Whether a medical malpractice insurer is a private or public entity can have significant implications on state-created organizations and their governance. On Dec. 16, 2024, the U.S. Court of Appeals for the Third Circuit (the Third Circuit) ruled that a medical malpractice insurer established by the Pennsylvania General Assembly is a public entity that cannot bring constitutional claims against its creator in response to legislative efforts to assume control.

The plaintiff in this case, the Pennsylvania Professional Liability Joint Underwriting Association (the JUA), was established to provide medical malpractice insurance to high-risk health care providers unable to obtain coverage in the private market. Over the years, the JUA accumulated a substantial surplus of approximately $300 million, leading the commonwealth of Pennsylvania to enact legislation (Acts 44, 41, and 15) aimed at transferring portions of this surplus to the state's general fund. Through a series of legal battles, the JUA contested these legislative actions, asserting its status as a private entity and claiming that the state's attempts constituted unconstitutional takings and violations of due process, leading directly to the Third Circuit’s ruling in Pennsylvania Professional Liability Joint Underwriting Association v. Governor of the Commonwealth of Pennsylvania (Third Circuit’s 2024 decision).