Court Opinion

ID: 9710172
Source: CourtListenerOpinion
Date Created: 2023-08-26 04:03:47.306298+00
Date Added: 2024-06-11T08:17:49.202604
License: Public Domain

ZAPPALA, Justice,
dissenting.
Because I disagree with the majority’s conclusion that the medical review committee is “a creature of the state, and like an administrative agency, is subject to due process review,” op. at 510, I dissent.
It is axiomatic that the due process protections afforded by the Fourteenth Amendment to the United States Constitution apply only to “state action” and not to private conduct.1 In Adler v. Montefiore Hospital Association of Western Pennsylvania, 453 Pa. 60, 311 A.2d 634 (1973), cert. denied, 414 U.S. 1131, 94 S.Ct. 870, 38 L.Ed.2d 755 (1974), citing Burton v. *20Wilmington Parking Authority, 365 U.S. 715, 81 S.Ct. 856, 6 L.Ed.2d 45 (1961), we noted:
In Burton, the United States Supreme Court held that essentially private conduct does not do violence to the Fourteenth Amendment (in that case Equal Protection Clause) unless the state has become involved to some significant extent. The amount of involvement must be measured by the facts of each particular case.
Adler, 453 Pa. at 69, 311 A.2d at 639.
Here, the majority, in concluding that procedural due process applies to the proceedings of the medical review committee, relies on the fact that the medical review committee “is formed and functions pursuant to the terms of the regulatory act.” Op. at 510. However, the mere fact that a certain area is highly regulated is not sufficient by itself to establish that a private party covered by such regulation acts under color of state law. See Jackson v. Metropolitan Edison, 419 U.S. 345, 95 S.Ct. 449, 42 L.Ed.2d 477 (1974) (the action of a partial monopoly, a highly regulated utility company, in terminating service to a customer did not constitute state action). In order to demonstrate state action, there must also be a showing that the state ordered the private party to act in a specific manner. Flagg Brothers, Inc. v. Brooks, 436 U.S. 149, 98 S.Ct. 1729, 56 L.Ed.2d 185 (1978). The appropriate inquiry in determining whether state action can be imputed to a private entity is whether there is a sufficiently close nexus between the state and the challenged action of the regulated entity so that the action of the latter may be fairly treated as that of the State itself. Jackson, 419 U.S. at 351, 95 S.Ct. 449.
The parties to this action are Blue Shield, a private, nonprofit, professional health services corporation, and former participating Blue Shield physicians and professional corporations. Pursuant to Section 6324(c) of the Professional Health Services Plan Corporation Act, 40 Pa.C.S. § 6324(c), disputes relating to the professional health services rendered by health service doctors “shall be considered and determined only by the health service doctors as selected in a manner prescribed in the bylaws of the professional health service corporation.” *21(Emphasis added). Article X of Blue Shield’s Bylaws provides that all disputes “shall be considered, acted upon, disposed of and determined by the [Medical Review Committee].” The parties to this matter entered into a private contract whereby Appellants agreed that they would “perform services ... and accept compensation therefore, as provided for in the ... Regulatory Act ... and [Appellee’s] Bylaws.”
The Legislature, in enacting the Regulatory Act, did not specify in what manner professional health service corporations are to resolve disputes relating to the professional health services rendered by health service physicians. To the contrary, the Legislature specifically left it to the discretion of professional health service corporations, through their bylaws, to establish how disputes should be resolved. Section 6324(c) in no way directs, limits or guides professional health service corporations concerning the manner in which they are to structure their bylaws regarding dispute resolution.
Given that professional health service corporations are free to set forth, in their bylaws, whatever dispute resolution scheme they deem appropriate, without direction from the Legislature, i.e,, the state, there is not a sufficiently close nexus between the state and the challenged action for due process to be implicated. See, e.g., Staino v. Pennsylvania State Horse Racing Commission, 98 Pa.Cmwlth. 461, 512 A.2d 75, 77 (1986), wherein the court noted:
Because a private corporation is licensed and pervasively regulated by the state does not make its actions “state actions” meaning that those actions must comport with the requirements of the Fourteenth Amendment to the Constitution ....
Moreover, the fact that a private party follows a procedure outlined in a state statute does not convert the private action into state action.
Based on the foregoing, and contrary to the majority, I conclude that the proceedings of the medical review committee are not subject to the requirements of due process. Accordingly, I would affirm, for different reasons, the Superior *22Court’s order vacating the judgment of the common pleas court.
CASTILLE, J., joins this dissenting opinion.

. The Fourteenth Amendment to the United States Constitution provides, in pertinent part:
No State ... shall ... deprive any person of life, liberty, or property without due process of law.
(Emphasis added).