. One-half of the licensed composed advisory broadly committee shall be of physicians providers, and other health care hospital providers, licensed or institutional health care malpractice tioners. One-half shall be legal practi- insurance carriers and licensed nongov- broadly composed of ernmental, nonlawyer, provider, nonhealth care and persons. may noninsurance point approval 24.13054. ap- carrier The committee specialized more subcommittees with the 500.3054; of the commissioner.” MCL MSA committee, part which includes malpractice insurance health-care carriers and providers, has a direct in reducing interest number and size of There malpractice awards. is a insists, substantial possibility, plaintiff Jackson that they similarly will select candidates who are inclined. v Kavanagh, of degree any here

All has been shown between relationship is a there is certainty awards on number and size malprac- availability hand, and the cost one taken may This be the other. on tice insurance that, because be assumed It also granted. are con- administrators hospital physicians malprac- availability the cost cerned with a class which insurance, are members they tice other in a case between decision affected Ohio, 273 US 510, 522; 47 S Tumey parties. See (1927). More 749; ALR 1243 437; L Ed Ct shown, however, out a to make than that must process. offends due case which disqualified was Tumey, village mayor In compensated he was sitting judge from as a where prohi- of the state imposed from fines for violation the mayor The Court concluded bition act. direct, interest con- personal, pecuniary "had a before him for victing defendant who came trial, imposed in the twelve dollars of costs his behalf, if he would not have received acquitted.” Tumey, p had 523. defendant been Monroeville, Ward v 80; 409 US S Ct (1972), L although 34 Ed 2d 267 mayor was directly compensated imposed from fines for traffic offenses, he held wide executive and was powers responsible village disquali- for finances. The Court sitting fied the from mayor judge as a because mayor’s responsibilities village executive for finances might partisan have made him to main- tain the high level of contribution from may- fines, costs, or’s court. Revenue from and fees in collected court mayor’s annually contrib- uted village almost half of the total revenues. Gibson,

Also, supra, the Court affirmed the finding district court’s the Alabama Board of Mich Kavanagh, was Optometry provide biased and could not a fair impartial hearing and to optometrists charged unprofessional working conduct for a corporation. The board composed was solely of independent doctors not employed by corporations. The Court held that the board had a substantial pecuniary interest in the proceedings because sought what was was the revocation of the licenses of nearly half of all optometrists in the state which, successful, if would possibly redound to the personal benefit of members of the board. case, present contrast, has not been demonstrated the medical members of these panels have a direct pecuniary interest or that their decision may have any substantial effect on availability insurance premi- insurance ums. We have been shown grounds no sufficient for us to conclude that these decisionmakers will not act with honesty integrity. We look for a pecuniary interest which creates a probability unfairness, a risk of actual bias which high is too to be constitutionally tolerable. It has not been shown here.

Plaintiff Jackson argues also as a class physicians and hospital possess administrators subliminal against bias patients who claim medical malpractice.

We interpret this as a claim made out under Crampton, supra. In Crampton, we held that probability of actual bias was too high where a prosecutor police officer sat on an appeal board to review the revocation Crampton’s driv- er’s license ‍​​​‌​‌​‌‌​​​‌​‌‌​​‌‌​​​​‌​‌​​​​‌​​‌​​​‌‌‌​‌‌​​‌‌‍for refusal to submit to a chemical test upon arrest for driving under the influence of intoxicating liquor. Police officers prosecutors are full-time law officials, said, enforcement we deeply and personally involved the fight against Morris v Opinion by Kavanagh, aligned "[T]hey violators. are identified law adversary as the citizen who with the state of the law. Their function charged with violation expected reference be to make and frame of their own 'partisan authority them to maintain’ Crampton, supra, fellow officers.” and that of their 395 Mich 357. of

We do not believe that the medical members aligned are so identified and panels these respondents malpractice they may cases that respondents. expected Physicians to favor in the other health are trained professionals care the ill. Hos- medical arts and are oath-bound to treat proper func- pital are trained in the administrators tioning hospitals. of Neither nor physicians hospi- tal administrators have professional interests are adverse to patients even claim- consistent, ants on a daily Any identity basis. of respondents strong interest with is not so as to create a subliminal bias against for one side and the other.

"All questions judicial qualification may not involve constitutional validity. Thus matters bias, kinship, personal state policy, remoteness of interest, would seem generally to be matters merely legislative Tumey, supra, discretion.” 273 US 523. are persuaded We these panels arbitration deprive plaintiffs of fair and impartial decisionmaking.

Plaintiffs next argue that agree- ment waives rights constitutional to a trial jury and access to a court. Because these fundamental rights waived, they rest say, burden should contract, with the defendants to show a valid which they can only by showing do waiver was made and in- voluntarily, knowingly, telligently. showing The burden a voluntary Mich by Opinion Kavanagh, J. argue plaintiffs, easy one, because not an is waiver agreement time at the was offered the arbitration atmosphere hospital in an to admission of infected plain- Additionally, implicit coercion. with intelligent knowing argue waiver and that a tiffs easily the defendants because shown will be chargeable fraud. Construc- with constructive are agreement’s out of the arise is said to tive fraud highlight waiver, failure to fact of failure panel composition the arbitration disclose (even though in an contained information is this agree- accompanying the booklet informational ment), the attitudes to disclose failure and hospital general, they physicians ad- in and the reasonable biased ministrators probability by affected rates are insurance awards. respond con- that we should not

The defendants they arguments any were because of these sider only courts. The issues in the lower not raised properly preserved argue, appeal, defendants panel’s process question about the due besides agree- composition, the arbitration are whether it is adhesion and whether ment is a contract of unenforceable as unconscionable. of the issues briefed Some Ordinarily appeal. in for the time this raised first questions, but, be- would not consider these we pending or similar issues are cause the same plain- courts, we address other cases in the lower Michigan Consoli- tiffs’ contentions. Johnston v Co, 572, 580; 60 NW2d dated Gas Mich plaintiffs’ questions, Answering merits of a matter of defendants contend that arbitration is agree- signs a contract and that one who written pre- presumed it. The act ment is to understand Morris v Kavanagh, conforming agreement valid, MCL to be sumеs 27A.5041(7), 600.5042(8); 600.5041(7), MSA 27A.5042(8). disproving Therefore, the burden plaintiffs. agreement rests this arbitration say establish- defendants, the burden of Moreover, ing party rests with violation a constitutional agreement asserting infor- it. The arbitration reasonably that arbi- indicated mational booklet trial alternative to exclusive was an tration rights expressly jury. their waived Plaintiffs voluntary by jury. and not is Arbitration trial required, plainly agreement states signature. capital The form of letters above agreement the information booklet the strictly 500.3053, 500.3060,

controlled, MCL 24.13053, 24.13060, 600.5041, 600.5042; MSA approved by the 27A.5041, 27A.5042, was Michigan of Insurance. Commissioner defendants,

Plaintiffs, have failed to contend signing they coerced into that were demonstrate argument Answering agreement. of con- say fraud, that the informa- defendants structive given that a doctor to states tion booklet hospital serves on the arbitration or administrator panel. states that a A chart the booklet also by judge jury an court case is heard while by heard the three-member arbitration case is panel. reject plaintiffs’ of the burden of

We allocation proof avoiding these to defendants. The of burden agreements, contracts, other as with The act rests with those who would avoid them. agreement in- states that an to arbitrate which provisions presumed statutory cludes the shall be 600.5041(7), 600.5042(8); MSA valid. MCL 27A.5042(8). 27A.504K7), showing ground some for rescind- burden Mich 423 418 by Kavanagh, merely altered a contract is not invalidating

ing or of constitu- entails eschewal the contract because coercion, like allegations of Plaintiffs’ rights. tional duress, mistake, defenses of contract other seeking fraud, party proven must be grounds. on such the contract avoid the arbitration contends Plaintiff Jackson adhesion, terms of is a contract agreement expectations. reasonable She exceeded her which stating explicitly that court claims waived, trial was this right jury access with and hence the contract in effect concealed fact was is unconscionable. are characterized stan

Contracts of adhesion party one prepared by dardized forms oppor acceptance without rejection offered for bargaining and under circumstances tunity cannot obtain desired party the second in the except by acquiescing product or service Casualty v & Co Fidelity Steven agreement. form York, 172; Rptr 2d 27 Cal New Cal Michigan Allen Bell (1962), v 377 P2d 284 see Co, Telephone 632; 171 App 18 Mich NW2d (1969) Zurich Ins Co (1970), lv den 383 Mich , 228, 232-233; Rombough, 384 Mich 180 NW2d (1970), Coaches, Suppliers, and cf. Cree Inc v Panel Inc, 646, 649; 384 Mich 186 NW2d 335 Regardless among pa of any possible perception provision optimal tients that medical care agree conditioned on their the signing ment, pe we believe that the rescission sixty-day riod, informed, patients fully of which must be protects sign agreement. pa those who the ability agreement tients’ to rescind the after leav ing hospital the allows them to obtain the desired binding service without them to its terms. As a result, agreement the cannot considered a con be tract of adhesion. v by Kavanagh, that the arbitra- reject plaintiffs also claim

We the According to unconscionable. agreement is tion us, agreement signed the arbitration record before long. The paragraphs is six Jackson plaintiff "I begins, paragraph the first sentence of first I this hospital by signing that this understand claims or dis- agree any to arbitrate document para- of the second putes”. The first two sentences state: graph Michigan gives me the choice

"I understand that Law judge jury or of I understand trial or arbitration. of that arbitration either dispute a procedure by panel that is a upon appointed mutually agreed or decides judge jury.” rather than long covering contract different This was not a which, terms, among many of obscured only one Arbitration was concerned arbitration. paragraphs, singular agree- nature the essential person do an ordinary ment. We not believe that to reason- this arbitrate would signing agreement reject plaintiffs’ trial. also expect jury We ably agreement is unconscionable argument Williams See failure to these terms. highlight for Co, Walker-Thomas Furniture DC App US 315, 319; F2d ALR3d we find Finally, both ask that construc- un- fraud are agreements tive and hold conscionable because failure of contracts the attitudes composition panel, disclose medical member physicians, the fact that panel against intrinsically biased that mal- plaintiffs, and the reasonable probability practice in medical rates are affected awards cases. agree- decline.

We We do believe failing include ments unconscionable 423 Mich Opinion Williams, C.J. plaintiffs’ recommendations. Nor do believe we equitable a legal defendants have breached deceiving plain- which has of duty had effect tiffs, nor have defendants received an unmerited Waller, benefit. Goodrich v 456, 462; Mich NW2d 862 Jackson,

In finding we reverse the of unconstitu- tionality reinstate the order the trial court submitting the matter to arbitration. Morris, we affirm. costs, а public question.

No Levin, J., Kavanagh, concurred with J. Williams, C.J. (concurring for constitutionality). provision The of medical services is one of the and, important most in many aspects, one of the most difficult concerns of our day. One particularly problem difficult connected the provision malpractice services dispute is medical resolution. Medical litigation, as many remember, will reached proportions. crisis The consequences of the failure to address adequately this situation seemed incalculable. Legislature in the Medical Ar- Malpractice

' seq.; MCL 600.5040 et bitration Act of MSA seq., et wisdom, 27A.5040 in its attempted ad- dress this problem. serious This litigation raises the question deprives litigants whether that act a fair procedure fair tribunal because of the presence of a physician or health-care on provider the arbitration panel. Cavanagh I

While my believe brother M. F. makes a strongly reasoned case that the Medical Malpractice Arbitration Act of 1975 unconstitu- deprives tionally process of their due rights decisionmaker, to a fair impartial I am Ryan, of bias proofs persuaded plaintiffs’ wholly the presumption' to overcome strong enough I therefore legislative action. of constitutionality Kavanagh’s conclu- T. G. my brother concur panels arbitration in the that these cases sion biased constitutionally to be have not been shown representatives. the of presence the determine whether Ryan, We asked to J. are (MMAA) of Act Malpractice Arbitration Medical et seq., seq.; 600.5040 et MSA 27A.5040 1975, MCL of the federal the Due Process Clause violates XIV, Const, 1, constitution, Am or US § 1963, 1, constitution, Const art Michigan state 17, representative a or that doctor requiring § as a member of the serve provider of a health-care The plaintiffs claim panel. three-person arbitration rights due process MMAA violates their that the decisionmaker since impartial them an by denying partic- person that a medical mandates statute v Detroit Jackson panel a member. ipate as Hospital, App 204; 110 Mich Memorial (1981), Appeals agreed NW2d 212 Court due plaintiff the MMAA did violate Jackson’s process rights by a his or her claim to

"forcing litigant to submit high composed way tribunal which is such probability tribunal will biased exists such use an against arbitration form panel’s makeup.” mandating the the claimant without detailing explicitly the nature of in Morris v Metriyakool, However, App 107 Mich (1981), the Court held thаt 309 NW2d 910 Clause of MMAA did not the Due Process violate the federal or state constitution. violate hold that the MMAA does not

We Mich Ryan, Due of either the Process Clause federal composition constitutions since the panel action” does involve "state implicating the Due Process Clauses. allege that even if MMAA also agreements constitutional, the arbitration they

these must not be enforced cases since contracts adhesion and involve constructive agreements fraud. We hold that the arbitration adhesion, fraud, are not contracts of involve no and are enforceable. Hospital

Jackson Detroit Memorial and Bloom plaintiff 3, 1977, On November Jackson entered Hospital non-emergency Detroit Memorial den- by tal treatment Dr. Bloom. At the time her plaintiff admission, agreement the executed an arbitration provided that, which should she have any dispute hospital with the or the doctor con- cerning dispute treatment, her care or the would be submitted to arbitration. In accordance with Malpractice Act, the Medical Arbitration the plaintiff copy agreement received a of the print signature stated, in bold line, above the that: site Revoked Within cation ^[*] "This ^{[*] [*]} to Health Care or >> Agreement Writing Days to Arbitrate to: Medical Records Director After Treatment, Execution not a Is Prerequi- May Notifi- Be Along copy agreement, hospital with a of the the gave plaintiff promulgated the a booklet Michigan Commissioner of Insurance which more fully explained system. Specifically, the arbitration the booklet stated that a doctor health-care provider would sit as a member of the arbitration Morris v Ryan, the arbitra- revoked has never plaintiff The panel. agreement. tion a com- 1979, filed 22, plaintiff August

On alleging Circuit Court Third Judicial in the plaint guilty of the doctor were hospital the plaintiff in which manner in the 1979, the defendants treated. On October was asserting that judgment, accelerated moved for trial the case. The over no jurisdiction court had acceler- motion for defendants’ granted court lacked juris- the court holding ated judgment, agreement. the arbitration diction because grant of accelerated appealed plaintiff three and raised Appeals to the Court judgment issues:

1) plaintiff’s right MMAA violated That impartial decision- a fair and hearing before to a maker.

2) MMAA, unconsciona- was applied, as That ble.

3) conforming agreements the arbitration That of adhesion. with the MMAA were contracts the MMAA was held that Appeals The Court of plaintiff’s unconstitutional as a violation decision- impartial fair and process right due to a of the arbitration maker because one member or health-care panel required was to be doctor the statute was representative, but provider’s a con- not constitute not unconscionable and did v Detroit Memorial Jackson tract of adhesion. Hospital, 312 NW2d App Mich Hospital and South Macomb Morris v Hospital Macomb Plaintiff Morris entered South 9, 1976, non-emergency surgery on November Metriyakool. defendant Dr. under the care of 418 Mich Ryan, hospital, the course of her admission to the plaintiff agreement executed an arbitration that, provided any dispute should she have or hospital concerning the doctor her care or treatment, dispute would be submitted to arbi- MMAA, tration. In accordance with the the arbi- stated, agreement plaintiff tration signed line, bold print signature above the that: Agreement Prerequi- "This to Arbitrate Is not May Treatment, site to Health Care or Be Days Revoked Within After Notifi- Execution Writing cation to: Medical Records Director ^{[*] [*] [*]} >> plaintiff allege

The does not that she did not copy agreement receive a or that not was accompanied promulgated the booklet by the explained Commissioner of Insurance which fully system, including the arbitration the fact that a provider doctor or health-care would sit on the panel. plaintiff arbitration The did not revoke the agreement. 19, 1977, July plaintiff complaint On filed a Court, in the alleging Macomb Circuit hospital the doctor were guilty in the care and treatment during she received following plaintiffs át South Macomb surgery 25, 1977, Hospital. On hos- October the defendant pital moved to submit the matter to arbitration. 19, 1979, July On the trial court dismissed the plaintiff ap- case with prejudice. pealed to the Court Appeals. The Court Appeals held that the MMAA did violate Clause, Due Process the MMAA was not unconscionable, the MMAA did not in- Metriyakool, volve contracts of adhesion. Morris v App Mich NW2d 910 by Ryan, J. Malpractice Challenged Medical Act: I. The of Act Arbitration provi- relevant the to examine helpful It The statute detail. in some MMAA sions and a may, provider” care a "health that provides arising must, disputes to arbitrate offer "hospital” offer, to be The care. of health provision the from in MMAA, made must be the under enforceable statutory conditions: following the compliance writing; 1) in must be to arbitrate the offer must be 2) the offer, patient, accepted by if the writing; if revoked days for 60 revocable state, 3) signature the above must agreement Agree- "This type, boldface 12-point line in Prerequisite a Is not ment to Arbitrate May Be Re- Treatment Care Health Days Noti- Execution After voked Within * * Writing *”; to: fication 4) detailing a booklet given must be patient agree- of the arbitration provisions specific ment;

5) given copy a must be patient agreement; arbitration

6) precede must not to arbitrate the offer MCL medical care. emergency ‍​​​‌​‌​‌‌​​​‌​‌‌​​‌‌​​​​‌​‌​​​​‌​​‌​​​‌‌‌​‌‌​​‌‌‍provision 600.5042; MSA 27A.5041, MCL 600.5041; MSA 27A.5042.

However, require the MMAA does offer to hospital’s the doctor’s or patient accept arbitrate or not to The decision whether arbitrate. patient. to the entirely is left in which delineates the structure The statute in cases will occur arbitrate the offer to patient accepts in which the treatment. from the care or disputes arising be heard dispute will provides statute 418 Mich 423 Opinion by Ryan, J. three-person panel composed attorney, of an hospital person doctor or administrator, and a who attorney. is neither a doctor nor an 600.5044; MCL positions 27A.5044. MSA are Candidates for arbitrator required to be screened the American Arbi- organized entity tration arbitrate or Association "other disputes pursuant chapter”. to this The screening biographical includes consideration of a by proposed panel statement arbitration mem- completion ber and of a disclosure statement signed may under oath. The candidate also be personally by representatives interviewed of the 600.5044; 27A.5044, association. MCL MSA MCL 600.5045; MSA 27A.5045. From a roster of ac- cepted compiles candidates, the association a list of categories five candidates in each of the three panel parties members and sends the lists to the agreed 600.5044; who to arbitrate. MCL MSA parties given 27A.5044. The are also the candi- biographical may ques- dates’ sketches and submit prospective panelists through tions to the the asso- parties pick ciation. The then the arbitrators striking any from the lists the name of candidate satisfactory. showing who is not No of cause is required. The first candidate each list who is agreeable mutually parties placed to the is on the panel. agreed upon If none can be from the first provided lists, set of a second set lists is and the process repeated. parties agree is If the still cannot upоn proposes category, a candidate for each the association single remaining

a candidate to fill each vacancy. challenged only This candidate can be requires produced cause which facts be professional community "establish that unusual pressures unreasonably objectiv- will influence the ity parties panelist”. Additionally, if the they may agree upon person elect, a to sit on the suggested panel who not is a candidate Ryan, still, in any must panel The association. hospi- doctor or lawyer, of a event, composed be neither. who is administrator, person tal 600.5044; 27A.5044. MSA MCL chosen, the arbi- is panel the arbitration Once like civil much procedurally hearing tration coun- represented by parties may The litigation. evidence, may testify, sel, material present may concepts The witnesses. cross-examine to those identical practice and care duty limits on the are no There litigation. used in civil MCL law. except provided by as damages award of is ad- Expert testimony 600.5043; 27A.5043. MSA is infor- hearing missible, required. but is promulgated the rules in accordance mal and the federal rules except association by the where not follow- must be followed procedure civil prejudice. result substantial them would ing discovery Pretrial 600.5050; MSA 27A.5050. MCL allowed essentially as are available subpoenas 27A.5048, 600.5048; MSA MCL litigation. in civil 600.5051; 27A.5051. MSA MCL relief panel grant any A the majority may of reaching In its deci- equitable just. deemed briefs, sion, but must panel the order written may of the decide within 30 of the termination days briefs. The hearing or of the submission of written signed, and writing, decision must be in must be panel’s must include of all is- determination necessary which are sues submitted for arbitration panel’s to the of The writ- dispute. resolution finding ten for a opinion must include the reasons of liability or the reasons nonliability, and, award, of applicable, where a determination A dis- degree parties. of of of the fault each dissent. senting panel member file a written 600.5055; MCL MSA 27A.5055. The decision 418 Mich Ryan, to the according appealable is panel arbitration under grounds available procedures court rules. and applicable law provisions includes numerous MMAA also The which are not process concerning the arbitration this case. applicable to directly II. State Action is that contention primary plaintiffs’ rights. process their due challenged act violates repeatedly has Supreme Court The United States required tо three-step analysis indicated process a due there has been whether determine exist, as process a due violation violation.1 For traditionally spoken Supreme of a Court has The United States Ingraham Wright, process two-step 651, 672; v 430 US violation test. due (1977), 1401; the Court stated the S 51 L Ed 2d 97 Ct test as follows: deprivation prohibits any Amendment "The Fourteenth life, process Application liberty, property due of law. without analysis: requires two-stage prohibition ask whether the asserted We must the familiar this encompassed individual interests are first 'life, protection liberty or within the Fourteenth Amendment’s implicated, protected property’; we then must decide if interests process procedures law’.” constitute 'due what spoke two-stage analysis apparently because in terms of a The Court there was no action”. concerning dispute the existence of "state case California, 277, 284-285; However, 100 S Ct 444 US Martinez (1980), three-stage analysis applied L 62 Ed 2d Court process challenges. due deprivation protected only from Fourteenth Amendment her "[T]he * * * * * * Although process of law’. the 'State of life without due State, prison by the the decision to release Thomas from the action of Thomas five months later cannot be as state action. was action fairly characterized * * * that, allega- taking particular hold these [W]e true, 'deprive’ appellants’ life tions as did not decedent of [the State] meaning within the of the Fourteenth Amendment”. is, therefore, process analysis state due divided into three The Martinez 1) 2) action, life, deprived person steps: was there which the of 3) process liberty, property, or without due of law. 1908; 536-537; Taylor, v 68 L Ed 2d Parratt 451 US S Ct (1981), process the due test in terms of four the Court articulated steps: v Ryan, J. assert, must be: there the person private or a state 1) deprivation state; as the treated fairly who life, or liberty, 2) cognizable constitutionally aof interest; property

3) of law. process due without missing, the chal- is these elements of one any If no process of due a violation is conduct lenged law; State. violation of tion. protects against a valid alleged regardless of the the test: "without without due have chosen analysis direct and 'without We note "Unquestionably, We state, Standing The Fourteenth Amendment recognize loss, due due hobby 2) logical, inappropriate. the Fourteenth process even to decide the case process of process alone, kit falls all that Justice particular articulation though we have stated deprives the respondent’s due claim: deprivations however, of "tests” have law’.” process law. Since this within the negligently Amendment. Kavanagh these upon petitioners person claim of law”. of protects three elements the basis life, liberty, analysis definition caused, satisfies of following common Nothing in that Amendment three-step analysis is most and Chief life, We acted only .against deprivations amounted in three of the third element liberty, believe, three analysis: of under color or property; do not establish a Justice Williams property by the prerequisites of steps. or that such to a 1) property, an act elements, and the depriva- of state an 3) process without state action. "[T]he can be no due concern There only to the addressed of the Fourteenth Amendment are commands authority”. acting District of its to those under color of State or Carter, 418, 423; 2d 613 34 L Ed 409 US 93 S Ct Columbia action, finding, implicit explicit, of state Until there is a or process requirements are not Amendment of the Fourteenth due language implicated of 1 of § Even the and should not be addressed. organization of the evalua- this the Fourteenth Amendment leads to process challenge: tion of a due life, prop- liberty, any deprive any person shall State "[N]or erty, process without due of law”. Supreme Following which has Court the lead of the United States not, shows, passed action over so far as our research ever test, action step assume state we shall not issue to reach a later grounds. process law” and decide this case on "without due 418 Mich 423 452 Opinion Ryan, J. wrongful”. "discriminatory Blum v or how

matter 2777; 73 L Yaretsky, 991, 1002; 102 S Ct 457 US (1982), citing Shelly Kraemer, 334 US v 534 Ed 2d 836; 92 L Ed 1, 13; S Ct begin the "state action” element then with We analysis. Clause of the Due Process Supreme Background United States Court Case Law Supreme recog- States Court has The United determining the task of whether state might appear nized that simple as as action exists is not in instances in since few cases raise which a state acts without issue directly private person or a acts any Rather, involvement of the state. ground usually is raised on middle facts issue challenged purely where the action is neither private purely action nor action. As the United Supreme States Court stated Jackson Metro- politan Co, 345, 349-350; Edison US S Ct (1974): 449; 42 L Ed 2d 477 principle private

"While the action is immune from the of the Fourteenth Amendment is restrictions stated, easily question well established and whether hand, particular 'private’, conduct on the one action’, other, easy 'state frequently on the admits of no answer.”

Although easy always evident, no answer is Supreme United States situations in Court has identified three "private to the action” rises level of "state action” so as to involve the due process requirements of the Fourteenth Amend- ment: "private

First, the "state action”/ action” nexus Morris v Ryan, "has suffi- challenged when the conduct is formed imprimatur of the State so as received ciently Four- purposes to make 'state’ action for Blum, supra, p 1003. teenth Amendment”.

Second, action” "private "state action”/ "private” challenged nexus is formed where the powers that are conduct involves the exercise prerogative exclusive "traditionally Edison, Metropolitan Jackson v 353. p State”.

Third, nexus "private the "state action”/ action” challenged formed where the conduct necessi- between the state "symbiotic relationship” tates a private party. and the

The law under each of these situations will case before them to separately applying be discussed the facts of these cases. Encouragement or of Private State Command

1. Action "private” A will held for responsible be "imprima- if its only placed action the state has it challenged tur” on the action "so as to make purposes 'state’ action for the Fourteenth Blum, supra, p Amendment”. 1003. The state places action” "imprimatur” upon "private its when it encourages” questioned "commands or However, encourage” is a activity. "command or term of art. precedents States indicate Supreme "[United Court] normally responsible

that a State can be held private only decision coercive when has exercised power provided significant encouragement, or has such covert, in either overt or deemed to be that of the State. approval the choice must law * * * [But] [m]ere pri- acquiescence of a the initiatives holding party justify vate is not sufficient the State 418 Mich Ryan, J. responsible for those initiatives under the terms of the Blum, pp Amendment”. 1004-1005. Fourteenth precedent upon the United States which Supreme Court makes this statement illuminates might only statement, otherwise offer dark and abstruse conclusions. Metropolitan supra, Co, Edison Jackson

Metropolitan public utility, gen- Edison, a filed a Pennsylvania eral tariff statement with the Utility Public regulates public Commission which all util- Metropolitan Pennsylvania. ities in Included general Edison’s provisions tariff statement were series utility

which allowed to discontinue nonpaying following service to customers reason- provisions, able notice. Pursuant to these Metro- politan plaintiff’s utility Edison discontinued the alleging sued, service. She a violation of the due process requirements of the Fourteenth Amend- Supreme However, ment. the United States Court found that implicated the Fourteenth Amendment was not despite depriva-

since, the fact that the procedure "passed” by public tion was the state utility commission, there was no "state action”. As Supreme the United States Court stated: "Here, hand, on the impri- other there was no such placed matur practice on the Metropolitan about petitioner which tal complains. governmen- The nature of regulation private utility utilities is such that a. may frequently required by regulatory the state approval scheme to practices obtain for a business regulated in less detail would be free to institute with- any approval out regulatory body. Approval by from a a utility utility, state lated request regu- commission of such a from a put where the Commission has not its own weight on proposed practice ordering the side of the by it, practice does not transmute a by utility initiated by Ryan, action’. At into 'state approved the Commission and most, practice this failure to overturn the Commission’s that a than a determination to no more amounted Pennsylvania employ such a utility was authorized exercise of the Respondent’s practice if it so desired. comes law where the initiative by state choice allowed State, action does not make its not from the from it and Fourteenth purposes doing 'state action’ in so Jackson, supra, p 357. Amendment.” Flagg Brooks, 149; S Ct Bros, 436 US Inc v In (1978), United States L 2d 185 1729; 56 Ed Supreme no state that there was Court found Flagg bailor-warehouse, Brothers, a when action pursuant plaintiff’s goods York New sold allowing provision Code Uniform Commercial Flagg provision "self-help” under which The sales.3 in which the situations Brothers acted delineated prescribed "self-help” the exact was available and out. to be carried in which the sale was manner Flagg goods plaintiff, sold were the sale violated due The Brothers, sued, whose alleging acting

process Flagg at since Brothers was Cavanagh 3Justice declares: feature, appears "Second, distinguishing although truly it is not wrong concluding Supreme Court was to me that the United States that the man’s lien did not involve state action. procedures a warehouse- 7-210 to enforce outlined UCC Indeed, not that conclusion did Bros, Flagg easily naturally prior law. See follow from its case (Stevens, J., Post, supra, pp dissenting)”. 168-179 482. upon objection raise an to the MMAA based claim, evaluating is federal Due this Court Process Clause. Supreme bound Court. "[T]he decisions of the United States Court], involving Supreme in cases decisions of Federal United States [the questions, courts”. áre conclusive authorities in the State (6 Wall) 611, 628; Massachusetts, 18 L Provident Institution v 73 US present. Fletcher v Ed 907 This rule has to the See continued (1982).Therefore, Weir, 1309; we 455 US 102 S Ct 71 L Ed 2d 490 Cavanagh agree free to disre- cannot gard think that "the United States the this that we are our brother decision in Bros, might majority Flagg supra, we because wrong” Supreme in favor Court was Moreover, Court, dissenting position of Justice Stevens. one, concerning scope constitu- of federal final arbiter rights. tional Mich Ryan, J. encouragement” of the state. The "command or Supreme disagreed: Court, however, responsible cases state 'that a State is for the "Our * * * State, law, private party act of a when the its * * * Court, however, compelled the act.’ This has has never held that a State’s mere acquiescence private in a action converts that action into that of the State. The argument [p in rejected Court a similar Jackson 357]: " 'Approval by utility a state commission of such a request regulated utility, from a where the commission put weight proposed has not practice by ordering its own on the side of the it, practice does not transmute a utility approved by initiated into "state action.” the commission added.)’ (Emphasis "[Likewise,] way the State of New York in no decision, responsible Flagg for Brothers’ a decision in permits compel, the State 7-210 but does not § respondents’ belongings. to threaten to sell these "Here, compelled the State of New York has not goods, merely sale of a bailor’s but has announced the circumstances under which its courts will not interfere private Indeed, with a complaint sale. respondents’ crux of acted, is not that the State has but has refused to act. different in statutory This refusal to act is no principle ordinary from an statute of limita- tions whereby provide remedy State declines to private deprivations of property passage after the given period Bros, Flagg supra, pp time.” 164-166.

Finally, recently, supra, Blum, most Suprеme nursing United States Court held that home decisions to alter the level of’care of Medi- patients caid and thus affect their Medicaid bene- despite fits does not involve state action the fact that the state has an interest and oversees the nursing noting home determinations. After "[fjaithful require- adherence to the 'state action’ requires ment of the Fourteenth Amendment care- by Ryan, J. Opinion the gravamen ful attention to Blum, 1003, the supra, p United States complaint”, Court declared: Supreme Appeals’ finding Court of of state action cannot "[T]he present The court reasoned that state action was

stand. in implemented discharge by or transfer decisions the responded nursing homes because the State to those the adjusting patient’s decisions Respondents, Medicaid benefits. however, challenge adjustment do not benefits, discharge patients or transfer of but the to adequate without notice or hear- lower levels ings. care responds by adjust- the State to such actions That ing responsible not render for those benefits does respondents decisions com- actions. The plain istrators, about nursing by physicians and home admin- are made concededly private parties. of whom are all suggestion that those influ- There is no decisions were any degree by obligation in adjust enced State’s to conformity changes benefits in the cost of medically necessary care. "* * * [Additionally, respondents] argue 'affirmatively summary discharge State commands’ the patients thought or transfer of Medicaid who are to be placed inappropriately nursing in their facilities. Were accurate, this characterization we would have differ- However, question ent before us. our review of the regulations by respondents statutes and identified does support respondents’ not characterization of them.” Blum, supra, p 1005. supported The Court its conclusion as follows: State, "We cannot say by requiring comple- form, responsible tion of a physician’s is for the deci- sion. case, any "In respondents’ complaint nursing is about admit, discharge transfer,

home decisions to not to patients. Medicaid But we are not satisfied that responsible State is for those decisions either. 418 Mich 423 Ryan, nursing regulations require homes do "[State] making discharge or transfer forms in rely on the decisions, they demonstrate the State nor do discharge or transfer responsible for the decision to patients. ultimately turn on particular medical Those decisions according by private parties judgments made professional standards that are not established Blum, supra, pp 1006-1008. State.” Therefore, to constitute state "command or en- "imprimatur”, or state the state’s couragement” prominent pervasive must be more action Jackson, Bros, or Blum. Flagg present than that equal To the extent that the state’s involvement is cases, than that in those there is no to or less purposes. "state action” for Due Process Clause a Traditionally Exclusively 2. Performance of Governmental Function of Due magnitude "State action” Process Clause is a is present private person perform- also where ing governmental func- "traditionally exclusively action, tions”. As with "tradi- "imprimatur” State”, prerogative the exclusive of the tionally state action is through applica- best understood its tion in specific cases. Jackson, supra, pp 352-353,

In the Pennsylvania case, Public Commission Utility the United States Supreme public Court held that did not utility exercise a state power traditionally which was exclusively governmental function. dealing "If we were by Metropolitan with the exercise power delegated

of some to it the State traditionally associated sovereignty, such as emi- domain, nent our quite case would be a different one. But while tion Pennsylvania imposes obliga- an statute utilities, regulated imposes to furnish service on Ryan, obligation Pennsylvania State. The no such on the rejected furnishing the contention that courts have utility of pal duty. services is either a state function or munici- * * *

"Perhaps recognition supplying fact that utility traditionally pre- service is the exclusive State, rogative petitioner expansion invites the the doctrine of this limited line of cases into a broad principle public all businesses 'affected with interest’ are state actors in all their actions.

"We decline the invitation.” provision utility Since the service is not a state governmental function, it cannot either tradi- required tional or exclusive as for state action under the Due Process Clause. Flagg supra, pp Bros, 158-163, the bailor- Supreme case,

warehouse sale the United States again Court held there was no violation of the Due Process Clause because there was no "state Specifically, Supreme action”. Court refused to private disputes hold that the resolution of was a "traditionally exclusively governmental functiоn”. "many It noted that while functions have been traditionally performed governments, very few 'exclusively have been reserved to the State’ ”. Supreme recognized Flagg While Court pursuant Brothers acted to a state statute which action, detailed a course of the Court held that the statutory "system rights recogniz- remedies, of ing place private arrangements the traditional ordering relationships world, in the commercial hardly delegated Flagg can be said to have prerogative Brothers an exclusive of the sover- eign”. Supreme obviously The Court was not im- pressed argument rights with the were statute, created eign-function so it held that "our sover- support finding

cases do not Here, state action here”. the United States Su- Mich Ryan, J. emphasis preme placed on the exclusive Court challenged action. nature of the supra, p nursing- Finally, Blum, Supreme case, United States Court home care nursing performed refused to find homes traditionally exclusively functions which were governmental functions.

"Respondents’ argument regard premised in this on their assertion that both the Medicaid statute and the New York Constitution responsible make the State providing every patient nursing Medicaid home provisions The state constitutional services. respondents, legislature cited however, do no more than authorize the provide funds needy. for the care of the * * * They provision any partic- do mandate the care, long-term nursing ular much less Similarly, care. requires the Medicaid funding provide statute the States nursing for skilled services as a condition to * * * receipt of federal monies. It require does not provide that the States the services themselves.” upon Therefore, to find state action based private party exercising sovereign powers, powers exclusively traditionally exercised must be both power government. As noted in Flagg "many Bros, while functions have been tra- ditionally performed by governments, very few 'exclusively have been reserved to the State’ ”. Flagg supra, p challenged Bros, 158. The action satisfy requirements must both to constitute "state magnitude. action” of Due Process Clause Interdependent Symbiotic Relationship 3. Finally, "private the "state action”/ action” private nexus is formed where the state and the mutually dependent symbiotic entities have a relationship. Supreme Court created this basis 461 v Opinion by Ryan, J. Wilmington Burton v action in finding for 856; S 6 L 715; 81 Ct 365 US Parking Authority, test, the applied has 45 The Court 2d Ed met other that in three has found was but Irvis, 163; US 92 107 407 Lodge Moose No cases: (1972), Jackson, supra, L 2d 627 Ed S Ct Blum, supra. and a Burton, parking authority built the state

In shop included commercial which facility parking from parties could rent private space parking authority’s One authority. parking white only which served ran a restaurant lessees authority noting parking After persons. pay rental funds to shop on the very heavily relied parking authority and that facility lease prohibited have the discrimination could Supreme Court stated: provision, inaction, through it Authority, "By its State, service, party a ‍​​​‌​‌​‌‌​​​‌​‌‌​​‌‌​​​​‌​‌​​​​‌​​‌​​​‌‌‌​‌‌​​‌‌‍the refusal of only has not made itself place power, property its but has elected The State prestige behind the admitted discrimination. interdepen- position far insinuated itself into a has so Eagle it must dence recognized [the restaurant] challenged participant in the joint as a account, which, considered activity, to on that cannot be private’ 'purely have been as to fall without the so Burton, supra, p scope of the Amendment.” Fourteenth 725. Burton,

In the more than since years has not Supreme "symbiotic” Court found another relationship constituting action”. Moose "state sym- the Court whether Lodge, supra, discussed liquor relationship the state biotic existed where racially liquor license to a gave commission It there was no discriminatory club. decided nothing approaching "state action” since "there is les- symbiotic between lessor relationship Mich Ryan, present see that was in Burton”. Moose Lodge, 175. The supra, p Supreme Jackson, Court in supra, also the symbiotic reviewed relationship applied regulation test to the public of a in utility. Lodge, As Moose the Court found "ab- sent in the instant case the symbiotic relationship Jackson, presented Burton”. supra, 357. In p Blum, 1010-1011, supra, pp the Court reviewed the nursing home case for any symbiotic relationship between the state and the nursing home. "Finally, respondents vague advance the gen- rather relationship eralization State such a exists between the nursing the regulates homes it that the State joint participant be considered a in the homes’ * * * discharge and patients. transfer of Medicaid Re- spondents argue that State subsidization operat- of the ing medical the State, facilities, capital payment costs of the of the expenses of more than patients 90% facilities, licensing and the of the facilities the together taken convert the action of the homes into accepting 'state’ action. But all of these assertions true, as State is respondents. owned we are agree nonetheless unable to responsible for the challenged by decisions held, As previously we have privately enterprises providing services that the State necessarily provide,

would not though they even extensively regulated, do not fall within the ambit of Burton.”

The symbiotic-relationship basis for attributing private action to the state is therefore the most limited of the three bases. The Supreme Court has not present found it in any recent case. Application

III. of the State Action Tests to

the Facts of These Cases A. State Command Encouragement or of Private

Action above, As indicated object on due Morris v Ryan, grounds of their process the state’s enforcement agreement agreement private since arbitration regulating provisions complies MMAA process. The issue is whether the arbitration placed encouraged” or "commanded state has private "imprimatur” so as to actions on the its into actions”. them "state transform enacting state, uncontroverted It is require anyone to arbitrate. MMAA, does accept- regulate an however, does, establish and It process of arbitration able private effect, the state enforces In

claims. complying tradi- over to elect decision doing litigation. so, the state sets tional agreements in for enforceable arbitration standard malpractice the ac- and establishes cases medical ceptable procedure malpractice arbi-

for question action con- is whether such The tration. encouragement” sufficient "command stitutes parties’ agreement private to arbi- to attribute according law to the state. to state trate analogous according think, answer, to we The clearly Supreme cases, no. Court is United States private person providing elects if a In that the claim claim arbitrate a medical panel which a three-member shall be heard hospital administrator, a doctor or a includes through not constitute state action statute does encouragement”. "command or result Flagg upon primarily same whether one relies Bros, Jackson, or Blum. Flagg which Bros, a statute the state enacted

provided a could sell that an individual bailee property pay if the overdue bill an bailor’s giving complied notice, the statute bailee meeting holding párticular way, and the sale in a 418 Mich 423 Opinion by Ryan, requirements. require The state other did goods; only provided it the bailee sell bailor’s could elect to do so without the bailee inter But, the state. when the bailee sold the vention goods, the state would not use its courts to bailor’s punish the sale or the bailor.4 As the correct Supreme Court United States noted: "Here, compelled the State of New York has not goods, merely sale of a bailor’s but has announced the circumstances under which its courts will not interfere Indeed, private respondents’ with a complaint sale. the crux of acted, is not that the State has but statutory has refused to act. This refusal to act is no principle ordinary from an different statute of limita- whereby provide remedy the State declines to tions private deprivations property passage after the Bros, given period Flagg supra, p of time.” 166. us, In the cases before the state has not com- pelled private parties to arbitrate before a panel composed lawyer, hospital of a a doctor or layperson. administrator, Instead, and a it has private system persons may created a elect elected, to use. If arbitration is and if there is compliance statute, with the the state will not party agreement by allow a to void the arbitration suing ordinary paraphrase in an civil action. To Supreme Flagg the United States Court Bros: Cavanagh distinguish Flagg Justice would in further Bros on the plaintiff Flagg challenge procedure basis that the Bros did not the statute, by challenged only afforded the state but the state court’s intervene, challenge refusal procedure to while in this the case the by afforded the incorrect. state statute. This "distinction” is Bros, plain- Supreme Flagg As the United States Court said in "[the * * * * * * seeking initiated this class action declaration tiff] such a sale [a] pursuant to Process and 7-210 would violate the Due § Equal Protection Clauses of It is there- the Fourteenth Amendment”. plaintiff challenging Flagg fore clear that procedure the the Bros was indeed by afforded the state statute. Morris v Ryan, by compelled Michigan Here, has the State concerning medical disputes their parties to arbitrate the circum- merely announced but has malpractice, stances with a will not interfere its courts under which malpractice medical agreement to arbitrate private Indeed, complaint is not plaintiffs’ the crux of disputes. acted, has refused that the state has but that the state to act to before private agreements to arbitrate prohibit or a a doctor panel, one of whom is three-person statutory refusal to act hospital administrator. limitations ordinary statute of than an no different remedy trial provide a civil declines passage given of a malpractice after the for medical period of time. Jackson, the United States supra, p acted public utility Court held that

Supreme plaintiff’s it cut off service de- "privately” when approved the state had spite the fact approved utility’s general it practice when tariff. most, this

"At the Commission’s failure overturn practice amounted to no more than a determination Pennsylvania utility employ that a was authorized to practice Respondent’s if it such a so desired. exercise the choice allowed state law where the initiative State, comes from and not from the action in Fourteenth Amendment.” does not make its doing purposes so 'state action’ for cases, applied As to these supports Jackson conclusion that Michigan, through State of MMAA, merely afforded an alternative to private parties who have malpractice disputes. medical accept The initiative to state-regulated system does not constitute "state action”. It merely private constitutes and, chosen, choice which is permitted if is en- forced the state. 418 Mich 423 by Ryan, J. Opinion Blum, supra, p the United in

Finally, distinguished be- explicitly Court Supreme States and state response private to actions tween state actions. private responsibility by adjusting responds State to such actions "That the responsible for those actions. benefits does not render The decisions about made all suggestion respondents complain are which administrators, nursing by physicians and home concededly private parties. is are There no of whom any those decisions were influenced obligation adjust to degree by the State’s benefits conformity changes medically in the cost of neces- sary care.”

Here, certainly responds private the state to decisions to arbitrate medical claims. Those conform with the state’s statutory enforced; standard are those which do not conform with the standard are not enforced. This statutory not, however, a situation in which the state is private for the decision. Whether responsible pri- vаte choose to parties arbitrate what terms they agree upon are not controlled the state. However, parties please. Private do as they the state to responds according position its stated which is articulated in the MMAA. The decisions about which complain, whether composition arbitrate and the of the arbitration panel, are private parties. decisions of private There suggestion is no those decisions mandated in any degree the state’s decision to enforce medical malpractice agree- ments which MMAA. comport with the

Therefore, there is no or "com- "imprimatur” mand or encouragement” action in these cases. The regulation state’s malprac- tice arbitration does not alter this conclusion. For Morris v Ryan, Amendment, Fourteenth purposes deci- private response of or enforcement state’s action”. "state constitute does not sions Exclusively Traditionally aof B. Performance Function Governmental by allowed as choice to arbitrate private The performance private not constitute law does func- governmental exclusively "traditionally of a has disputes private tion”. While resolution through the state by traditionally performed been entity per- courts, only not the state was its As the United resolution. private dispute forming "sys- recognized, statutory Court Supreme States remedies, the tradi- recognizing rights tem of ordering in arrangements private place tional world, hardly can in the commercial relationships an private party] delegated to have be said [the sovereign”. Flagg prerogative exclusive Bros, allowed self- supra, p 160. There the state situations; here the state help sales bailor-bailee to arbi- private agreements and enforces allows cases, self-help or trate. In the method of both But, the fact re- closely regulated. the exclu- mains that the state has not and is not concerning private disputes. sive decisionmaker This is proves another instance which correct Supreme "many Court’s statement that while performed functions have been traditionally governments, very 'exclusively few have been re- Bros, Flagg supra, p served to the State’.” 158. Private civil tradition- dispute resolution is not a ally exclusively governmental function for which acquiescence private state’s in performance by parties deprivation constitutes state action. The private occurs because of a does not decision which 418 Mich Ryan, governmental of a performance constitute function. Relationship Symbiotic

C. private to arbitrate as allowed decision symbiotic MMAA relation- the ship does create private parties between the state agreement. relationship the arbitration The state’s private merely with the decision is to enforce private decisions which are accordance with state law. supra, p Blum, the United States Su-

preme Court that no such held "relationship nursing exists between the State and the regulates homes the State be considered a joint participant discharge in the homes’ and transfer patients.” of Medicaid relationship though

The Court found no state subsidized the of the even the capital operating expenses nursing paid homes, the state for the medi- expenses nursing patients, cal home 90% nursing and the state licensed the homes. participation cases, In these the state’s the challenged activity does not reach the level of regulation Blum, and subsidization involved in let alone the level of lessor-lessee involved in Burton. relationship challenged activity The state’s to the Flagg in these cases is like that in Jackson and private Bros. The state allows or enforces the decision, but does not seek direct benefit from the challenged activity. symbi- Therefore, there is no relationship otic "state action” in these cases.

D. Conclusion conclude, We therefore, that since there is no Ryan, propor Amendment Fourteenth action” "state Amendment’s cases, Fourteenth these tions Conse implicated. not concerns process due there is a whether consider we need quently, life, property or liberty, cognizable constitutionally without deprivation is a interest, there or whether MMAA, require with its law. process of due on sit administrator hospital or that a doctor ment plain deprive does not panel, the arbitration in violation decisionmaker impartial an tiffs of t.5 Amendmen the Fourteenth Cavanagh MMAA if we find that the contends that brother Our judicial action, must also conclude state we not involve does promulgation, ings suggest regulating proceed- use, court rules enforcement of respectfully action. We involve state does not in our courts unsound for three reasons: that such a conclusion upon single narrowly First, colleague factor of focuses our factor, promulgates analysis. whether the That state-action rules actions, challenged controlling party’s is relevant but not Flagg analysis. from Bros controlling and As is evident in the state-action private Blum, may promulgate rules under the state transforming private automatically into action parties act without Likewise, "traditionally exclusively in the as is evident state action. "interdependent symbiotic governmental cases and the function” regulating cases, state-promulgated rules relationship” the absence of rising prevent private to the private action from level action will not Therefore, state-promul- presence or absence of action. of state distinguishing gated characteristic which differenti- rules is not the private action. ates state action from colleague controlling being our factor as Instead of sole assume, regulating appears challenged promulgation by the state of rules merely private which must be consid- action is one factor factors, light It is these other ered in together of other relevant factors. promulgation, rule which determine with the fact of state private pursuant state-promulgated rules is or not action whether regarded Among the other factors are: as state action. 1) themselves, scope of the rules the content and 2) action, merely private require or allow whether the rules 3) out and enforced the state whether the rules are carried state, someone else who is not related to 4) provide require involvement active state whether the rules for or stage. merely promulgation the or involve state involvement at rules, promulgated focusing only upon colleague the the In the fact that state suggest a action in which determine our fails to context challenged private like state should be treated whether the action. 418 Mich Ryan, Second, colleague misinterprets purpose the of our we think our case, required analysis. not level of state action so hypothesis Court action rose to the level case, was to determine whether or In this the Court MMAA) (arbitration pursuant private to the rose to the action colleague’s process. as to violate due In our rules), use, (promulgation, the and enforcement of court private required to determine whether or not would not be Rather, hypothetical of state action. in the challеnged would be the direct action of a branch of actions require ascription government and would not vicarious to the state state. The action ment because the govern- would be state action of a branch of state self-enforcing; they court rules are not do not have order, they authority independent of a court decision or regulate judicial the actions of the branch of state intended to private parties judicial government branch of state would not state action is' whether the actions of before the Therefore, government. hypothesis, in the the issue require application present analysis of our since where clearly present, there is no occasion to determine private action. action rises to level state Third, hypothesis somehow to concoct a even if one were able allegedly deprived person application of a court rule a (court process equal protection any due order or court inevitably or without direct state action analysis proceeding), our in this case would require finding hypothetical in the case that there was no Supreme acknowledged state action. As the United States Court Jackson, 349-350, pp challenged supra, the determination whether a private "frequently easy action is Therefore, admits of no answer”. private the decision whether action rises to the level of necessarily upon particular state action turns facts of the case. As indicated, necessarily we have the facts include those relevant promulgated "other” factors as well as whether the state the rules regulating and our the state. The "other” challenged private Obviously, conduct. both this case colleague’s hypothetical promulgated case involve rules factors, however, demonstrate that this case (MMAA) rules) (court hypothetical and the case differ in several significant ways: 1) cases, state-promulgated regulate dispute In both rules case, process. parties mutually agree resolution upon In the MMAA both case, only party the forum. In the court rules one chooses the (as rule). general forum a 2) dispute Both cases involve a resolution forum. In the MMAA case, case, independently the forum is administered. In the court rules government the forum is a branch of state administered state. 3) case, parties mutually In the MMAA the forum exists because agree case, constitutionally it. use In the court rules the forum is 6, mandated. Const art 1.§ 4) case, In the MMAA the state does not involve itself in the forum beyond case, promulgating the for its rules use. the court rules state is the forum. 5) case, rules, promulgates stays In the MMAA the state then its case, promulgates hand. In the court rules the state the rules and affirmatively then acts to enforce them. v Ryan,

IV chal- plaintiffs three additional raised have agree- lenges of the arbitration the enforcement They first, signed. contend, that the they ments agreements enforced not be should Second, they of adhesion. contracts because agreements they the arbitration contend they construc- involve since enforced not be should they the arbitra- Third, contend tive fraud. the agreements since not be enforced should tion proof their burden carried have not defendants that intelligently, voluntarily, right jury knowingly trial. We to a their waived reject three contentions. all

A has a contract which A of adhesion contract following characteristics: or all of some parties strength; unequal bargaining were of to the contract expressed in standardized contract is stronger party prepared by language to meet by the is offered needs; the contract his stronger party party it or a "take on to the weaker Rombough, it” Zurich Ins Co leave basis. finding might might to a not lead differences While these factual court hypothetical in which the case of state action in the unusual rules affect a is not Court has said that determined in actual cases. action, private person any that case direct state without Supreme presently States and the United before the Court scope should Due Process Clause judicial "gradual process and exclusion” inclusion Teamsters, Local International Brotherhood of Inc, 284, 287; Vogt, 1 L Ed 2d 1347 Ct AFL v 354 US 77 S Orleans, 97, 104; (1957), citing 24 L Ed 96 US Davidson v New (1877). however, disagreement with our analysis, our it is not In the last The fact is colleague of the issue. which is determinative empowered Court, exclusively Supreme which is States United define has without Amendment, scope under the Fourteenth of state action rules, promulgation of Flagg Blum that state declared in Bros and more, automatically action. amount to state does not 418 Mich 423 Opinion by Ryan, J. 228, 232-233; Mich 180 NW2d 775 There- fore, the essence aof contract of adhesion is a agreement upon party nonconsensual forced against his will. agreements obvious,

As is the arbitration in- satisfy any volved teristics tion this case do not of the charac- First, contracts of adhesion. the arbitra- agreements parties are not contracts between unequal bargaining power. plaintiffs with The accept reject were free to or the contract without any negative consequences agreements since the explicitly provide clearly must agreement "[t]his prerequisite

to arbitrate is not a to health the Moreover, care or treatment”. even after plaintiffs signed agreements, the arbitration they days agreements were free to revoke the within 60 agreement "may

since the be revoked within days by writing after execution notification in Consequently, to: Medical Records Director”. agreements signed by plaintiffs arbitration do unequal bargaining power not involve the charac- teristic of Second, contracts of adhesion. while the agreements expressed are in standard- language, provisions ized their essential are not they designed written the defendants nor are for the exclusive benefit of Rather, the defendants. Legislature provi- determined the essential agreements provide sions of the arbitration to malpractice litigation. fair alternative to medical agreements Third, while the arbitration were of- plaintiffs yes fered to they on basis, or no were traditionally not offered on what would considered a "take it or leave it” basis. The arbi- agreements tration necessary prerequi- were not a site to health care and were not offered to the plaintiffs any negative under threat of conse- quences agreements. deciding sign not to the arbitration plaintiffs accept were free to Morris v Ryan, J. option reject within 60 them an contracts opportunity reject days them with or to agreement. later into arbitration enter agreements involved Therefore, the arbitration of adhesion. not contracts in these cases are B This fraud as defined constructive Court has "receipt benefits”. of unmerited and retention Waller, 469; 22 NW2d 314 Mich Goodrich generally benefit The unmerited legal of a of the breach obtained as a result equitable duty. case, contend In this guilty of constructive the defendants agreements did not since the arbitration fraud panel, composition of the arbitration disclose the persons attitudes and biases did not disclose the against plaintiffs profession in med- in the medical malpractice cases, did not disclose the ical relationship awards

between malpractice insurance costs. and medical plaintiffs nondisclosures consti- believe that these their benefit” which makes tute an "unmerited agreements dis- unenforceable. We arbitration agree. composition We note at the outset plaintiffs panel the arbitration was disclosed to the accompany in the must a valid booklet which portion agreement. Therefore, arbitration the finding plaintiffs’ argument support does not plaintiffs Additionally, fraud. of constructive provide legal support any conten- do not for their legal under a or tion that the defendants were equitable duty attitudes of doctors to disclose the profession general, of the medical the biases against malpractice cases, or in medical

474 418 Mich 423 Opinion by Ryan, effect of medical malpractice arbitration opposed awards as malpractice medical litiga- upon tion awards insurance rates. Finally, we do accept plaintiffs’ unsupported blanket professional assertion of bias rising to the level of constructive fraud.

Therefore, agreements arbitration involved in these cases are not upon based unconscionable constructive fraud.

C Finally, we reject plaintiffs’ contention that their agreements are unenforceable since the defendants did not adequately prove that the plaintiffs voluntarily, intelligently, and know ingly waived their right constitutional to jury trial. In rejecting the plaintiffs’ contention, we do not reach the merits of their argument. We reject it instead because the argument was not raised in court, the trial in the Court of Appeals, or in this Court in the plaintiffs’ applications for leave to appeal. It is axiomatic that an issue not properly raised and preserved will not ordinarily consid ered on appeal in this Court. Whiteman, Dale v 698; Mich Gordon Gross (1972); NW2d 797 man Building Elliott, Co v 596; 382 Mich (1969); NW2d 441 Therrian v General Laborator ies, Inc, Mich 127 NW2d 319 This is, course, general However, rule. reject we application of the Johnston v Michigan Consol Co, idated Gas 337 Mich 580; 60 NW2d (1953), exception to the facts of these cases. The Johnston exception, which was without authority when announced, and which has not until today been cited this Court since it was laid down 30 years ago, should not be expanded applied this case. n Opinion by Dissenting Cavanagh, J.

V is re- Appeals of the Court judgment The Hospital Memorial in Jackson v Detroit versed to the trial court the case is remanded opinion. this аction consistent with is af- Appeals of the Court of judgment Metriyakool. firmed in Morris v and the arbitration The MMAA is constitutional are not con- plaintiffs agreements signed by unconscionable, adhesion, are not and do tracts of presump- not involve unconstitutional irrebuttable tions. Ryan, J., J.

Brickley, concurred with (dissenting). The central issue in Cavanagh, the Due Process these two cases is whether Constitution,1 United States and the Clauses of the Constitution,2 the state from Michigan which bar life, liberty, depriving any person property law, process without due are violated 1975, act of MCL seq. 600.5040 et MSA 27A.5040 et I seq.; per am suaded that are because the act unconstitu they deprives pro these of their due tionally rights hearing impartial an cess to a fair before decisionmaker.3 in

Accepting principle analytical approach Const, US Am XIV. 1963, 1, Const art 17.§ participated 3 ‍​​​‌​‌​‌‌​​​‌​‌‌​​‌‌​​​​‌​‌​​​​‌​​‌​​​‌‌‌​‌‌​​‌‌‍I am not unmindful of the fact that I in the decisions (1981), O’Connor, App 613; in Williams v 108 Mich 310 NW2d 825 (1981), Frankel, App 604; Cushman v 111 Mich 314 NW2d 705 both of However, upheld question. constitutionality which Bowman v of the act in (1983), Lutz, App I 123 Mich 333 NW2d 346 in reconsidering light Judge my position indicated I was Kauf Wilner, App very persuasive reasoning Murray v 118 Mich man’s 352; others, Having opinions and 325 NW2d 422 revisited these persuaded my prior upholding I the statute am now view was incorrect. 418 423 476 Mich Dissenting Opinion by Cavanagh, J. brother I am convinced by my advanced Ryan, (1) have deprived been consti cognizable right

tutionally hearing to a fair before (2) decisionmaker, of impartial an because .4 (3) action, due process without of law I While it is difficult to know whether to classify hearing impartial fair before an right to a right, decisionmaker as a or there liberty property can no it is a constitutionally cogni be doubt Indeed, a right. process zable basic tenet of due impart that decisionmakers must be unbiased re Mur in In Supreme ial.5 As the Court stated chison, 133, 136; 623; 349 75 L US S Ct 99 Ed 942 (1955): requirement

"A fair trial in a fair tribunal ais basic process. requires of due actual Fairness of course an absence of system

bias the trial of cases. But our of law always prevent probability has of unfairness. To this end own case and no man is endeavored to even the judge

no man can be a in his permitted try cases where he has an interest in the outcome. That interest cannot be precision. defined with relationships Circumstances and however, said, must be considered. This Court has 'every procedure possible tempta- which would offer a * * * average tion to the judge man as a hold the not to 4 Ryan, ante, by my p contrast tо the test set forth brother see 452, analysis proceed I believe that the relevant should in the follow- order, ing i.e., there must be: 1) deprivation life, constitutionally cognizable liberty, of a interest; property 2) by private person fairly the state or a who treated as the state; 3) process without due of law. 5 Ohio, Tumey 510, 532; 437; 749; v 273 US 47 S Ct 71 L Ed 50 ALR (1927); State, Crampton Dep’t 351; v 395 Mich 235 NW2d (1975). v Dissenting Opinion Cavanagh, nice, the State and the true between clear and balance accused, Tumey process of law.’ the latter due denies 437; 749; Ohio, 510, 532; L Ed 47 S Ct 273 US stringent may sometimes rule ALR 1243 Such a and who judges who have no actual bias trial bar weigh justice very the scales would do their best contending parties. perform But to its equally between way 'justice satisfy the high in the best must function States, United 348 US appearance justice.’ Offutt v (1954).” 11, 14; 75 S Ct 99 L Ed 11 part potential Thus, for actual bias on the great in be too some cir- the decisionmaker system justice risk, to de- for our cumstances potential might spite never the fact that such realized. presents great proba situation which too

One bility is when the decisionmaker has of actual bias pecuniary in the a direct or substantial interest Crampton Dep’t controversy. outcome of the State, 347, 351; 395 Mich 235 NW2d 352 here, i.e., claim This what the exists provider that a health-care who must decide a malpractice medical mini case will be inclined to any mize the size of award because the number malpractice directly and size of awards affect the availability malpractice and cost of insur medical coverage.6 ance dispute malpractice

There is no that the legislative response arbitration act was the to an alleged malpractice suppos- insurance crisis which edly spiraling resulted from the costs of insurance coverage providers reduc- health-care and the experienced malpractice The affidavits of underwriters of medical insurance, part record, specifically any which are of this aver that malpractice plaintiff availability award in favor of a affects the malpractice coverage any cost of insurance and thus health-care provider would have a direct and substantial in the outcome interest malpractice of arbitrated cases. Mich Dissenting Cavanagh, coverage.7 availability

tion in actual of such Sub malpractice mission of controversies to arbitration perceived way as a was reduce the costs of such disputes complicаted because arbitration is less quicker litigation usually than results in A decision that is final. reduction in the costs of bringing malpractice disputes to a resolution was to then practice result a reduction the costs of mal coverage provi

insurance for health-care relationship However, ders. since the mal between practice malpractice controversies and insurance direct, rates is so it is clear that a reduction in the malpractice awards, number and size of in addi resolving tion to a reduction in the costs of such disputes, would be of substantial benefit to those paying age. malpractice for the cost of insurance cover malpractice premiums

The cost of insurance has significant provider’s a ability effect on a health-care practice profession. in the medical If the directly and size of number awards premiums affect the cost of these so premiums costly are more after an in the increase awards, number and size of such then health-care providers pecuniary have a direct interest in see- ing malpractice the number and size of they opportu- small, awards remain have the nity they to further this interest when sit as malpractice decisionmakers in medical cases. particular The fact that the direct effect of a malpractice upon single provi- a health-care award der’s insurance rate be minimal does not 7 See, e.g-, Redish, Legislative Response Malpractice to the Medical Implications, Insurance Crisis: Constitutional 55 L Rev 759 Tex Malpractice Preliminary Analy- (1977); Abraham, Medical Reform: A sis, (1977); Comment, Michigan’s Malprac- Medical L 36 Md Rev 489 Defects, Legislation Prognosis: tice Curable D 55 U of J of Urban — (1978). Law, p 309 479 v Dissenting Cavanagh, provider’s potential for bias the health-care make enough pecuniary remote interest the basis of a on to be constitutionally permissible. the over Since signifi malpractice and awards claims effect of all cantly rates, the threat of a insurance affects systematic in the medical bias exists subliminal profession. temptation in a for the

This results requi forget the decisionmaker to medical-member proof fail to hold the balance site burden true and clear between parties.8 adverse providers may vary of health-care The interests they according in which find them to the situation patient in need of a is sick and selves. When treatment, clearly provider’s interests are the health-care point patient. At this adverse to the paramount patient’s undoubtedly of welfare is profes importance the members of the medical to However, in case the focus of sion. attention is no patient longer how to make the on patient rather, enti well; it is on whether the compensation any re tled to for mistreatment profession ceived from a member of the and, compensation so, due. Mem if the amount of longer profession are no in a bers of the medical improve patient’s position to use their skills position point they solely health. At this of choosing patient any whether to award the money alleged wrongful I medical treatment. believe that in this situation the interests of the of the providers health-care in relation to those patient change practice light and, in of the effect a mal pecuniary may have on their inter

award expected providers may ests, the health-care align of their themselves with and favor a member profession.9 own Ohio, 749; 437; Tumey 50 ALR 71 L Ed US S Ct noted, dissenting Judge concurring in Morris v As Bronson 418 423

480 Mich Dissenting Opinion Cavanagh, J. (1981): 110, App 128; Metriyakool, 910 107 Mich 309 NW2d addition, relatively articles commented "In recent cases and have testify against unwillingness among practitioners the medical to on one another. (Mo See, App, e.g., Morgan Rosenberg, 370 685 v SW2d (1968); Peterson, 668; 1963); 159 738 Halldin 39 2d NW2d v Wis (CA 6, Co, 1968);Agnew L’Orange Parks, v v F2d 57 Medical Protective 394 (1959) (suit brought App 172 Cal 118 was 2d P2d against group 'conspiracy of for to obstruct the ends a of doctors Markus, Silence, testify); Conspiracy justice’ for their to of refusal Seidelson, (1965); Malpractice L Rev Medical Cleveland-Marshall Cases and Problems the plaintiff As (1966).9 Expert, L the 16 Cath U Rev 158 Reluctant 'conspiracy mitigated over of have been the silence’ Nonetheless, years. that anti- it is not unrealistic conclude large among doctors.10 to exist numbers of attitudes continue such, strong possibility physician the on an there a is panel will be biased. Prosser, (4th 3, survey ed), 227, p a as a providers health-care not to that say This is However, in the context are not fair-minded. group their function as litigation, malpractice of may make their frame of reference arbitrators colleagues, professional of their partisans them thus results. This situation partisan producing part bias on high too a risk of actual presents to be con decisionmakers of the medical-member stitutionally permissible.10 рart on the of potential this for bias light cases, I deciding malpractice providers

health-care malpractice the medical conclude in the requirement provider act’s of a health-care panel the arbitration violates composition to a fair right hearing constitutional plaintiffs’ impartial before an decisionmaker. doctors and some bad health-care institutions. Medicine has some bad We concerned not believe that them, them, proud nor do we defend and we are are not of that element. Some do with the correction or elimination concern, but me it is It we have this believe true. is overnight, profes-

my opinion sional if this were to be corrected * * liability problem would remain *. " organizations belabored. Medical are 'The House of Medicine feels deficiencies, opinion, trying my their but in their best to overcome malpractice litigation places result improvement. is not the best incentive to It adversary position, medicine in an and hostilities too often ” * * foregoing strong potential align- The is further evidence of the for ment between medical-member decisionmakers and medical-member defendants in controversies. 1963, directly parallel, provisions While not certain of GCR pertinent pro- part evidence a similar concern. In 511.4 GCR vides: Challenges prospective ".4 for Cause. After the examination of jurors sworn, completed any juror parties may is and before challenge any juror Every challenge for cause. for cause shall be juror challenged determined the court. A for cause be directed every question pertinent inquiry. following to answer to the grounds challenges for cause: "(12) person that the has financial interest other than that taxpayer case; in the outcome of the "(13) person question to be is interested in a like the issue tried.” 418 Mich Dissenting Cavanagh,

II the relevant step of to the second regard With that, federal constitutional under I believe inquiry, Flagg from distinguished law, cases can these Brooks, 149; 1729; 56 L Bros, 436 US 98 S Ct Inc v (1978), 457 US and Blum v Yaretsky, 2d 185 Ed (1982), i.e., L 991; 102 S Ct Ed 2d 534 action in these impermissible present there is cases. Blum, pp

First, Court noted Supreme as 1003-1004: from those cases obviously different "This case is question private party and the is a the defendant sufficiently received the has his conduct is whether to make it 'state’ action the State so as imprimatur of See, e.g., Amendment. of the Fourteenth purposes for ** * Bros, [Nevertheless,]

Flаgg Inc v Brooks. th[o]se upon analysis necessary to light the types of cases shed present case. resolve the setting will be of each case

"[Although the factual that a State nor- precedents our indicate significant, responsible private decision held mally can be pro- power has it has exercised coercive or only when encouragement, or signiñcant either overt vided such covert, to be that the choice must in law be deemed Bros, (Emphasis Flagg Inc v Brooks”. that of the State. added.) above-emphasized the lan- cases fall under These guage.

Second, distinguishing it although truly is not a feature, United States appears to me that that wrong concluding Supreme Court was enforce a outlined in UCC 7-210 to procedures involve state action. warehouseman’s lien did not Indeed, naturally easily did not conclusion v Dissenting Cavanagh, Bros, Flagg case law. See prior its follow from Further, (Stevens, J., dissenting). supra, pp 168-179 same result have reached could the Court au- so, procedures finding, properly deprive 7-210 did under UCC thorized process absent due right property of a bailor to enforce law, i.e., authorized procedures right to the constitutional did comply the lien the real fact, to be latter seems process. due the Court’s decision. reason for action, Third, no initial although there is an i.e., compelled to execute are not parties in the is state action there agreement, i.e., the state execution, and after execution itself (1) included in the terms to be certain requires (2) pursuant specific procedures agreement, Indeed, the enactment broad agreement. expression public an statutory scheme is extent, and, this certainly of the state policy agree of arbitration "encouragement” constitutes this Court noted in Shavers ments the state. As General, 267 NW2d Attorney Mich (1978), be invoked the Due Process Clause close nexus be only sufficiently where there is a complained tween the action of and the state itself such that the state has involved itself significantly challenged in the conduct.11 Ass’n, Metropolitan Savings See also Cramer v 401 Mich 402 Mich & Loan 252, 258; (1977), (1977), 258 NW2d reh den 402 Mich 954 (1978), (1979), 958; 3072; 959 405 Mich 57 830 cert den 436 US 98 S Ct (1978), (1983), L Ed 2d 1123 and (ED reconsideration den 417 Mich 1114 Ass’n, Northrip Mortgage Supp v Federal National 372 F 594 1974). Mich, Indeed, 'permission’ 'compulsion’ "the distinctions between the one and on hand, 'non-exclusive’, other, and 'exclusive’ and on cannot be great analysis. determinative factors in state-action There is no 'permission’ requiring 'compulsion’ particular chasm between and camp. state action to fall within one or the other definitional Even Lodge Irvis, 1965; Moose No 107 v 407 US 92 S Ct 32 L Ed 2d 418 Mich Dissenting Cavanagh, malpractice a medical claimant’s ini Although or to execute an arbitra tial choice to execute selection, agreement will lead to free always tion action, dispute-resolution from state of a voluntary (2) (1) lawsuit, mechanism: whether to institute a (3) reach dispute, arbitrate some other settle agreement alleged wrongdoer, ment or with the or (4) nothing, do it does not follow that necessarily statutorily procedures imposed pursuant mandated to the mechanism selected are devoid of state Indeed, action.12 a when medical claim ant to agreement, elects not execute an arbitration *** * (1972), recognizes many intervening are there levels of private support finding may state involvement in conduct that state action.4 * * * Lodge [although "4In Moose the Court found state action the] * * * regulation compel Lodge was neutral on its face and did not adopt discriminatory membership Bros, pp Flagg supra, rule.” (Stevens, J., dissenting) (emphasis 170-171 original). in Rather, inquiry defining must focus on "the State’s role in * * * Id., controlling relationship”. p (emphasis original). 'traditional,’ 'exclusive,’ 'significant,’ "Whether termed power binding, to order nonconsensual resolution of a conflict * * * exactly power the sort of with which the Due Process Clause delegation power private is concerned. And the State’s of that to a * * * is, party is not on the accordingly, subject process scrutiny. to due The focus ** * private deprivation but on the state authorization. statutory The State’s conduct in this case takes the concrete form of a enactment, challenged. and it is that statute that be longer possible, was, sharp is no if it "[I]t ever to believe that a line * * * private public can be drawn between actions. sense, expect government provide "In the broadest we 'to a reason- able and fair framework of rules which facilitate commercial transac- premised tions’ This 'framework of [citation omitted]. rules’ is on assumption deprivations that the State will control nonconsensual property will, turn, subject and that the State’s control to the power legally restrictions of the Due Process Clause. The to order binding property surrenders of and the restrictions on constitutional power effect, necessary system. today’s correlatives in our simple decision allows the State to divorce these two elements expedient parties. transferring implementation policy private of its * * * Fourteenth Amendment [T]he does not countenance power Bros, responsibility”. Flagg supra, pp such a division 176-179. 485 Dissenting Opinion Cavanagh, J. lawsuit, choosing instead to institute the state requires that statutes and numerous court rules be parties dispute. followed to resolve the However, disagree no one could proce- those dures cannot abridge rights. one’s constitutional cases, in these

Similarly, malpractice claimants have to elected execute an arbitration election, agreement. Pursuant to that the state requires provisions of this chapter shall "[t]he applicable dispute” the arbitration of a in volving a medical claim. MCL added). 27A.5040(1) 600.5040(1); MSA (emphasis Indeed, parties none of the even has control over terms of the agreement. MCL 600.5041(2), (3), (5), (7); 27A.5041(2), (3), (5), MSA (7); 600.5042(2)-(4), (8); MCL 27A.5042(2)-(4), MSA (8). 13 it should Accordingly, be concluded that procedures in the latter employed situation cannot abridge one’s rights constitutional and no convinc ing reasons have been advanced to the contrary. Moreover, my under brother analysis, Ryan’s would follow that the statutes and court rules employed resolve abridge lawsuits could liti gants’ rights. constitutional

The final distinguishing Flagg feature from Bros is the arguments advanced by parties. Bros, Flagg plaintiffs did not directly challenge procedures state-mandated to enforce a ware- Rather, houseman’s lien. the plaintiffs claimed their right to procedural process due would be violated if a hearing did not precede the sale undertaken to satisfy lien; the suit was in essence one for a declaratory judgment. Accord- ingly, the Supreme Court found that the state’s failure to prevent the sale prior to a hearing did Also, See fns accompanying and 12. as is obvious from the text Ryan 14, my regarding interpretation and fn brother and I differ ante, pp 447-450, 467, the MMAA. See 473. Mich Dissenting Cavanagh, action; no violation there was

not involve process. right to due constitutional plaintiffs’ challeng- cases, in these Conversely, ar- to imposed procedures the state-mandated ing claim, specifically, bitrate de- panel of the arbitration composition the that cognizable constitutionally of the prives them deci- impartial an hearing a fair before right to 27A.5044(2). 600.5044(2); MSA MCL sionmaker. Bros, not they are Flagg in plaintiffs Unlike the argued, persuаsively not and it could claiming, arbitration prevent failure to that the state’s pro- due procedural of deprivation to a amounts encourage compel cess. State action did Bros, require it nor does Flagg in goods sale of the can Although the state in these cases. arbitration dispute-resolution choice of a in one’s acquiesce proce- mandate mechanism, statutorily it cannot selected to the mechanism pursuant dures it Consequently, rights. abridge constitutional that, federal constitu- under concluded should be action. law, involve state tional these cases Ill that also be concluded Finally, should hearing fair right to a plaintiffs’ of deprivation decisionmaker, pursuant impartial an before law; a action, process due is done without cases, Indeed, in these exists. process due violation in the inquiries relevant answering the first two conclusion leads to the necessarily affirmative I, explained As of law is absent. process § due impartial an hearing before right to a fair pro- of due requirement "is a basic decisionmaker Thus, Murchison, finding supra. In re cess”. Morris Opinion by Dissenting Cavanagh, both first and right of that satisfies deprivation my analysis.14 under inquiries tripartite third

IV have hold conclusion, I would cognizable constitutionally deprived been deci- impartial an before hearing fair to a right action, due without of state sionmaker, because affirm I would Accordingly, of law. process in Jackson but Appeals Court of the judgment and remand in its judgment reverse the trial court. case J., decision participate did not

Boyle, this case. scheme, present statutory although 14 In absence independently parties could have contracted to abide procedural process, due the state would not be

which did not afford authorizing merely arbitration, might might controlling not but or it. enforce statutorily mandated Also note in these cases terms cannot, not, proce agreement perhaps contain the do arbitration dures Further, agreement. imposed pursuant is no to the there accompany which must indication the "information brochure” procedures. agreement given patient explains those MCL to the 27A.5042(7). 600.5042(7); 600.5041(6); 27A.5041(6); MCL MSA MSA information, the Even if the contain such act does brochure did permit part agreement require nor that it be read make i.e., prior furnished agreement, brochure shall be to execution of the "[t]he person receiving the time execution”. health care at Thus, dispute-resolu even if the control a state сould authorize and procedural process, it tion mechanism which does not afford cannot be concluded on this record that due patients governed cases agree of 1975 to a biased the medical arbitration act Further, query whether, agreement decisionmaker. tained the even if the con decisionmaker, referring inability a term to the biased patient to alter that term would nonetheless result in a violation See, process? generally, 252, 257-260; Metropolitan Savings & due v Cramer Ass’n, (1977), 401 Loan Mich reh den 402 258 NW2d (1977), (1979), ‍​​​‌​‌​‌‌​​​‌​‌‌​​‌‌​​​​‌​‌​​​​‌​​‌​​​‌‌‌​‌‌​​‌‌‍(1978), Mich 954 Mich 959 den 402 Ct 405 Mich cert 958; 3072; (1978), 436 US 417 Mich 1114 Mich 408 Mich 98 S 2d 57 L Ed reconsideration den (1983); Works, Springfield Corp, & Inc v Williams App 363-367; (1978), grounds on 265 NW2d 328 rev’d other (1980); Airport Corp Wayne NW2d 304 National Bank, App 572; 73 Mich 252 NW2d 519 the notes "9In fn author Torts University Institute Boston Law-Medicine Research conducted and showed of the survey reported August Medical Economics on 1961. doctors, specialists only and that out of 214 of 31% 27% testify plaintiff general practitioners willing to would be for wrong surgeon, operating kidney, removed one. if a on a diseased daily community is a members face in their "10There medical whose (1) risks, including: living experiences make common and efforts to the nience associated with the defense of such ated costs; a (2) malpractice; possibility being subjected to for inconve of a suit (3) suit; anxiety a associ (4) suit; malpractice malpractice subjection to with a increased (5) malpractice facing possibility cannot insurance any physician did at It would the uncommon who be obtained cost. against bias, overtly unconsciously, plaintiff a not have either alleging malpractice.” Wilner, addition, Murray Judge v 118 Mich Kaufman noted in (1982): 352, 362-363; App NW2d 422 malpractice "Survey physician attitudes indicates that evidence of Pabst, Survey growing of of W. 'A Medical has been a concern. Appendix, Report Malpractice’, Physicians’ Medical Attitudes on Health, Malpractice, Dep’t Secretary’s Medical Education Comm on (1973), survey, pp 83-86. In Pabst over and Welfare responding 40% technique physicians felt that 'the most effective alleviating problem’ limiting malpractice suits’ or Taws such was survey judgments’. Arizona court Id. recent 'reduced physicians A more fully felt that in 'most revealed that 75% Brown, suits, Physicians’ physician not at 'Arizona fault’. Care’, Consumers, Physicians Arizona and Health Attitudes Toward telling Medicine, March, 1980, Perhaps pp is the more 174-179. Northrup George following Department to a excerpt Dr. of the statement of Health, studying Education Welfare commission malpractice problem: " physician, Fear of suit. I live an aura fear—fear 'As rarely hostility action. to constructive contributes contributes Dissenting Opinion Cavanagh,

Case Details

Case Name: Morris v. Metriyakool

Court Name: Michigan Supreme Court

Date Published: Mar 1, 1984

Citation: 344 N.W.2d 736

Docket Number: Docket Nos. 67480, 68208. (Calendar Nos. 9, 10)

Court Abbreviation: Mich.