2005-170, VENISE THERESA GONYA & a. v. COMMISSIONER, NH INSURANCE DEPARTMENT

represents the estate of a deceased tort claimant. Among the defendants in the The record reflects the following undisputed facts. Each petitioner

enforcement. We affirm. petition to declare RSA 402-C:40, I (1998) unconstitutional and enjoin its Scaife, appeal an order of the Superior Court (McGuire, J.) denying their DUGGAN, J. The petitioners, Venise Theresa Gonya and Roxane S.

for the respondent. attorney general, on the brief, and J. Christopher Marshall, attorney, orally), Kelly A. Ayotte, attorney general (Suzanne M. Gorman, senior assistant

and Stephen Blackburn on the brief, and Mr. Rich orally), for the petitioners. A. Lemire on the brief), and Baron & Budd, P.C., of Dallas, Texas (Alan Rich Errors may be reported by E-mail at the following address: Watson & Lemire, P.A., of Portsmouth (Thomas R. Watson and Jennifer

page is: http://www.courts.state.nh.us/supreme. v.

errors in order that corrections may be made before the opinion goes to press. No. 2005-170 Hampshire, One Noble Drive, Concord, New Hampshire 03301, of any editorial Merrimack Readers are requested to notify the Reporter, Supreme Court of New ___________________________

a.m. on the morning of their release. The direct address of the court's home reporter@courts.state.nh.us. Opinions are available on the Internet by 9:00

well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule 22 as reasoned, intelligent and voluntary choice.”

p. 2 insured without allowing them “to obtain enough information to make a

and denied the petitioners’ cross-motion.

actionable injuries, infringing upon the claimant’s constitutional right to the redress of his relinquishment of that claimant’s cause of action against the insured, thus

filing a claim in liquidation and pursuing their cause of action against the rights of potential third party claimants by requiring them to choose between judgment on all claims. The trial court granted the Commissioner’s motion plaintiffs. Finally, they argue that RSA 402-C:40, I, violates the due process face. After jointly filing a stipulation of facts, the parties moved for summary safeguards or meaningful access to information,” is unconstitutional on its

declare it invalid except upon inescapable grounds.

party claimant’s ability to file a claim in the liquidation upon the

arguments in turn. Because the petitioners rely solely upon the State claimants by treating them differently from similarly situated potential Aeronautics, 152 N.H. 30, 34 (2005). We address each of the petitioners’ involves a question of law, which we review de novo.” Hughes v. N.H. Div. of claimant to give up a common-law cause of action without procedural President, 152 N.H. 124, 133 (2005). “The constitutionality of a statute

In reviewing a statute, we presume it to be constitutional and we will not

doctrine of unconstitutional conditions because it conditions the potential third

party releasing the insured from a certain degree of liability on the claim. conditions the filing of a claim in the liquidation proceeding upon the third with the Commissioner, as the liquidator of Home. However, the statute

RSA 402-C:40, I, violates the equal protection rights of potential third party

On appeal, the petitioners first argue that RSA 402-C:40, I, violates the

parties asserting claims against an insured of Home, may file claims directly

against Home, sought declaratory and injunctive relief in the superior court, Hampshire Insurance Department (Commissioner), as liquidator of Home. petitioners, purporting to represent all persons with existing or potential claims Neither petitioner has filed a claim with the Commissioner. Instead, the company. On June 13, 2003, the Superior Court (

(1998 & Supp. 2005). RSA 402-C:40, I, provides that the petitioners, as third Hampshire Insurers Rehabilitation and Liquidation Act, RSA chapter 402-C The liquidation proceedings are being conducted pursuant to the New

liquidation and appointed the defendant, the Commissioner of the New

issued by The Home Insurance Company (Home), a New Hampshire insurance tort cases are two corporations that were insured under excess liability policies promptly, and without delay; conformably to the laws.

p. 3 the liquidator. 3 The release shall be void if the insurance coverage is avoided by party claims appropriate language to constitute such a release. discriminatory infringements on access to the courts.

the redress of their actionable injuries. actionable injuries.

being obliged to purchase it; completely, and without any denial; property, or character; to obtain right and justice freely, without recourse to the laws, for all injuries he may receive in his person,

liquidator shall also insert in any form used for the filing of third City of Dover v. Imperial makes civil remedies readily available and guards against arbitrary and

against the insureds, thus infringing upon their State constitutional right to This provision provides that all citizens have a right to the redress of their however, that the filing of a claim by the third party

Every subject of this state is entitled to a certain remedy, by having

Part I, Article 14 of the State Constitution states: of action in the amount of the applicable policy limit, but the

Home in liquidation by requiring them to relinquish their causes of action with the liquidator on that cause of action. RSA 402-C:40, I, further provides, unconstitutional condition upon their ability to file claims directly against The petitioners first argue that RSA 402-C:40, I, places an

stated purposes. RSA 402-C:1, III (1998). 402-C:1, IV(c)-(d) (1998). The Act is to be “liberally construed” to effect its liquidation” and the “[e]quitable apportionment of any unavoidable loss.” RSA shall release the insured’s liability to the third party on that cause

liquidation, both the third party and the insured have the option to file a claim asserted by a third party against an insured of the insurance company in RSA 402-C:40, I and II (1998) provide that when a cause of action is

Among its stated purposes are the “[e]nhanced efficiency and economy of otherwise financially troubled insurance companies. See RSA 402-C:20 (1998). Act), RSA chapter 402-C, contains procedures for the liquidation of insolvent or The New Hampshire Insurers Rehabilitation and Liquidation Act (the

I. The Doctrine of Unconstitutional Conditions

aid in our analysis. See State v. Grey, 1 p. 4 48 N.H. 666, 668 (2002). Constitution, we base our decision upon it alone, using federal cases only to today,

liquidation is the type of government benefit contemplated by the doctrine of

policy limits. the right to recover damages from the insured to the extent of the applicable similar constitutional analysis in a context different from the one before us to file a claim directly against the insurer in liquidation – upon the waiver of

that the doctrine is applicable to this situation. Constitution. Nevertheless, we will assume, for the purposes of this case only, The Commissioner does not dispute that the ability to file a claim in

“sufficiently related” to the benefit, then it may validly be imposed. Id. developers by municipalities), (1995). However, not all conditions are prohibited. Id. If a condition is Town of Dedham, p. 4 43 F.3d 731, 747 (1st Cir. 1995), cert. denied, 515 U.S. 1103 might have refused to grant the benefit at all.” National Amusements, Inc. v. constitutional right, regardless of the fact that the government appropriately the rights and powers in question.” Furthermore, while we have applied a arbitrarily conditioning the grant of a benefit on the surrender of a case is whether a statute can condition the grant of a benefit – here, the ability of constitutional law that operates with equal force regardless of the nature of The doctrine of unconstitutional conditions “bars government from notoriously inconsistent application; it has never been an overarching principle

explained in his dissenting opinion in doctrine of unconstitutional conditions or applied it under the State unconstitutional conditions is applicable to this case. As Justice Stevens v. McEvoy, 131 N.H. 383, 388 (1988), we have never expressly adopted the

(1981) (discussing “unconstitutional exactions and requirements” placed upon see J.E.D. Assoc’s, Inc. v. Town of Atkinson, 121 N.H. 581, 58 p. 4 4-85

be a satisfactory substitute for the right). However, the issue presented in this ‘unconstitutional conditions’ doctrine has for just as long suffered from p. 4 407 n.12 (1994) (citations omitted), “Although it has a long history, the would have been a violation of the claimants’ constitutional rights. Dolan v. City of Tigard, 512 U.S. 374,

We first note that we are not convinced that the doctrine of

right of any class of persons to recover damages for their injuries, there must of Abbott, 139 N.H. p. 4 412, 416 (1995) (to justify the complete abolition of the

claim in liquidation upon their agreeing to do so, we have no doubt that it up to the applicable policy limits, rather than conditioning the right to file a against persons insured by an insolvent insurer release the insured of liability Had the legislature simply required that all tort claimants with claims

solicitous protection,” Gould, 126 N.H. at p. 4 409. right,” Carson v. Maurer, 120 N.H. 925, 931-32 (1980), and is “accorded for one’s injuries is not a fundamental right, id., it is “an important substantive Cas. & Indemn. Co., 133 N.H. 109, 116 (1990). Although the right to recover partial surrender of a constitutional right. p. 5 insured from liability up to the applicable policy limits arguably amounts to a receive full compensation for his actionable injuries. Thus, the release of the

against the insured.

the third party who files a claim in the liquidation is surrendering his ability to

the liquidation proceeding as an alternative to the usual legal proceeding

unlikely to receive payment in full in [a] liquidation.” At least to some extent,

if the claim is allowed, he receives the opportunity to be compensated through

seek relief from the receiver of the insolvent insurer”). it may be validly imposed under the doctrine of unconstitutional conditions.

of the insurer’s insolvency” and “it is apparent that [third party claimants] are concessions that “[u]ncertainty over liquidation recovery is inherent in the fact redress of his actionable injuries, the Commissioner ignores his own which has the ultimate authority to allow or disallow claims in liquidation, and, injury). redress of his injuries because his claim is submitted to the superior court, conforms to the statutory and common law rights applicable at the time of the He argues that the third party claimant is still exercising his right to the will receive full compensation for their injuries, but does require a remedy that

has a right to either seek relief against alleged tortfeasors or waive same and 747. As stated above, if a condition is “sufficiently related” to the benefit, then sufficiently related to the benefit. See National Amusements, Inc., 43 F.3d at a constitutional right, we next consider whether the condition in this case is Assuming, without deciding, that the condition involves the surrender of

essentially an equivalent alternative means of exercising one’s right to the

party claimant’s constitutional right to the redress of his actionable injuries. 523, 525 (1999) (Part I, Article 14 does not guarantee that all injured persons See Trovato v. DeVeau, 143 N.H.

Florida constitutional right of access to the courts because “the injured party

is sufficiently related to the benefit. surrender of the constitutional right at issue, and, if so, whether the condition

However, in arguing that the pursuit of a claim in liquidation is

applicable policy limits, it is not conditioned upon the “surrender” of the third liquidation is contingent upon the release of the p. 5 insured from liability up to the

Dist. Ct. App. 1987) (holding that similar statute did not amount to a denial of

we must consider whether the benefit in this case is conditioned on the

doctrine of unconstitutional conditions,

The Commissioner contends that although the filing of a claim in the

747.

protects only “preferred right[s] normally protected by strict judicial review”), Conditions, 102 Harv. L. Rev. 1413, 1427 (1989) (indicating that the doctrine

actionable injuries is a constitutional right that is afforded protection by the unconstitutional conditions. Assuming, then, that the right to the redress of p. 6 Amendment right to just compensation for the taking of his property. conditions a benefit upon the relinquishment of an individual’s Fifth

to provide the petitioners with the right to file a claim in the liquidation; rather,

they argue that we must apply the same standards in determining the

the context of exactions under the Takings Clause). Nothing compels the State Supreme Court has not extended the improvements. Dolan “rough proportionality” test beyond Monte Dunes at Monterey, Ltd. of a portion of the applicant’s property to flood control and traffic, 526 U.S. 687, 702 (1999) (noting that the requirement of the cases such as Dolan and J.E.D. Associates applies here. Cf. Monterey v. Del We are not persuaded that the standard applied in land use regulation

analysis in determining the constitutionality of RSA 402-C:40, I. Accordingly, benefit. Constitution. They then argue that we must apply this modified State Constitution unless the condition is specifically attributable to the Dolan test must be incorporated into the Dolan analysis as a requirement of our State petitioners in this case argue that the J.E.D. Associates specifically attributable regulation that conditioned approval of a building permit upon the dedication Fifth Amendment.” Id. at 391 (emphasis added). Thus, the proportionality” test, which it found “best encapsulates what we hold to be the Associates standard, id. at 389-91, 389 n.7, the Court adopted a “rough court standards for the adequacy of this relationship, including the J.E.D. petitioner’s proposed development.” Id. at 388. After discussing various state conditions bears the required relationship to the projected impact of asked “whether the degree of the exactions demanded by the city’s permit condition imposed. Id. at 386. Finding that a nexus did exist, the Court then there is an “essential nexus” between the “legitimate state interest” and the relinquishment of property rights without violating Part I, Article 12 of the Id. at 377, 385. In its analysis, the Court asked first whether

petitioners argue that we must apply the test that we articulated in unconstitutional conditions to consider the constitutionality of a land use of unconstitutional conditions. In Dolan, the Court applied the doctrine of articulated in J.E.D Associates is applicable to an analysis under the doctrine Court in Dolan v. City of Tigard, 512 U.S. at 386, 388-91, to argue that the test The petitioners rely upon the reasoning of the United States Supreme

city could not condition the issuance of a land use permit upon the Associates, Inc. v. Town of Atkinson, 121 N.H. at 584-85, where we held that a

“germane” to the legitimate state interests underlying its imposition. The contends that the condition is sufficiently related to the benefit so long as it is The Commissioner, citing National Amusements, Inc., 43 F.3d at 747,

whether the condition is “sufficiently related” to the benefit. Id. The parties disagree, however, over the applicable test for determining imposition. The Commissioner has not provided us with a workable definition

p. 7 urged application of a middle-tier analysis, relying upon unconstitutional condition issue. Although in the trial court the petitioners 7

the condition is “germane” to the legitimate state interests underlying its direct violation of the underlying constitutional right”).

doctrine applies, regardless of the nature of the constitutional right at issue.

Government interest” (quotation omitted));

appeal any alternative test or case for us to apply in our analysis of the

procedural due process claim);

The Commissioner contends that the relevant inquiry is merely whether conditions claims by an examination of the standards applicable to claims of (2005). does not require that the same standards be applied in every case to which the will not address it. See Appeal of AlphaDirections, 152 N.H. 477, 483-84 932, they make no such argument in their brief to this court. Accordingly, we property, the condition need only be “rationally related to a legitimate Carson, 120 N.H. at

relevant test, which we have rejected, the petitioners do not articulate on Having relied solely upon Dolan and J.E.D. Associates as presenting the Fifth Amendment takings claim may not be the same as in the context of a

Supreme Court has, either explicitly or implicitly, resolved unconstitutional & Services, 842 F. Supp. 1243, 1251 n.18 (E.D. Cal. 1994) (noting that “[t]he constitutional right. Furthermore, the doctrine of unconstitutional conditions Louisiana Pacific v. Beazer Materials granting of a purely gratuitous benefit is conditioned on the waiver of a constitutional right may be more stringent than that applied where the the context of Fifth Amendment takings claims; when dealing with intellectual “different inquiries have developed which apply to different types of property” in would not constitute a taking.” Cir. 2002) (noting that, under the doctrine of unconstitutional conditions, the permit should not be found to be a taking if the refusal to issue the permit Philip Morris, Inc. v. Reilly, 312 F.3d 24, 46 (1st condition that serves the same legitimate [state interest] as a refusal to issue that standards for analyzing an unconstitutional condition in the context of See, e.g., Vance v. Barrett, 345 F.3d 1083, 1092 (9th Cir. 2003) (acknowledging

where the issuance of a building permit is conditioned on the waiver of a

condition analysis employed in land use regulation cases, such that “a permit (quotations omitted). It is this principle that gave rise to the unconstitutional interests” or if it “den[ies] an owner economically viable use of his land.” Id. constitute a taking if it does not “substantially advance legitimate state empowers a municipality to deny a building permit may, in and of itself, Coastal Comm’n, 483 U.S. 825, 834 (1987). A land use regulation that is actually compelled by constitutional standards. See Nollan v. California regulation cases, the benefit of a building permit is not purely gratuitous, but government to third party claimants. By contrast, in Dolan and other land use the ability to file a claim is a purely gratuitous benefit offered by the in RSA 402-C:40, I, provides policyholders at least some degree of protection.

p. 8 reduce litigation against policyholders, it is apparent that the release provision

maximum possible degree of protection. While there may be ways to further to protect certain individuals, those individuals must be provided with the reasonable or arbitrary does not require that, where the legislative objective is

argument, however, overlooks the fact that an inquiry into whether a statute is a condition similar to that imposed by RSA 402-C:40, I.

policyholders in the form of actions for prejudgment attachment. The cited by the petitioners have not declared unconstitutional statutes that impose filing of claims in the liquidation and encouraging increased litigation against protecting policyholders, but actually defeats that objective by discouraging the

achieve the legislative goals.

determinative of whether the statute is constitutional. Furthermore, cases 8 position, or even whether we favor one position over the other, is not policy limits, RSA 402-C:40, I, not only fails to serve the legislative objective of for us to consider; whether a statute is reflective of a majority or minority

legislative objectives and, thus, the release provision is arbitrary and does not

liquidation upon the third party releasing the insured of liability up to the apportioning unavoidable loss. The popularity of the legislature’s choice is not

access to the courts under state constitution); I, is unconstitutional. We disagree. response, the petitioners argue that, even under this standard, RSA 402-C:40, requiring them to release the insured of any liability would not defeat the third party claimants to file a claim in the liquidation without simultaneously legislative objectives of RSA chapter 402-C. The petitioners argue that allowing

The petitioners next argue that by conditioning the filing of claims in the have employed any of a number of solutions to the problem of equitably 2006). Co., 841 A.2d 588, 591-93 (Pa. Commw. Ct. 2004), rev’d, 893 A.2d 70 (Pa.

So. 2d at 1241-42 (holding that similar provision did not amount to a denial of objective of protecting policyholders and apportioning unavoidable loss.” In See, e.g., Ramos, 510

there can be no connection between the condition in RSA 402-C:40, I, and the

We acknowledge that, in drafting RSA 402-C:40, I, the legislature could

thus constitutional, because the condition “directly serves the legislative case is germane to the legitimate legislative objectives of the statute, and is line with this definition, the Commissioner argues that the condition in this are able to administer insurance liquidations without a release provision,” a condition like that imposed by RSA 402-C:40, I, while “forty-four other states First they contend that because New Hampshire is “one of only six states” with The petitioners advance three arguments in support of their position.

trial court as requiring that the statute not be unreasonable or arbitrary. In of “germane” in the context of this inquiry, but the petitioners defined it for the for any liability that exceeds the limits of the policy issued by the insurer in

p. 9 will automatically preclude access to the insured’s excess insurance coverage

that releasing an insured of liability up to the policy limits of a primary policy more than speculation. The petitioners have pointed to no authority indicating and hypothetical. We agree that the petitioners’ concern is based upon nothing

them with adequate information upon which to base that decision. release has such an effect, and the possibility of that happening is speculative claimants to decide whether to file a claim in the liquidation without providing

out to the third party claimant in the liquidation.

argues that it would be unreasonable for an excess insurer to contend that the post-judgment creditors of the insolvent insurer; and (3) forcing third party liquidation will be less than the full amount allowed. The Commissioner excess coverage will not be triggered because the actual payment from the

them open to liability for any amount within the policy limits that is not paid

other solvent insurers; (2) precluding third party claimants from becoming 9 access to an insured’s potential excess insurance coverage available through allowed in the liquidation in the full amount of the primary policy limits, the that the statute overburdens potential third party claimants by: (1) precluding

the liquidation, doing so would provide policyholders less protection, leaving encourage even more potential third party claimants to file claims directly in could have been levied against them. While eliminating the condition may

excess of primary policy limits.” Thus, the petitioners argue that, if a claim is upon the public that the statute is unreasonable. Specifically, they contend excess of the [primary] policy limit is triggered by legal liability of the insured in is not in this case, an “excess insurer’s responsibility to pay for claims in

of the burdens of litigation and liability for the balance of any judgment that

third party claimants by RSA 402-C:40, I, so outweighs the benefits conferred policy directly affected by the liquidation is a primary insurance policy, which it With respect to the first contention, the petitioners argue that, where the

some potential third party claimants to file, thus relieving those policyholders liquidation, even when filing is conditioned upon a release, encourages at least judgment. Allowing potential third party claimants to file claims directly in the Finally, the petitioners argue that the burden imposed upon potential

when they are sued by a third party.

degree of protection, although they remain liable for the balance of the avenue of access to liquidation proceeds provides policyholders with some against them in the underlying suit. See RSA 402-C:40, III (1998). This recovery received by the policyholders in the liquidation offsets any judgment

other things, allowing them to file claims in liquidation on their own behalf the current liquidation scheme. The Act protects policyholders by, among liquidation would arguably provide no greater protection to policyholders than Furthermore, permitting third parties to unconditionally file claims in the legislative[ly] allocated consequence of the insurer’s insolvency.” p. 10 the extent such a choice could be considered a burden, it is simply a

against the potential defendant. As the Commissioner argues in his brief, “To

may provide for some plaintiffs a means of recovery not otherwise available defendant. The option to file a claim in the liquidation of an insolvent insurer is faced with the task of assessing the viability of recovery against a potential

little, or even no, recovery is inherent in any litigation. Every potential plaintiff

unreasonable. As is acknowledged in the petitioners’ own argument, risk of

from any other claimants. third party claimant, it is not so burdensome as to render RSA 402-C:40, I, imposition of this choice may surely be viewed as a burden on the potential recovery for them than would a direct action against the insured. While the

claimants, whether filing as post-judgment creditors or otherwise, differently

solvent or otherwise insured and whether the liquidation might yield a larger

that is] a difficulty made necessary by the unfortunate and uncontrollable fact

challenge to that provision, we note that nothing therein treats third party creditors. Although the petitioners have not articulated any constitutional establishes claim filing deadlines applicable to all of the insolvent insurer’s without the information needed in order to ascertain whether the insured is 10 made.” They argue that it is grossly unfair to ask them to make this decision provide [them] with any needed information upon which [their] decision can be

“The Act poses a difficult decision for a [potential] third party [claimant], [but

provision in the Act that may create such a bar is RSA 402-C:37 (1998), which

where “[n]either [option] is certain to result in a recovery and the State will not

party claimants imposed by RSA 402-C:40, I, is not unreasonable or arbitrary. legislative objectives of the statute. Any burden on the rights of potential third unconstitutional conditions because the condition is germane to the legitimate We thus conclude that RSA 402-C:40, I, does not violate the doctrine of

judgment against the insured. The Commissioner argues that the only would preclude them from filing a claim in the liquidation after receiving a However, the petitioners have pointed to nothing in RSA 402-C:40, I, that 402-C:40, I, forces potential third party claimants to elect one of two options,

successfully prevailed against [the] insured,” who may be or become insolvent. With respect to their final contention, the petitioners argue that RSA

unreasonable. deny coverage as a result of the release is insufficient to render the statute

against the [insolvent] insurance company as a judgment creditor after having lawsuit against the insured, third party claimants lose “the ability to proceed choosing not to file a claim in the liquidation and instead choosing to initiate a With respect to their second contention, the petitioners argue that by

has occurred. The mere possibility that an excess insurer could attempt to liquidation. Nor have the petitioners cited any instances in which this result not in liquidation need not do so. The Commissioner contends that plaintiffs in

p. 11 insurer, while plaintiffs with claims against defendants insured by an insurer

the injury.

not lost by the mere existence of RSA 402-C:40, I.

that third party claimants waive part of their claim in order to collect from the post-judgment creditor. Essentially, they argue that RSA 402-C:40, I, requires common law rights available to potential third party claimants at the time of potential third party claimants lose their right to recover from the insurer as a however, because RSA 402-C:40, I, does nothing to restrict the statutory and guaranteed by Part I, Article 14 of the State Constitution. We disagree,

liquidation and instead choosing to pursue their claims against the insured,

implicates only the potential third party claimants’ right to a remedy

regardless of whether those defendants are insured by an insurer in their statutory and common law claims against their potential defendants, the injury). All potential third party claimants maintain the right to pursue

treatment of persons so classified. The petitioners further argue that by choosing not to file a claim in the

third party claimants differently from other potential plaintiffs because it

equal protection claim”).

that conforms to the statutory and common law rights applicable at the time of review at all, that action must treat similarly situated persons See Trovato, 143 N.H. at 525 (Article 14 only requires a remedy

protection inquiry are the existence of a classification and the differing

The petitioners urge that RSA 402-C:40, I, treats the class of potential

insurers not in liquidation. have potential claims against uninsured individuals or individuals insured by S.E.2d 17, 20 (N.C. 1994) (“[w]ithout some type of ‘classification’ . . . there is no (emphasis added)), cert. denied, 540 U.S. 1046 (2003); Phelps v. Phelps, 446

1088 (9th Cir. 2002) (“in order for a state action to trigger equal protection

(2004) (quotation omitted). Thus, two basic prerequisites of the equal similarly situated should be treated alike.” In re Sandra H., 150 N.H. 634, 637 The equal protection guarantee is “essentially a direction that all persons

potential third party claimants differently from other potential plaintiffs who They assert that these provisions are implicated because the statute treats provisions of the State Constitution. See N.H. CONST. pt. I, arts. 2, 12, 14. The petitioners argue that RSA 402-C:40, I, violates the equal protection

II. Equal Protection

the insured alike.” Koken v. Reliance Ins. Co., 893 A.2d 70, 85 (Pa. 2006). of the insolvency, a fact which affects the [potential third party claimant] and inadequate notice of the consequences of participation in the statutory scheme

p. 12 liquidation. In essence, the petitioners argue that RSA 402-C:40, I, provides

knowing, voluntary and intelligent choice whether to file a claim in the "reasonable" and "arbitrary." process to ensure that potential third party claimants are able to make a objectives of protecting policyholders and apportioning unavoidable loss. incorporating procedural due process safeguards into the decision-making

address it.

policy limits, and is thus treated differently from similarly situated persons,

intermediate or middle-tier scrutiny tests in that both tests include the terms reasonable, not arbitrary, and fairly and substantially relates to the legislative the relinquishment of a constitutional right, it cannot do so without The petitioners contend that if the State may condition a benefit upon

classification, except to urge that we not examine it. Therefore, we will not III. Due Process

legislation in order to satisfy State equal protection guarantees.” scrutiny test as it necessitates further briefing and argument. of difference having a fair and substantial relation to the object of the the liquidation that he or she must release the insured of liability up to the us to, and we will not in this case, address the elusive nature of our middle-tier injuries “must be reasonable, not arbitrary, and must rest upon some ground 223 (1993), with Gould, 126 N.H. at 408-09. However, neither party has asked

We recognize that there is an overlap between our rational basis and under the doctrine of unconstitutional conditions, this classification is reasons upon which we base our decision regarding the petitioners’ claim C:40, I, is based upon the fact of the insurer’s insolvency. For the same liquidation. However, the petitioners make no argument as to this i.e., other potential third party claimants who choose not to file a claim in the

It is only after a potential third party claimant chooses to file a claim in requires that legislative classifications of the right to recover for personal

now. N.H. at 408-09 (quotation omitted). The classification created by RSA 402- acknowledge that we have yet to directly address this issue. We need not do so

protection provisions of the State Constitution. Our middle-tier scrutiny test RSA 402-C:40, I, has on that right does not result in a violation of the equal from their defendant’s insurer as a post-judgment creditor, any impact that Even assuming that all plaintiffs have a common law right to recover

except in limited circumstances as provided by statute. Both parties general do not have a right to recover directly from their defendant’s insurer, p. 13 13

for medical injury actions. After determining that the right to recover for

recovery in a liquidation.

and intermediate or middle-tier scrutiny tests.

the liquidation by every third party claimant. specially. of the administration of the liquidation as well as the size of every claim filed in

constitutionality of RSA chapter 507-C, which created various classifications review in Carson v. Maurer, 120 N.H. 925 (1980), when we examined the We first adopted an intermediate scrutiny approach to constitutional the unreliability of the prediction and the inherent uncertainty of any creditor’s actual extent of any monetary “loss.” petitioners would receive as a result of the prediction would be minimal given making the predictions that the petitioners seek, and any benefit that the and write separately to further explain the overlap between our rational basis BRODERICK, C.J., concurring specially. I concur with the affirmance,

DALIANIS and GALWAY, JJ., concurred; BRODERICK, C.J., concurred satisfied by the notice contained in the proof of claim form. prediction of recovery can be made until the Commissioner knows the final cost receive notice of the consequences of filing a claim, that requirement is Affirmed.

meaningful notice of the government’s action. requires actual forecasts of potential liability or a pre-determination of the petitioners cite no authority, and we found none, to indicate that due process Commissioner would be unreasonable in light of the near impossibility of for expenses incurred by the government in connection therewith). The (Supp. 2005). The imposition of such a burden upon the liquidator or the

predictions would be wholly speculative and unreliable, as no reasonable limits. To the extent that due process requires that third party claimants extent of a potential third party claimant’s recovery in the liquidation, such Furthermore, were the Commissioner to make predictions about the

property or liberty interest, due process requires that the citizen receive

who is the subject of a CHINS petition must include notice of potential liability N.H. at 38-39 (requiring that summons issued by court to parents of a child

will result in the release of the insured of liability up to the applicable policy signed by the third party claimant, both provide notice that the filing of a claim N.H. 30, 36 (1985). Here, RSA 402-C:40, I, and the proof of claim form that is

When the government seeks to take action that will deprive a citizen of a

claimant of his right of action against the insured without due process of law. through the filing of a claim in liquidation, and thus deprives the third party standard derived from

misidentification) of the

uncertainty over the meaning of the second segment of the

test, as we have seen, but also placing temptation in the way of same high level of deference it does under rational basis review. Carson standard with the rational basis condition not only facilitating the identification (or legislative objective. This uncertainty must be seen as a further relationship between the chosen classification and the legitimate

This pledge of deference is a shaky one, however, thanks to opinions cited in N.H. at 933. He explained: the legislation be related to a “legitimate legislative objective.” Carson, 120 basis test.” (Souter, J., dissenting). The test as articulated in Carson only required that

questioning whether legislation examined under that test should receive the Justice Souter continued his critique of the intermediate standard by

omitted). judicial scrutiny than allowed under the rational basis test.” City of Cleburne v. Cleburne Living Center, 473 U.S. 432, 441 (1985)) (citation lapsing into rational basis terminology.” Id. (Souter, J., dissenting) (quoting

Carson as so applying it have reverted to type, as it were, by

formulation to provide ‘somewhat heightened’ middle-tier scrutiny, the very federal judiciary, like this court, has subsequently tried to use Royster ’s the legislation.” Id. at 122 (Souter, J., dissenting). He continued, “Although the some ground of difference having a fair and substantial relation to the object of and substantial,” was in fact “what we today would call the first-tier, rational He first explained that the test applied in Royster, although using the term “fair language from F.S. Royster.” Dover, 133 N.H. at 121 (Souter, J., dissenting). protection review, a failing perhaps portended by the derivation of Carson ’s “suffers from a proven susceptibility to confusion with other standards of equal in Carson in his dissent in Dover. He noted that the Carson intermediate test that the restrictions imposed on those rights be subjected to a more rigorous Justice Souter, while still a member of this court, examined our holding

substantive right” protected by the State Constitution. 415 (1920)). 163 (1973), in turn quoting F.S. Royster Guano Co. v. Virginia, 253 U.S. 412,

Carson, 120 N.H. at 932 (citing State v. Scoville, 113 N.H. 161,

required that legislation be “reasonable, not arbitrary, and must rest upon N.H. 109, 121 (1990) (Souter, J., dissenting). This new level of scrutiny State Constitution . . . .” City of Dover v. Imperial Cas. & Indemn. Co., 133 “Middle-tier equal protection scrutiny thus entered the jurisprudence of the

931-32. We therefore held that the right was “sufficiently important to require

that we apply strict scrutiny, we nevertheless held that it was an “important personal injuries is not a “fundamental right,” and therefore did not require p. 15 15

argument for the need to reexamine the equal protection analysis. There could be no more striking a majority of the court to impose the strictest scrutiny known to scholarship unsound.”

was the product of a unanimous court, and has been repeatedly and determining that “Carson was well-reasoned and considered with special care, court as a standard of intermediate review, is now being applied by Brannigan, 134 N.H. at 54 (quotation omitted). After on the grounds that its “legal antecedents [were] questionable and its In Brannigan v. Usitalo, 134 N.H. 50 (1991), we were asked to reverse Carson One year after Dover was decided, we appeared to take on this challenge.

Id. at 127 (Souter, J., dissenting).

conceptual basis underlying what passes for intermediate review.

attempted, the intermediate nature of the scrutiny will remain elusive.” itself [to] confront the difficulty in the earliest possible case, for until the job is life as a rational basis test, and was ostensibly adopted by this metamorphosed yet again. A formulation that began its juridical merely “legitimate.” Indeed, the federal intermediate scrutiny standard that scrutiny demands.” And so the “fair and substantial” relation test is

fact applied strict scrutiny under the label of an intermediate analysis: the standard was not only wrongly adopted, but also that the Dover court in had misapplied the purported middle-tier test set forth in Carson. He felt that Justice Souter concluded his dissent by arguing that the court in Dover

124 (Souter, J., dissenting).

then encouraged “both advocates before the court and members of the court

action, the government should have to prove more than that its ends are court is to identify the requisite degree of efficiency, or fit, that intermediate scrutiny test it articulated, Justice Souter stated, “[T]he task confronting the After explaining the problems inherent in Carson and the intermediate

Virginia, 518 U.S. 5 p. 15 15, 533 (1996) (same). be substantially related to achievement of those objectives”); United States v. certain classifications “must serve important governmental objectives and must e.g., Craig v. Boren, 429 U.S. 190, 197 (1976) (equal protection requires that be important, but rather that the governmental objective be important. See, Carson purportedly adopted requires not that an individual’s substantive right

scrutiny professes to impose a higher standard on the government to justify its Dover, 133 N.H. at 123 (Souter, J., dissenting). That is, where intermediate

intermediate scrutiny . . . . those inclined to impose a far stricter standard in the name of continue to be part of our intermediate test,

p. 16 must address: (1) whether the terms “reasonable” and “arbitrary” should

the elusive nature of the intermediate standard. Specifically, I believe that we parties. However, like Justice Souter, I encourage future litigants to confront case to address these issues, as they are not raised by the record or the

and intermediate or middle-tier scrutiny standards. I agree that this is not the

interest.

fundamental right in question.”

that I join the majority in recognizing the overlap between our rational basis It is because of the confusion in our standards of constitutional review requires that legislation be rationally related to a legitimate governmental “reasonable,” “arbitrary,” or “unduly restrictive.” Our rational basis test Id. at 179. [must be] reasonably related to its objective and [must] not unduly restrict the 177, 179 (1993). However, the Seabrook court also declared that a “regulation

restrictions on fundamental rights must be necessary to achieve a compelling judicial scrutiny than allowed under the rational basis test.” basis test”)). 148 N.H. at 124 (quotation omitted). Our strict scrutiny test requires that under the rational basis test “not unduly restrict fundamental rights,” Dow, a particular zoning provision,” id., and required that legislation challenged under that standard we have additionally inquired into the “reasonableness of acknowledged, and the See Taylor v. Town of Plaistow, 152 N.H. 142, 145 (2005). However,

rational basis review and strict scrutiny. Both use some form of the terms This confusion can also be seen in our other levels of scrutiny — namely,

that the restrictions imposed on those rights be subjected to a more rigorous (1986) (fair and substantial relation test “assumed to be equivalent to rational N.H. at 122 (Souter, J., dissenting) (citing State v. Deflorio, 128 N.H. 309, 315 Royster have in some instances been treated as interchangeable.” Dover, 133 “recogniz[ed] candidly that the rational basis test and the test derived from

existent in our intermediate scrutiny test. Indeed, as Justice Souter however, that the Brannigan court failed to recognize and resolve the confusion also Dow v. Town of Effingham, 148 N.H. 121, 124-25 (2002). I believe, applied in certain equal protection situations, as this case demonstrates. See 932. Further, I do not suggest that intermediate scrutiny should no longer be

conclusion that certain substantive rights “are sufficiently important to require I agree with Brannigan to the extent that the court there reaffirmed the

restrictions on private rights, id. at 56. legitimate legislative objective; and (2) whether it imposes unreasonable inquiring: (1) whether the statute has a fair and substantial relation to a ellipses omitted), we upheld its articulation of the intermediate scrutiny test as consistently accepted and applied by this court,” id. at 57 (quotation and p. 17 17

not clear whether our intermediate scrutiny test does so.

interest and narrowly tailored to meet that end. As currently articulated, it is

namely, that legislation be necessary to achieve a compelling governmental interest — but a less exacting examination than our strict scrutiny test — that legislation merely be rationally related to a legitimate governmental

standard should require more scrutiny than the rational basis test — namely, with our other levels of constitutional review. An intermediate scrutiny A new articulation of this test is necessary to bring it into conformity

518 U.S. at 533. compare Brannigan, 134 N.H. at 56, with Craig, 429 U.S. at 197, and Virginia, due to the “fair and substantial” prong of the intermediate scrutiny test, in rational basis review, or whether we should require an “important” objective the governmental objective required by the test should be merely “legitimate” as 137 N.H. 213, 223 (1993), with Carson, 120 N.H. at 932-33; and (2) whether