The opinion of the court was delivered by: Simandle, District Judge
HONORABLE JEROME B. SIMANDLE
This case involves a federal constitutional challenge to recently promulgated regulations governing the medical insurance benefits available to automobile accident victims under New Jersey's newly reformed no-fault automobile insurance law. Presently before the court are defendants' motions to dismiss plaintiffs' First Amended Complaint for lack of subject matter jurisdiction and/or for failure to state a claim upon which relief can be granted, pursuant to Federal Rule of Civil Procedure 12(b)(1) and/or (6), and/or to dismiss the First Amended Complaint under a variety of abstention doctrines.
Because the court finds that plaintiffs have adequately invoked the jurisdiction of this court by asserting claims for alleged violations of the due process and equal protection clauses of the Fourteenth Amendment and that plaintiffs have standing, the court denies defendants' motions to dismiss for lack of subject matter jurisdiction and lack of standing. However, because the court finds that timely and adequate state court review of the challenged regulations is available to plaintiffs, and that federal judicial review of the challenged regulations of the state regulatory agency may disrupt New Jersey's attempt to ensure a coherent policy in its treatment of the substantial local problem of automobile insurance reform, the court dismisses plaintiffs' First Amended Complaint under the Burford abstention doctrine. For the reasons that follow, it is apparent that the Appellate Division of the Superior Court of New Jersey is the appropriate forum for adjudicating these issues.
Plaintiffs in this matter are professional organizations that represent chiropractors and/or individual chiropractors who practice in New Jersey. *fn1 They challenge the constitutionality of certain regulations *fn2 recently promulgated by defendant Jaynee LaVecchia, Commissioner of the Department of Banking and Insurance ("DOBI"),("the Commissioner"), pursuant to authority granted to her by the Automobile Insurance Cost Reduction Act ("AICRA"), P.L. 1998, Chapters 21 and 22, codified at N.J.S.A. 39:6A-1.1 (1998 N.J. Sess. Laws Vol. 2). *fn3
The Legislature of the State of New Jersey enacted AICRA on May 19, 1998 in an effort to create a comprehensive scheme to reform private passenger automobile insurance in New Jersey. The Legislature's primary goal in enacting AICRA was to reduce the high cost of automobile insurance in New Jersey. See generally N.J.S.A. 39:6A-1.1. The Legislature attempted to achieve this goal by, among other things, revising the state's method of providing first-party no-fault insurance personal injury protection ("PIP") benefits to victims of automobile accidents. To that end, AICRA provides, in pertinent part, that:
Benefits provided under basic coverage shall be in accordance with a benefit plan provided in the policy and approved by the commissioner. The policy form, which shall be subject to the approval of the commissioner, shall set forth the benefits provided under the policy, including eligible medical treatments diagnostic tests and services as well as such other benefits as the policy may provide. The commissioner shall set forth by regulation a statement of the basic benefits which shall be included in the policy. Medical treatments, diagnostic tests, and services provided by the policy shall be rendered in accordance with commonly accepted protocols and professional standards and practices which are commonly accepted as being beneficial for the treatment of the covered injury. Protocols and professional standards and practices which are deemed to be commonly accepted pursuant to this section shall be those recognized by national standard setting organizations, national or state professional organizations of the same discipline as the treating provider, or those designated or approved by the commissioner in consultation with the professional licensing boards in the Division of Consumer Affairs in the Department of Law and Public Safety. The commissioner, in consultation with the Commissioner of the Department of Health and Senior Services and the applicable licensing boards, may reject the use of protocols, standards and practices or lists of diagnostic tests set by any organization deemed not to have standing or general recognition by the provider community or the applicable licensing boards. Protocols shall be deemed to establish guidelines as to standard appropriate treatment and diagnostic tests for injuries sustained in automobile accidents, but the establishment of standard treatment protocols or protocols for the administration of diagnostic tests shall not be interpreted in a such a manner as to preclude variance from the standard when warranted by reason of medical necessity.
N.J.S.A. 39:6A-3.1(4)(a). AICRA defines "medically necessary" as follows: "Medically necessary" means that the treatment is consistent with
the symptoms or diagnosis, and treatment of the injury (1) is not primarily for the convenience of the injured person or provider, (2) is the most appropriate standard or level or service which is in accordance with standards of good practice and standard professional treatment protocols, as such protocols may be recognized and designated by the Commissioner of Banking and Insurance, in consultation with the Commissioner of Health and Senior Services or with a professional licensing or certifying board in the Division of Consumer Affairs in the Department of Law and Public Safety, or by a nationally recognized professional organization, and (3) does not involve unnecessary diagnostic testing.
AICRA authorized the Commissioner to "enlist the services of a benefit consultant in establishing the basic benefits level" of coverage. N.J.S.A. 39:6A-3.1(4)(a).
Accordingly, the Commissioner retained the firm of PriceWaterhouseCoopers ("PWC") to assist DOBI in carrying out the Legislature's directive to determine and establish protocols and standard treatments and practices for specified diagnosed injuries.
On September 8, 1998, the Commissioner published the proposed regulations DOBI developed in conjunction with PWC pursuant to the authority granted by AICRA. See 30 N.J.R. 3211. The Commissioner also extended the public comment period from October 8, 1998 through November 4, 1998, and held a public hearing on November 4, 1998. See 30 N.J.R. 3748(a). After making certain minor changes to the original proposed regulations, the Commissioner signed the regulations for adoption on November 30, 1998. See 30 N.J.R. 4401(a). The regulations became effective on December 21, 1998 and will become operative on March 22, 1999. See id.
The primary feature of the regulations is the creation of six so-called "care paths" that designate the appropriate treatment for certain particularized back injuries. See N.J.A.C. 11:3-4. The regulations also provide a system for resolving disputes about the medical necessity of care that deviates or exceeds the type or degree of care designated in the six care paths, culminating in arbitration. See N.J.A.C. 11:3-5.
On November 4, 1998, plaintiff Chiropractic America commenced this action by filing a Complaint challenging the constitutionality of the regulations. On January 12, 1999, Chiropractic America and the other plaintiffs filed a First Amended Complaint. Plaintiffs allege that three of the six care paths (care path 2: cervical spine herniated disc/radiculopathy; care path 4: thoracic spine herniated disc/radiculopathy; and care path 6: lumbar spine herniated disc/radiculopathy) completely eliminate the availability of reimbursable chiropractic care for automobile accident victims, while the remaining three care paths (care path 1: cervical spine strain/sprain/ contusion whiplash of the neck; care path 3: thoracic spine strain/sprain/contusion of the upper back; and care path 5: lumbar sacral spine strain/sprain/contusion) restrict the number of chiropractic care visits available without pre-approval from the insurer to twelve in the first month. See First Amended Complaint at ¶¶ 26-26, 30-31. Plaintiffs claim that the care paths "are inconsistent with the standard of chiropractic care in the State of New Jersey" and "are arbitrary and capricious and violate federal substantive due process principles." Id. at ¶ 37. Furthermore, plaintiffs claim that the arbitration provisions of the regulations are designed in such a way as to make it all but impossible for an insured or a medical provider to successfully challenge an insurer's refusal to approve care that deviates from or exceeds the care paths. Id. at ¶¶ 52-59. Thus, plaintiffs claim that they "will surely be placed in the intolerable position of choosing between providing necessary care without compensation, or substandard care mandated by the care paths." Id. at ¶ 60.
In the First Count of the First Amended Complaint, plaintiffs seek a declaratory judgment "that the regulations violate the substantive due process rights of chiropractors and their patients" because "the care paths and the arbitration provisions are unreasonable and capricious and do not bear a rational relationship to the legitimate aim of the enabling legislation" and because they "appear to be targeted at restricting chiropractic care to accident victims" and "manifest a bias and bad faith towards chiropractors and accident victims who opt to undergo chiropractic care." Id. at ¶ 64. Plaintiffs also allege that "[t]he elimination of chiropractic care for auto accident victims with herniated discs or radiculopathy [care paths 2, 4 and 6] is an irrational and arbitrary restriction on the ability of chiropractors to perform chiropractic services within the scope of chiropractic practice in the State of New Jersey" in violation of their substantive due process and equal protection rights. Id. at ¶ 65.
In the Second Count of the First Amended Complaint, plaintiffs "seek a declaration that the arbitration provisions contained in the proposed regulations violate the procedural due process rights of chiropractors and their patients in that they deny health care practitioners any practical right to contest the medical treatment judgments of the PIP carriers." Id. at ¶ 71.
In the Third Count of the First Amended Complaint, plaintiffs seek a permanent injunction banning the implementation of the regulations as they pertain to chiropractors. Id. at ¶ 73.
In addition to this federal action, plaintiffs have filed a notice of appeal challenging the regulations in the Superior Court of New Jersey, Appellate Division, pursuant to Rule 2:2-3(a)(2). The state court appeal filed by plaintiffs is one of four appeals challenging the regulations that are currently pending in the Appellate Division, the others having been filed by the Association of Lawyers of America - New Jersey, which filed two appeals, and a consortium of health care providers including the New Jersey Coalition of Health Care Professionals, Inc., ...