SOUTH DAKOTA PHYSICIAN‘S HEALTH GROUP, a South Dakota nonprofit corporation v. STATE of South Dakota, acting By and Through its DEPARTMENT OF HEALTH, Honorable Katherine Kinsman as Secretary of the Department of Health, its Department of Commerce and Regulation, Division of Insurance, Honorable Jeffrey Stingley as Secretary of the Department of Commercе and Regulation, Honorable Roger Tellinghuisen as Attorney General of the State of South Dakota
No. 16440
Supreme Court of South Dakota
Decided Oct. 18, 1989
447 N.W.2d 511
Argued May 22, 1989. South Dakota Chiropractors’ Assn. and South Dakota Optometric Society, Dr. G.E. Lee, and Dr. John B. Jarding, Intervenors and Appellees.
Mark Smith, Janice Waysman and John Heege, Asst. Attys. Gen. Pierre, for defendants and appellees.
PROCEDURAL HISTORY/ISSUES
HENDERSON, Justice.
Plaintiff/Appellant, the South Dakota Physician‘s Health Group (Physician‘s Group), initiated this action against the State of South Dakota1 in the circuit cоurt for Hughes County. Physician‘s Group alleged that
- H.B. 1272 violates
S.D. Const. Art. III, § 21 , by embracing more than one subject not expressed in its title; - H.B. 1272 violates
S.D. Const. Art. VI, § 18 , by establishing arbitrary classifications among practitioners of the healing arts, and by imposing a criminal penalty where none applies to similаr contracts; - H.B. 1272 does not apply to renewals of existing contracts; and,
- The trial court failed to make a declaratory ruling as to what public entities employees are covered by H.B. 1272.
We reverse on constitutional issues 1 and 2. We do not reach the merits of issues 3 and 4, deeming them moot.
FACTS
Physician‘s Group is a health maintenance organization (HMO),2 which markets its services, known as Dakotacare,3 statewide. Seven hundred and fifty physicians (total S.D. Medical Association membership is approximately 950) are members of Physician‘s Group. No chiropractors or optometrists provide services via Dakotacare, as these groups have been unablе to come to terms with Physician‘s Group. This failure is apparently due to Physician‘s Group‘s refusal to enroll such practitioners as part of Dakotacare basic services. Physician‘s Group, during negotiations, insisted that chiropractors or optometrists could join Dakotacare only as separаte extra-cost options, a prospect the outsiders found unacceptable.
Following breakdown of negotiations, chiropractors and optometrists sought legislation to improve their situation. The result was 1988 S.D. Sess. L. Ch. 273 (H.B. 1272), which was strongly opposed by, among others, Physician‘s Group, the South Dakota Medicаl Association, and their lobbyists.
H.B. 1272 was entitled: “An Act to provide for nondiscrimination in the use of public funds for public employees.” The act provided:
That
34-1-20 . Hereafter all funds appropriated by the state of South Dakota or otherwise established by the state, or from any other source whatever as a public fund, to be distributed or allotted for any public health program, financed in whole or in part by such public funds or administered or supervised by any
public agency controlled by the state or any county, municipality, school district or other political subdivision, or any corporation or association organized under thе laws of the state for the administration of such funds, shall when administered or distributed in payment of services rendered by physicians or licensed [practitioners of the healing arts] chiropractors or optometrists under the provisions of such public health program be so administered or distributed that there shall be no restrictions in the right of any client, officer, еmployee or citizen to select any regularly licensed physician, chiropractor or [practitioners of the healing arts] optometrist of his choice for the performance of services under such program, provided that this section shall in no way affect the provisions of
§ 34-1-21 , relating to the powers and duties of the department of health relating to the servicеs for crippled children. This section applies to the purchase of any insurance and any contracts entered into after the effective date of this Act with health maintenance organizations, preferred provider organizations and individual practice associations by the state of Sоuth Dakota, counties, school districts and municipalities for health care programs or insurance for public officials or employees. Any violation of this section is a Class 1 misdemeanor.
The underlined wording was added to
H.B. 1272 was passed by the legislature, overriding the Governor‘s veto. Physician‘s Group unsuccessfully challenged the act‘s constitutionality and, in the alternative, sought declaratory judgment to establish the scope of the act in the circuit court for Hughes County. The trial court dеtermined that H.B. 1272 was constitutional and applied to renewal contracts, but did not set out which organizations were affected. This appeal followed.
DECISION
H.B. 1272 is unconstitutional. Article III, § 21, of the South Dakota Constitution provides: “No law shall embrace more than one subject, which shall be expressed in its title.” This provisiоn has three purposes:
- To prevent the combining into one bill of several diverse measures which have no common basis except, perhaps, their separate inability to receive a favorable vote on their own merits;
- to prevent the unintentional and unknowing passage of provisions insertеd in a bill of which the title gives no intimation; and,
- to fairly apprise the public of matters which are contained in the various bills and to prevent fraud or deception of the public as to matters being considered by the legislature.
Kanaly v. State By and Through Janklow, 368 N.W.2d 819, 827 (S.D.1985); South Dakota Ass‘n of Tobacco and Candy Distributors v. State, 280 N.W.2d 662, 665 (S.D.1979). The requirements of this provision are mandatory. Kanaly, at 827. See also, State v. Morgan, 2 S.D. 32, 43, 48 N.W. 314, 318 (1891). As interpreted by this Court, § 21 contains twо requirements: “First, that no law shall embrace more than one subject, and second, that the subject shall be expressed in the title.” Kanaly, at 827; South Dakota Ass‘n, at 665. “While the subject must be single, provisions to accomplish the objective of an act may be multifarious.” Kanaly, at 828 (quoting Independent Community Bankers Ass‘n v. State, 346 N.W.2d 737, 741 (S.D.1984)). The above principles, when ap-
The title of H.B. 1272 specifies thаt it is to provide “for nondiscrimination in the use of public funds for public employees“. This title is very broad, but is not broad enough to encompass its antithesis. Although the title of H.B. 1272 proclaims it “to provide for nondiscrimination ... in the use of public funds[,]” the actual wording of the act is contrary to that purpose. The protection extended to selection of “any regularly licensed physician or practitioners of the healing arts” in
Although we deem the title of H.B. 1272 to be fatally defective, we reject a related assеrtion, by Physician‘s Group, that such title is necessarily infirm because it contains no reference to the original act amended by H.B. 1272. In this regard, Physician‘s Group relies upon Schomer v. Scott, 65 S.D. 353, 370-1, 274 N.W. 556, 565 (1937). Schomer, however, directs that the Constitution does not mandate such references to the act being amended. Id. Thus, while reference to the original aсt may be helpful in communicating the subject of an amendatory act, lack of such reference does not, by itself, render an act unconstitutional. In Simpson v. Tobin, 367 N.W.2d 757, 767 (S.D.1985), we expressed:
Objections to a legislative act on the grounds that it embraces more than one subject not adequately expressed in its title should be grave, and the confliсt between the statute and the constitution must be plain and manifest, before it may be justifiably declared unconstitutional and void.
Physician‘s Group has not demonstrated the gravity nor the plain and manifest conflict, under this subissue, to declare this statute unconstitutional and void.
In passing, we reject the State‘s argument that Physician‘s Group lacked standing to raise the issue of equal protection because no discrimination affects it. H.B. 1272 explicitly relates to use of public funds. It is settled law that “[t]he constitutionality of legislation affecting the use of public funds is a matter of public right.” Wyatt v. Kundert, 375 N.W.2d 186, 195 (S.D.1985). State ex rel. Parker v. Youngquist, 69 S.D. 423, 426, 11 N.W.2d 84, 85 (1943). “Ownership, speсial interest, or injury is not a prerequisite to litigate a case ... involving public funds.” Kundert, at 195; Kanaly, supra, at 827. We consider Physician‘s Group to have standing on this issue.
In determining whether the equal protection clause has been violated, this Court utilizes a two-part test derived from City of Aberdeen v. Meidinger, 89 S.D. 412, 415, 233 N.W.2d 331, 333 (1975). See, Sedlacek v. S.D. Teener Baseball Program, 437 N.W.2d 866, 869 (S.D.1989); State ex rel. Wieber v. Hennings, 311 N.W.2d 41, 42 (S.D.1981).
The first part of this test is “whether the statute does set up arbitrary classificаtions among various persons subject to it.” (citation omitted). The second part of the test is the application of the appropriate standard of review to the arbitrary classification. (citation omitted). Hennings, at 42 (quoting Meidinger, supra). “Applying the first prong, we look to see if the statute applies equally to all people.” Lyons v. Lederle, 440 N.W.2d 769, 771 (S.D.1989). See also, Janish v. Murtha, 285 N.W.2d 708, 709 (S.D.1979). H.B. 1272 does not apply equally to all, on its face. It deletes protection against discrimination afforded to all “practitioners of the healing arts” and limits such protection to physicians, chiropractors and optometrists. This appears to be an arbitrary classification. While some hеalers are protected, others are not, with no apparent basis for such a distinction. While physicians and various other “practitioners of the healing arts” are regulated separately in chapters of
As no suspect classes or fundamental rights are involved, our standard of review is to “inquire whether there is a rational relationship between the classification or classifications and some legitimate legislative purpose.” Matter of Clark, 340 N.W.2d 189, 192 (S.D.1983). The provisions of relating to “practitioners of the healing arts” in H.B. 1272, intended, by its title,” to provide for nondiscrimination in the use of public funds for public employees” obviously do not bear any rational relationship to such an end. Although a statute will not be declared invalid “unless it is ‘patently arbitrary’ and bears no rational relationship to a legitimate government interest” (Birchfield v. Birchfield, 417 N.W.2d 891, 894 (S.D.1988) (quoting Frontiero v. Richardson, 411 U.S. 677, 684, 93 S.Ct. 1764, 1768, 36 L.Ed.2d 583, 589 (1973)), such is the case here. H.B. 1272 is unconstitutional insofar as it discriminates against practitioners of the healing arts.
We reject, however, Physician‘s Group‘s claims that H.B. 1272 violates equal protection in singling out health maintenance organizations, preferred provider organizations and individual practiсe associations. The historical background of this act, extensively laid out below, and before this Court, indicates that these groups, by their nature, have a great potential for funneling patients away from optometrists and chiropractors. “A State is not constrained in the exercise of its police рower to ignore experience which marks a class of offenders or a family of offenses for special treatment.” State v. King
The trial court is reversed, as H.B. 1272 is unconstitutional in its entirety under
Reversed.
WUEST, C.J., and MORGAN and MILLER, JJ., concur.
SABERS, J., concurs specially.
SABERS, Justice (concurring specially).
I would not reach the merits on the second issue because it is moot, as indicated by the majority. “A fundamental and longstanding principle of judiciаl restraint requires that courts avoid reaching constitutional questions in advance of the necessity of deciding them.” Lyng v. Northwest Indian Cemetery Protective Ass‘n, 485 U.S. 439, 442, 108 S.Ct. 1319, 1323, 99 L.Ed.2d 534, 544 (1988).