BCBS has two arguments that seem real to me: The governor is violating their property rights by telling them they can’t invoke contract rights (to terminate), which is a due process violation; and that the governor is violating their rights to procedural due process by ignoring the whole procedural framework the statute has.
The AG responds on point one by pretending it’s a Lochner-era “freedom of contract” claim, which I really think doesn’t fairly characterize the argument. To both, the AG responds that this is all really about accusing the governor of violating state law, and a federal court has no business ordering a state official to comply with state law. I think the AG is right about that, to an extent.
Is the contract claim really a state-law claim in con law drag? I’m… not sure. I think perhaps. I think it’s sufficiently unclear BCBS would prevail on that one that there probably shouldn’t be a TRO (except that far too many judges think that TROs are legit to hold-things-in-place till they can get to the merits at some future date).
What about the procedural due process claim? I think the state procedure Bryant is ignoring no more than informs a 14th amend. claim– it’s an illustration of what would be adequate, but that doesn’t mean any other process would violate due process. Perhaps its existence also shows Bryant is just making it up.
But what would BCBS be guaranteed? The executive order does lay out a process to resolve this. That may well be enough for 14th amend. purposes.
On the other hand, if this were in state court before a reasonably intelligent judge, Bryant would be toast. He’s not empowered to do what he did, and the statute he invokes actually demands this be done a different way.
Did BCBS avoid state court because they did not think they could get a reasonable forum there?