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E.J. Dionne, Jr. got it wrong

By Robert S. Sargent, Jr.
web posted July 1, 2002

On Tuesday, June 25, E.J. Dionne, Jr., columnist for the Washington Post, wrote a column titled "When State's Rights Get in the Way" and in it he charged that the conservative members of the Supreme Court abandoned their principles in their dissent of Rush Prudential HMO, Inc. v. Debra Moran. In this case, the HMO denied Moran certain medical procedures alleging they were unnecessary. Moran made a written demand for a review by an independent physician, which is required by the Illinois HMO Act when the primary care physician and the HMO disagree on treatment. When Rush refused, Moran sued in state court. While the suit was pending, Moran went ahead and had the surgery then amended her complaint and sought reimbursement. Rush argued that the Employee Retirement Income Security Act (ERISA), a federal statute that covered Rush Prudential, pre-empted the state regulations, and that it had complied with the mechanisms for review built into the ERISA statute. The dissent, written by Justice Thomas, joined by Renquist, Scalia, and Kennedy, argued that Rush was correct. The majority opinion, written by Justice Souter, argued that ERISA allowed the states to regulate ERISA-affiliated HMOs.

Dionne wrote "The doctrine of state's rights, so often invoked as a principle, is almost always a pretext to deny the federal government authority to do things that conservatives dislike. These include expanding claims to individual rights, increasing protections for the environment and regulating business. How do I know this? Because when states have the temerity to try doing things I just listed, conservatives are quick to use federal power to stop them from exercising their right to act." He points out that the conservatives on the court sided with the federal government against the states, proving they are willing to abandon principle. "In other words, state's rights are great until Wall Street firms or HMOs decide they don't like them. Then they're a calamity. So much for state's rights."

The problem with Dionne's analysis is that this case does not involve a state's rights issue. State's rights proponents are interested in the so-called vertical separation of powers revolving around the 10th Amendment ("The powers not delegated to the United States by the Constitution...are reserved to the States..."). If Rush v. Moran questioned the power of Congress to mandate ERISA on the states, that would be a state's rights issue, but since the law says that ERISA applies to businesses that are involved in interstate commerce, and, obviously, all nine Justices accept its constitutionality under the "Commerce Clause," then the question becomes a "Supremacy Clause" issue:" Does the state law bump up against the federal law?

Here's what the law says: "The provisions of (ERISA) shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan ... except ... nothing shall be construed to exempt any person from any law of any State which regulates insurance..." Justice Souter made the argument that HMOs are in the insurance business; therefore the Illinois HMO Act should be allowed. But ERISA further states: "Neither an employee benefit plan...nor any trust established under such a plan, shall be deemed to be an insurance company...for purposes of any law of any State purporting to regulate insurance companies." A commonsense reading would interpret Rush Prudential as the medical provider of the benefit plan, and not "deemed to be an insurance company." A more liberal view, of course, would see an HMO as not only a medical provider, but also an insurance company.

So the Justices did what they usually do: the conservatives gave a strict interpretation of the law, and the liberals stretched it to fit their own personal idea of compassion (and O'Connor sided with whoever she felt like on that particular day) and nobody abandoned their principles. Does Dionne really think that Justice Souter was upholding state's rights? Either Dionne is ignorant of constitutional analysis or this was just a deliberate misrepresentation to give him an excuse to bad mouth Justice Thomas and his conservative brothers.

Robert S. Sargent, Jr. can be reached at rssjr@citcom.net.

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