Iowa Individual Health Benefit Reinsurance Association v. State University of Iowa, Iowa State University of Science and Technology, and University of Northern Iowa

IN THE SUPREME COURT OF IOWA

No. 14–1605

Filed March 18, 2016

IOWA INDIVIDUAL HEALTH BENEFIT REINSURANCE ASSOCIATION,

Appellant,

vs.

STATE UNIVERSITY OF IOWA, IOWA STATE UNIVERSITY OF
SCIENCE AND TECHNOLOGY, and UNIVERSITY OF NORTHERN
IOWA,

Appellees.

On review from the Iowa Court of Appeals.

Appeal from the Iowa District Court for Polk County, Dennis J.

Stovall, Judge.

Nonprofit reinsurance association seeks further review of a court of

appeals decision affirming a district court judgment that association

lacked capacity to sue members for unpaid assessments. DECISION OF

COURT OF APPEALS VACATED; DISTRICT COURT ORDER

REVERSED; CASE REMANDED.

Gregory M. Lederer of Lederer Weston Craig P.L.C., Cedar Rapids,

for appellant.

Thomas J. Miller, Attorney General, Jeffrey S. Thompson, Solicitor

General, and Diane M. Stahle, Special Assistant Attorney General, for

appellees.
 2

WATERMAN, Justice.

In this appeal, we must determine whether a nonprofit corporation,

the Iowa Individual Health Benefit Reinsurance Association (IIHBRA), has

the capacity to sue its members for unpaid assessments it is statutorily

obligated to collect and, if so, whether this case is subject to mandatory

arbitration under Iowa Code section 679A.19 (2013). The IIHBRA was

created under Iowa Code chapter 513C (1997) and incorporated under

chapter 504A. 1 Chapter 513C initially included a provision listing among

the IIHBRA’s powers the authority to “sue or be sued,” a power also set

forth in chapter 504A. See Iowa Code § 513C.10(5)(b) (1997); id.

§ 504A.4(2). A 2001 amendment deleted that redundant provision from

chapter 513C but left intact the IIHBRA’s duty to collect assessments.

See 2001 Iowa Acts ch. 125, § 5. The IIHBRA sued several alleged

members—Iowa’s regent universities—for unpaid assessments. The

universities moved to dismiss, contending the 2001 amendment revoked

the IIHBRA’s power to sue. Alternatively, the universities argued the

district court lacked subject matter jurisdiction because the IIHBRA is an

administrative department, commission, or board of the state

government and is therefore required to arbitrate under Iowa Code

section 679A.19 (2013). The IIHBRA resisted, arguing it retained the

capacity to sue under chapter 504 and is not subject to the arbitration

statute. The district court, without deciding the arbitration issue, ruled

that the 2001 amendment to chapter 513C revoked the IIHBRA’s

1Chapter 504A, the Iowa Nonprofit Corporation Act, governed nonprofit
corporations when the IIHBRA was created. In 2004, the legislature enacted chapter
504, the Revised Iowa Nonprofit Corporation Act, which now governs the IIHBRA’s
powers as a nonprofit corporation. See 2004 Iowa Acts ch. 1049 (codified at Iowa Code
ch. 504 (2005)).
 3

capacity to sue and dismissed the action. The court of appeals affirmed.

We granted the IIHBRA’s application for further review.

For the reasons explained below, we hold the IIHBRA has the

capacity to sue its members in district court for unpaid assessments.

The 2001 amendment to chapter 513C left intact the IIHBRA’s capacity

to sue under chapter 504A, and the IIHBRA is not an “administrative

department, commission or board of the state government” subject to

mandatory arbitration under section 679A.19. Accordingly, we vacate

the decision of the court of appeals, reverse the district court’s dismissal

order, and remand the case for further proceedings.

I. Background and Procedural History.

This appeal involves two statutes addressing access to health

insurance, specifically high-risk policies for individuals with preexisting

medical conditions. An overview of this legislation provides context for

the issues on appeal. In 1986, the legislature enacted Iowa Code chapter

514E, which created the Iowa Comprehensive Health Insurance

Association (ICHIA). See 1986 Iowa Acts ch. 1156, § 2 (codified at Iowa

Code § 514E.2 (1987)). The ICHIA issues its own individual and group

health insurance policies to eligible Iowans. See Iowa Code § 514E.2

(2013). The goal of chapter 514E was to provide health insurance to

Iowans unable to obtain affordable coverage on the private market. See

id. The insurance commissioner determined the ICHIA program was

underutilized and, in 1994, issued a bulletin reminding private health

insurers of their obligation under section 514E.11 to notify applicants of

the option to purchase ICHIA policies whenever the insurer rejected the

applicant or offered coverage at a higher rate. Therese M. Vaughan, Iowa

Ins. Div., Bulletin No. 94–6 Utilization of Iowa Comprehensive Health

Association’s Policy Services (1994), rescinded by Nick Gerhart, Iowa Ins.
 4

Div., Bulletin No. 13-4—Rescission of Insurance Division Bulletins 4

(2013).

In 1995, the legislature enacted Iowa Code chapter 513C, the

Individual Health Insurance Market Reform Act. 1995 Iowa Acts ch. 5,

§§ 3–13 (codified at Iowa Code ch. 513C (1997)). The legislature

expressed the goal of this Act as follows:

The purpose and intent of this chapter is to promote the
availability of health insurance coverage to individuals
regardless of their health status or claims experience, to
prevent abusive rating practices, to require disclosure of
rating practices to purchasers, to establish rules regarding
the renewal of coverage, to establish limitations on the use of
preexisting condition exclusions, to assure fair access to
health plans, and to improve the overall fairness and
efficiency of the individual health insurance market.

Iowa Code § 513C.2 (1997). Section 10 created the IIHBRA, a nonprofit

corporation organized under Iowa Code chapter 504A. Id. § 513C.10(1).

Membership in the IIHBRA is mandatory for health insurance companies

selling coverage in Iowa, as well as health maintenance organizations,

fraternal societies, and self-insured employers that offer health benefit

plans subject to state insurance regulation. Id. The members are

required to “report the amount of earned premiums and the associated

paid losses for all basic and standard plans.” Id. § 513C.10(7). The

IIHBRA uses these reports to determine and collect a yearly assessment

from healthcare providers to spread the cost of providing health

insurance to Iowans who cannot afford to pay market rates for high-risk

policies. Id. § 513C.10(10).

In 2001, the legislature amended chapters 513C and 514E to

merge the boards of directors of the IIHBRA and the ICHIA and delete

from chapter 513C the enumeration of certain powers, including the

power to sue. See id. § 513C.10(5); 2001 Iowa Acts ch. 125, § 5. The
 5

amendment left intact the IIHBRA’s duty to ascertain and collect

assessments from its members. See Iowa Code § 513C.10(3) (2003). No

prohibition on suits was added. Another amendment in 2003 clarified

the members’ obligation to report data and pay assessments to the

IIHBRA. 2003 Iowa Acts ch. 91, § 26 (codified at Iowa Code § 513C.10(6)

(2005)).

The IIHBRA filed this civil action on November 1, 2013. The

IIHBRA’s petition alleges that the State University of Iowa (SUI), Iowa

State University of Science and Technology (ISU), and the University of

Northern Iowa (UNI) (collectively, the universities) are members required

to submit annual reports and pay assessments due under Iowa Code

chapter 513C. In 2010, the universities submitted their reports but

failed to pay their assessments. The IIHBRA alleges the following

assessments are owed for 2010: $508,030 from SUI, $198,852 from ISU,

and $78,131 from UNI, plus interest and costs. In 2011, the universities

failed to submit reports or pay any assessments. The IIHBRA demands

payment of the assessments as well as injunctive relief requiring annual

reporting by the universities.

On January 17, 2014, the universities filed a preanswer motion to

dismiss the petition. The universities conceded solely for purposes of the

motion (and this appeal) that they are members of the IIHBRA, which

they otherwise deny. The motion to dismiss asserted two grounds:

(1) that the IIHBRA lacks the capacity to sue based on the 2001

amendment to chapter 513C; and (2) that the district court lacks subject

matter jurisdiction because the IIHBRA is required to arbitrate this case

under Iowa Code section 679A.19, which governs disputes between

“administrative departments, commissions, and boards of the state

government.” The IIHBRA resisted on both grounds. The IIHBRA argued
 6

that its capacity to sue under Iowa Code section 504.302(1) was left

intact by the 2001 amendment because the explicit right to sue in

chapter 513C was duplicative of its right to sue under chapter 504A. See

Iowa Code § 504A.4(2) (2013). The IIHBRA also denied that it was a

department, commission, or board of state government required to

arbitrate with the universities under section 679A.19.

On August 28, the district court, without reaching the arbitration

issue, granted the universities’ motion to dismiss on the first ground.

The district court ruled that the 2001 amendment to chapter 513C

“revoke[d] the authority to sue which [the legislature] had previously

bestowed upon IIHBRA.”

The IIHBRA appealed, and we transferred the case to the court of

appeals, which affirmed the dismissal without reaching the arbitration

issue. The court of appeals concluded that the 2001 amendment

eliminated the IIHBRA’s power to sue. We granted the IIHBRA’s

application for further review.

II. Standard of Review.

“We review a district court’s ruling on a motion to dismiss for the

correction of errors at law.” Shumate v. Drake Univ., 846 N.W.2d 503,

507 (Iowa 2014) (quoting Mueller v. Wellmark, Inc., 818 N.W.2d 244, 253

(Iowa 2012)). We accept the petition’s well-pleaded factual allegations as

true, but not its legal conclusions. Id.; see also Estate of Dyer v. Krug,

533 N.W.2d 221, 222 (Iowa 1995) (reviewing for correction of errors at

law a ruling dismissing petition on grounds that plaintiff lacked the

capacity to sue). We review rulings on statutory construction for

correction of errors at law. Schaefer v. Putnam, 841 N.W.2d 68, 74 (Iowa

2013). Our standard of review of rulings on subject matter jurisdiction is
 7

also for correction of errors at law. Id. (noting court’s inherent power to

determine subject matter jurisdiction).

III. Analysis.

This appeal presents two questions of statutory interpretation.

First, we must decide whether the legislature intended in 2001 to

eliminate the IIHBRA’s power to sue its members to collect assessments

that the organization remained obligated to collect under chapter 513C

and its members remained obligated to pay. 2 We conclude the IIHBRA

retained its power to sue under section 504.302 given the lack of any

express restriction on its power to sue in chapter 513C. Second, we

must decide whether the IIHBRA is required to arbitrate this dispute

under Iowa Code section 679A.19. We conclude that section 679A.19 is

inapplicable based on our legal conclusion that the IIHBRA is not a

department, commission, or board of the state government within the

meaning of that statute.

We begin our analysis with familiar rules of statutory

interpretation. An entity created by statute is “limited in power to that

authority granted by the legislature to it.” Llewellyn v. Iowa State

Commerce Comm’n, 200 N.W.2d 881, 884 (Iowa 1972). “The goal of

statutory construction is to determine legislative intent.” Star Equip.,

Ltd. v. State, 843 N.W.2d 446, 455 (Iowa 2014) (quoting Auen v. Alcoholic

Beverages Div., 679 N.W.2d 586, 590 (Iowa 2004)). “We derive legislative

intent not only from the language used but also from the statute’s

subject matter, the object sought to be accomplished, the purpose to be

2We do not reach the question whether the universities are members of the
IIHBRA, an allegation the universities accepted as true for purposes of the motion to
dismiss and this appeal in light of the standard of review. The parties may litigate that
issue on remand.
 8

served, underlying policies, remedies provided, and the consequences of

the various interpretations.” Id. (quoting Postell v. Am. Family Mut. Ins.

Co., 823 N.W.2d 35, 49 (Iowa 2012)). “We read related statutes together

and attempt to harmonize them.” In re A.M., 856 N.W.2d 365, 372 (Iowa

2014).

A. Capacity to Sue. The universities’ primary assertion is that

the IIHBRA has no capacity to sue. “[A] party must have capacity to sue

before the party may commence and maintain a cause of action.” Iowa

Coal Min. Co. v. Monroe County, 555 N.W.2d 418, 428 (Iowa 1996).

Capacity to sue is

distinct from, although closely allied to, legal existence, or
the quality of being a person in law, and the possession of
the requisite interest to support an action, or “standing,” to
sue. Capacity relates to a party’s personal or official right to
litigate the issues presented by the pleadings. Want of
capacity to sue has reference, not to the existence of a
plaintiff, but to legal disability, such as infancy, mental
incompetence, and the like, which deprives a party of the
right to come into court.

Id. (quoting 59 Am. Jur. 2d Parties § 24 (1987)).

The fighting issue is the effect of the 2001 amendment to chapter

513C. See 2001 Iowa Acts ch. 125. The universities argue the 2001

amendment to chapter 513C stripped the IIHBRA of its capacity to sue

by deleting a provision expressly empowering it to sue. The district court

and court of appeals agreed. The IIHBRA argues the 2001 amendment

merely removed “duplicative language” and left intact its express power

to sue in Iowa Code section 504.302. We agree that the 2001

amendment did not eliminate the IIHBRA’s capacity to sue.

Because the IIHBRA is a nonprofit corporation created by statute,

the Iowa Code must establish the IIHBRA’s capacity to sue. See

Llewellyn, 200 N.W.2d at 884 (holding entities created by statute can
 9

only exercise the powers granted to them by the legislature). We

construe the 2001 amendment “mindful of the state of the law” at the

time it was enacted and of our duty to “harmonize the statute, if possible,

with other statutes on the same subject matter.” Jud. Branch v. Iowa

Dist. Ct., 800 N.W.2d 569, 576 (Iowa 2011) (quoting State v. Dann, 591

N.W.2d 635, 638 (Iowa 1999)). “When an amendment to a statute adds

or deletes words, a change in the law will be presumed unless the

remaining language amounts to the same thing.” Davis v. State, 682

N.W.2d 58, 61 (Iowa 2004).

A review of the history of the legislation is instructive. The Act that

created the IIHBRA stated that “a nonprofit corporation is established”

and “shall be incorporated under chapter 504A.” 1995 Iowa Acts ch. 5,

§ 12 (codified at Iowa Code § 513C.10(1) (1997)). The IIHBRA’s duties

included collecting reports from members, calculating the amount of

earned premiums and associated paid losses for basic and standard

insurance plans, and making assessments and distributions according to

the statute to equalize the gains and losses reported. Id. (codified at Iowa

Code § 513C.10(7)–(11)). As a nonprofit corporation, the IIHBRA enjoyed

powers under chapter 504A. Iowa Code § 504A.4(2) (1997). Chapter

504A explicitly gave nonprofit corporations the power to sue:

Each corporation, unless otherwise stated in its
articles of incorporation, shall have the power:
....
2. To sue and be sued, complain and defend, in its
corporate name.

Id. The enabling legislation that created the IIHBRA nevertheless

included a redundant power to sue:
 10
5. The association has the general powers and
authority enumerated by this section . . . . In addition, the
association may do any of the following:
....
b. Sue or be sued, including taking any legal action
necessary or proper for recovery of any assessments for, on
behalf of, or against members of the association or other
participating persons.

1995 Iowa Acts ch. 5, § 12 (emphasis added) (codified at Iowa Code

§ 513C.10(5)(b) (1997)). The parties agree the IIHBRA had the authority

to sue members to recover assessments and compel reporting under the

original enabling legislation.

The parties disagree whether that power was eliminated by the

2001 amendment to chapter 513C. As part of the 2001 amendment,

section 513C.10(5)(b), which stated the IIHBRA had the power to sue,

was indeed deleted. 2001 Iowa Acts ch. 125, § 5. The universities,

district court, and court of appeals seized on that deletion to conclude

the IIHBRA was thereby deprived of its capacity to sue. But we must

construe the 2001 amendment in light of the related statutes and the

purpose of chapter 513C. Significantly, the 2001 amendment left

unchanged the IIHBRA’s status as a nonprofit corporation under chapter

504A. 3 We must read these statutes together and harmonize them if
possible. In re A.M., 856 N.W.2d at 372. Thus, we conclude the IIHBRA

retained its power to sue as expressly provided in section 504A.302.

3The subsection making IIHBRA a nonprofit corporation was nonsubstantively
amended in 2001. Compare 1995 Iowa Acts ch 5, § 12 (codified at Iowa Code
§ 513C.10(4) (1997)) (“A nonprofit corporation is established to be known as the Iowa
individual health benefit reinsurance association. . . . The association shall be
incorporated under chapter 504A . . . .”), with 2001 Iowa Acts ch. 125, § 4 (codified at
Iowa Code § 513C.10(1)(b) (2013)) (“The Iowa individual health benefit reinsurance
association is established as a nonprofit corporation. . . . The association shall be
incorporated under chapter 504A . . . .”).
 11

So what was the purpose of the 2001 amendment? Plainly, to

merge the boards of directors of the ICHIA and the IIHBRA for greater

efficiency. By its terms, the 2001 amendment provided that the IIHBRA,

which previously had its own board of directors, 4 would thereafter

“exercise its powers through the [ICHIA’s] board of directors established

under chapter 514E.” 2001 Iowa Acts ch. 125, § 4 (codified at Iowa Code

§ 513C.10(1)(b) (2003)). The ICHIA statute, chapter 514E, was

simultaneously amended to state: “The [ICHIA] shall also be responsible

for administering the Iowa individual health benefit reinsurance

association pursuant to all of the terms and conditions contained in

chapter 513C.” Id. § 7 (codified at Iowa Code § 514E.2(1)). As part of

this reorganization, the ICHIA board of directors expanded from eleven

members to fourteen. Compare Iowa Code § 514E.2(2) (1997) (providing

for eleven director positions), with Iowa Code § 514E.2(2) (2003)

(providing for fourteen director positions). The new director positions

added to the ICHIA board mirrored, albeit imperfectly, the director

positions eliminated from the IIHBRA statute. 5 This restructuring of the

4Chapter 513C originally provided for a seven member board of directors of the
IIHBRA consisting of four members from the four largest domestic carriers of individual
health insurance in the state, and three members from the three largest carriers of
health insurance in the state. 1995 Iowa Acts ch. 5, § 12 (codified at Iowa Code
§ 513C.10(2) (1997)).
5Compare Iowa Code § 513C.10(2) (1997) (providing for a seven-person board of
directors composed of representatives from the four largest domestic carriers of
individual health insurance in the state and three members from the three largest
carriers of health insurance in the state), and id. § 514E.2(2) (enumerating eleven board
of director positions without any mandated representatives from health insurance
providers), with Iowa Code § 514E.2(2) (2003) (listing the members of a fourteen-
member board of directors, including two members representing the largest domestic
carriers of health insurance in the state and three members representing the three
largest carriers of health insurance in the state).
 12

boards of directors made the provisions in section 513C.10 referencing

the IIHBRA’s board of directors unnecessary, so they were deleted. 6

The legislative history confirms the purpose of the 2001

amendment was to merge the board of directors of the ICHIA and the

IIHBRA. The preamble to the 2001 amendment stated the Act

relat[ed] to the Iowa individual health benefit reinsurance
association and the Iowa comprehensive health insurance
association, by changing the board of directors, membership,
and assessment related to the associations, and making
changes relating to adjustments in the coverage of basic and
standard health plans.

2001 Iowa Acts ch. 125. The amendment was accompanied by a bill

explanation stating in relevant part,

The bill deletes subsections of Code section 513C.10
that address the board of directors for the [IIHBRA].
....
The bill amends Code section 514E.2 to provide that
the [ICHIA] shall be responsible for administering the
[IIHBRA] pursuant to all of the terms and conditions
contained in Code chapter 513C. . . .
The bill also amends Code section 514E.2 regarding the
composition of the board of directors of the [IIHBRA], resulting
in a merger of the boards of the [ICHIA] and the [IIHBRA].

H.F. 733, 79th G.A., 1st Sess., explanation (Iowa 2001) (emphasis

added); see Star Equip., 843 N.W.2d at 454 & n.3 (noting explanations

attached to bills are indications of legislative intent).

6Each deleted section referenced the IIHBRA’s board of directors or its
independent plan of operation. See Iowa Code § 513C.10(2) (1999) (providing for a
seven-member board of directors); id. § 513C.10(3) (requiring the association to submit
a plan of operation to address board meetings, reimbursement, and selection); id.
§ 513C.10(4) (requiring the association to approve of any delegation of the association’s
powers and duties under its plan of operation); id. § 513C.10(5) (stating the IIHBRA’s
powers are defined in part by the association’s plan of operation); 2001 Iowa Acts
ch. 125, § 5 (deleting Iowa Code § 513C.10(2)–(5)).
 13

Notably, the 2001 amendment did not eliminate the IIHBRA’s

statutory duty to collect reports and assessments from its members. It

left untouched chapter 513C’s express objective “to promote the

availability of health insurance coverage to individuals regardless of their

health status or claims experience.” Iowa Code § 513C.2) (2003). That

legislative objective is accomplished by spreading the cost of high-risk

health insurance policies for Iowans. That objective would be

undermined if assessments from members go uncollected. By contrast,

an interpretation recognizing IIHBRA’s capacity to bring suit to enforce

the provisions of chapter 513C furthers the objectives of the statute. We

interpret statutes and statutory amendments to effectuate, not thwart,

the purpose of the legislation. See Star Equip., 843 N.W.2d. at 455 (“We

derive legislative intent ... from the ... object sought to be

accomplished, the purpose to be served, . . . and the consequences of the

various interpretations.” (quoting Postell, 823 N.W.2d at 49)). We do not

believe the legislature intended to impose on the IIHBRA the obligation to

collect assessments from its members without the power to sue to

enforce collection. The 2001 amendment was not intended to render the

IIHBRA toothless to enforce its members’ obligations.

The universities rely on Iowa Code section 504.301(2), which now

provides that nonprofit corporations regulated under another statute are

subject to the restrictions in that statute. Section 504.301(2), however,

was not in the Iowa Code in 2001. See 2004 Iowa Acts ch. 1049, § 24

(codified at Iowa Code § 504.301 (2005)). Its predecessor, chapter 504A,

did not contain an equivalent provision limiting the powers of a nonprofit

corporation subject to regulation by statute. See Iowa Code ch. 504A

(2001).
 14

Subsequent amendments to section 513C.10 reinforce our

conclusion that the IIHBRA retained its capacity to sue. In 2003, the

legislature again amended section 513C.10 to add this section regarding

members’ obligation to comply with reporting requirements and pay

assessments:

For purposes of calculating and conducting the assessment,
the association shall have the express authority to require
members to report on an annual basis each member’s total
health insurance premiums and payments for subscriber
contracts and paid losses. A member is liable for its share of
the assessment calculated in accordance with this section
regardless of whether it participates in the individual
insurance market.

2003 Iowa Acts ch. 91, § 26 (emphasis added) (codified at Iowa Code

§ 513C.10(6) (2005)). The amendment’s preamble described the Act as

“relating to insurance, including . . . calculation of assessments by the

Iowa individual health benefit reinsurance association, [and] payment of

certain insurance fees.” 2003 Iowa Acts ch. 91. This amendment

expressly authorized the IIHBRA to require its members to file the annual

reports and stated its members were liable for any assessment. A person

who is “liable” is “bound or obligated according to law or equity.” Liable,

Webster’s Third New International Dictionary (unabr. ed. 2002). Again,

we do not believe the legislature intended to leave the IIHBRA powerless

to enforce its members’ obligations.

After this 2003 amendment to chapter 513C, the statute governing

nonprofit corporations was changed to state, “A corporation engaging in

an activity that is subject to regulation under another statute . . . shall

be subject to all limitations of the other statute.” 2004 Iowa Acts

ch. 1049, § 24 (codified at Iowa Code § 504.301 (2005)). The universities’

reliance on section 504.301 is misplaced because there is no provision in

chapter 513C as amended that expressly limits the power of the IIHBRA
 15

to sue. We will not construe chapter 513A’s silence as a restriction on

the unambiguous power to sue provided both before the 2004

amendment in section 504A.4(2) (2003) and after the 2004 amendment

in section 504.302(1) (2005). Rather, we read the statutes together and

harmonize them to conclude the IIHBRA retained the power to sue

following the legislature’s amendments.

The universities contended at oral argument that the insurance

commissioner has the authority to sue for the IIHBRA, obviating the

IIHBRA’s need to litigate on its own behalf. However, no provision in

chapter 513C grants the insurance commissioner the power to sue

members of the IIHBRA. Other statutes expressly grant the insurance

commissioner power to file a civil action. 7 If the legislature had intended

the insurance commissioner to collect assessments from recalcitrant

members of the IIHBRA, it could have said so in chapter 513C. It did

not.

We recognize the insurance commissioner has broad powers to

enforce the insurance laws of this state. See Iowa Code § 505.8(1) (2013)

(“The commissioner of insurance shall . . . enforce all the laws of the

state relating to federal and state insurance business transacted in the
state.”). We need not decide whether the insurance commissioner could

sue members of the IIHBRA to collect unpaid assessments. In either

7See, e.g., Iowa Code § 507C.16 (2013) (permitting the commissioner to petition
the district court for an order of liquidation); id. § 507C.17 (authorizing the
commissioner to petition the district court for an order directing the commissioner to
liquidate an insurer); id. § 507C.17A(2) (permitting the insurance commissioner to
petition the district court for an order of rehabilitation or liquidation of a domestic
insurer); id. § 521A.9(1) (authorizing the commissioner to seek an injunction to prevent
a violation of the Insurance Holding Company Systems Chapter); Huff v. St. Joseph’s
Mercy Hosp. of Dubuque Corp., 261 N.W.2d 695, 698 (Iowa 1978) (recognizing the
commissioner’s power to seek an injunction against violators of the HMO Act).
 16

case, there is nothing inconsistent in allowing the IIHBRA to have the

power to sue to enforce the statute it administers.

For these reasons, we hold the IIHBRA has the capacity to sue its

members to compel reporting and to collect assessments owed under

chapter 513C. We next consider whether the IIHBRA’s civil action may

proceed in district court or instead is subject to mandatory arbitration.

B. Jurisdictional Challenge. The universities argue that even if

the IIHBRA has capacity to sue, this dispute is subject to mandatory

arbitration. Neither the district court nor court of appeals decided this

issue. Iowa Code section 679A.19 governs disputes between government

agencies:

Any litigation between administrative departments,
commissions or boards of the state government is prohibited.
All disputes between said governmental agencies shall be
submitted to a board of arbitration of three members to be
composed of two members to be appointed by the
departments involved in the dispute and a third member to
be appointed by the governor. The decision of the board
shall be final.

Iowa Code § 679A.19 (emphasis added). The plain language of the

statute limits its application to administrative departments,

commissions, and boards of state government. See State ex rel. Iowa

Dep’t of Health v. Van Wyk, 320 N.W.2d 599, 602 (Iowa 1982) (“Under

section [679A.19], litigation is prohibited between administrative

departments, commissions, or boards of state government.”). Under this

statute, disputes that are fundamentally between executive branch

departments must be resolved through arbitration; litigation in the

courts is prohibited. Id. We have never applied this section to an entity

that was not an administrative department, commission, or board of

state government. See id. (holding dispute between the board of

chiropractic examiners and the Iowa Department of Health required
 17

arbitration under section 679.19 (1981) 8); Llewellyn, 200 N.W.2d at 884

(holding a dispute between the Board of Engineering Examiners and the

State Commerce Commission required arbitration).

If the legislature had intended to make the IIHBRA a board,

commission, or department, it presumably would have used one of those

terms to describe it, as it has done in numerous other statutes creating

such entities. The legislature identifies boards of state government as

“boards” in our statutes. See, e.g., Iowa Code § 272C.1(6) (2013)

(defining “licensing board” to include thirty-one different positions or

boards created pursuant to statute).9 State administrative departments

are also typically denominated as such by the respective enabling acts.

See, e.g., id. § 7E.5(1) (providing a nonexclusive list of the twenty-three

“principal central departments of the executive branch”). 10 Other entities

8This provision was originally codified at Iowa Code section 679.19. See 1959

Iowa Acts ch. 363, § 1. It was transferred to section 679A.19 in 1981. 1981 Iowa Acts
ch. 202, § 19. The text of the statute was not altered. See id.
9The thirty-one enumerated examples of a licensing board are the state board of
engineering and land surveying examiners; the board of examiners of shorthand
reporters; the accountancy examining board; the real estate commission; the board of
architectural examiners; the board of landscape architectural examiners; the board of
barbering; the board of chiropractic; the board of cosmetology arts and sciences; the
dental board; the board of mortuary science; the board of medicine; the board of
physician assistants; the board of nursing; the board of nursing home administrators;
the board of optometry; the board of pharmacy; the board of physical and occupational
therapy; the board of podiatry; the board of psychology; the board of speech pathology
and audiology; the board of hearing aid specialists; the board of veterinary medicine;
the director of the department of natural resources; the board of respiratory care and
polysomnography; the board of athletic training; the board of massage therapy; the
board of sign language interpreters and transliterators; the director of public health; the
plumbing and mechanical systems board; and the department of public safety. Iowa
Code § 272C.1(6). Additional boards created by enabling statutes include the real
estate improvement district board of trustees and the Bushy Creek recreation area
trails advisory board. Id. § 358C.13(1) (setting out the real estate improvement district
board of trustees); id. § 455A.8 (creating the Brushy Creek recreation area trails
advisory board).
10Thestate administrative departments are the department of management; the
department of administrative services; the department of revenue; the department of
 18

are expressly identified as a “department.” See, e.g., id. § 135.62(2)

(creating the state health facilities council as a division of the department

of health). The legislature also calls a “commission” a “commission”

when it creates one. See, e.g., id. § 521.5 (“A commission consisting of

the commissioner of insurance and the attorney general is hereby

created . . . .”). 11 The universities have not provided any statutory

support for their contention that the IIHBRA is a board, department, or

commission, and on our review of the Code, we have found none.

The IIHBRA notes other indications that it is not an arm of state

government. The employees of the IIHBRA are not paid by the State of

Iowa. By contrast, the staff members of state boards and commissions

are state employees. Most of the members of the IIHBRA are private

entities. A majority of its board of directors are private persons or

representatives of private insurers, although our state boards and

commissions are also populated with private citizens. The IIHBRA is

represented by private legal counsel, while the universities and other

state boards, commissions, and departments are represented by the Iowa

________________________
inspections and appeals; the department of agriculture and land stewardship; the
department of commerce; the economic development authority; the department of
workforce development; the department of human services; the department of public
health, the department of aging; the department of cultural affairs; the department of
education; the department of corrections; the department of public safety; the
department of public defense; the department of natural resources; the state
department of transportation; the department of human rights; an agency headed by
the state board of regents; the department for the blind; the department of veterans
affairs; and the department of homeland security and emergency management. Iowa
Code § 7E.5(1).
11The legislature has also created the alcoholic beverages commission, the dairy

industry commission, a pay-for-performance commission, and the state transportation
commission. See Iowa Code § 123.5(1) (“An alcoholic beverages commission is created
. . . .”); id. § 179.2(1) (“There is created an Iowa dairy industry commission . . . .”); id.
§ 284.14(2) (“A pay-for-performance commission is established . . . .”); id. § 307A.1A(1)
(“There is created a state transportation commission . . . .”).
 19

Attorney General. The IIHBRA is funded by its assessments collected

primarily from private sources. It does not receive appropriations or

funding from the State treasury (except indirectly to the extent public

entities pay assessments).

Section 679A.19 was enacted to reduce the costs of resolving

disputes between two state agencies. When this provision was proposed,

the purpose of the bill was to lower litigation costs for internecine

disputes between state departments:

This bill would prevent litigation between state
departments over disputes of questions of law or fact. Such
litigation is expensive, time-consuming and wasteful of
public funds. Legal counsel is employed on both sides and
in many cases such litigation continues for years. This bill
would submit such internecine disputes to arbitration.

H.F. 594, 58th G.A., Reg. Sess., explanation (Iowa 1959). This case is

not a dispute between two public entities with both sides represented by

the attorney general at public expense—the recurring situation this

statute was enacted to address.

The universities note that the legislature has created various

nonprofit corporations for economic development and research purposes

through statutes that expressly provide the entity is not a state agency or

subject to the privileges or requirements of a state agency. See, e.g.,

Iowa Code § 7D.15 (creating the public policy research foundation under

chapter 504, noting it “is not a state agency and shall not exercise any

sovereign power of the state,” and providing “the state is not liable for

any debts of the foundation”); id. § 15E.64 (authorizing the Iowa capital

investment corporation and providing that it “is not a public corporation

or instrumentality of the state and shall not enjoy any of the privileges

and shall not be required to comply with the requirements of a state

agency”); id. § 15E.204 (creating the agricultural industry finance
 20

corporation as “a private business corporation and not a public

corporation or instrumentality of the state”); see also id. § 480.3 (creating

a statewide notification center under chapter 504 and stating its board

“is subject to chapters 21 and 22”). It is a good idea for the legislature to

include such language in the enactment that creates a nonprofit entity to

clarify whether the entity is or is not subject to disclosure obligations

and other duties of state agencies. But the absence of such language in

chapter 513C does not transform the IIHBRA into an administrative

department, commission, or board of the state government.

In their appellate brief, the universities raise for the first time a

state constitutional challenge to any assessment against them under

Iowa Code chapter 513C, as violating article VII, section 1 of the Iowa

Constitution, which provides,

The credit of the State shall not, in any manner, be given or
loaned to, or in aid of, any individual, association, or
corporation; and the State shall never assume, or become
responsible for, the debts or liabilities of any individual,
association, or corporation, unless incurred in time of war
for the benefit of the State.

The universities, relying on Grout v. Kendall, 195 Iowa 467, 192 N.W. 529

(1923), argue this provision prohibits the state from “incurring

obligations by the indirect method of secondary liability.” They contend,

“The assessments at issue are redistributed to cover the losses of private

insurance carriers. The Regents would thus become responsible for the

debts of a corporation, which is constitutionally prohibited.” The

universities neglected to cite our more recent decision in Star Equipment,

which rejected a challenge under article VII, section 1. 843 N.W.2d at

462–63. Regardless, we decline to reach the universities’ constitutional

challenge because they did not raise it in district court. “It is a

fundamental doctrine of appellate review that issues must ordinarily be
 21

both raised and decided by the district court before we will decide them

on appeal.” Meier v. Senecaut, 641 N.W.2d 532, 537 (Iowa 2002). The

universities may raise that constitutional issue on remand, and we

express no opinion on its merits.

IV. Conclusion.

For these reasons, we vacate the opinion of the court of appeals

and reverse the district court ruling that granted the universities’ motion

to dismiss. We remand this case for further proceedings consistent with

this opinion.

DECISION OF COURT OF APPEALS VACATED; DISTRICT

COURT ORDER REVERSED; CASE REMANDED.