Opinion ID: 1923285
Heading Depth: 1
Heading Rank: 3

Heading: Question of Conflict between Charter and Statute.

Text: The question of conflict between the Charter and the Statute is based upon the terms of Section 3-C of the Charter and 24 M.R.S.A. § 2303. Both the Charter and the Statute authorize the operation of the Blue Cross-Blue Shield programs. Sec. 3-C of the charter authorizes the extended benefits the issuance of contracts under which plaintiff assumes liability on the whole or part of expenses incurred by a subscriber as a result of injury or disease not covered by this corporation's regular contracts for hospital service or medical service    which shall be limited to health care services and supplies and shall not extend to and include indemnity for loss of time, incapacity or death benefits. These extended benefits are not authorized under the general law. The Commissioner and intervenors urge that this difference calls for the application of Article IV, Part Third, Section 14, Constitution of Maine: Corporations shall be formed under general laws, and shall not be created by special Acts of the Legislature, except for municipal purposes, and in cases where the objects of the corporation cannot otherwise be attained; and, however formed, they shall forever be subject to the general laws of the State; that the Constitution so applied requires plaintiff to be limited to the general law (24 M.R.S.A. § 2301 et seq.) and that its Extended Benefits Endorsement is invalid. Plaintiff counters that the silence of § 2303 on the matter of benefits to be extended beyond the hospital and medical service explicitly authorized is not a prohibition, that there is no conflict, that the presumption of Laughlin v. City of Portland, 111 Me. 486, 90 A. 318, 51 L.R.A.,N.S., 1143 (1914) that the Charter is constitutional (does not conflict) is unrebutted, and that if the Charter or the Statute is susceptible of two interpretations, the one sustaining constitutionality (non-conflict) should be adopted. Stubbs, Applt., 141 Me. 143, 39 A. 2d 853, 156 A.L.R. 400 (1944). We recognize the presumption. It must be noted that the special law granting plaintiff's Charter was approved March 2, 1939. The public law authorizing Non-profit Hospital Service Corporations was approved March 30, 1939. It is this approval which gives life to all legislative enactments. Opinion of the Justices, 120 Me. 566, 569. Section 1 of Chapter 149, Public Laws 1939, reads: Any corporation organized under special act of the legislature, or under the provisions of chapter 70 of the revised statutes (the then general law authorizing formation of corporations without capital stock) for the purpose of    operating a nonprofit hospital service plan    may be licensed by the insurance commissioner on the terms and conditions hereinafter provided. Our present statute 24 M.R.S.A. § 2301 (Non-profit Hospital or Medical Service Organizations) reads in pertinent details the same,the then Chapter 70 (referred to above) R.S.1930, now being Title 13 M.R. S.A. § 901. The Public Law of 1939, approved March 30, 1939 specifically included within its terms the corporation organized 28 days earlier under the special act. In substance Chapter 24, Private and Special Laws 1939, was merged into and enveloped by Chapter 149, Public Laws 1939. Such legislative action was only consistent with Article IV, Part Third, Section 13 of the Maine Constitution which states: The Legislature shall, from time to time, provide, as far as practicable, by general laws, for all matters usually appertaining to special or private legislation. The rationale of this constitutional mandate is quoted from the legislative record in Opinion of the Justices, 146 Me. 316, 322, 80 A.2d 866, and fully applies here. Plaintiff's present Charter and Public Law 24 M.R.S.A. § 2301 et seq. are in conflict as to the extended benefits phase of our question. A corporation formed under the authority of the general law (24 M.S.R.A. § 2301) would be confined in its declaration of purpose to the scope therein allowed. The declaration of purpose would be its charter and the specific powers enumerated in its charter excludes all others except such as are reasonable and necessary to carry into effect those expressly given. Gardiner Trust Company v. Augusta Trust Co., 134 Me. 191, 198, 182 A. 685, 688. The silence of 24 M.R.S.A. § 2303 on the subject of extended benefits cannot be authority for their issue without restriction. The authority of such a corporation to issue extended benefits contracts, would depend upon their reasonability and necessity in carrying into effect the hospital and medical service contracts. The Blue Cross and Blue Shield programs have been operated successfully without the proposed extension. The additional benefit contracts are neither reasonable nor necessary for carrying the Blue Cross-Blue Shield services into effect. Under Section 14 of our Constitution quoted supra, the public law prevails. This conflict between plaintiff's charter and the general law and the determination that as to Blue Cross-Blue Shield activities the public law prevails, does not, however, fully solve our problem. Granting that the Blue Cross-Blue Shield services authorized by the special law are identical to those authorized by the public law and that the public law controls by virtue of the clause of the Maine Constitution cited, it might be urged that one phrase of the constitutional provision has been overlooked. This phrase reads that in cases where the objects of the corporation cannot otherwise be attained such corporation may be created by special act. Were it determined that the objects (extended benefits) [5] of AHS could not otherwise be attained, special legislation would be constitutionally allowable and arguendo power to establish must include power to extend. Upon this premise the extended benefits phase of plaintiff's operation could be valid as a special grant from the legislature. Were it determined that the objects (extended benefits) [5] of AHS could be attained under the general law 13 M.R.S.A. §§ 901-936 (corporation without capital stock), 13 M.R.S.A. § 71 et seq. (stock corporation) or 24 M.R.S.A. § 502 et seq. (stock and mutual insurance companies) plaintiff's operation could not be valid as a special grant from the legislature. We have neither to apply the attainment test nor decide the result of its application for if the extended benefits contract under the operation here proposed be authorized by either special or public law, it only brings us face to face with the ultimate question raised by the intervenors. The answer to this question is found by a determination of the nature of the contract offering the extended benefits.