In December 2023, a case was filed in US District Court for New Jersey that challenged New Jersey’s in-state licensure law. The law (NJ Statute C:45:1-62(2)(b)) requires health care providers to be licensed in New Jersey in order to provide telehealth services to New Jersey patients. Generally, licensure of medical professionals, in this case physicians, is within the jurisdiction of states to decide and regulate, however the plaintiffs in Shannon MacDonald, MD, et al v. Otto Sabando claimed that New Jersey’s licensure restrictions preventing the cross-state use of telehealth were illegal based upon four different constitutional arguments:
- Commerce Clause & Dormant Commerce Clause
- Privileges and Immunities Clause
- First Amendment Protection on Speech
- Due Process Clause
In May 2025, the court dismissed the case and all arguments the plaintiffs had made based upon the fact that there was no discrimination against out-of-state physicians, since all physicians are equally required to obtain a license. However, the 2025 verdict is now being appealed in the US Court of Appeals for the Third Circuit.
RECAP OF THE CASE
CCHP reported on this case first in January 2024 (Starting 2024 Off With a Licensure Bang!), with updates in April 2024 (New Jersey Telemedicine Licensure Court Case) and February 2025 (Policy Clarifications & Court Cases). CCHP also covered the case in a webinar in October 2024 (Cross-state Licensure Court Cases). The MacDonald v. Sabando case involved two families who are New Jersey residents and require very specialized care from specific physicians who are located out-of-state. One patient, Jun Abell, a child, required specialized cancer treatment from Dr. MacDonald, a radiation oncologist at Massachusetts General Hospital in Boston who has expertise in pediatric oncology and proton therapy. The other plaintiff is Hank Jennings, a college student from New Jersey who was diagnosed with giant craniocervical junction chordoma. Mr. Jennings receives treatment from Dr. Paul Gardner, a neurosurgeon at the University of Pittsburgh. Both practitioners involved in this case are not licensed in New Jersey and as a result the patients must travel to see their health care providers in person as opposed to holding their visit virtually.
The law being challenged is NJ Statute C:45:1-62(2)(b) and it states:
Any health care provider who uses telemedicine or engages in telehealth while providing health care services to a patient, shall:
(1) be validly licensed, certified, or registered, pursuant to Title 45 of the Revised Statutes, to provide such services in the State of New Jersey;
(2) remain subject to regulation by the appropriate New Jersey State licensing board or other New Jersey State professional regulatory entity;
(3) act in compliance with existing requirements regarding the maintenance of liability insurance; and
(4) remain subject to New Jersey jurisdiction.
The four constitutional arguments the plaintiffs used that were dismissed by the US District Court of New Jersey are:
1.Commerce Clause & Dormant Commerce Clause
The plaintiffs’ first argument was that the New Jersey telemedicine licensure laws violate the Commerce Clause of the US Constitution because the statutes regulate and impact interstate commerce, which is in Congress’ power to oversee, and does not lie within the authority of the state.
2.Privileges and Immunities Clause
The Privileges and Immunities Clause of the US Constitution notes that all citizens are entitled to the rights in that clause, one of which is the right to practice an occupation, and that an out-of-state citizen can enjoy the same privileges as an in-state citizen. The plaintiffs argue that the New Jersey licensure laws unduly burden out-of-state practitioners like MacDonald and Garland, because they must maintain a New Jersey license when they may have very few patients to treat who are physically located in New Jersey.
3.First Amendment Protection on Speech
The plaintiffs argued that the First Amendment right to speech has been violated by limiting the ability to discuss potential treatment and follow-up care. The suit noted that because the telehealth conversations between the physician and patient must be reviewed to determine if health care services were provided, that this is a violation of the First Amendment rights of both patient and provider.
4.Due Process Clause
The Due Process Clause notes that no State can deprive any person of “life, liberty, or property without due process of law.” While many readers may be familiar with the use of the Due Process clause as it relates to criminal cases, it also protects the rights of parents to direct the care, upbringing and education of their children. Plaintiff Jun Abell is a minor and his father argued that his right to seek lawful medical care for his child was being impeded by the state’s licensure law and therefore, his Due Process rights have been violated.
THE APPEAL
The rejection by the New Jersey federal court in May 2025 led to the current appeal to the Third Circuit. A hearing was held at the end of March 2026 with the judges querying the plaintiffs on several points of their argument as was recapped in the article, “Cancer patients urge Third Circuit to ease New Jersey restrictions on out-of-state telemedicine,” published in Courthouse News Service.
One of the significant procedural points that the panel of judges focused on included whether or not the plantiffs continue to have any standing in this case. As additional context, with court cases, in order to have enough standing to bring forward any case, it must be demonstrated that the person involved will, has, or is at high risk of, suffering an injury unless the court intervenes. One of the plaintiffs in this case, Jun Abell, has not had a reoccurrence of his cancer diangosis in three years and thus has not required medical attention related to the original health concern. The attorney for the plaintiff noted that a reoccurrence was a likely event and that vigilance was needed. However, the judges questioned whether a “likely event” was enough to constitute standing or was merely hypothetical. Abell’s attorney responded that the standard for standing was immiment threat not certainty and, in this case, there is risk of reoccurrence for the plaintiff given the likelihood with this specific type of cancer.
The judges also focused on the merits of the First Amendment argument and whether or not speech constitutes treatment. One judge used the example of therapy, noting that the talking portion is therapy and therefore is a medical service, not speech. In the current case, the judge asked, wouldn’t discussion about cancer treatment options also be medical treatment, and not speech? The plaintiffs’ lawyers noted the two situtations were different and countered that in the case of cancer specifically, discussion around treatment options qualifies as speech about treatments, and not treatment itself, because the actual treatment involved other actions. The planitiff’s lawyers drove this point home by stating, “You can’t treat cancer by talking at it, unlike with mental health.”
The attorney representing the medical board, who is the defendant in this case, also experienced questioning by the panel of judges with one asking where the line is drawn around what a medical service actually is versus what it is not. Judge Hardiman used an example, asking if a physician (not licensed in New Jersey) does a Zoom call for a check-up to relay to the patient that a recent scan result was poor, would that be prosecutable under the New Jersey law? After some additional questioning, the defendant’s attorney determined that the hypothetical question posed would likely fall into the category of providing medical services, but noted it was not the type of situation that was being argued by the plaintiffs.
The judges stated that they may wait to hear how the Supreme Court decides another case, Chiles v. Salazar, before rendering their own decision. Although Chiles does not address telehealth specifically, there are still implications that have the potential to affect the utilization of virtual care. Last week, the Supreme Court returned with an 8-1 verdict in favor of the plaintiff, Chiles. Chiles v. Salazar is a challenge to a 2019 Colorado law (Colo Rev. Statu. Section 12-24-224(1)(t)(V)) that prohibited licensed counselors from engaging in conversion therapy with minors. Chiles, a licensed counselor, filed a suit in federal court noting that her First Amendment rights to speech were being limited by the law as it applied to her talk therapy. Both the district and the Tenth Circuit courts ruled that the Colorado law was regulating professional conduct and any impact on regulating speech was incidental. The case was then elevated to the Supreme Court.
In the decision for Chiles, the Supreme Court noted that in cases where speech is restricted, strict scrutiny is used and the government must prove that the restriction is “narrowly tailored to serve compelling state interests.” The Court noted that the Colorado law not only regulated Chiles’ speech, but also “prescribe(s) what views she may and may not express, discriminating on the basis of viewpoint. The law permits her to express acceptance and support for clients exploring their identity or undergoing gender transition…, but forbids her from saying anything that attempts to change a client’s “sexual oritentation or gender identity,” or “romantic attraction(s).””
Colorado did make the case that the law was a traditional law of licensing medicine, but the Supreme Court disagreed because “licensing laws have traditionally addressed qualifications, not dictated a professional’s point of view.” The Court noted that the Colorado law when applied to Chiles “seeks to silence a viewpoint she wishes to express.”
While we are uncertain how the Third Circuit will use the Chiles judgment in the current telemedicine licensing case before them, the Court noted that the Colorado law specifically impacted a point of view and unlike typical licensing laws did not address qualifications. This reasoning may not help the plaintiffs in Macdonald’s argument that their free speech has been impacted by New Jersey’s telehealth licensure law. The New Jersey licensing law being challenged does not make any specific demands on what speech is to be used. However, we will have to see how the Third Circuit decides how much weight the Chiles decision will have as they assess the First Amendment argument in Macdonald v. Sabando.
For more information read the full decision for Chiles v. Salazar, as well as the Courthouse News Service recap of the hearing for Macdonald v. Sabando. CCHP will keep you apprised of any developments in the case. |