K. Chiropractors in Three States Prevail in Challenges to Marketing Practices

     Chiropractors in Arkansas, Florida, and Illinois gained significant First Amendment commercial speech victories in anti-solicitation cases in 2001.  All three decisions -- two of which were decided by state high courts -- show that courts are requiring state officials to produce evidence that solicitation activities by chiropractors cause actual harm.  Two of the three decisions contrasted the state officials’ lack of evidence with a 106-page study on the deleterious effects of attorney advertising in Florida Bar v. Went For It, Inc., 515 U.S. 618 (1995).  All three decisions emphasized that the defendants failed to produce anecdotal evidence, studies, or other evidence supporting their regulations.

     Dr. Chris Culpepper, doing business as Liberty Chiropractic Clinic, utilized the services of a telemarketing company, Physician’s Assistance Group, to contact accident victims for chiropractic treatment.  The telemarketing group would contact victims a day or two after an accident.

     The Arkansas Board of Chiropractic Examiners charged Dr. Culpepper with committing the “unprofessional act” of soliciting business through direct contact with prospective patients.  The board fined Dr. Culpepper $3,000 and placed him on one-year probation.  Dr. Culpepper challenged this administrative ruling in court.  After a trial court affirmed the board’s ruling, he appealed to the Arkansas Supreme Court.

     On Feb. 1, 2001, the state high court reversed and ruled in favor of Dr. Culpepper.  Culpepper v. Arkansas Board of Chiropractic Examiners, 343 Ark. 467, 36 S.W.3d 335 (Ark. 2001).  The court applied the U.S. Supreme Court’s test enunciated in Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557 (1980).  Under that test, the government may freely regulate false and misleading commercial speech.  However, if the speech is not misleading and concerns lawful activity, three other requirements must be met: (1)The government must assert a substantial interest to be advanced by the regulation; (2) the regulation must advance this substantial interest in a direct and material way; and (3) the regulation must be narrowly tailored.

     Because both sides agreed that the speech in question was lawful and not misleading, the court proceeded to the remaining prongs of the Central Hudson test.  The board advanced four substantial interests: (1) protecting the privacy of accident victims at home; (2) protecting accident victims from overreaching at a time when their judgment could be impaired; (3) protecting the reputation of the chiropractic profession; and (4) reducing unnecessary medical treatment.  Dr. Culpepper did not contest these substantial interests.

     However, the state court determined that the regulation violated the final two prongs of the Central Hudson test.  The court wrote that the board “has not presented the necessary empirical evidence to support its alleged governmental interests at any stage of this case.”  The court pointed out that the board failed to present any studies or testimony on how its rule would directly advance its interests.

     The regulation also is not narrowly tailored, according to the Arkansas high court, which cited similar rulings by other courts.  See Bailey v. Morales, 190 F.3d 320 (5th Cir. 1999), and Gregory v. Louisiana Board of Chiropractic Examiners, 608 So.2d 987 (1992).  The court reasoned that the regulation could have been drafted much more narrowly. “For example, the regulation could have put a time restriction upon which solicitation was prohibited or the regulation could have identified a target group, such as accident victims, which could not be solicited,” the court concluded.

     As part of a statewide effort known as “Operation Chiro-Sweep,” numerous chiropractors were charged with violating a Florida law prohibiting unlawful insurance solicitation.  Section 817.234(8) provided in pertinent part that: “It is unlawful for any person ... to solicit any business ... for the purpose of making motor vehicle tort claims or claims for personal injury protection benefits....  Any person who violates the provisions of this subsection commits a felony of the third degree.”

     Charles Bradford, a licensed chiropractor, was charged under this section for his business relationship with Prebeck Consultants, Inc., a company that solicits appointments for chiropractors with persons involved in auto accidents.  Representatives from Prebeck would telephone accident victims to see if they would schedule an initial appointment with Dr. Bradford.  The chiropractor would then bill the victims’ insurance carriers for his services.

     After a trial court denied Dr. Bradford’s motion to dismiss, he pled no contest to the lesser offense of conspiracy to commit unlawful insurance solicitation.  As part of his agreement, he retained the right to challenge the constitutionality of the statute on appeal.

     The case proceeded to the Florida Supreme Court, which had to decide two questions: (1) whether the unlawful-insurance-solicitation statute included a requirement of specific intent to defraud the insurer; and (2) whether the statute passed the Central Hudson test.

     The court issued its opinion on May 31, 2001.  State v. Bradford, 787 So.2d 811 (Fla. 2001).  The court first determined that the statute’s plain language and legislative history showed that the statute did not include a requirement of specific intent to defraud: “Instead, it is evident to us that subsection (8) solely seeks to curtail what has come to be known as chasing business, irrespective of any intent to defraud.”

     The court then turned to its application of Central Hudson.  The parties agreed that the speech in question concerned lawful activity and was not misleading.  The state asserted several substantial interests, including: (1) protecting the public from inflated insurance rates; (2) preventing fraud and misrepresentation; (3) protecting privacy; and (4) promoting ethical standards for professionals.  The court determined that the state’s interests were indeed substantial.

     However, the Florida Supreme Court determined that the statute did not directly and materially advance its goal of eliminating insurance fraud.  The state high court pointed out that the statute applied to all solicitation for personal injury protection benefits, fraudulent or non-fraudulent.  “Thus, we conclude that the statute does not directly and materially alleviate the problem of insurance fraud and actually condemns totally lawful conduct.”

     The state high court also determined that the statute violated the last prong of Central Hudson because it was not narrowly tailored.  “The statute as written is far too broad in terms of the scope of activities it can potentially reach,” the court wrote.  “The fact that a prospective client may have had a legitimate need for chiropractic services as a result of an automobile accident would be irrelevant given that the statute contains no requirement that there be an intent to defraud.”

     The Florida high court went on to note that the U.S. Supreme Court has made it “unmistakably clear” that professional advertising is “heavily protected.”  The court pointed out that the Supreme Court upheld restrictions on professional advertising in only two cases -- Ohralik v. Ohio State Bar Association, 436 U.S. 447 (1978), and Florida Bar v. Went For It.

     The court distinguished the Florida statute in the instant case with the face-to-face disciplinary rule in Ohralik and the time limit ban in Went for It.  The court noted that the Florida unlawful-insurance-solicitation statute banned all forms of solicitation, not just face-to-face solicitation, and “is far from being narrow in scope or duration.”  Finally, the Florida high court noted that the restriction in question was a criminal statute, rather than a rule of professional conduct.

     In December 1996, the Illinois Department of Professional Regulation charged chiropractor Joseph Snell with violating a section of the Medical Practice Act prohibiting testimonials.  The section provided in pertinent part that “it is unlawful for any person licensed under this Act to use testimonials or claims of superior quality of care to entice the public.”

     Dr. Snell displayed in his office a 27-page booklet that contained preprinted forms entitled “My Chiropractic Story.”  The forms contained 14 questions and answers supplied by various patients.

     An administrative law judge recommended that Dr. Snell be reprimanded, pay a $2,500 fine, and complete continuing education courses.  In September 1999, a circuit court upheld this ruling.

     Dr. Snell appealed to the Appellate Court of Illinois, Fourth District, which reversed on First Amendment grounds in a 2-to-1 decision.  Snell v. Department of Professional Regulation of the State of Illinois, 318 Ill. App. 3d 972, 742 N.E.2d 1282 (Ill. App. Ct. 2001).

     The department argued that the testimonials in Dr. Snell’s booklet, like all testimonials, are “inherently misleading.”  The majority disagreed, saying only that they have the “potential” to be misleading.  “Testimonials are not innately more likely to deceive the public than inform it,” the court wrote.

     The court acknowledged that the state had a substantial interest in regulating the medical profession and ensuring that only truthful information reach the public.  However, the appeals court determined that the regulation violated the final two prongs of Central Hudson.

     The court noted that the department had no “anecdotal accounts of actual harm to potential customers of chiropractic who were misled or deceived by the booklet’s testimonials” and that the department did “not point to any studies or empirical evidence suggesting that the testimonials in the booklet, or any other type of testimonials, mislead or deceive potential consumers.”

     The appeals court majority also determined that the statute was not narrowly tailored enough to satisfy the last prong of Central Hudson.  The majority called the measure “disproportionately broad.”

     One judge dissented, finding that the testimonials at issue were “inherently misleading.”  The case has been appealed to the Illinois Supreme Court.