Adverse Medical-Debt Credit Reporting Is Commercial Speech; Idaho Patient Act Preconditions to “Extraordinary Collection Actions” Survive First and Fourteenth Amendment Facial Challenges

Introduction

In Ridgeline Medical, LLC v. Lyon (Idaho Supreme Court, Jan. 9, 2026), Ridgeline Medical, LLC (“Ridgeline”) attempted to collect a $777 medical bill from patient David Lyon (“Lyon”). Lyon counterclaimed under the Idaho Patient Act, Idaho Code sections 48-301 through 48-312 (2020) (“IPA”), asserting Ridgeline filed suit and undertook other “extraordinary collection actions” without first providing the statutory notices—particularly a “final billing statement”—and therefore owed statutory penalties.

The case became a broad facial constitutional challenge to the IPA. Ridgeline argued that key IPA provisions violated: (1) the First Amendment (speech and petition), (2) the Fourteenth Amendment (equal protection, procedural due process, substantive due process), and (3) initially below, the Eighth Amendment (later reframed as substantive due process on appeal). The Idaho Attorney General intervened to defend the statute’s constitutionality.

The Idaho Supreme Court affirmed the district court’s intermediate appellate decision (which had affirmed the magistrate court’s amended decision), holding the disputed IPA provisions withstand Ridgeline’s facial challenges.

Summary of the Opinion

The Court upheld the IPA’s requirements that must be satisfied before a healthcare creditor may take an “extraordinary collection action” (including reporting adverse debt information to consumer reporting agencies and pursuing judicial action). The Court’s core holdings include:

Credit reporting of an unpaid medical debt is “commercial speech.” Therefore, the IPA’s restriction is reviewed under Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n of N.Y., not strict scrutiny.
Overbreadth doctrine is unavailable because it generally does not apply to commercial speech under Bd. of Trs. of State Univ. of N.Y. v. Fox.
The IPA satisfies intermediate scrutiny under Central Hudson. Importantly, the Court corrected the magistrate court’s use of prong one: “lawful activity” concerns the subject matter of the speech, not whether the regulation makes the speech unlawful.
No violation of the First Amendment right to petition/access to courts because the IPA does not bar suit; it imposes prerequisites and alters fee/penalty consequences.
No recognized (or, in any event, no infringed) “pre-petitioning activity” right under these provisions, because the IPA does not forbid sending demand letters or hiring counsel; it limits authorizing third parties to collect in another name before compliance.
Equal protection, procedural due process, and substantive due process challenges fail; the $3,000 minimum statutory damages are not “so severe and oppressive” as to be “obviously unreasonable” under St. Louis, I. M. & S. Ry. Co. v. Williams.
No appellate attorney fees awarded to either party.

Analysis

Precedents Cited

1) Standards of review and facial/overbreadth doctrine

Doe I v. Doe (2024-23) (In re Doe II): The Court reiterated that, on appeal from an intermediate appeal, it reviews the magistrate court decision independently while giving due regard to the district court; and it used the decision again in the procedural due process section for the “notice and opportunity to be heard” formulation.
Gomersall v. St. Luke's Reg'l Med. Ctr., Ltd.: Used for two purposes—(i) free review of statutory constitutionality as a legal question; and (ii) equal-protection framework (identify classification, determine scrutiny, apply scrutiny).
Moody v. NetChoice, LLC, United States v. Salerno, Wash. State Grange v. Wash. State Republican Party: These cases supplied the general facial-challenge standards (“no set of circumstances” / “plainly legitimate sweep”).
United States v. Hansen, Americans for Prosperity Found. v. Bonta: Cited for the First Amendment overbreadth test (“substantial number of unconstitutional applications”).
Bd. of Trs. of State Univ. of N.Y. v. Fox: Crucial for the proposition that commercial speech regulations “cannot be challenged as facially overbroad,” which disposed of Ridgeline’s overbreadth theory once the Court classified the speech as commercial.

2) Commercial-speech classification and scrutiny

Va. State Bd. of Pharmacy v. Va. Citizens Consumer Council, Inc.: Anchored the proposition that First Amendment guarantees apply to the states via the Fourteenth Amendment and framed “purely factual” matters as protected speech.
Brandenburg v. Ohio, Counterman v. Colorado, Miller v. California, Chaplinsky v. New Hampshire: Enumerated categories of unprotected speech, used to situate the dispute within the broader First Amendment framework.
Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n of N.Y.: Provided the four-part intermediate-scrutiny test governing restrictions on commercial speech; it is the decision’s doctrinal engine for the IPA’s credit-reporting restrictions.
Fla. Bar v. Went For It, Inc.: Cited to describe the Central Hudson inquiry as “intermediate scrutiny.”
Thompson v. W. States Med. Ctr.: Used to explain that Central Hudson’s first prong is a threshold inquiry and to support the Court’s correction of the magistrate court’s misreading of “lawful activity.”
Barr v. American Ass'n of Political Consultants, Inc.: Cited for the baseline rule that content-based regulations of noncommercial speech trigger strict scrutiny—helpful as contrast to the commercial-speech regime.
United States v. United Foods, Inc., Zauderer v. Off. of Disciplinary Counsel of Sup. Ct. of Ohio: Informed the Court’s “common sense” identification of commercial speech and its association with economic relationships.
Bolger v. Youngs Drug Products Corp. and Bd. of Trs. of State Univ. of N.Y. v. Fox: Together provided the doctrinal boundary: economic motivation alone may not convert mixed speech into commercial speech (Bolger), but adding public-issue discussion to commercial content does not necessarily elevate it to fully protected noncommercial speech (Fox quoting Bolger).
In re Primus: Distinguished because that solicitation was tied to constitutionally protected litigation activity; by contrast, adverse credit reporting was treated as a purely economic practice not implicating protected petitioning conduct.
Sorrell v. IMS Health Inc.: Rejected as the basis for applying strict scrutiny to these commercial-speech restrictions; the Court read Sorrell to point back to Central Hudson for content-based commercial-speech restrictions.

3) Petition/access-to-courts doctrine

Bill Johnson's Rests., Inc. v. NLRB, Christopher v. Harbury: Used to define the right to petition as encompassing access to courts, and to explain that access claims require an underlying cause of action that is lost or impeded.
Cal. Motor Transp. Co. v. Trucking Unlimited, BE & K Constr. Co. v. NLRB, Borough of Duryea, Pa. v. Guarnieri: Reinforced that the First Amendment petition right and Fourteenth Amendment access-to-courts concepts are intertwined (the Court rejected Ridgeline’s attempt to treat them as distinct).
Harbury and Lewis v. Casey: Supported the requirement that an access-to-courts plaintiff identify the underlying claim that was lost or likely to be lost.
Sosna v. Iowa and Newlan v. State: Key analogies validating prerequisites and procedural conditions on filing claims (durational residency; notice-of-claim requirement) where the regime creates delay or conditions but not total deprivation.
Oregon Natural Resources Council v. Mohola: Invoked by Ridgeline for strict scrutiny; the Idaho Supreme Court did not adopt Ridgeline’s framing because the IPA did not deprive access to court.

4) Pre-petition activity

Sosa v. DIRECTV, Inc.: Recognized that petitioning may include conduct “incidental to the prosecution of the suit” (e.g., demand letters). The Court found the IPA did not prohibit that sort of conduct; instead it regulates authorizing third-party collection in another name as an “extraordinary collection action.”

5) Equal protection and due process

Eisenstadt v. Baird and Lynn v. Kootenai Cnty. Fire Protective Dist. No. 1: Provided general equal-protection principles (states may classify; classifications must be related to statutory purpose; rational basis applies absent suspect class or fundamental right).
United States v. Skrmetti: Cited for the strict-scrutiny trigger for classifications based on race, alienage, or national origin.
Planned Parenthood Great Nw. v. State: Cited for the definition of a “fundamental right” as one explicitly or implicitly guaranteed by the U.S. Constitution.
St. Louis, I. M. & S. Ry. Co. v. Williams: Provided the substantive due process standard for statutory penalties: invalid only if “so severe and oppressive as to be wholly disproportioned to the offense and obviously unreasonable.”

Legal Reasoning

1) The decision’s central move: classifying adverse credit reporting as commercial speech

The Court treated the IPA’s restriction on reporting adverse patient debt information to consumer reporting agencies as regulating commercial speech, emphasizing:

The communication is “predominantly, if not entirely” about the provider’s economic interest arising from a commercial transaction.
The recipient (the consumer reporting agency) also operates from an economic motivation (compiling economic information for commercial use).
The Court rejected Ridgeline’s attempt to characterize creditworthiness as an “important public issue,” noting the limited availability of such information to the general public and the negligible public-interest component relative to the commercial purpose.

This classification produced two doctrinal consequences that effectively structured the rest of the opinion: (i) the overbreadth doctrine was unavailable, and (ii) Central Hudson intermediate scrutiny governed.

2) Correcting the lower court’s misstep on Central Hudson prong one

Although the Court affirmed, it explicitly corrected the magistrate court’s threshold analysis. The magistrate court had reasoned that reporting before meeting IPA prerequisites was “false and misleading” (or otherwise unlawful) and thus unprotected. The Idaho Supreme Court held that Central Hudson’s “lawful activity” inquiry concerns whether the speech’s subject matter concerns lawful activity—not whether the challenged regulation makes the speech unlawful.

The Court used Central Hudson itself to show the flaw: in Central Hudson, the very speech restricted by statute still satisfied prong one, otherwise judicial review of commercial-speech restrictions would collapse into circularity. With that correction made, the Court still upheld the statute under prongs two through four.

3) Applying Central Hudson to uphold the IPA’s credit-reporting prerequisites

Prong 1 (lawful and not misleading): The Court held truthful reporting of a valid debt is lawful and not misleading (thus protected as commercial speech).
Prong 2 (substantial governmental interest): The legislature’s expressed purposes in I.C. § 48-302—fair medical debt collection, patient notice, transparency, and concerns about excessive attorney fees—constituted a substantial state interest.
Prong 3 (direct advancement): By requiring notice and waiting periods before extraordinary collection actions, the IPA gives patients time to contest or pay debts before major downstream harms (credit damage and additional fees) occur.
Prong 4 (reasonable fit): The Court emphasized the IPA does not permanently bar reporting; it imposes notice-and-time prerequisites. That was deemed a “reasonable fit,” not more extensive than necessary.

4) Petition/access-to-courts: prerequisites and altered remedies are not unconstitutional “denials”

Ridgeline framed the IPA as burdening a fundamental right to petition by conditioning litigation (and especially fees and penalties) on statutory pre-suit steps. The Court treated this as an access-to-courts claim and held it failed because Ridgeline could not show an underlying cause of action was lost.

The Court’s key distinction was between: (a) total deprivation of the ability to sue (potentially unconstitutional), and (b) delay, prerequisites, or modification of remedies (often constitutional). Relying on Sosna v. Iowa and Newlan v. State, the Court concluded that because the IPA does not prevent filing suit to collect the debt—at most it affects fees/costs and imposes penalties for noncompliance—there is no petition/access violation.

5) Pre-petitioning activity: the IPA regulates third-party collection authorization, not demand letters

Even assuming (without deciding) that Sosa v. DIRECTV, Inc. reflects a protected category of pre-suit conduct “incidental” to litigation, the Court found the IPA does not prohibit sending one’s own demand letters, hiring attorneys, or obtaining legal advice. The challenged provisions cover authorizing a third party to collect in a different name before the statute’s prerequisites are met—an “extraordinary collection action” under I.C. § 48-303(3)(a) (2020).

6) Equal protection and procedural due process: derivative failures

The equal protection claim depended on the premise that the IPA burdens fundamental First Amendment rights for a disfavored class (healthcare creditors). Because the Court rejected the First Amendment violations, strict scrutiny did not apply, and Ridgeline did not argue the statute fails rational basis review.

The procedural due process claim similarly hinged on an asserted deprivation of First Amendment liberty interests. With no constitutional deprivation established, the procedural due process theory failed for lack of an essential element.

7) Substantive due process and statutory penalties: applying Williams

Ridgeline challenged I.C. § 48-311 (2020), which provides statutory damages of the greater of three times actual damages or $3,000. Under St. Louis, I. M. & S. Ry. Co. v. Williams, a state penalty violates substantive due process only if it is “wholly disproportioned” and “obviously unreasonable.” The Court held Ridgeline offered only an unsupported assertion and, given the harms the IPA targets (credit damage, abusive collection practices, excessive fees), a $3,000 minimum was not “obviously unreasonable.”

Impact

The opinion is likely to have three practical and doctrinal effects in Idaho:

Commercial-speech framing for credit reporting: Litigants challenging regulations of credit reporting (at least in the medical-debt context) should anticipate Central Hudson, not strict scrutiny or overbreadth.
Stability for “preconditions” regimes: The Court’s reliance on Sosna and Newlan signals that pre-suit conditions and notice/waiting periods—especially those that do not foreclose filing—are generally defensible against petition/access attacks.
Higher bar for attacking statutory penalties: By applying Williams and emphasizing the need for record-based support, the decision discourages purely abstract disproportionality arguments against legislatively chosen penalty floors.

Complex Concepts Simplified

“Commercial speech”: Speech mainly about an economic transaction or financial interest (here, communicating unpaid-debt information to a credit bureau). It receives less First Amendment protection than political or artistic speech.
“Overbreadth” (First Amendment): A doctrine allowing a law to be struck down if it restricts a substantial amount of protected speech compared to its legitimate reach. The Court emphasized this tool generally does not apply to commercial speech (Fox).
Central Hudson test (intermediate scrutiny for commercial speech): A four-step balancing test asking whether the speech is lawful/non-misleading; whether the state has a substantial interest; whether the regulation directly advances it; and whether the regulation is not more extensive than necessary (reasonable fit).
“Right to petition” / “access to courts”: The First Amendment protects going to court, but it does not eliminate all procedural prerequisites. A plaintiff typically must show the government actually blocked or destroyed an underlying legal claim to prove a constitutional violation (Harbury; Lewis).
Substantive due process limits on penalties: Legislatures may set statutory damages, and courts invalidate them only when they are extreme and irrationally harsh relative to the offense (Williams).

Conclusion

Ridgeline Medical, LLC v. Lyon cements two important propositions in Idaho constitutional litigation over debt-collection regulation: (1) adverse medical-debt reporting to consumer reporting agencies is commercial speech evaluated under Central Hudson, and (2) statutory prerequisites and consequences (fee limitations and penalties) that do not bar filing suit do not violate the First Amendment right to petition/access to courts. The decision also clarifies that Central Hudson’s “lawful activity” prong concerns the speech’s subject matter, not the mere existence of statutory conditions. In practical terms, the Court preserved the IPA’s framework requiring notice and waiting periods before “extraordinary collection actions,” reinforcing legislative latitude to structure medical-debt collection to promote transparency and reduce abusive practices.