Fair procedure
Encyclopedia
Fair procedure is a common law
doctrine that arises from a line of groundbreaking decisions of the Supreme Court of California
dating back to the 1880s. Certain types of private actors
(especially professional associations, union
s, hospital
s, and insurance
companies), due to their overwhelming economic power within certain fields, cannot arbitrarily expel members or employees or deny persons admission for no logical reason; they are obligated to provide a rudimentary form of procedural due process
(in the form of notice and a hearing). It is contrasted against due process
in that it applies to private actors, while due process normally applies only to state actor
s.
Damages for violating the right of fair procedure can be substantial. For example, the State Compensation Insurance Fund
was found liable for $1,131,000 for arbitrarily denying a small medical clinic admission to its preferred provider network. But the right of fair procedure only applies where the conduct of the challenged private entity would destroy the plaintiff's right to practice a lawful trade or profession. Because it is possible (though slightly more difficult) to find gainful employment in the motion picture industry without being the holder of an Academy Award, the conduct of the guilds that determine eligibility for the Oscars is not subject to fair procedure.
Another limitation, of course, is that although the right of fair procedure (if applicable) clearly requires something slightly less than procedural due process, it does not require the affected party to be afforded more rights than would be available under procedural due process. Thus, when the plaintiff's professional association had clearly given him the benefit of far more procedural protections than he would have been entitled to from any government entity, he had received the benefit of fair procedure and had no cause of action for the mildly adverse action that resulted.
In the U.S., the existence of a separate doctrine of fair procedure for private actors is necessary because due process
generally controls only decisions taken by state actors. In contrast, the broader UK doctrine of natural justice
applies to both public and private entities.
Common law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...
doctrine that arises from a line of groundbreaking decisions of the Supreme Court of California
Supreme Court of California
The Supreme Court of California is the highest state court in California. It is headquartered in San Francisco and regularly holds sessions in Los Angeles and Sacramento. Its decisions are binding on all other California state courts.-Composition:...
dating back to the 1880s. Certain types of private actors
Actor (policy debate)
In policy debate, an actor is an entity that enacts a certain policy action. If a plan were to have the U.S. send humanitarian aid to Sudan, then the actor would be the United States federal government....
(especially professional associations, union
Trade union
A trade union, trades union or labor union is an organization of workers that have banded together to achieve common goals such as better working conditions. The trade union, through its leadership, bargains with the employer on behalf of union members and negotiates labour contracts with...
s, hospital
Hospital
A hospital is a health care institution providing patient treatment by specialized staff and equipment. Hospitals often, but not always, provide for inpatient care or longer-term patient stays....
s, and insurance
Insurance
In law and economics, insurance is a form of risk management primarily used to hedge against the risk of a contingent, uncertain loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for payment. An insurer is a company selling the...
companies), due to their overwhelming economic power within certain fields, cannot arbitrarily expel members or employees or deny persons admission for no logical reason; they are obligated to provide a rudimentary form of procedural due process
Due process
Due process is the legal code that the state must venerate all of the legal rights that are owed to a person under the principle. Due process balances the power of the state law of the land and thus protects individual persons from it...
(in the form of notice and a hearing). It is contrasted against due process
Due process
Due process is the legal code that the state must venerate all of the legal rights that are owed to a person under the principle. Due process balances the power of the state law of the land and thus protects individual persons from it...
in that it applies to private actors, while due process normally applies only to state actor
State actor
In United States law, a state actor is a person who is acting on behalf of a governmental body, and is therefore subject to regulation under the United States Bill of Rights, including the First, Fifth and Fourteenth Amendments, which prohibit the federal and state governments from violating...
s.
Damages for violating the right of fair procedure can be substantial. For example, the State Compensation Insurance Fund
State Compensation Insurance Fund
The State Compensation Insurance Fund is a workers' compensation insurer that was created as a "public enterprise fund" by the U.S. state of California, and today has partial autonomy from the rest of the state government...
was found liable for $1,131,000 for arbitrarily denying a small medical clinic admission to its preferred provider network. But the right of fair procedure only applies where the conduct of the challenged private entity would destroy the plaintiff's right to practice a lawful trade or profession. Because it is possible (though slightly more difficult) to find gainful employment in the motion picture industry without being the holder of an Academy Award, the conduct of the guilds that determine eligibility for the Oscars is not subject to fair procedure.
Another limitation, of course, is that although the right of fair procedure (if applicable) clearly requires something slightly less than procedural due process, it does not require the affected party to be afforded more rights than would be available under procedural due process. Thus, when the plaintiff's professional association had clearly given him the benefit of far more procedural protections than he would have been entitled to from any government entity, he had received the benefit of fair procedure and had no cause of action for the mildly adverse action that resulted.
In the U.S., the existence of a separate doctrine of fair procedure for private actors is necessary because due process
Due process
Due process is the legal code that the state must venerate all of the legal rights that are owed to a person under the principle. Due process balances the power of the state law of the land and thus protects individual persons from it...
generally controls only decisions taken by state actors. In contrast, the broader UK doctrine of natural justice
Natural justice
Natural justice is a term of art that denotes specific procedural rights in the English legal system and the systems of other nations based on it. Whilst the term natural justice is often retained as a general concept, it has largely been replaced and extended by the more general "duty to act fairly"...
applies to both public and private entities.