05/20/2025
Well here's something interesting, but not entirely surprising.
GENERAL HEALTH CARE NEWS—D.N.J.: Multiple challenges to New Jersey telemedicine licensure requirement dismissed, (May 16, 2025)
Organizations Mentioned:Pacific Legal Foundation
By Justin Marcus Smith, J.D.
The court primarily found that a national specialist residing in New Jersey, but licensed in Pennsylvania, would face the same hurdles to engage in telemedicine with a patient in New Jersey.
A litany of out-of-state physician and patient concerns with the State of New Jersey telemedicine licensure requirement highlighted personal experiences and practical effects, but they ultimately raised questions of policy for the legislature to decide, not the court, held a federal district court in New Jersey. The court granted the state medical licensure board president’s motion to dismiss Dormant Commerce Clause, Privileges and Immunities Clause, First Amendment, and due process challenges to the telemedicine licensure requirement. Fundamentally, the court found the licensure requirement fell equally on New Jersey and out-of-state physicians. At multiple junctures, the court expressed dissatisfaction that the physicians appeared to be placing their own definition of telemedicine practice and their own preferred business practices over the New Jersey legislature’s judgment of how best to protect public health and safety (MacDonald v. Sabando, No. 1:23-cv-23044-ESK-SAK (D.N.J. May. 12, 2025)).
Background. A Massachusetts board-certified oncologist, a Pennsylvania neurosurgeon, and two New Jersey oncology patients, including one minor, sued Otto F. Sabando in his official capacity as President of New Jersey’s medical licensure board (Board). The physicians and patients complained that New Jersey’s telemedicine licensure requirement burdens specialist medical providers.
The State of New Jersey permits the practice of telemedicine, including telehealth, but providers must be licensed, certified, or registered in New Jersey. See N.J. Stat. Ann. § 45:1. Initial licensure costs $550 and requires a background check, fingerprinting, significant documentation, and takes an average of three months to process. In general, healthcare providers with licenses in good standing in another state may obtain reciprocal licensure in New Jersey, subject to requirements. See N.J. Admin. Code § 13:35–3.2(a). New Jersey considers the unlicensed practice of medicine a crime of the third degree. N.J. Stat. Ann. § 2C:21–20. New Jersey relaxed aspects of its telemedicine licensure requirement during the COVID-19 pandemic, possibly without any ill effects, but that relaxation expired in 2023.
Although the Interstate Medical Licensure Compact was intended to streamline the licensure process, it still requires $700 for participation, state fees, background checks, fingerprinting, and weeks to process. The two physicians described how maintaining licenses in multiple states was costly and burdensome, even for their national practices, because they do not know in advance where their patients may come from and they only occasionally consulted with or treated New Jersey patients. The patients also complained that the licensure requirements limited their access to out-of-state specialists, involved travel time and cost burdens, and interfered with follow-up care.
The physicians and patients asserted four counts:
Count 1 alleged that the N.J. Stat. Ann. § 45:1–62(b) licensure requirement restricts and burdens the practice of medicine across state lines by prohibiting out-of-state specialists from consulting and following-up with New Jersey patients by telemedicine in violation of the dormant Commerce Clause.
Count 2 claimed that § 45:1–62(b) violated the Privileges and Immunities Clause by prohibiting out-of-state specialists, even those hailing from states with essentially identical licensure requirements, from practicing across state lines using telemedicine, even though the COVID-19 relaxation period did not lead to any known harms.
Count 3 invoked First Amendment rights to engage in speech and alleged that § 45:1–62(b) placed content-based licensure restrictions on the physicians’ ability to speak with the named patients and potential patients.
Count 4 alleged that § 45:1–62(b) prevented a parent from seeking lawful medical care for the minor patient in violation of his due process right to the care, custody, and control of his child.
The physicians and patients sought declarations that § 45:1–62(b) violates the dormant Commerce Clause, Privileges and Immunities Clause, and First and Fourteenth Amendments as applied to them, permanent injunctive relief restraining enforcement of § 45:1–62(b) against them, and attorney’s fees and costs.
After the parties submitted pre-motion letters to the previously assigned district court judge, that judge waived her pre-motion conference requirement and directed the Board President to respond to the complaint. The Board President filed a Fed. R. Civ. P. 12(b)(6) motion to dismiss for failure to state a claim.
Dormant Commerce Clause. The court found the licensure requirement fell equally on New Jersey and out-of-state physicians. It was even-handed; therefore, heightened scrutiny with respect to the Dormant Commerce Clause did not apply. The physicians made arguments similar to those made by attorneys who unsuccessfully challenged the New Jersey bona fide attorney office and in-person continuing legal education requirements. See Tolchin v. Supreme Court of the State of New Jersey, 111 F.3d 1099, 1102-05 (3d Cir. 1997). The Third Circuit did not disagree with the Tolchin attorneys that out-of-state attorneys who wished to maintain a small or sporadic practice in New Jersey were forced to maintain an office without receiving the comparable benefits of an attorney with a larger New Jersey Practice; however, the Third Circuit concluded that argument failed to implicate the Commerce Clause because sporadic practice attorneys could also be New Jersey residents.
Here, the physicians might be correct that duplicative fees, time, and ongoing compliance burdens did not affect New Jersey physicians who need only one license to treat and speak to New Jersey patients. However, that New Jersey physician “may or may not be a New Jersey resident.” A national specialist residing in New Jersey but licensed in Pennsylvania would face the same hurdles to engage in telemedicine with a patient in New Jersey. The court said it was the physicians’ own desire to engage with potential patients in New Jersey that created the asserted burdens, and that did not equate to discrimination against out-of-state residents.
Because heightened scrutiny was inappropriate, the court applied the Pike balancing test to determine whether the § 45:1–62(b) licensure burdens on interstate commerce substantially outweighed the putative local benefits. See Pike v. Bruce Church, Inc., 397 U.S. 137 (1970). The court had already rejected the physicians’ definition of treatment in their own practices where § 45:1–61 unambiguously included “provider consultation” in its definition of “telehealth.” The Board President’s brief did not assert that preventing specialized national experts from practicing telemedicine protects society. Instead, the Board President asserted that § 45:1–62(b) operates in the same manner as New Jersey’s in-person licensure requirement and that New Jersey has an interest in ensuring that medical professionals are qualified, an important element of state police power.
That court said that correct assertion of the local benefit favored the defendant. All state regulations increase the cost of doing business. The question is whether such burdens are excessive. Citing to various Third Circuit cases, the court again concluded that the burdens the physicians described had to do with the chosen size and nature of their own practices, not their state residency, and the Commerce Clause does not protect preferred business practices.
Because New Jersey has a strong interest in regulating medicine within the state, the court said it could not conclude that § 45:1–62(b) burdens substantially outweighed the local benefit. See Tolchin, 111 F.3d at 1110. The court granted the Board President dismissal of Count 1.
Privileges, immunities. The court analyzed that the physicians’ arguments with respect to the Privileges and Immunities Clause, U.S. Const. art. IV, § 2, suffered from essentially the same flaws as their dormant Commerce Clause Claim. Again, a national specialist residing in New Jersey, but licensed in Pennsylvania, would be in the same position. Again, the burdens more aptly related to the nature of the physicians’ practice choices rather than their states of residency. And again, even if the court had found that § 45:1–62(b) discriminates against non-residents, New Jersey has a “strong interest in regulating the practice of medicine.” The court held the licensure requirement “bears a substantial relationship to the state’s objective and does not impose too heavy a burden on the privileges of nonresidents.” The court granted the Board President dismissal of Count 2.
Speech. Turning to Count 3, the First Amendment count, the court held that § 45:1–62(b) does not dictate what a physician can and cannot say based on content or speaker viewpoint. It sets forth a licensure requirement. The court took issue with the physicians’ tendency to argue that the conversations they wanted to have with people seeking medical treatment did not amount to treatment. The court said the physicians’ attempt at a narrow, as-applied challenge appeared to be an effort to “rewrite the statute to better suit their practices and arguments.”
The court analyzed several First Amendment cases, including the Castille-Simandle line of cases, at considerable length. See National Association for the Advancement of Multijurisdiction Practice v. Castille, 799 F.3d 216, 218 (3d Cir. 2015); see also National Association for the Advancement of Multijurisdiction Practice v. Simandle, Case No. 14–03678, 2015 WL 13273313, at *1–2 (D.N.J. Sept. 1, 2015). In analyzing the Castille-Simandle line of cases, the court found that § 45:1–62(b) “does not inquire as to the identity of a physician or what they might say, but rather is interested in whether they are licensed in New Jersey.” Consequently, the court said it was satisfied that § 45:1–62(b) is a “content neutral licensure scheme” and valid because it “furthers New Jersey’s strong interest in regulating the practice of medicine.”
The court did not agree with the physicians and patients that dismissal would be premature. In applying Castille, the court found § 45:1–62(b) rationally connected to the physicians’ fitness and capacity to practice. Development of a factual record was not necessary. The court granted the Board President dismissal of Count 3.
Substantive Due Process. Turning to Count 4, the parental due process challenge, the court said it was “for the final time in this opinion” rejecting the physician and patient attempt to insert their definition of treatment as opposed to what is set forth in the statute. With respect to a cited midwifery case, the Third Circuit noted that the parents’ interest in selecting the midwife of their choice was not fundamental and therefore subject to rational-basis review. See Sammon v. New Jersey Board of Medical Examiners, 66 F.3d 639 (3d Cir. 1995). The court said Sammon was directly on-point and controlling. Parents do not have an absolute right to select a specific type of provider for a specific medical or mental health treatment that the state has reasonably deemed harmful. The physicians and patients did not cite any authority contradicting this established principle. The court said it had no reason to doubt the physicians’ and patients’ contextualized arguments, but policy choices were up to the legislature, not the court.
Applying rational basis review, the court looked to the state’s asserted legitimate interest in public health and safety and concluded that the legislature could have rationally required New Jersey licensure to practice telemedicine in New Jersey to serve that interest. The court therefore dismissed the parent’s due process challenge.
The case is No. 1:23-cv-23044-ESK-SAK.
Judge: Kiel, E.
Attorneys: Jonathan Houghton (Pacific Legal Foundation) for Shannon MacDonald. Christopher John Ioannou, State of New Jersey Office of the Attorney General, for Otto F. Sabando.
