Opinion ID: 1664239
Heading Depth: 1
Heading Rank: 14

Heading: does section 301(7) of pa 350 deprive bcbsm, its directors, officers and members of guaranteed rights of free speech?

Text: BCBSM attacks § 301(7) of 1980 PA 350, MCL 550.1301(7); MSA 24.660(301)(7), under US Const, Am I, and Const 1963, art 1, § 5, which guarantee the right of free speech. BCBSM argues that [t]his section deprives BCBSM, its directors, officers and corporate members of guaranteed rights of free speech and clearly violates art 1, § 5 of the Michigan Constitution and the First Amendment of the United States Constitution. The act vests authority to amend the bylaws in the board of directors (§ 301[1]). It then sets forth the membership of the board, limits the number of provider directors to not more than twenty-five percent (§ 301[3]) and provides that the remaining members shall include representatives of subscriber groups in proportions which fairly represent the total subscriber population of the health care population (§ 301[5]). Section 301(6) then provides that the method of selection of the directors shall be specified in the bylaws. Section 301(7) provides that the method of selection of subscribers shall maximize subscriber participation, and that: The method of selection [established by the bylaws] shall neither permit nor require nomination, endorsement, approval, or confirmation of a candidate or director by the corporate body, the board of directors, or the management of the health care corporation, or any member or members of any of these. This subsection shall not apply to the selection of an officer or employee as a director pursuant to subsection (4). This subsection shall not limit the rights of any director, member of the corporate body, or employee or officer of the health care corporation to participate in the selection process in his or her capacity as a subscriber, to the same extent as any other subscriber may participate. [66] There are two plausible constructions of subsection (7). The section could be read in conjunction with subsection (5) as precluding the bylaws from permitting or requiring the named groups from promoting or inhibiting the selection of subscriber members, or it could be read more broadly to limit these entities with respect to the selection of all members of the board (other than the public members, § 301[6], and the single officer/employee director authorized in § 301[4]). Since neither party has briefed this issue, we do not need to resolve which interpretation is correct. Neither view is a direct limitation on any individual, management, or corporate right of expression. Properly viewed, subsection (7) is a limitation on the method of selection to be ultimately adopted by the board of directors in the bylaws; that is, a directive that the selection process may not be impeded by a provision in the bylaws which either requires or permits the named entities to nominate, endorse, approve, or confirm a candidate or director. Since the bylaws relating to the selection process have not yet been amended, nor is there a suggestion as to how the board wishes to revise the bylaws, there is no actual case or controversy at this time. If subsection (7) is subsequently interpreted by the Insurance Commissioner to impose a limitation on corporate expenditures or other expressions of influence which conflicts with the bylaws adopted by the board of directors, then a free exercise challenge would be presented. That, of course, is a wholly speculative matter, to be resolved when a case or controversy is presented. In short, we hold that subsection (7) is not a limitation of expression, but rather a limitation on the method of selection which the board through its bylaws may adopt. We therefore conclude that no cognizable constitutional challenge has here been advanced.