Lubofsky v. Miyagi

Opinion

rDrDTflR COUPT

Cr RT 3

6 IN THE SUPERIOR COURT OF GUAM 7

8 DAVID LUBOFSKY and CRISTINE CIVIL CASE NO. CV055849 9 SIMBAHAN,

10 Plaintiffs, 11 vs. 12 DECISION AND ORDER SHISHIN MIYAGI, ETHAN SNIDER, 13 and SEVENTH-DAY ADVENTIST CLINIC and JOHN DOE INSURANCE 14 COMPANY, 15 Defendants, 16

17 INTRODUCTION 18 This matter comes before the Honorable Arthur R. Barcinas upon the Defendants’ 19 Motion for Stay Pending Arbitration filed May 28, 2019, and the Plaintiffs’ Motion for 20 Declaratory Judgment and Permanent Injunction filed December 2, 2019. Plaintiffs David 21 Lubofsky and Christine Simbahan (collectively, “the Plaintiffs”) are represented by Attorney 22 Robert L. Keogh. Defendants Shishin Miyagi, Ethan Snider, and Seventh-Day Adventist Clinic 23 (collectively, “the Defendants”) are represented by Attorney Mitchell F. Thompson. Having 24 reviewed the pleadings, legal authorities, and the parties’ arguments in this matter, the Court 25 issues the following Decision and Order. 26 BACKGROUND 27 This matter arises from a medical malpractice claim. On May 8, 2019, Plaintiffs filed 28 their Complaint, alleging the wrongful death of their five-year old son as a result of the Decision and Order . . Civil Case No. CV055$-19; Lubofsky, et at. v. Miyagi, et at.

i Defendant’s negligence while receiving medical treatment at Seventh-Day Adventist Clinic 2 (“the Clinic”). The Plaintiffs, consequently, seek damages and injunctive relief based on 3 professional negligence and medical malpractice on the part of the Defendants. Additionally, 4 the Plaintiffs, in their Complaint, seek to challenge the constitutionality and “organicity” of the 5 Medical Mandatory Arbitration Act (“MMMAA”). See 10 GCA § 10101, et seq. 6 On May 28, 2019, the Defendants filed a Motion to Stay, requesting that the Court stay

7 this action pending arbitration of the Plaintiffs’ claims pursuant to the MMMAA. Specifically, 8 the Defendants argue that the Plaintiffs’ claims based on alleged malpractice are subject to 9 mandatory arbitration and must be stayed. The Plaintiffs filed their Opposition on June 21,

10 2019. The Plaintiffs, on the other hand, assert inter atia that instead, it is the mandatory ii arbitration that should be stayed pending the resolution of their constitutional challenges to the 12 MMMAA. The Defendants, in their Motion and in their Reply filed July 8, 2018, argue that 13 Plaintiffs’ constitutional challenges to the M1MMAA are meritless and premature. 14 On October 21, 2019, the Court issued an Order scheduling a motion hearing on the

15 Plaintiffs’ constitutional challenges to the MMMAA. In response to the Court’s Order and in 16 preparation of the motion hearing, the Plaintiffs filed a Motion for Declaratory Judgment and

17 Permanent Injunction on December 2, 2019. In their motion, the Plaintiffs argue that the

18 MMMAA’s imposition of costly, forced, and unconsented arbitration as a precondition to their

19 access to the courts runs afoul of certain fundamental rights guaranteed by the United States 20 Constitution and the Organic Act of Guam. Specifically, the Plaintiffs assert that the MMMAA

21 violates their fundamental rights of access to the courts, due process, and equal protection. The

22 Defendants, on the other hand, filed their Opposition to the Plaintiffs’ Motion for Declaratory 23 Judgment on February 3, 2020. In their Opposition, the Defendants contend, inter alia, that the

24 Plaintiffs lack standing to challenge the constitutionality of the MMMAA, and that the

25 MMMAA is not unconstitutional. The Plaintiffs filed their Reply to the Defendants’ Opposition 26 on March 4, 2020. In short, the Plaintiffs request that the Court declare the MMMAA

27 unconstitutional for violating their fundamental rights of access to the courts, and that the Court

2$

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1 issue a permanent injunction prohibiting the imposition of the mandatory arbitration of their 2 medical malpractice claim against the Defendants for the wrongful death of their son. 3 On March 10, 2020, the Court heard arguments on both the Defendants’ Motion to Stay 4 and the Plaintiffs’ subsequent Motion for Declaratory Judgment. At the conclusion of the 5 hearing, the Court took both matters under advisement. 6 DISCUSSION 7 As a preliminary matter, the Court acknowledges that the Plaintiffs’ medical malpractice 8 claims fall under the MMMAA. The MMMAA defines “malpractice” as “any tort or breach of 9 contract based on health care or professional services rendered or which should have been 10 rendered by a health professional or health care institution to a patient.” 10 GCA § 10101(d). ii The first three causes of action in the Plaintiffs’ Complaint — wrongful death, negligent

12 infliction of emotional distress, and insurer’s liability — are based on alleged breaches of duty by

13 the Clinic and its healthcare providers. See Compl., ¶91 26-27, 35-36, 38, 40-4 1. Thus, because 14 the Plaintiffs’ first three causes of action pertain to medical malpractice, those causes of action 15 are subject to the MMMAA. 16 Under the MMMAA, a claimant asserting a medical malpractice claim must first 17 submit that claim to arbitration. See 10 GCA § 10102. The statute provides in relevant part: 18 Any claim that accrues or is being pursued in the territory of Guam, whether in tort, contract, or otherwise, shall be submitted to mandatory arbitration if it . . .

19 is a controversy between the patient, and the health professional or health . . .

20 care institution and is based on malpractice, tort, . . . or any other alleged . . .

violation of a legal duty incident to the acts of the health professional or health ‘1 = care institution, or incident to services rendered by health processional or . . .

22 health care institution.

23 Id. (emphasis added). Further, the MMMAA provides that a “party aggrieved by the alleged

24 failure . . . to arbitrate . . . may petition the Superior Court of Guam, for an order directing that

25 such arbitration proceed in the manner provided for in [the MMMAA].” 10 GCA § 10115

26 (alterations in the original). Once arbitration is completed and an award is issued, the Superior

27 Court may confirm, vacate, or modify that award, as well as hold a trial de novo on the

28 arbitrated claims upon a Notice of Appeal filed by either party. See 10 GCA § 10135-10139. In

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other words, under the MMMAA, medical malpractice claimants are required to first submit 2 their claims to arbitration prior to bringing a court action. See 10 GCA § 10102; see also 3 Villagomez-Palisson u. Super. Ct., 2004 Guam 13, ¶91 8-9, 34. Hence, under the MMMAA, if a 4 claimant fails to first arbitrate his or her medical malpractice claims, the Court does not have 5 subject matter jurisdiction to resolve such claims. Id. 6 On May 8, 2019, the same day the Plaintiffs filed and served the instant Complaint, the

7 Plaintiffs also served a Petition and Demand for Arbitration on the Defendants in compliance 8 with the MMMAA. The Plaintiffs however, maintain that arbitration of their medical 9 malpractice claims should be deferred pending resolution of the statutory challenges presented 10 in their Complaint. In addition to their tort claims, the Plaintiffs’ fourth and fifth causes of 11 action seek a declaratory judgment, as well as preliminary and permanent injunctive relief while 12 challenging the constitutionality and “organicity” of the MMMAA. See Compl., ¶91 10-12. In 13 their Complaint, Plaintiffs allege that the MMMAA is inorganic and unconstitutional because it 14 deprives them of their fundamental rights guaranteed under the Due Process, Equal Protection, 15 and Privileges and Immunities clauses of the Organic Act of Guam and the United States 16 Constitution by compelling them to first submit their claims to costly and burdensome 17 arbitration. Id. Specifically, the Plaintiffs maintain that by mandating arbitration first, the 18 MMMAA imposes excessively high costs on medical malpractice victims thereby causing a 19 legal impediment that obstructs meaningful access to the courts and justice. Thus, by

20 fragmenting their Complaint in distinct parts, the Plaintiffs assert that the Court has subject 21 matter jurisdiction to first decide the statutory challenges to the MMMAA presented in their

22 fourth and fifth causes of action. See Compl., ¶91 10-12.

23 In response, the Defendants argue that the Plaintiffs lack standing to assert any

24 constitutional challenge to the MMMAA because their purported injuries are, at this time,

25 hypothetical, abstract, and generalized. Further, the Defendants maintain that because the

26 Plaintiffs have not yet attempted to arbitrate their claims, their challenge to the MMMAA is

27 unripe. Thus, the Defendants assert that the Plaintiffs’ non-compliance with the mandates of the

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1 MMMAA is misguided, and the Plaintiffs should be compelled to arbitrate their claims pursuant 2 to Title 10 GCA § 10102. 3 Here, the first issue before the Court is whether the Plaintiffs have standing to challenge 4 the constitutionality of the MMMAA. If the Court determines that the Plaintiffs have standing 5 to pursue a constitutional challenge to the MMMAA, the Court will proceed with the applicable 6 constitutional analysis.

7 I. The Plaintiffs’ standing to challenge the constitutionality of the MMMAA. 8 “Standing is a threshold jurisdictional matter.” Gitam Image Consultants v. Guam 9 Mem’t Hosp. Auth., et al., 2004 Guam 15 ¶ 17 (citing Brewer v. Lewis, 989 F.2d 1021, 1025 10 (9th Cir. 1993)). Standing is a requirement of subject-matter jurisdiction that must be ii determined as of the date of filing of the complaint. Taitano v. Lujan, 2005 Guam 26 ¶ 15. The 12 Court has no subject-matter jurisdiction over a case when a party lacks standing, and must 13 dismiss the case. DFS Guam L.P. v. A.B. Won Pat Int’l Airport Auth., 2014 Guam 12 ¶ 14. A 14 plaintiff cannot rely on events unfolding after the filing of the complaint to establish standing. 15 Hemiani v. Meiwani, 2016 Guam 33 ¶ 17 (citing Wilbur v. Locke, 423 F.3d 1101, 1107 (9th 16 Cir. 2005)). 17 To establish standing, a party must show that it has suffered an “injury in fact,” which 18 is causally related to the conduct at issue, and redressable by a favorable decision from the 19 court. See Guam Mem’l Hosp. Auth. v. Super. Ct., 2012 Guam 17 ¶ 10; see also Benavente v. 20 Taitano, 2006 Guam 15, ¶ 14 (quoting the three-part test supplied by the United States 21 Supreme Court in Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)). In other 22 words, the Plaintiffs must show an actual or imminent injury that is traceable to the Defendants 23 and redressable by the Court. 24 For the purposes of standing, the Plaintiffs must demonstrate that they suffered an 25 “injury in fact” meaning, an invasion of a legally protected interest that is concrete and 26 particularized, as well as actual or imminent, and that is neither conjectural nor hypothetical. 27 Lujan, 504 U.S. at 560. Here, the Plaintiffs allege that the wrongful death of their five-year old 28 son was caused by the negligence of the Defendants. Under the MMMAA, the Plaintiffs are

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I statutorily mandated to engage in private arbitration which they allege they cannot afford. 2 Consequently, because the Plaintiffs cannot proceed to obtain direct judicial relief without 3 having first engaged in costly arbitration, the Plaintiffs argue that the MMMAA deprives them 4 of their right to pursue a claim against the Defendants for the wrongful death of their son. In 5 their Complaint, the Plaintiffs assert that they will suffer substantial and irreparable harm if 6 they are required to pursue mandatory arbitration first. Specifically, the Plaintiffs maintain that

7 the excessive financial burden imposed by the mandatory arbitration greatly disadvantages 8 individuals, such as the Plaintiffs, who are without substantial financial means. See Compl., ¶‘jI

9 45-46.

io The Defendants, on the other hand, note that the Plaintiffs are currently pursuing a

11 wrongful death claim against the Guam Memorial Hospital Authority (“GMHA”), which is not 12 affected by the MMMAA, in Civil Case No. CV1024-l9. See 10 GCA § 10144 (claims against

13 government providers are exempt from the MMMAA). Because the Plaintiffs are currently 14 pursuing a similar wrongful death case in CV 1024-19, the Defendants argue that the Plaintiffs

is have not been barred from seeking judicial relief and therefore, have not suffered an injury. 16 Thus, the Defendants assert that the Plaintiffs lack standing to claim that the MMMAA has

17 precluded them from bringing such action. The Court disagrees. The Court finds that the

18 Plaintiffs’ claims against GMHA and the claims against the Defendants in the instant case are

19 separate and distinct. The fact that the Plaintiffs initiated a separate cause of action against

20 GMHA does not negate the Plaintiffs’ causes of action against the Defendants for their

21 negligence in the present case.1

22 Nonetheless, the Court finds that the Plaintiffs have a legally protected interest to seek

23 redress from the court, and that the deprivation of this right constitutes an intangible harm

24 sufficiently concrete to satisfy the Court. See Spokeo, Inc. v. Robins, 136 S.Ct. 1540, 1549

25 (2016) (intangible harms such as the effects of defamation or the deprivation of rights could be

27 ‘Plaintiffs allege claims for wrongful death against GMHA, et al. under the Government Claims Act. See Lubofsky v. Guam Memoriat Hospital Auth., et at., Superior Court of Guam Civil Case No. CV1024—19 (“Amended 28 Complaint”).

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i concrete enough to be an injury in fact). Further, the Court finds that the Plaintiffs’ injury is 2 particularized as the Plaintiffs assert they do not have the financial means to engage in the 3 mandatory arbitration before the matter can brought to court. See Lujan, 504 U.S. at 575 (the 4 claimant must show that it has “sustained or is immediately in danger of sustaining a direct 5 injury as the result of that action is not sufficient that he has merely a general interest common 6 to all members of the public.”) (quoting Exparte Levitt, 302 U.S. 633, 634 (1937)). Finally, the 7 Court finds that the harm to the Plaintiffs is actual or imminent, and not conjectural or 8 hypothetical. Litjan, 504 U.S. at 560. As aforementioned, the Plaintiffs cannot proceed to 9 obtain judicial relief until they engage in the costly arbitration prerequisite mandated by the 10 MMMAA. The Plaintiffs have rights guaranteed by the Organic Act of Guam and the United ii States Constitution, the violation of which grants them the right to seek redress from the court. 12 Accordingly, for the reasons explained above, the Court finds that the Plaintiffs have

13 sufficiently established their standing to challenge the constitutionality of the MMMAA. Thus, 14 the Court has subject matter jurisdiction to decide the statutory challenges presented in the 15 Plaintiffs’ fourth and fifth causes of action. See Compl., ¶(j[ 10-12. 16 II. The Plaintiffs’ constitutional challenges to the MPVIMAA are ripe for review. 17 Inextricably linked with the concept of constitutional standing is the doctrine of

18 ripeness. See Renne v. Geary, 501 U.S. 312, 320 (1991) (“Justiciability concerns not only the 19 standing of litigants to assert particular claims, but also the appropriate timing of judicial 20 intervention.”); see also chandler v. State Farm Mat. Attto. Ins. Co., 598 F.3d 1115, 1121-22 21 (9th Cir. 2010) (“Standing addresses whether the plaintiff is the proper party to bring the 22 matter to the court for adjudication . . . ripeness is a means by which [courts] may dispose of

23 matters that are premature for review because the plaintiffs purported injury is too speculative 24 and may never occur.”). Inquiry into “ripeness asks whether the facts have developed 25 sufficiently so that an injury has occurred or is likely to occur, rather than being contingent or 26 remote.” Matter of Guardianship of Moylan, 201$ Guam 15 ¶ 7 (quoting Patterson v. Planned

27 Parenthood of Hous. & Se. Tex., Inc., 971 S.W.2d 439, 442 (Tex. 199$)); see also Immigrant 28 Assistance Project of Los Angeles Cty. Fed’n of Labor (AFL-CIO) v. I.N.S., 306 F.3d $42, $61

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1 (9th Cir. 2002) (“The ripeness question is whether the harm asserted has matured sufficiently 2 to warrant judicial intervention.”). A question or claim is fit for judicial review when “the 3 issues raised are primarily legal, do not require further factual development, and the challenged 4 action is final.” People v. Gay, 2007 Guam 11 ¶ $ (citing Verizon California Inc. v. Peevey, 5 413 F.3d 1069, 1075 (9th Cir. 2005). Conversely, “[a]n issue is not ‘fit’ for judicial review 6 when it involves ‘contingent future events that may not occur as anticipated, or indeed may not 7 occur at all.” Id. (citing United States v. Dibiase, 687 f.Supp. 38, 42 (D.Conn. 1998)); Texas

8 v. United States, 523 U.S. 296, 300 (199$). 9 Here, the Plaintiffs’ challenge to the constitutionality and “organicity” of the MMMAA

10 presents a purely legal issue and therefore, is ripe for review. See Territorial Prosecutor for 11 Territory of Guam v. Superior Court of Guam, No. CIV. 82-02 15, 1983 WL 30224, at*2 (D. 12 Guam App. Div. May 26, 1983) (“A constitutional challenge to a statute presents a ripe issue if 13 the issue is a purely legal one which further factual development will not render more 14 concrete.”) (citing Pac. Legal Found. v. State Energy Res. Conservation & Dev. Comm ‘ii, 659 15 f.2d 903, 915 (9th Cir. 1981)). The Court rejects the Defendants’ arguments that the Plaintiffs’ 16 constitutional challenges are unripe due to their alleged failure to establish an inability to afford 17 the arbitration costs, failure to minimize potential harm, or failure to initiate or attempt is arbitration under the MMMAA. In other words, the Defendants contend that because the 19 Plaintiffs have not even attempted to arbitrated their claims, the Plaintiffs cannot demonstrate 20 an injury or live controversy resulting from the MMMAA’s mandatory arbitration procedures. 21 The Defendants cite to Kennedy v. GentleCare Dental Associates, P.C. and Hugh Sitle, 22 Superior Court of Guam Civil Case No. CV0499-02, Decision and Order re Defendants’ 23 Motion to Compel Arbitration (Sept. 1, 1996), in both their Motion to Stay and their 24 Opposition to Plaintiffs’ Motion for Declaratory Judgment, to support their argument that the 25 Plaintiffs’ statutory challenges to the MMMAA are premature. In Kennedy, the plaintiff filed a 26 complaint in court for dental malpractice before first submitting the claims to arbitration. When 27 the defendant moved to compel arbitration under the MMMAA, the plaintiff argued that the 28 MMMAA was unconstitutional, on a number of grounds, due to the alleged excessive cost of

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i arbitration. The Kennedy court rejected the plaintiff’s constitutional challenges holding, inter 2 aiia, that the plaintiffs claim that the cost of arbitration was excessive was unripe. 3 Specifically, by not completing arbitration, the court held that the plaintiff had yet to incur the 4 harm of any fees or costs and thus, could not claim a denial of access to the courts, or any other 5 right, as a result of those fees. See Kennedy, sttpra, pp. 9-10. 6 The Court disagrees with the holding reached by the Kennedy court. As

7 aforementioned, “a constitutional challenge to a statute presents a ripe issue if the issue is a $ purely legal one which further factual development will not render more concrete.” Territorial

9 Prosecutor for Territory of Guam, supra; see, e.g., Shelter Framing Corp. v. Pension Benefit 10 Guaranty Corp., 705 F. 2d 1502, 1509 (9th Cir. 1983) rev’d on other grounds by Carpenters ii Pension Trust for Southern Calfomia v. Shelter Framing Corp., 467 U.S. 1257 (1984) (“the 12 arbitration requirement does not apply where the constitutionality of the statute . . . is at

13 issue.”); Central States, Southeast and Southwest Areas Pension Fttnd v. Johnco, Inc., 694 F. 14 Supp. 478, 48 1-82 (N.D. fll. 1988) (“Thus, necessarily, challenges to the constitutionality of 15 the MPPAA’s arbitration procedures will involve situations where the challenger has not 16 undergone arbitration.”) (citations omitted)).

17 Pursuant to the standards set forth above, the Court determines the Plaintiffs’

18 constitutional challenges to the MMMAA are ripe for review. first, an actual attempt by the

19 Plaintiffs to arbitrate would not further establish or develop the purely legal issue of whether

20 the MMMAA is unconstitutional or inorganic. Second, requiring the Plaintiffs to complete

21 arbitration before seeking judicial review would only inflict the harm and undue hardship the

22 Plaintiffs’ statutory challenge seeks to avoid. Because of the mandatory arbitration

23 prerequisite, the MMMAA, assuming arguendo, bars the Plaintiffs’ right to seek redress from

24 the courts. If the Plaintiffs cannot afford to initiate, let alone complete, arbitration, the

25 Plaintiffs’ constitutional challenges to the MMMAA would not come before this Court. Thus,

26 the Court finds that the issues appear sufficiently concrete and mature to warrant the exercise

27 of jurisdiction. See Territorial Prosecutor for Territory of Guam, supra. The Plaintiffs’

28 constitutional challenge to the MMMAA is therefore, ripe for adjudication.

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Accordingly, having found that the Plaintiffs have standing to challenge the 2 constitutionality of the MMMAA, and having determined the issues ripe for review, the Court 3 hereby DENIES the Defendants’ Motion for Stay Pending Arbitration insofar as it relates to 4 the Plaintiffs’ constitutional challenges to the MMMAA. The Court now turns its analysis to 5 the Plaintiffs’ Motion for Declaratory Judgment and Permanent Injunction. 6 III. Constitutionality of the MMMAA. 7 In their Complaint, the Plaintiffs allege that the MMMAA is inorganic and

8 unconstitutional because it deprives them of their fundamental rights guaranteed under the Due 9 Process, Equal Protection, and Privileges and Immunities clauses of the United States 10 Constitution and the Organic Act of Guam, by compelling them to first submit their claims to Ii costly and burdensome arbitration. Specifically, the Plaintiffs maintain that by mandating 12 arbitration first, the MMMAA imposes excessively high costs on medical malpractice victims, 13 causing a legal impediment that obstructs meaningful access to the courts and justice. further, 14 the Plaintiffs assert that because the MMMAA violates their fundamental right of access to the Is courts, strict judicial scrutiny applies. Thus, under a strict judicial scrutiny analysis, the 16 Plaintiffs posit that the MMMAA is unconstitutional. 17 The Defendants, on the other hand, maintain that the MMMAA does not affect a 18 fundamental right. Specifically, the Defendants assert that the Plaintiffs’ right to pursue a claim

19 for medical malpractice is not a fundamental interest. Therefore, the Defendants contend that

20 the Plaintiffs’ constitutional challenge to the MMMAA is instead subject to the rational basis

21 test. Under the rational basis test, the Defendants argue that the MMMAA is rationally related

22 to a legitimate government purpose and therefore, is valid. 23 As a preliminary matter, the Supreme Court of Guam has held that the constitutionality

24 of a statute must begin with the “general rule that legislative enactments are presumed to be

25 constitutional.” Underwood v. Guam Election comm’n, 2006 Guam 17 ¶ 51 (citing In re

26 Request of Governor Gutierrez, 2002 Guam 1 ¶ 41). “The Party challenging constitutionality of 27 a local law bears the burden of establishing its unconstitutionality.” Id. at ¶ 52. In Gutierrez,

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1 the Supreme Court of Guam provided the following guidance regarding the trial courts’ duties 2 and responsibilities when reviewing the constitutionality of a Legislative act:

[T]he validity of acts is to be upheld if at all possible with all doubt resolved in 4 favor of legality and unconstitutionality will be decreed only when no other reasonable alternative presents itself. However, it is the court’s duty to . . .

5 interpret the laws. Therefore, the court must declare a legislative enactment unconstitutional if an analysis of the constitutional claim compels such a result. 6 “[Tjhe fact that a given law or procedure is efficient, convenient, and useful in 7 facilitating functions of government, standing alone, will not save it if it is contrary to the Constitution.” I.N.S. v. Chadha, 462 U.S. 919, 944 (1983). $ In re Reqitest of Gutierrez, 2002 Guam 1 at ¶ 41 (citations omitted). Thus, with the foregoing 9 principles in mind, the Court will begin its analysis with determining the appropriate level of 10 scrutiny to apply — whether, the Plaintiffs’ constitutional challenges are subject to strict 11 scrutiny or rational basis review. Thereafter, the Court will analyze the Plaintiffs’ constitutional 12 challenges to the MMMAA under the applicable standard of review. 13 a. Applicable Standard of Review 14 Strict judicial scrutiny of a statute applies to those cases involving laws that operate to 15 the disadvantage of suspect classes or that impinge on fundamental rights and liberties 16 explicitly or implicitly protected by the Constitution. See San Antonio Indep. Sch. Dist. v. 17 Rodriguez, 411 U.S. 1, 17 (1973); see also Massachusetts 3d. of Ret. v. Mttrgia, 427 U.S. 307, 18 312 (1976) (“{E]qual protection analysis requires strict scrutiny of a legislative classification 19 only when the classification impermissibly interferes with the exercise of a fundamental right 20 or operates to the peculiar disadvantage of a suspect class.”). When no suspect class is involved 21 and no fundamental right is burdened, courts apply a rational basis test to determine the 22 constitutionality of a legislative classification. Kahawaiolaa v. Norton, 386 F.3d 1271, 1277-78 23 (9th Cir. 2004) (citing Olagues v. Russoniello, 770 F.2d 791, 802 (9th Cir. 1985). “The 24 conclusion of whether a governmental act is subject to strict scrutiny or rational basis 25 examination is important, as it often determines the outcome of the inquiry.” Id. at 1278 (citing 26 United States v. Durnas, 64 F.3d 1427, 1432 (9th Cir. 1995)). 27 Here, the Plaintiffs argue that the MMMAA’s mandatory imposition of costly, forced, 28 and burdensome arbitration infringes on their fundamental right of access to the courts

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i guaranteed by the Due Process, Equal Protection, and Privileges and Immunities clauses of the 2 Organic Act of Guam and the United States Constitution. Thus, the Plaintiffs argue that 3 because the MMMAA infringes on their fundamental right of access to the courts, it is subject 4 to strict judicial scrutiny. The Defendants however, contend that the MMMAA does not affect 5 a fundamental right and therefore, rational basis review applies. 6 A fundamental right is a personal right or liberty explicitly or implicitly protected by 7 the Constitution. See San Antonio hidep. Sch. Dist., 411 U.S. at 4. “[T]he right of access to the 8 courts is a fundamental right protected by the Constitution.” Ringgold-Lockhart ‘. County of

9 Los Angeles, 761 f.3d 1057, 1061 (9th Cir.2014) (quoting Delew v. Wagner, 143 f.3d 1219, io 1222 (9th Cir.1998)); see also Bounds v. Smith, 430 U.S. 817, 828 (1977), overruled in part by ii Lewis v. Casey, 518 U.S. 343 (1996) (acknowledging the fundamental right of access to the 12 courts as recognized in Bounds). The right of access to the courts is explicitly protected under 13 the First Amendment of the Constitution. U.S. Const. amend. I (“Congress shall make no law. 14 . . abridging . . . the right of the people . . . to petition the Government for a redress of

15 grievances.”). Guam’s Organic Act Bill of Rights, 48 U.S.C. § 1421b, also contains an 16 identical provision regarding the right to petition as the First Amendment. See 48 U.S.C. §

17 142 lb(a) (“No law shall be enacted in Guam. . . abridging. . . the right of the people. . . to

is petition the government for a redress of their grievances.”). The First Amendment “right of the

19 people . . . to petition the Government for a redress of grievances,” which secures the right to

20 access the courts, has been recognized as “one of the most precious of the liberties safeguarded 21 by the Bill of Rights.” Ringgold-Lockhart, 761 F.3d at 1061; see also Guam Greyhound, Inc. v.

22 Brizilt, 2008 Guam’Jt 15 (citing BE & K Constr. Co. ‘. N.L.R.B., 536 U.S. 516, 524-25 (2002)).

23 In addition to explicit protection under the first Amendment, the U.S. Supreme Court has also

24 recognized the right of access to the courts in the Privileges and Immunities clause, the Fifth

25 Amendment due process clause, and the Fourteenth Amendment equal protection clause. See

26 Christophyer v. Harbury, 536 U.S. 403, 415 n. 12 (2002); see also Tennessee v. Lane, 541 U.S. 27 509, 523 (1978) (citing Boddie v. Connecticut, 401 U.S. 371, 379 (1971) and M.L.B. v. S.L.

28 J., 519 U.S. 102, 117 (1996) (The Due Process Clause also requires the States to afford certain

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i civil litigants a “meaningful opportunity to be heard” by removing obstacles to their full 2 participation in judicial proceedings.). 3 The essence of the Plaintiffs’ constitutional challenge to the MMMAA involves the 4 right of access to the courts. Specifically, the Plaintiffs claim that the MMMAA’s mandatory 5 arbitration prerequisite foists an arduous expense upon medical malpractice victims, without 6 reasonable and affordable Options for alternative relief, thereby barring claimants that cannot

7 afford arbitration from seeking redress from the courts. Accordingly, since the Plaintiffs’ 8 constitutional challenge to the MMMAA involves the alleged interference with their 9 fundamental right of access to the courts, the Court will apply the strict scrutiny standard of 10 review. See San Antonio Indep. Sch. Dist., 411 U.S. at 17. To withstand strict scrutiny, a statute 11 must be precisely tailored to serve a compelling state interest. Plyler v. DOE, 457 U.S. 202, 12 217(1982).

13 The Defendants cite numerous cases in their Opposition in which the United States

14 Supreme Court rejected claims asserting that court filing fees were unconstitutional when the 15 claimants could not afford to pay such fees. See, e.g., M.L.B. v. S.L.J., 519 U.S. 102, 117 16 (1996); Boddie v. Connecticttt, 401 U.S. 371, 374 (1971); United States v. Kras, 409 U.S. 434,

17 444-45 (1973); Ortwein v. Schwab, 410 U.S. 656, 659 (1973). In those cases, however, the

18 U.S. Supreme Court, applying the rational basis test, rejected constitutional arguments 19 challenging the validity of a statute that did not affect a fundamental interest. See also Taylor v.

20 Delatoore, 281 F.3d 844 (9th Cir. 2002); Rodrigttez v. Cook, 169 F.3d 1176, 1180 (9th Cir. .21 1999). In this case, the Plaintiffs assert that the costly and burdensome arbitration mandated by 22 the MMMAA infringes on their right to free access to the courts. Because access to the courts 23 is a fundamental right, strict judicial scrutiny applies.

24 The Defendants also cite to cases wherein Federal Appellate Courts have applied the

25 rational basis review to constitutional challenges of state laws regulating certain medical

26 malpractice and tort claims. See, e.g., Smith v. Botsford Gen’i Hospital, 419 F.3d 513, 5 19-520

27 (6th Cir. 2005); Patton v. TIC United Corp., 77 F.3d 1235, 1247 (10th Cir. 1996); Hoffman v.

28 United States, 767 F.2d 1431, 1435-36 (9th Cir. 1987); Fitz v. Dolyak, 712 F.3d 330, 332 (8th

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1 Cir. 1983). In those cases, the courts held that the right to recover tort damages was not a 2 fundamental right. This matter however, is distinguishable from the aforementioned cases cited 3 by the Defendants. In those cases, the claimants challenged the constitutionality of certain 4 damages provisions regarding its applicability and restrictions. See, e.g., Watson v. Hortman, 5 844 F.Supp.2d 795, 800-801 (E.D. Tex. 2012) (“[T]he underlying right affected by the 6 legislation is the right to recover on a health care liability claim.”). Here, the Plaintiffs are not 7 asserting that the MMMAA explicitly excludes them from recovering damages, or that the 8 MMMAA impermissibly limits the amount of damages they could ultimately receive. Instead, 9 the Plaintiffs argue that the MMMAA’s mandatory arbitration provision imposes excessively 10 high costs on medical malpractice victims, causing a legal impediment that obstructs ii meaningful access to the courts and justice. In other words, the Plaintiffs assert that the 12 MMMAA’s mandatory arbitration provision infringes on their fundamental right of access to 13 the court. Again, because access to the courts is a fundamental right, strict judicial scrutiny 14 applies. 15 Finally, the Court notes a related decision issued by the Honorable Steven S. Unpingco

16 in Laguana v. Vitlagomez-Patisson, et at., Civil Case No. CV0557-02, filed in the Superior 17 Court of Guam on January 7, 2005. In that case, the Plaintiff similarly challenged the 18 MMMAA on the grounds that the mandatory arbitration provision violated equal protection

19 rights, the right to a jury trial, and the right of access to the courts. On remand, the court found

20 that the constitutional challenges did not involve fundamental rights and therefore, applied the 21 rational basis standard of review. Consequently, the Laguana court found that the MMMAA

22 was constitutional and “organic” facially and as applied. Here, the Court is not convinced that

23 the same standard should apply under these particular set of facts and arguments in this case.

24 As determined above, the right of access to the courts is a fundamental right protected by the

25 United States Constitution, as made applicable to Guam through the Organic Act. Because the

26 Plaintiffs argue that the MMMAA infringes on their fundamental right of access to the courts,

27 review is subject to strict judicial scrutiny - narrowly tailored to serve a compelling

28 government interest.

Page 14 of 20 Decision and Order Civil Case No. CV0558-19; Ltthofslcv, et at. v. Miyagi, et at.

b. The MMMAA does not violate Equal Protection, Due Process, or the Privileges and 2 Immunities clauses of the Organic Act of Guam and the United States Constitution.

3 The Organic Act of Guam guarantees substantive fundamental rights, i.e., the right to 4 petition the government for a redress of grievances; the right to equal protection of the laws; 5 the right to due process; and the protections afforded under the Fourteenth Amendment of the 6 United States Constitution to the extent that “[n]o state shall make or enforce any law which

7 shall abridge the privileges and immunities of citizens of the United States; nor shall any state 8 deprive any person of life, liberty, or property, without due process of law; nor deny to any 9 person within its jurisdiction the equal protection of the laws.” See 48 U.S.C. § 1421b(a)

10 (“access to the courts”), §1421b(e) (“due process”), §1421b(n) (“equal protection”), and ii §1421b(u); see also U.S. Const. amend. XIV. 12 In their Complaint, the Plaintiffs allege that the MMMAA is inorganic and

13 unconstitutional because it deprives them of their fundamental rights guaranteed under the Due 14 Process, Equal Protection, and the Privileges and Immunities clauses of the Organic Act of is Guam and the United States Constitution by compelling them to first submit their claims to 16 costly and burdensome arbitration. As determined above, the crux of the Plaintiffs’

17 constitutional challenge to the MMMAA is the infringement of their fundamental right of 18 access to the courts. The Plaintiffs maintain that by mandating arbitration first, the MMMAA

19 imposes excessively high costs on medical malpractice victims, causing a legal impediment

20 that obstructs meaningful access to the courts and justice. However, the Defendants,

21 erroneously applying the rational basis standard, contend that the MMMAA is rationally

22 related to a legitimate governmental purpose that is, providing greater access to medical

23 malpractice insurance for Guam providers and better healthcare for Guam residents.

24 Under strict judicial scrutiny, a law will be upheld if it is necessary to achieve a

25 compelling government purpose. See, e.g., Adarand Constrttctors v. Pena, 515 U.S. 200

26 (1995); Sugarman v. Dottgall, 413 U.S. 634 (1973); Sherbert v. Vemer, 374 U.S. 398 (1963). 27 Tn other words, the government’s purpose must be vital and the law must be necessary to

28 accomplishing that purpose. See, e.g., Wygant v. Jackson Bd. of Educ., 476 U.S. 267, 280

Page 15 of 20 Decision and Order e Civil Case No. CV0558-19; Lubofsky, et cii. v. Mivagi, et cii.

1 (1986) (“Under strict scrutiny the means chosen to accomplish the State’s asserted purpose 2 must be specifically and narrowly tailored to accomplish that purpose.”). further, the law must 3 be the least restrictive or least discriminatory alternative. If the law is not the least restrictive 4 alternative, then it is not necessary to accomplish the government’s purpose. See, e.g., Simon & 5 Schuster v. New York Crime Compensation 3d., 502 U.S. 105 (1991). Thus, a law will be 6 upheld as valid or constitutional only if such classifications are narrowly tailored to further 7 compelling government interests. See Grtttter v. Boltinger, 509 U.S. 306, 326 (2003); see also 8 Plyler, 457 U.S. at 217 (to withstand strict scrutiny a statute must be precisely tailored to serve 9 a compelling state interest). 10 Since the MMMAA was enacted in 1991, only once has the issue regarding the validity ii of the statutory scheme reached the Supreme Court of Guam. In Villagomez-Palisson v. 12 Sttperior Court, 2004 Guam 13, the Supreme Court of Guam upheld the validity of the statute, 13 finding that the MMMAA did not violate the separation of powers doctrine. The Guam 14 Supreme Court however, declined to address the issue regarding whether the provisions of the

15 MMMAA violated rights to a jury trial, access to the courts, due process, or equal protection. 16 See Villagomez-Patisson, supra at ¶ 32 (“[TJhe trial court did not decide the organicity of the ‘7 [MMMAA], facially or as applied, in relation to the various rights identified. .. . We decline to

18 address these arguments in this proceeding in the first instance.”).2 Thus, the issue of whether

19 the MMMAA is unconstitutional on other grounds other than separation of powers remains

20 unresolved. 21 In Villagomez-Patisson, the Supreme Court of Guam also interpreted the MMMAA and

22 found the legislative intent as follows:

23 [Title 10, Chapter 10] was passed as a result of the perceived problem associated 24 with the increase in the cost of malpractice insurance, and even its unavailability. The committee found that the island was faced with a dilemma due to the passing 25 on of high medical fees and costs to the consumer, as well as the increase in costs of medical care due in part to the tendency of physicians to practice “defensive

27 2 On remand, the trial court, applying the rational basis test, held that the MMMAA’s mandatory arbitration 28 provision was constitutional facially and as applied. See Laguana v. Viitagomez-Pauisson, et ai., Civil Case No. CV0557-02, stipra. Neither party appealed the decision.

Page 16 of 20 Decision and Order . Civil Case No. CV0558-19; Lubofsky, et cii. v. Mivagi, et at.

medicine” to avoid malpractice suits. The Guam Legislature apparently believed that the provisions of the [MMMAA] would remedy what it perceived as a crisis 2 situation in the area of medical malpractice. Id. at ¶ 29. After reviewing the language of the MMMAA, its predecessor P.L. 13-115, the holding in Awa v. Guam Memorial Hosp. Authority, 726 f.2d 594 (9th Cir. 1984) (striking down P.L. 13-115 as unconstitutional), and the Committee Report on Bill No. 325 (later

6 enacted as P.L. 21-043 (MMMAA)), it is clear that the MMMAA was intended to address the rising costs of malpractice insurance in Guam, and to help provide for the prompt, efficient,

8 and effective resolution of medical malpractice claims through arbitration as opposed to litigation. The Court finds that the need to keep medical insurance costs down, thereby

10 maintaining the availability of affordable health care, is a compelling government interest. See Villagomez-Palisson, 2004 Guam at ¶ 31; see also Awa v. Guam Memorial Hosp. Authority,

12 supra at 595. The Court now turns to whether the provision of the MMMAA are narrowly

13 tailored to further the Legislature’s purpose.

14 The MMMAA requires all medical malpractice claimants to first submit their claims to

15 mandatory arbitration with the American Arbitration Association (“AAA”), or other entity

16 organized to arbitrate disputes pursuant to the MMMAA. 10 GCA § 10102 and 10103. Once

17 arbitration has concluded, the arbitrators must promptly render an award. 10 GCA § 10132.

18 Thereafter, any party may move to confirm, vacate or modify the award in the Superior Court

of Guam. 10 GCA § 10135-37. Further, any party may also appeal the award and request for a

20 trial de novo in the Superior Court of Guam. 10 GCA § 10139. If a party chooses to appeal the

21 arbitration award, he or she must improve the award by forty percent (40%) or more otherwise

22 that party will be subject to harsh sanctions including costs, fees, attorney’s fees, and costs of

23 jurors. l0GCA 10143.

24 The Court acknowledges the obstacles and hurdles the MMMAA has created for

25 medical malpractice claimants. First, the MMMAA imposes a prohibitively expensive private

26 arbitration prerequisite on medical malpractice claimants thereby barring them from obtaining

27 direct access to the courts for redress of their claims. Although the MMMAA, on its face,

28 allows a claimant to appeal an award and request for a trial de novo, claimants can only access

Page 17 of2O Decision and Order Civil Case No. CV0558-19; Lubofsky, et al. v. Miyagi, et al.

i the courts after they have completed and incurred the high cost of private arbitration. Second, 2 other than the AAA, there is no other entity that has been organized under the MMMAA to

3 provide an alternative forum of dispute resolution. Thus, pursuant to 10 GCA § 10101(a), the 4 AAA must be the entity that arbitrates medical malpractice disputes in order for the arbitration 5 to comply with the MMMAA mandates. Arbitration in a different forum (e.g., Dispute 6 Prevention and Resolution located in Hawaii (“DPR”) and Pacific Arbitration and Mediation 7 Services (PAMS)), will not, under the MMMAA, allow the courts to ultimately review the

8 dispute. Finally, while some or all of the filing fees of the AAA can be deferred upon a 9 showing of financial hardship, at least half of the administrative costs, as well as the 10 arbitrators’ fees, must be paid in advance. See 10 GCA § 10107 (administrative costs shall be ii equally shared by the parties subject to an award of costs by the panel); see also 10 GCA § 12 10108 (the act requires a panel of three arbitrators). 13 Here, the Plaintiffs maintain that they are unable to afford private arbitration mandated 14 by the MMMAA. Under the MMMAA, the Plaintiffs must first submit their medical 15 malpractice claims to a panel of three arbitrators from the AAA. The Plaintiffs claim $11

16 million in damages. According to the AAA’s fee schedule, the Plaintiff must front

17 approximately $11,000.00 in fees in order to initiate the arbitration process. See 18 Commercial Arbitration Rules and Mediation Procedures, Administrative Fee Schedules,

19 available at https ://adr.org/sites/defaultlfiles/Commercial_Arbitration_Fee_Schedule_ 1 .pdf.

20 These fees are non-refundable and are not used to cover any other expenses of arbitration. Id.

21 (Refunds will not be made once an arbitrator has been appointed, or if a case is not settled or

22 withdrawn before an arbitrator is appointed). While the arbitration panel may, in its discretion, 23 order the Defendants to pay some or all of the filing fees if the Plaintiffs prevail, the Plaintiffs

24 must still pay the initial filing fee which they claim they cannot afford. Further, even if the

25 Plaintiffs managed to initiate and complete arbitration, the MMMAA imposes a penalty upon a

26 party if that party fails to improve the arbitration award by at least 40% upon a trial de nova on

27 appeal. See 10 GCA § 10142-43. Typically, medical malpractice victims, such as the

28 Plaintiffs, have high debts due to medical bills or low income as a result of their medical

Page 18 of2O Decision and Order Civil Case No. CV0558-19; Ltthofskv, et al. v. Miyagi, eta!.

i injuries and thus, are unlikely to be able to afford the high initial costs of private arbitration 2 mandated by MMMAA. Therefore, it is substantially certain that if a claimant cannot afford to 3 complete arbitration under the MMMAA, they may never have the chance to resolve their 4 disputes in court. In other words, the MMMAA’s statutory scheme, as currently written, 5 deprives medical malpractice claimants who cannot afford the high costs associated with 6 private arbitration with a remedy or any reasonable options for relief to adjudicate their claims.

7 The Court recognizes the imminent and irreparable harm, albeit primarily economic, $ the Plaintiffs may sustain by being denied access to the courts in this instance. However, 9 having thoroughly considered the arguments, and reviewed the pertinent legal authorities, the

10 Court finds the evidence presented insufficient to overcome the standard imposed under a strict ii judicial scrutiny analysis. As aforementioned, the Legislature’s purpose of keeping medical 12 malpractice insurance premiums low for Guam providers, thereby resulting in affordable and 13 accessible healthcare for the people of Guam, is a compelling government interest. However, 14 the Court cannot conclude, based on the facts presented, that the MMMAA was izot narrowly

15 tailored to accomplish that purpose. Although the MMMAA places a burden of keeping 16 malpractice insurance premiums low and maintaining affordable healthcare on one small and

17 vulnerable sector of society, namely non-wealthy victims of medical malpractice, the Court

18 cannot conclude, with the facts before it, that the MMMAA is not the least restrictive

19 alternative necessary to accomplish the Legislature’s purpose.

20 Thus, based on the foregoing, the Court finds the MMMAA constitutional and organic,

21 both facially and as applied, and that it does not violate the fundamental right of access to the

22 courts guaranteed under the Due Process, Equal Protection, and Privileges and Immunities

23 clauses of the Organic Act of Guam and the United States Constitution. Accordingly, the

24 Plaintiffs’ Motion for Declaratory Judgment and Permanent Injunction is DENIED.

25 CONCLUSION

26 For the reasons set forth above, the Court finds that the Plaintiffs have standing to

27 challenge the constitutionality of the MMMAA, and having determined the issues ripe for

2$ review, DENIES the Defendants’ Motion for Stay Pending Arbitration insofar as it relates to

Page 19 of2O Decision and Order . . Civil Case No. CV0558-19; LtthoJslcy, et at. e. Miyagi, et at.

i the Plaintiffs’ constitutional challenges to the MMMAA. Consequently, applying the strict 2 scrutiny analysis above, the Court finds the MMMAA constitutional and organic both facially 3 and as applied. Accordingly, the Plaintiffs’ Motion for Declaratory Judgment and Permanent 4 Injunction is DENIED. 5 Finally, because the Defendants have also moved alternatively for a stay pending 6 arbitration, pursuant to 10 GCA § 10114, the Court hereby STAYS these proceedings until 7 arbitration is conducted and completed in accordance with the MMMAA. 8

9 IT IS SO ORDERED JtL 30 10

HONORABLE ARTHUR R. BARCINAS 15 Judge, Superior Court of Guam

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