The Idaho Supreme Court has delivered a major ruling affirming the constitutionality of the Idaho Patient Act (IPA), a state law designed to regulate how healthcare providers collect debts from patients. The decision sides against Ridgeline Medical, LLC, which had challenged the law on multiple grounds, including violations of the First and Fourteenth Amendments of the U.S. Constitution.
The case originated from a simple billing dispute: Ridgeline Medical sued David Lyon for $777 in outstanding medical fees. Lyon countered, arguing that Ridgeline could not legally pursue the debt because it had failed to follow the strict procedural requirements laid out in the IPA before filing suit.
The Long Road Through the Courts
The legal battle has been complex, involving multiple court levels and shifting constitutional arguments. Initially, a magistrate judge sided partly with Ridgeline, striking down certain IPA provisions as unconstitutional. However, after the Idaho Attorney General intervened to defend the law, the magistrate judge reversed course, found the IPA constitutional, dismissed Ridgeline’s collection suit due to non-compliance, and awarded Lyon statutory penalties under the Act.
Ridgeline appealed this decision to the District Court, which affirmed the magistrate judge’s final ruling. Now, on appeal to the Idaho Supreme Court, Ridgeline reasserted its challenges, claiming the IPA unconstitutionally restricts its rights to free speech, petition, and due process, and imposes unreasonable penalties.
The Supreme Court, however, affirmed the lower courts’ decisions across the board, concluding that the challenged provisions of the IPA survive constitutional scrutiny.
Commercial Speech vs. Free Speech
One of Ridgeline’s central arguments centered on the First Amendment’s protection of free speech. Ridgeline contended that the IPA provisions—which delay a provider’s ability to report a patient’s debt to a credit bureau until certain billing prerequisites are met—are an overbroad restriction on speech.
Justice Zahn, writing for the Court, determined that the speech in question—reporting an unpaid debt to a consumer reporting agency—is commercial speech, not core noncommercial speech. The Court reasoned that this communication is purely economic, relating solely to the provider’s financial interest in a completed transaction, and does not address a matter of public concern.
Because the speech is commercial, the Court applied intermediate scrutiny (the *Central Hudson* test) rather than the stricter standard Ridgeline sought.
The Court found the IPA satisfied all four prongs of the *Central Hudson* test:
1. The speech involves lawful activity (reporting an accurate, existing debt).
2. The State has a substantial interest in minimizing abusive medical debt collection practices.
3. The IPA directly advances this interest by giving patients notice before credit scores are affected.
4. The regulation is a reasonable fit, as it only delays, rather than permanently prohibits, reporting the debt.
Notably, the Court corrected a technical error made by the magistrate judge regarding the first prong of the *Central Hudson* test, clarifying that the test assesses the *subject matter* of the speech, not whether the regulation itself makes the speech unlawful. However, since the IPA passed the remaining three prongs, the overall free speech challenge failed.
Right to Petition and Access to Courts
Ridgeline also argued that the IPA infringes upon its First Amendment right to petition, claiming that the procedural prerequisites for filing a lawsuit (which result in loss of attorney fees or statutory penalties for non-compliance) burden its access to courts.
The Court made clear that the First Amendment right to petition regarding court access is functionally the same as the right guaranteed under the Fourteenth Amendment. To prove a violation, Ridgeline needed to show that the IPA prevented it from bringing an underlying cause of action entirely.
The Court found this was not the case. The IPA does not prohibit Ridgeline from suing Lyon for the $777 debt; it simply imposes conditions on recovering costs or avoiding penalties if the lawsuit is filed prematurely. Citing precedent where residency requirements for divorce or notice requirements for tort claims against the state were upheld, the Supreme Court concluded that reasonable procedural prerequisites do not equate to a total deprivation of the right to access the courts.
Similarly, the Court dismissed Ridgeline’s claim regarding a separate “pre-petitioning” right, noting that the IPA does not stop Ridgeline from sending its own demand letters or hiring counsel; it only regulates when a debt can be *sold or assigned* to a third-party collector.
Due Process and Excessive Fines
Ridgeline’s remaining constitutional challenges—concerning Equal Protection, Procedural Due Process, and Substantive Due Process (including the Eighth Amendment’s excessive fines clause)—were all dismissed based on the failure of the underlying First Amendment claims.
Because the IPA did not restrict a fundamental right (speech or petition), the Equal Protection claim was subject only to rational basis review, which the Court found the IPA easily satisfied. Likewise, the Procedural Due Process claim failed because Ridgeline could not establish the deprivation of a protected liberty interest once its First Amendment rights were deemed uninfringed.
Regarding the Substantive Due Process challenge to the statutory damages (the greater of three times the actual damages or $3,000), the Court found Ridgeline offered no evidence that the penalty was “obviously unreasonable.” Given the State’s interest in preventing abusive medical billing, the $3,000 penalty was deemed a permissible legislative deterrent.
Attorney Fees Denied
Finally, neither party was awarded attorney fees on appeal. Ridgeline, as the losing appellant, could not claim fees as the prevailing party. Lyon, despite winning at the intermediate level, could not claim fees under the IPA section provided, as the appeal centered on the law’s constitutionality rather than the enforcement of a liability under the Act itself.
The Idaho Supreme Court affirmed the intermediate appellate decision, meaning Ridgeline’s lawsuit against Lyon remains dismissed due to non-compliance with the Idaho Patient Act.