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Michigan Supreme Court Lansing, Michigan

Opinion
MICHIGAN CHIROPRACTIC COUNCIL and MICHIGAN CHIROPRACTIC SOCIETY, Petitioners-Appellees, v COMMISSIONER OF THE OFFICE OF FINANCIAL AND INSURANCE SERVICES, Respondent, and FARMERS INSURANCE EXCHANGE and MID-CENTURY INSURANCE COMPANY Intervenors-Respondents-Appellants. _______________________________ BEFORE THE ENTIRE BENCH YOUNG, J.

Chief Justice:

Justices:

Clifford W. Taylor

Michael F. Cavanagh Elizabeth A. Weaver Marilyn Kelly Maura D. Corrigan Robert P. Young, Jr. Stephen J. Markman

FILED JUNE 28, 2006

No. 126530-1

Petitioners, two organizations representing the interests of Michigan chiropractors, challenged the validity of the "Preferred Provider Option" offered by appellants to their policyholders. In count I of their petition, petitioners claimed that the option violated the rights of the appellants' insureds. In count II of their petition, petitioners claimed a violation of the rights of chiropractic providers.

Regarding count I, we hold that petitioners do not satisfy the test for third-party standing, and may not litigate the claims of appellants' insureds. Regarding count II, assuming arguendo that petitioners have standing to sue on behalf of their membership, petitioners have not established an actual or imminent injury. Thus, petitioners' claim is not ripe for judicial review. Therefore, we vacate the judgments of the circuit court and the Court of Appeals and reinstate the decision of the Commissioner of the Office of Financial and Insurance Services (the Commissioner).1 I. Facts and Procedural History The appellant-insurers offer a "Preferred Provider Option" (PPO) to their no-fault automobile insurance policyholders, allowing their insureds to elect to limit their choice of medical care providers in the event they require personal injury protection (PIP) benefits. In exchange for reduced PIP premiums, insureds agree to receive treatment from a network of medical care providers maintained by Preferred Providers of Michigan (PPOM). In the event that a policyholder seeks treatment from a provider outside the PPOM network, the insured must pay a deductible, and provider reimbursement is limited to PPOM's customary reimbursement rate. The "Preferred Provider Option" is entirely voluntary; if policyholders do not opt for the endorsement, they do not receive the premium discount and are not limited to the PPOM network of providers. Because we dispose of this case on the basis of standing and ripeness, we do not address the substantive merits of appellants' appeal.
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Appellants began offering the discounted policy option in July 2000.2

In

August 2000, petitioners filed a request with the Commissioner for a contested case hearing pursuant to MCL 500.2028 and MCL 500.2029, claiming that the PPO endorsement violated the Insurance Code, MCL 500.100 et seq. Petitioners asked the Commissioner to withdraw approval of the endorsement pursuant to MCL 500.2236(5) and to issue a cease and desist order to respondents.3 The Commissioner sought additional information from respondents and petitioners, which petitioners refused to supply. On the basis of the record

established, the Commissioner rejected petitioners' request for a contested case hearing. The Commissioner concluded that the endorsement did not violate the nofault act, MCL 500.3101 et seq. Petitioners appealed to the circuit court, which

The policy option was deemed approved after the Commissioner failed to act within 30 days after the endorsement was submitted for approval pursuant to MCL 500.2236(1). Petitioners' amended petition contained four counts; however, only the two counts referenced above are relevant to this appeal. As noted, count I alleged that the endorsement violated the rights of insureds and count II alleged that the endorsement violated the rights of chiropractic providers. Count III alleged that the $500 deductible imposed when a policyholder sought treatment from a nonnetwork provider was a penalty, which "potentially imposes a tremendous hardship on insureds." However, following an adverse decision by the Commissioner, petitioners did not seek review of count III in the circuit court. Count IV challenged appellants' refusal to pay for chiropractic care in favor of allegedly comparable care provided by osteopathic physicians. This issue, which was not addressed by the Commissioner, was resolved in petitioners' favor in Sprague v Farmers Ins Exch, 251 Mich App 260; 650 NW2d 374 (2002), lv den 469 Mich 914 (2003).
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reversed the decision of the Commissioner and held that the "Preferred Provider Option" was not authorized by law. The Court of Appeals affirmed the circuit court judgment, holding that respondents' PPO endorsement was inconsistent with the no-fault act and that the authority to issue the endorsement must emanate from the Legislature.4 We granted leave to appeal, directing the parties to address among the issues briefed whether petitioners had standing to challenge the Preferred Provider Option on behalf of appellants' insureds and chiropractic providers.5 II. Standard of Review Whether a party has standing is a question of law that we review de novo.6 Moreover, questions of justiciability implicate constitutional separation of powers principles.7 Constitutional questions are likewise reviewed de novo.8

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262 Mich App 228; 685 NW2d 428 (2004).
472 Mich 899 (2005).


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Nat'l Wildlife Federation v Cleveland Cliffs Iron Co, 471 Mich 608; 684 NW2d
800 (2004); Crawford v Dep't of Civil Service, 466 Mich 250; 645 NW2d 6
(2002); Lee v Macomb Co Bd of Comm'rs, 464 Mich 726; 629 NW2d 900 (2001).

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Nat'l Wildlife, supra; Lee, supra.
Wayne Co v Hathcock, 471 Mich 445; 684 NW2d 765 (2004).


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III. Analysis a. Justiciability Our tripartite system of government is constitutionally established in both our state and federal constitutions. US Const, art III,

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