Seventh District Court Judge Bruce Pickett rules Idaho Patient Act is constitutional
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IDAHO FALLS — Seventh District Court Judge Bruce Pickett upheld the constitutionality of the Idaho Patient Act in a May 29 ruling on the Ridgeline Medical, LLC v. David Lyon case that had been appealed from magistrate court.
“This appeal involves a question regarding the constitutionality of the Idaho Patient Act …” Pickett wrote. “This Court exercises free review when considering such challenges. This Court, acting as an appellate court, ‘is obligated to seek an interpretation of a statute’ that maintains its constitutionality. The judicial power to declare legislative action unconstitutional should be exercised only in certain cases.”
The Idaho Patient Act (IPA) “govern(s) fair collection of debts owed to health care providers (and) provide(s) requirements for extraordinary collection actions when collecting medical debts.”
The law was adopted in March 2020 because previously “Idaho law enable(d) excessive attorney’s fees and fail(ed) to provide judges with clear guidance to combat abuses of the collections process.”
On May 31, 2023, Melaleuca filed bar complaints against the plaintiff’s attorneys Bryan Smith, Bryan Zollinger and the defendant’s attorney Edward Dindinger – accusing them of collusion in the case.
The company issued a statement in December 2022 stating that “the plaintiff’s attorneys, the defendant, and the defendant’s attorney are longtime, close, personal friends and political allies and have a history of teaming up in political and legal situations.”
Read more about the circumstances of the original case here.
Melaleuca played a significant role in the original creation and legislative push behind the Idaho Patient Act after one of the company’s employees was sued for a $294 medical bill by Medical Recovery Services (MRS), EastIdahoNews.com reported previously. MRS’ lawyer, Bryan Smith, asked for almost $6,000 in fees from the employee to satisfy the debt.
In his ruling last Wednesday, Pickett provided six reasons why the Idaho Patient Act was constitutional:
- “Ridgeline lacks standing to bring a third-party facial challenge to the Idaho Patient Act.”
A facial challenge questions a law’s constitutionality.
- “The Idaho Patient Act does not violate the First Amendment’s right to petition and right to free speech, nor does it violate provider’s right to engage in pre-petitioning activity.”
Representing Ridgeline Medical, Bryan Smith, of Smith Driscoll & Associates, argued on April 18 that the act burdens freedom of speech.
“It’s clearly free speech to report something to credit. You’re just saying somebody owes money,” he said.
However, Pickett ruled that “commercial speech receives limited protection under the First Amendment. The First Amendment does not prevent restrictions directed at commerce or conduct from imposing incidental burdens on speech.”
- “The IPA does not violate the 14th Amendment right to equal protection.
- “The Magistrate Court did not err when it held that the IPA does not violate the right to procedural due process, nor does the IPA violate Ridgeline’s right to substantive due process.
- “The Magistrate Court correctly held that the IPA’s penalties for noncompliance are constitutional under due process.”
- “The Magistrate Court correctly held that the IPA is not void or unenforceable.”
Under the Idaho Patient Act, after a patient goes to a health care facility, “all charges will be sent to the patient’s insurance within 45 days. By 60 days, they will issue a Consolidated Summary of Services that includes all the various providers who treated the individual,” IdahoPatientAct.org states. “Sixty days after the final statement, the account can be transferred to a collection company or charged interest. Ninety days after the final statement, extraordinary collection can be taken, such as a lawsuit or a negative credit report.”
Background on the case
David Lyon was treated at Ridgeline Medical in Idaho Falls on March 22, 2021, and did not pay his $777 bill.
READ OUR IN-DEPTH STORY ABOUT THE CASE AND LAWSUIT HERE
Court documents indicate Lyon was sent a final statement, but the plaintiff and the defendant agree he never received the notification as required by the law.
In his ruling, Pickett took exception that both parties would agree that the notice never showed up.
“Strangely, Ridgeline and Lyon stipulated to the fact Lydon did not receive the final notice,” he wrote “… It is not clear to the Court how Lyon has any knowledge of the mailing. If Lyon knew the final billing notice was mailed, as he must to stipulate to that fact, it follows that he knew of the final billing statement and the owing balance to Ridgeline. It is also not clear how Ridgeline can have any knowledge of whether or not the final billing was received. If they have the knowledge necessary to stipulate to that fact then they either should not have pursued this action or corrected the service.
“This court notes that no evidence or stipulation was presented to the Magistrate Court regarding Ridgeline providing a consolidated summary statement. Their failure to do so would have landed Ridgeline in the same position they now find themselves — in violation of IPA requirements.”
Nevertheless, “On May 14, 2021, Ridgeline hired Smith Driscoll & Associates to collect the debt,” court documents state.
Lyon was sued on Aug. 4, 2021, after he didn’t respond to demand letters.
He then hired Dindinger & Kohler, a firm from Boise, to “file a counterclaim against Ridgeline, seeking to … fine the clinic for filing its lawsuit and reporting Lyon to a credit agency before he had received his final statement.”
Initially, Magistrate Judge Jason Walker ruled three portions of the act unconstitutional in the case, but the Idaho Attorney General’s office then intervened at the request of Melaleuca.
The Attorney General’s Office, under then-Attorney General Lawrence Wasden, argued Smith Driscoll & Associates should have notified it because the case was challenging the constitutionality of a state law.
Walker reversed his decision on Aug. 11, 2023, declaring the Idaho Patient Act constitutional.
Smith Driscoll & Associates then appealed that ruling, moving the case to district court.
Ultimately, Pickett upheld the lower court’s ruling on May 29.
“My client is pleased with the decision of the District Court affirming the constitutionality of the Idaho Patient Act,” Dindinger responded.
East Idaho News repeatedly reached out to the Idaho Attorney General’s Office, Smith, Ridgeline Medical and Melaleuca, but they declined to comment or were unavailable.
Smith has indicated previously that he would appeal the case up to the Idaho Supreme Court.