American Manufacturers Mutual Insurance Company v. Sullivan
In American Manufacturers Mutual Insurance Company v. Sullivan, 526 U.S. at 40, 48, 119 S.Ct. 977, 143 L.Ed.2d 130 (1999) a class of employees sued Pennsylvania state officials, claiming that Pennsylvania's Workers' Compensation Act deprived them of property without due process.
The Act permitted insurance companies to withhold reimbursements for medical treatment from workers who suffered job-related injuries until private "utilization review organizations" determined that the treatment was "reasonable or necessary for the medical condition of the employee." Id. at 46-48, 119 S.Ct. 977.
Rejecting the employees' claim that they were entitled to the benefits as soon as the employers' liability was established, the Supreme Court held that the employees "do not have a property interest" in the benefits until they "establish that the particular medical treatment . . . was reasonable and necessary." Id. at 61, 119 S.Ct. 977.
In American Manufacturers Mutual Insurance v. Sullivan, 526 U.S. 40, 57, 119 S.Ct. 977, 143 L.Ed.2d 130 (1999), seven Justices opined that " Burton v. Wilmington Parking Authority, 365 U.S. 715, 81 S.Ct. 856, 6 L.Ed.2d 45 (1961) was one of our early cases dealing with `state action' under the Fourteenth Amendment, and later cases have refined the vague `joint participation' test embodied in that case."
Further, in American Manufacturers, the Supreme Court reversed our court's determination that private insurers became state actors by providing benefits under the extensively regulated and state-controlled workers' compensation system, admonishing our court for having "figuratively thrown up its hands and fallen back on language in our decision in Burton." Id.