ORDERS:
ORDER AND DECISION
STATEMENT OF THE CASE
This matter came before me pursuant to Petitioner's motion for a temporary injunction and
request for a contested case hearing. The South Carolina Department of Insurance opposed
Petitioner's request and filed motions to dismiss predicated upon a lack of subject matter
jurisdiction.
A hearing was held before me on September 13, 1996 at the offices of the Administrative Law
Judge Division (Division) Columbia, South Carolina on the issues of the subject matter
jurisdiction of this Division and the temporary injunctive relief sought by the Petitioner. Present
at the hearing were Linda A. Garrett, Esquire, representing the Petitioner and Gwendolyn L.
Fuller, Esquire, representing the Respondent.
After carefully considering the arguments of counsel and the applicable statutory and case law, I
find that the Division lacks subject matter jurisdiction over this action because it does not present
a justiciable controversy. Accordingly, this case is dismissed for lack of subject matter
jurisdiction.
I. DISCUSSION
A threshold determination which must be made in every case is whether a court has subject matter
jurisdiction over the matter in question. Issues relating to subject matter jurisdiction may be
raised at any time, cannot be waived by consent of the parties, and should be considered by the
court on its own motion. See, e.g., Johnson v. State, _____S.C. _____, 459 S.E.2d 840 (1995).
In this case, an examination of the relevant statutory provisions leads inexorably to the conclusion
that the Division lacks subject matter jurisdiction.
This case arose from the Petitioner's request that it be declared a provider within the meaning of
S.C. Code Ann. § 38-33-10(2) (Supp. 1995), and that the Respondent be enjoined from
enforcing the requirements of § 38-33-130. Section 38-33-130 requires that "each health
maintenance organization shall require every provider who participates in the health maintenance
organization and furnishes health care services to the health maintenance organization's enrollees
to execute an agreement not to bill the enrollee or otherwise hold the enrollee financially
responsible for services rendered. The provider's agreement must be given on forms prescribed or
approved by the director or his designee, shall extend to all services furnished to the enrollee
during the time he was enrolled in the health maintenance organization, and shall apply even
where the provider has not been paid by the health maintenance organization" S.C. Code Ann.
§38-33-130(B) (Supp. 1995). Petitioner seeks to be declared a provider so that it may execute
one hold harmless agreement on behalf of all the doctors associated with it. The Department
transmitted Petitioner's request for a hearing, and subsequently filed motions to dismiss for lack of
subject matter jurisdiction.
II. Jurisdiction of the Administrative Law Judge Division
The jurisdiction of the Division includes contested cases, appeals, and hearings on proposed
regulations. S.C. Code Ann. § 1-23-600(B) provides that an Administrative Law Judge (ALJ)
shall preside over all contested case hearings as defined in S.C. Code Ann. § 1-23-310 (Supp.
1995) where such hearings involve an executive branch department and where a single hearing
officer is authorized or permitted by law or regulation to hear and decide such cases. Appellate
jurisdiction is conferred in S.C. Code Ann. § 1-23-600(D). The Division's jurisdiction to conduct
hearings on proposed regulations is provided in S.C. Code §§ 1-23-111 and 1-23-130 (Supp.
1995).
The contested case and appellate jurisdiction of the Division and of an ALJ is not granted solely
by the general jurisdictional provisions of S.C. Code Ann. § 1-23-600. Section 1-23-600(B)
provides that statutes may specifically assign jurisdiction to the Division. The Code is replete
with examples of specific grants of jurisdiction. Since the Division's jurisdiction is not limited to
that provided in its enabling legislation, all statutes relevant to each particular case must be
considered in making a final determination as to jurisdiction. In reviewing the statutes pertinent
to this matter, it is clear that no justiciable controversy has been presented for this Division's
determination.
A. Dismissal is appropriate because this matter does not present a justiciable controversy.
The jurisdiction of all judicial and quasi-judicial tribunals is limited to matters which are justiciable
in nature. A justiciable controversy is a real and substantial controversy which is ripe and
appropriate for judicial determination, as distinguished from one which is hypothetical, abstract or
contingent. See Treasured Arts, Inc. v. Watson, ___ S.C. ___, 463 S.E.2d 90 (1995). This
matter does not present a justiciable controversy.
1. Petitioner lacks standing to challenge the Department's enforcement of § 38-33-130 (Supp.
1995).
In order to establish standing, three elements must be established. First, the party must have
suffered an injury in fact---an invasion of a legally protected interest which is (a) concrete and
particularized and (b) actual or imminent, not conjectural or hypothetical. Second, there must be
a causal connection between the injury and the conduct complained of---the injury has to be fairly
traceable to the challenged action of the adverse party and not the result of independent action of
some third party not before the court. Third, it must be likely as opposed to merely speculative,
that the injury will be redressed by a favorable decision. See Lujan v. Defenders of Wildlife, 504
U.S. 555, 112 S.Ct. 2130, 2136, 119 L.Ed.2d 351 (1992); Chambers Medical Technologies of
S.C. v. Bryant, 52 F.3d 1252 (4th Cir. 1995). Petitioner does not satisfy any of the requirements
required to establish standing.
Petitioner did not establish at the hearing that any administrative disciplinary action has been taken
or been threatened by the Respondent against the Petitioner. Thus, the Petitioner has not
demonstrated an injury in fact or invasion of its own legally protected interest. An agency must
have jurisdiction over an entity before it is authorized to take administrative disciplinary action.
Inasmuch as the Petitioner is not engaged in the business of insurance in this State, the
Respondent does not exercise jurisdiction over it and is unable to impose or threaten
administrative disciplinary action against it. The only possible action the Respondent could take
would be against an HMO, the entity over which it has regulatory authority. Petitioner cannot
properly assert the HMO's legal rights.
Standing to prosecute an action requires that a party must have a personal stake in the subject
matter of the lawsuit. In this action, Petitioner challenges the Department's enforcement of §
38-33-130 which applies to health maintenance organizations. According to the evidence adduced
at the hearing, Petitioner is not licensed as an HMO in South Carolina and is not engaged in the
transaction of the business of insurance. Although it may have some general economic interest in
the statutes which apply to HMOs, that interest is not of such a personal nature as to satisfy the
requirements for standing.
Rule 17 of the South Carolina Rules of Civil Procedure requires that actions be prosecuted in the
name of the real party in interest. See S.C.R.C.P. Rule 17. According to South Carolina law, a
party must be the real party in interest in order to have standing to sue. See Town of Sullivan's
Island v. Felger, ___ S.C. ___, 457 S.E.2d 626, 629 (Ct. App. 1995); Bailey v. Bailey, ___ S.C.
___, 441 S.E.2d 325, 327 (1994); WeSav Financial Corp. v. Lingefelt, ___ S.C. ___, 450 S.E.2d
580, 582 (1994); Dockside Ass'n, Inc. v. Detyens, Simmons, 285 S.C. 565, 330 S.E.2d 537 (Ct.
App. 1985). Petitioner is not the real party in interest; consequently, it lacks standing to challenge
this requirement.
Because the Petitioner lacks standing to bring this action, the petition fails to present a justiciable
controversy and Petitioner is not entitled to the declaratory or injunctive relief sought.
Accordingly, this action must be dismissed.
ORDER
For all the foregoing reasons, it is hereby:
ORDERED, ADJUDGED, AND DECREED that this action is dismissed for lack of subject
matter jurisdiction and,
IT IS SO ORDERED.
_______________________________________
Marvin F. Kittrell
Chief Administrative Law Judge
Columbia, South Carolina
September ____, 1996. |
