Opinion ID: 1195306
Heading Depth: 1
Heading Rank: 5

Heading: The Majority's Reliance on Marinship Is Misplaced

Text: The majority's reliance on Marinship is misplaced for three reasons: (1) Marinship did not involve the common law right of fair procedure. That right has been defined by this court as including adequate notice of the charges and a reasonable opportunity to respond. ( Ezekial, supra, 20 Cal.3d at p. 272, 142 Cal.Rptr. 418, 572 P.2d 32.) In Marinship, a union with a closed shop agreement discriminated against applicants on the basis of race. This court did not say that such discrimination was unobjectionable so long as the union gave applicants notice and an opportunity to respond to the charge of belonging to a racial minority. Rather, we held that an arbitrarily closed or partially closed union is incompatible with a closed shop ( Marinship, supra, 25 Cal.2d at p. 731, 155 P.2d 329), with the result that Negroes must be admitted to membership under the same terms and conditions applicable to non-Negroes unless the union and the employer refrain from enforcing the closed shop agreement against them. (Id. at p. 745, 155 P.2d 329.) The common law right extended in Marinship, therefore, was not the right to fair procedure, but the right to service. It was well established at common law that innkeepers and common carriers were under a duty to furnish accommodations to all persons, in absence of some reasonable ground [citations], and if colored persons are furnished separate accommodations they must be equally safe, commodious and comfortable. [Citations.] The analogy of the public service cases not only demonstrates a public policy against racial discrimination but also refutes defendants' contention that a statute is necessary to enforce such a policy where private rather than public action is involved. ( Marinship, supra, 25 Cal.2d at p. 740, 155 P.2d 329.) (2) The fact that the union in Marinship exercised monopoly power was important to our decision in that case. Where a union has, as in this case, attained a monopoly of the supply of labor by means of closed shop agreements and other forms of collective labor action, such a union occupies a quasi public position similar to that of a public service business and it has certain corresponding obligations.... Its asserted right to choose its own members does not merely relate to social relations; it affects the fundamental right to work for a living. [Citations.] ( Marinship, supra, 25 Cal.2d at p. 731, 155 P.2d 329.) Historically, the common law duty to serve arose in response to the fact that in the 15th century those engaged in certain public callings, for example, innkeepers and carriers, exercised virtual monopolies. When the weary traveller reaches the wayside inn in the gathering dusk, if the host turn him away what shall he do? Go on to the next inn? It is miles away, and the roads are infested with robbers. The traveller would be at the mercy of the innkeeper, who might practice upon him any extortion, for the guest would submit to anything almost, rather than be put out into the night. (Wyman, The Law of the Public Callings as a Solution to the Trust Problem (1904) 17 Harv. L.Rev. 156, 159.) And the existence of monopoly power is a requisite of not only the common law right to service, but also of the common law right of fair procedure. Forgoing repetitious analysis of cited cases [finding a common law right of fair procedure], I can safely assert that in every authority relied upon by the majority there was an element of monopoly control of the professional practice involved. ( Ezekial, supra, 20 Cal.3d 267, 281, 142 Cal.Rptr. 418, 572 P.2d 32 (dis. opn. of Mosk, J.).) Certainly in Pinsker v. Pacific Coast Soc. of Orthodontists (1969) 1 Cal.3d 160, 81 Cal.Rptr. 623, 460 P.2d 495 (Pinsker I) , this court's decision was bottomed on the monopoly control the American Association of Orthodontists (AAO) exercised over the field of orthodontics. Because of the unique position in the field of orthodontics occupied by defendant AAO and its constituent organizations, membership therein, although not economically necessary in the strict sense of the word ..., would appear to be a practical necessity for a dentist who wishes not only to make a good living as an orthodontist but also to realize maximum potential achievement and recognition in such specialty. Defendant associations hold themselves out to the public and the dental profession generally as the sole organizations recognized by the ADA, which is itself a virtual monopoly, to determine standards, both ethical and educational, for the practice and certification of orthodontics. Thus, a public interest is shown, and the associations must be viewed as having a fiduciary responsibility with respect to the acceptance or rejection of membership applications. (Id. at p. 166, 81 Cal.Rptr. 623, 460 P.2d 495.) Although the majority in Ezekial stated that the application of the common law rule [of fair procedure] does not depend on the existence of `monopoly' power ( Ezekial, supra, 20 Cal.3d at p. 277, 142 Cal. Rptr. 418, 572 P.2d 32), what this court actually found was that Kaiser Foundation Hospital's termination of the plaintiff from its surgical residency program meant that he would never be able to practice as a surgeon at any other accredited hospital in California. Dismissal from Kaiser will, as a practical matter and because of Kaiser's close relationship with other teaching hospitals, prevent plaintiffs acceptance in any other surgical residency program. Successful completion of an approved surgical residency is a prerequisite to attainment of the status of a `board certified general surgeon,' without which plaintiff cannot practice a surgical specialty in any accredited California hospital. (Id. at pp. 270-271, 142 Cal.Rptr. 418, 572 P.2d 32.) From the plaintiffs point of view, that was certainly tantamount to the exercise of monopoly power. If, in Ezekial, the doctrine this court had constructed on the common law right of fair procedure began to slip from its moorings in monopoly power, it is now entirely adrift. Under the standard announced by the majority today, an insurer need not exercise monopoly power before the burdens of the common law right of fair procedure are imposed on it. Rather, as I explain below, it is sufficient if the insurer has any significant share of a regional market. (3) Marinship, unlike the majority's decision in this case, is consistent with our long-held principle that, aside from constitutional policy, the Legislature, and not the courts, is vested with the responsibility to declare the public policy of the state. ( Green, supra, 19 Cal.4th at p. 71, 78 Cal.Rptr.2d 16, 960 P.2d 1046.) Marinship can be squared with this principle because the ultimate source of the public policy announced there was the federal Constitution. The discriminatory practices involved in this case are, moreover, contrary to the public policy of the United States and this state. The United States Constitution has long prohibited governmental action discriminating against persons because of race or color. (5th, 14th, and 15th Amendments.) ( Marinship, supra, 25 Cal.2d at p. 739, 155 P.2d 329.) Because the right vindicated in Marinship was transparently clear and transcendingly important, a right of constitutional stature, this court did not feel compelled to await action by the Legislature. Some courts have held that state legislation is necessary in order to announce a public policy restricting a union's right to arbitrarily exclude individuals from membership although as a result thereof excluded persons are unable to find employment in their chosen trade. [Citations.] As said hereinbefore, however, other authorities have indicated that the courts, without statutory aid, may restrain such conduct by a union on the ground that it is tortious and contrary to public policy. Further, as said in 4 Restatement, Torts, page 136, comment to section 794: `The expression of public policy is not confined to legislation and criminal law; in passing upon the propriety of an object [of concerted labor action], public policy otherwise defined is an important factor. If the object is an act against which the law has definitely set its face, it is not a proper object of concerted action.' ( Marinship, supra, 25 Cal.2d at p. 734, 155 P.2d 329.) History has confirmed this court's judgment that the racial discrimination practiced by the union in Marinship was an act against which the law has definitely set its face. ( Marinship, supra, 25 Cal.2d at p. 734, 155 P.2d 329.) However, it trivializes Marinship to suggest that anything like the same degree of public policy consensus has developed with regard to the question at bar. According to Dr. Potvin, the average physician who practices his specialty, obstetrics/gynecology, has been sued for malpractice 2.3 times. Metropolitan Life Insurance Company (MetLife) wishes to restrict its preferred provider lists to physicians with a slightly better than average malpractice history, to those who have not been sued more than twice. Potvin, by contrast, has been sued four timesnearly twice the average. (Maj. opn., ante, 95 Cal.Rptr.2d at p. 500, 997 P.2d at p. 1156.) Now the majority's public policy antennae may be more sensitive than mine, but I suspect the jury is still out on the question of whether an insurer should be able to control its costs by restricting its preferred provider lists to physicians with slightly better than average malpractice histories. That, surely, is a business judgment, and if the insurer makes the wrong judgment by depriving itself of doctors that patients insist upon, then the market will punish the insurer and force it to retreat from the impracticable standard. Far from having identified a practice against which the law has definitely set its face ( Marinship, supra, 25 Cal.2d at p. 734, 155 P.2d 329), the majority condemns today what the Legislature is as likely as not to approve tomorrow. Indeed, in the 1995-1996 (Assem. Bill No. 3226) and 1997-1998 (Assem.Bill. No. 434) legislative sessions, attempts were made to pass laws granting physicians the sorts of procedural rights they receive under the majority opinion, and those bills failed. Colorado did recently pass legislation on this subject, but the Colorado Legislature must have consulted a different public policy oracle than did the majority of this court, for the Colorado statute permits a provider of health coverage to terminate a contract with a physician without cause so long as the notice requirements are the same for both parties. (Grossman v. Columbine Med. Group (Colo.Ct.App.) 12 P.2d 269.)