HENRY et al v. NORTH CAROLINA ACUPUNCTURE LICENSING BOARD et al

Filing 37

MEMORANDUM OPINION AND ORDER signed by CHIEF JUDGE WILLIAM L. OSTEEN, JR on 1/30/2017; that Plaintiffs' Motion for Leave to File Surreply (Doc. 33 ) is DENIED, that Defendants' Motion to Stay (Doc. 20 ) is DENIED, and that Defendants' Motion to Dismiss Amended Complaint (Doc. 22 ) is GRANTED IN PART AND DENIED IN PART. The motion is DENIED as to Count One of Plaintiffs' Amended Complaint and GRANTED as to Count Two of Plaintiffs' Amended Complaint. (Sheets, Jamie)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

ELIZABETH HENRY, et al.,
Plaintiffs,
v.
NORTH CAROLINA ACUPUNCTURE
LICENSING BOARD, et al.,
Defendants.

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1:15CV831

MEMORANDUM OPINION AND ORDER
OSTEEN, JR., District Judge
This matter comes before the court on three motions — one
by Plaintiffs and two by Defendants. Defendants move for a stay
pending state court resolution of a related case (Doc. 20) and
move to dismiss the Amended Complaint (Doc. 22). Plaintiffs move
for leave to file a surreply to Defendants’ motion to dismiss
(Doc. 33). The motions have been fully briefed and are now ripe
for adjudication. For the reasons that follow, Defendants’
motion to stay the proceedings will be denied, Defendants’
motion to dismiss will be granted in part and denied in part,
and Plaintiffs’ motion for leave to file a surreply will be
denied.

I.

FACTS AND PROCEDURAL HISTORY
The following facts are drawn from the Amended Complaint,

(Amended Complaint (“Am. Compl.”) (Doc. 19)), and are presented
in the light most favorable to Plaintiffs.

See Ashcroft v.

Iqbal, 556 U.S. 662, 678 (2009).
A.

The Parties

The parties bringing the present lawsuit (referred to
throughout as “Plaintiffs”) are as follows: Dr. Elizabeth Henry
and Dr. Aart Schulenklopper are licensed physical therapists who
currently perform a practice called “dry needling” for their
patients. (Am. Compl. (Doc. 19) ¶¶ 7, 37.) Dr. Eileen Carter and
Dr. Shondell Jones “are physical therapists who want to [perform
dry needling] but are afraid to do so.” (Id. at 7.) Finally,
“Jan Burkhard-Catlin and Lindsay Purrington are professional
ballet dancers whose job performance depends on [dry
needling] . . . .”

(Id.)

The primary Defendant in this case is the North Carolina
Acupuncture Licensing Board (“the Acupuncture Board”), which is
the “state agency charged with regulating the practice of
acupuncture.” (Id. ¶ 15.) The Amended Complaint further names
Emmylou Norfleet, M. Cissy Majebe, Karen Vaughn, Chester

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Phillips, and Marc Cutler as Defendants, all of whom are members
or directors of the Acupuncture Board and all of whom practice
acupuncture. (Id. ¶¶ 16-20.) The Amended Complaint also names
Vikki Andrews as a Defendant. Dr. Andrews is a member of the
Acupuncture Board but is not a licensed acupuncturist. (Id.
¶ 21.) The court refers to the above-mentioned parties
(collectively) throughout as the “Acupuncture Board Defendants.”
B.

Background

According to Plaintiffs, dry needling is “[a] commonly used
intervention for treating myofascial trigger point pain,” during
which “physical therapists insert needles into trigger points
(taut bands in the muscles) to relieve patients’ pain or
dysfunction.” (Am. Compl. (Doc. 19) ¶¶ 30-31.) Plaintiffs allege
that dry needling is effective for a number of medical purposes
and that physical therapists in North Carolina have performed
dry needling safely for decades. (Id. ¶¶ 33-37.) The North
Carolina Physical Therapy Board (“Physical Therapy Board”) “is
the only North Carolina state regulatory agency charged with
regulating physical therapists” and in December of 2010,
“expressly determined that dry needling is within the scope of
[the] practice of physical therapy in North Carolina. (Id.
¶¶ 39-40.)

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In contrast, Plaintiffs allege that “[a]cupuncture has its
origins in ancient Chinese Daoist philosophy and religion.”
(Id. ¶ 46.) Plaintiffs alleges that acupuncturists base their
practice on the flow of “Qi” throughout a patient’s body, which
practitioners manipulate by inserting needles at “Ashi points,”
which are based on “energy meridians” in the hope “that the
technique will cause the individual’s energy flow to rebalance.”
(Id. ¶¶ 47-48.) Because acupuncture purports to address the same
pain as dry needling, “acupuncturists in North Carolina including the acupuncturists who serve on the Acupuncture Board
- compete with North Carolina physical therapists who perform
dry needling.” (Id. ¶ 51.)
“In April 2011, the Acupuncture Board requested an Advisory
Opinion from the North Carolina Attorney General on whether dry
needling was within the scope of [the] practice of physical
therapy or, alternatively, was a form of acupuncture.” (Id.
¶ 43.) “In December 2011, the North Carolina Attorney General’s
Office opined that the Physical Therapy Board had the authority
to determine that dry needling is within the scope of practice
of physical therapy.” (Id. ¶ 44.)
Pivotally, “[s]ome consumers in the relevant market prefer
dry needling by physical therapists over Ashi point needling”

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for a number of reasons, including the fact that some insurance
plans cover dry needling while none cover acupuncture. (Id.
¶¶ 54-56.) As a result, Plaintiffs allege that “[i]n recent
years, the number of licensed physical therapists in North
Carolina who offer dry needling has grown,” inspiring
Defendants’ anticompetitive and unconstitutional conduct. (Id.
¶ 5.)
C.

Challenged Conduct

The North Carolina Association of Acupuncture and Oriental
Medicine (“Acupuncture Association”) is the trade association to
which acupuncturists practicing in North Carolina belong,
including Defendants. (Id. ¶ 66.) “Beginning in 2010, the
Acupuncture Association pressured the Acupuncture Board to use
its governmental power to suppress competition from physical
therapists.” (Id. ¶ 67.)
On June 29, 2012, the Acupuncture Board and the Acupuncture
Association formed a committee to create a “position statement”
regarding the Acupuncture Board’s tentative stance on dry
needling which would be “distributed online.” (Id. ¶ 75.) At the
same meeting, the Acupuncture Board noted that it “[had] not
received a formal complaint . . . regarding the practice of dry
needling by a physical therapist.” (Id. ¶ 76.)

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Around this same time, Acupuncture Board members began
editing the Wikipedia page for “dry needling” to reflect their
contention that dry needling is a form of acupuncture. (Id.
¶ 77.) The Acupuncture Board would later instruct one of its
members to continue editing the “dry needling” Wikipedia page in
accordance with their goals. (Id. ¶ 80.)
In or around September, 2012, the Acupuncture Board posted
its publication entitled “Dry Needling is Intramuscular Manual
Therapy is Acupuncture” (“the Publication”) on its website, on
various social media platforms and on other relevant websites or
blogs under the control of its members. (Id. ¶¶ 81-85.) The
Acupuncture Board also edited the “dry needling” Wikipedia page
to reflect the Acupuncture Board’s conclusion and to include a
link to the Publication. (Id. ¶ 84.)
The Publication, after concluding that dry needling is
acupuncture, continued that “physical therapists performing dry
needling in North Carolina” were:


engaging in a misrepresentation of the skill set
included in the scope of practice of physical
therapists in North Carolina;



confusing the public as to who may provide Acupuncture
safely;



undermining the General Assembly;

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

subject to being legally enforced to discontinue these
actions; and



endangering the public.

(Id. ¶ 82) (internal quotation marks omitted).
From October of 2012 to August of 2013, the Acupuncture
Association and the Acupuncture Board experienced a number of
disagreements regarding the appropriate manner of handling
“those who are guilty of dry needling.” (Id. ¶¶ 87-103.) The
Acupuncture Association persistently pressed the Acupuncture
Board to take more “vigorous” action, while the Acupuncture
Board stressed the fact that it only had jurisdiction over
“licensed acupuncturists” as well as the need for justification
outside “professional protectionism,” citing the lack of
complaints from anyone other than licensed acupuncturists. (Id.
¶¶ 88-89.) Without patient complaints, the Acupuncture Board
ultimately acceded to the Acupuncture Association’s demands that
it move forward with the cease-and-desist letters. (Id. ¶¶ 9098.) The Acupuncture Association’s Executive Director,
displeased with the delay in sending the cease-and-desist
letters, had two of the Acupuncture Board’s members replaced.
(Id. ¶¶ 99-100.) In a June 17, 2013 email, one of the outgoing
board members made reference to the Acupuncture Association’s

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“professional protectionist position and turf war agenda.” (Id.
¶ 100.)
Around August of 2013, the Acupuncture Board sent ceaseand-desist letters (“the Letters”) to a number of physical
therapists who advertised dry needling. (Id. ¶ 104.) The
Letters:


ordered the targets to immediately “CEASE AND DESIST”
providing dry needling services;



attached a copy of the Publication



stated that by engaging in dry needling, the target
may be engaging in illegal billing procedures and
could be subject to further action by the North
Carolina Department of Insurance; and



stated that practicing acupuncture without a license
was a Class 1 misdemeanor.

(Id. ¶ 106.) Dr. Henry and Dr. Schulenklopper were among the
physical therapists to receive the Letters at their offices.
(Id. ¶ 109.) Dr. Carter and Dr. Jones, who had plans to enter
the relevant market, heard about the Letters and decided not to
enter the market “because they did not want to subject
themselves to ‘unauthorized practice’ allegations by the
Acupuncture Board or the costs of defending against allegations
of that kind.” (Id. ¶ 111.)

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On December 5, 2014, the Acupuncture Board “revised and
republished the Publication on its website. . . . [A]nd . . .
disseminated it again to third parties.” (Id. ¶ 112.) Further,
on January 8, 2015, “Dr. Majebe e-mailed a number of her
contacts and solicited them to call CBS headquarters in New York
about a television program featuring a physical therapist
performing dry needling.” (Id. ¶ 113.) “On January 7, 2015, the
Acupuncture Association e-mailed all of its acupuncturist
members” in an attempt to raise $25,000 for the stated goal of
“[stopping] dry needling.” (Id. ¶ 115.)
On September 2, 2015, the Acupuncture Board filed a
“verified complaint against the Physical Therapy Board in Wake
County Superior Court (‘the [State] Lawsuit’).” (Id. ¶ 116.)
The State Lawsuit seeks a “declaration that dry needling by
licensed physical therapists constitutes the unlawful practice
of acupuncture,” a “permanent injunction requiring the Physical
Therapy Board to advise its licensees that dry needling is not
within the scope of physical therapy practice” and “a judgment
authorizing the Acupuncture Board to notify physical therapists
not licensed to practice acupuncture in North Carolina to cease
and desist from doing so.” (Id. ¶ 117.) The Acupuncture Board
later amended the State Lawsuit to name Dr. Henry and Dr.

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Schulenklopper, seeking a permanent injunction against them.
(Id. ¶ 124.) Plaintiffs allege that, for reasons of sovereign
immunity and nonexhaustion, the State Lawsuit is “in bad faith
and for an improper purpose.” (Id. ¶ 127.)
D.

The Relevant Market

Plaintiffs allege that “[t]he relevant market in which to
evaluate the conduct of the Acupuncture Board is the combined
market for dry needling services and Ashi point needling
services in North Carolina.”1 (Id. ¶ 52.) Specifically, “[t]here
are approximately 500 licensed acupuncturists in North Carolina”
and “approximately 200 physical therapists in North Carolina who
currently offer dry needling.” (Id. ¶ 57.)

The strictly intrastate nature of the alleged relevant
market poses no issue concerning the Sherman Act’s interstate
jurisdictional requirement, as “[Plaintiffs] need not make the
more particularized showing of an effect on interstate commerce
caused by the alleged[ly anticompetitive activity of
Defendants].” McLain v. Real Estate Bd. of New Orleans, Inc.,
444 U.S. 232, 242–43 (1980); Shahawy v. Harrison, 778 F.2d 636,
640 (11th Cir. 1985), amended, 790 F.2d 75 (11th Cir. 1986) (“In
other words, an elaborate analysis of interstate impact is not
necessary at the jurisdictional stage, only an allegation
showing a logical connection as a matter of practical economics
between the unlawful conduct and interstate commerce.”).
1

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E.

Relief Sought

Plaintiffs assert two causes of action, designated in the
Amended Complaint as Counts. Count 1 alleges a violation of
Section 1 of the Sherman Act, under 15 U.S.C. § 1. (Am. Compl.
(Doc. 19) at 44.) Count 2 alleges a violation of Substantive Due
Process under 42 U.S.C. § 1983. (Id. at 52.)
As remedies, Plaintiffs seek “a permanent injunction
prohibiting Defendants from continuing their illegal and
anticompetitive actions,” “treble damages and prejudgment
interest,” costs and attorneys’ fees. (Id. ¶ 195.)
II.

PLAINTIFFS’ MOTION FOR LEAVE TO FILE SURREPLY
Plaintiffs filed the Amended Complaint on February 3, 2016

(Doc. 19), and Defendants moved to dismiss on March 7, 2016
(Doc. 22). Plaintiffs responded on April 21, 2016 (Doc. 28) and
Defendants replied on May 27, 2016 (Doc. 32). Plaintiffs then
moved for leave to file a surreply (Doc. 33) in order to address
“new arguments that were not raised in Defendants’ initial brief
or Plaintiffs’ response brief,” alleging that such new arguments
violated Local Rule 7.3(h). (Doc. 34 at 1.) Defendants responded
(Doc. 35), and Plaintiffs again replied (Doc. 36).
In the motion to file a surreply, Plaintiffs challenge
Defendants’ reply, alleging that “Defendants argue for the first

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time that the amended complaint fails to define a relevant
market under federal antitrust law” and that “Defendants argue
for the first time that the amended complaint fails to allege
market power.” (Doc. 34 at 3.)

Because “Plaintiffs have not had

the opportunity to rebut,” they “seek leave to file a surreply
to address Defendants’ new market-definition argument and
market-power argument.” (Id. at 2-3.) “Alternatively, Plaintiffs
ask that the Court disregard these new arguments when it decides
the motions to dismiss.” (Id. at 3.)
In response, Defendants allege that, because “Plaintiffs’
Response raised the issue of threatened injury[,] . . . it is
entirely appropriate for Defendants’ Reply to address the issue
of threatened injury, which includes an analysis of the relevant
market and market power . . . .” (Doc. 35 at 3.)
Pursuant to the Local Rules for Civil Practice for this
district, “[a] reply brief is limited to discussion of matters
newly raised in the response.” LR7.3(h) (emphasis added).
Plaintiffs’ response is not the first pleading to allege
“threatened injury,” as the Amended Complaint references the
topic in three different subheadings. (Am. Compl. (Doc. 19) at
36, 38, 41.) As such, any new arguments as to market power or
definition of the relevant market were not properly raised in

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Defendants’ reply because Defendants were “on notice” as to the
“threatened injury” component of Plaintiffs’ claim upon their
receipt of the Amended Complaint. Simply put, Plaintiffs’
allegations of “threatened injury” were not “newly raised in the
response.” As such, Defendants should not have posed new
arguments seeking dismissal, for the first time in their reply,
on the ground that Plaintiffs did not adequately allege
threatened injury.
Noting the impropriety of Defendants’ new arguments
regarding market power and definition of a relevant market (as
allegedly related to “threatened injury”), but recognizing no
need for further briefing on the topics, this court denies
Plaintiffs’ motion for leave to file a surreply. This court
will, later in this Memorandum Opinion, address the sufficiency
of Plaintiffs’ Amended Complaint.
III. DEFENDANTS’ MOTION TO STAY
In response to the Amended Complaint, Defendants filed a
motion to stay the present action (Doc. 20) pending resolution
of the State Lawsuit to which Plaintiffs responded (Doc. 26) and
Defendants then replied (Doc. 27). As discussed herein, the
parties primarily dispute whether Landis v. North American Co.,

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299 U.S. 248 (1936), or Colorado River Water Conservation Dist.
v. United States, 424 U.S. 800 (1976), controls the analysis.
Defendants ask the court to apply the balancing test from
Landis v. North American Co., 299 U.S. 248, 254-55 (1936), which
they argue gives this court full discretion in deciding whether
to impose a stay. (Br. in Supp. of Mot. to Stay (“Stay Br.”)
(Doc. 21) at 9.) Defendants argue that “[n]umerous reasons exist
to support the exercise of the Court’s discretion to stay this
action” including:
(1) the novel issues of State law raised that are
already before Judge Bledsoe in the prior pending
State Court Action; (2) Plaintiffs’ overreaching
attempt to impose liability on account of the
prosecution of the prior pending State Court Action;
(3) Plaintiffs’ admissions that they seek resolution
of identical issues contained in the prior pending
State Court Action; and (4) reasons of economy and
efficiency.
(Id. at 10.) Primarily, Defendants argue that “[i]f the prior
pending State Court Action results in a determination that dry
needling is the practice of acupuncture (which would establish
that Defendants’ alleged conduct was within its statutory
authority) then all of Plaintiffs’ claims in this action will
fail.” (Id. at 11.)
Plaintiffs respond that “[t]he balancing test in
Landis . . . does not govern a motion that asks a federal court

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to defer to a state-court proceeding,” instead suggesting that
the law of abstention applies. (Doc. 26 at 1.) Further,
Plaintiffs argue that “[c]ourts reject abstention when, as here,
a federal lawsuit contains antitrust claims.” (Id.) Finally,
Plaintiffs argue that, “even if the Acupuncture Board’s motion
did involve a balancing test, that test would not allow a stay
here.” (Id. at 2.) In reply, Defendants suggest Plaintiffs are
“arguing that this Court does not have the inherent authority to
control its own docket.” (Doc. 27 at 1.)
When considering whether to stay a federal proceeding
during the pendency of a similar state court action, the Fourth
Circuit has used both the Landis doctrine (see Williford v.
Armstrong World Indus., Inc., 715 F.2d 124, 127 (4th Cir. 1983))
and the Colorado River doctrine (see Cox v. Planning Dist. I
Cmty. Mental Health & Mental Retardation Servs. Bd., 669 F.2d
940, 942–43 (4th Cir. 1982)). The Fourth Circuit recently used
the Colorado River doctrine in a situation of “abstention in
favor of ongoing, parallel state proceedings . . . .” Ackerman
v. ExxonMobil Corp., 734 F.3d 237, 248 (4th Cir. 2013); see
MidAtlantic Int’l, Inc. v. AGC Flat Glass N. Am., Inc., 497 F.
App’x 279, 281 (4th Cir. 2012); Chase Brexton Health Servs.,

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Inc. v. Maryland, 411 F.3d 457, 461 (4th Cir. 2005). This court
concludes that a stay is not appropriate under either analysis.
A.

Abstention

“Abstention . . . is the exception, not the rule. The
doctrine of abstention, under which a District Court may decline
to exercise or postpone the exercise of its jurisdiction, is an
extraordinary and narrow exception to the duty of a District
Court to adjudicate a controversy properly before it.” Moses H.
Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 14 (1983)
(emphasis added) (internal quotation marks omitted). “As has
been reiterated time and again, the federal courts have a
virtually unflagging obligation to exercise the jurisdiction
given them.” Gannett Co. v. Clark Const. Grp., Inc., 286 F.3d
737, 741 (4th Cir. 2002) (internal punctuation and quotation
marks omitted). Further, “the existence of proceedings in state
court does not by itself preclude parallel proceedings in
federal court.” New Beckley Mining Corp. v. Int’l Union, United
Mine Workers of Am., 946 F.2d 1072, 1073 (4th Cir. 1991).
B.

The Colorado River Doctrine

“In order for a federal court to abstain under the Colorado
River doctrine, two conditions must be satisfied.” Sto Corp. v.
Lancaster Homes, Inc., 11 F. App’x 182, 186 (4th Cir. 2001). The

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Fourth Circuit has summarized the approach for applying the
Colorado River doctrine:
The threshold question in deciding whether
Colorado River abstention is appropriate is whether
there are parallel federal and state suits. If
parallel suits exist, then a district court must
carefully balance several factors, with the balance
heavily weighted in favor of the exercise of
jurisdiction. Although the prescribed analysis is not
a “hard-and-fast” one in which application of a
“checklist” dictates the outcome, six factors have
been identified to guide the analysis: (1) whether the
subject matter of the litigation involves property
where the first court may assume in rem jurisdiction
to the exclusion of others; (2) whether the federal
forum is an inconvenient one; (3) the desirability of
avoiding piecemeal litigation; (4) the relevant order
in which the courts obtained jurisdiction and the
progress achieved in each action; (5) whether state
law or federal law provides the rule of decision on
the merits; and (6) the adequacy of the state
proceeding to protect the parties’ rights.
Chase Brexton Health Servs., 411 F.3d at 463–64 (citations and
quotations omitted). Thus, Colorado River and Chase Brexton
require parallel proceedings and a balance of factors before
imposing a stay or abstention.
1.

Parallel Suits

This court’s analysis begins with “[t]he threshold question
. . . whether there are parallel federal and state suits.”
Chase Brexton Health Servs., 411 F.3d at 463. “Suits are
parallel if substantially the same parties litigate
substantially the same issues in different forums.” New Beckley,
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946 F.2d at 1073. Here, the state and federal lawsuits at issue
involve “substantially the same parties.” Chase Brexton Health
Servs., 411 F.3d at 464. Plaintiffs in the present federal
action include two physical therapists who perform dry needling,
two physical therapists who would like to perform dry needling
and two dancers who receive dry needling. (Am. Compl. (Doc. 19)
¶ 7.) Defendants in the present federal action are the
Acupuncture Board and individual acupuncturists who make up the
Acupuncture Board. (Id. ¶¶ 15-21.) Defendants brought the State
Lawsuit against the Physical Therapy Board (id. ¶ 116) and later
amended their complaint to include Dr. Henry and
Dr. Schulenklopper. (Id. ¶ 124.) It appears the parties are
substantially the same for the purposes of the Colorado River
analysis.
However, it is not as clear that the issues are
sufficiently similar in both proceedings to support a finding of
“parallel proceedings” under Chase Brexton. The issue in the
State Lawsuit is “a novel issue of State law — i.e., whether or
not North Carolina recognizes a procedure termed ‘dry needling’
as being within the practice of acupuncture in North Carolina.”
(Stay Br. (Doc. 21) at 1.) In the Amended Complaint, Plaintiffs
allege that “[t]he Lawsuit seeks a declaration that dry needling

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by licensed physical therapists constitutes the unlawful
practice of acupuncture” and that “[t]he Lawsuit requests a
permanent injunction requiring the Physical Therapy Board to
advise its licenses that dry needling is not within the scope of
physical therapy practice.” (Am. Compl. (Doc. 19) ¶ 117.)
The present federal case, according to the Amended
Complaint, poses different issues. Citing the Sherman Act, Count
1 of the present suit charges Defendants with a “contract,
combination or conspiracy, in restraint of trade.” (Id. ¶ 158.)
Count 1 alleges that Defendants “caused actual anticompetitive
effects” including “deterring competitors from entering the
relevant market,” “reducing rivalry and price competition within
the relevant market” and “reducing consumer choice within the
relevant market.” (Id. ¶ 170.) Citing 42 U.S.C. § 1983, Count 2
alleges that Defendants deprived Plaintiffs of their “liberty
interest and [] property interest in pursuing their right to
earn a living in their current professions.” (Id. ¶ 185.)
Neither Count 1 nor Count 2 makes any mention of whether dry
needling constitutes acupuncture. Both counts focus on the
allegedly culpable behavior of Defendants, whether in
restriction of trade or in deprivation of Plaintiffs’
Constitutional rights. Even if Defendants were to prevail in the

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State Lawsuit, “Plaintiffs may be able to convince a federal
jury that despite [Defendants’] meritorious results in state
court, those actions in combination with other acts amounted to
anti-competitive behavior.”

W.W. Enter., Inc. v. Charlotte

Motor Speedway, Inc., 753 F. Supp. 1326, 1332 (W.D.N.C. 1990).
This court finds a recent case, North Carolina State Board
of Dental Examiners v. F.T.C., 717 F.3d 359 (4th Cir. 2013), to
be factually similar and persuasive of the present issue. As
outlined above, Defendants contend that this court should impose
a stay until the State Lawsuit determining whether dry needling
is a form of acupuncture can be resolved. Defendants contend
that such a determination is relevant to this court’s analysis
of Plaintiffs’ underlying Sherman Act claims.
As relevant here, in the Dental Examiners case, “North
Carolina’s Dental Practice Act provides that it is unlawful for
an individual to practice dentistry in North Carolina without a
license from the Board.” N.C. State Bd. of Dental Exam’rs v.
F.T.C., 717 F.3d 359, 364 (4th Cir. 2013), aff’d, ____ U.S.
____, 135 S. Ct. 1101 (2015). Additionally, “[u]nder the Dental
Practice Act, a person shall be deemed to be practicing
dentistry if that person, inter alia, removes stains, accretions

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or deposits from the human teeth.”2 Id. (emphasis added)
(internal quotation marks omitted).3
Like the present case, the Dental Examiners Board “does not
have the authority to discipline unlicensed individuals or to
order non-dentists to stop violating the Dental Practice Act.”
Id. at 364. Despite this, “the Board issued at least 47 ceaseand-desist letters to 29 non-dentist teeth-whitening providers”
which “caused non-dentists to stop providing teeth-whitening
services in North Carolina and also caused manufacturers and
distributors of teeth-whitening products used by these nondentist providers to exit or hold off entering North Carolina.”
Id. at 365.
Relevant to the present issue of the propriety of a
potential stay, neither the Fourth Circuit nor the Supreme Court
placed any emphasis on whether teeth whitening in fact
constituted the practice of dentistry. The merits of that

This quoted text would seem to provide strong support for
the dentists’ claim that teeth whitening constituted the
unauthorized practice of dentistry — a claim that, as discussed
below, the Fourth Circuit did not consider an impediment to its
ruling.
2

In an introductory comment, the Supreme Court noted that,
“[t]he Act does not specify that teeth whitening is ‘the
practice of dentistry.’” N.C. State Bd. of Dental Exam’rs v.
F.T.C., ____ U.S. ____, ____, 135 S. Ct. 1101, 1104 (2015).
3

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particular consideration played no role in the Fourth Circuit’s
determination that “substantial evidence supports the FTC’s
factual findings regarding the economic effects of the Board’s
actions and that those findings support the conclusion that the
Board’s behavior violates § 1.” Id. at 375. As in the Dental
Examiners case, the Acupuncture Board has not pointed to any
statutory or regulatory language specifying “that [dry needling]
is the practice of [acupuncture].” See Dental Exam’rs, 135
S. Ct. at 1104. It may well be that the State Lawsuit results in
a determination that dry needling is the practice of
acupuncture, but at the present time, the Amended Complaint
alleges that the Physical Therapy Board has “expressly
determined that dry needling is within the scope of practice of
physical therapy.” (Am. Compl. (Doc. 19) ¶¶ 39-40.) The State
Lawsuit may result in some change to that alleged status, but
Defendants have not demonstrated any possibility that the State
Lawsuit would retroactively apply to the historical facts
alleged by Plaintiff.

As a result, this court concludes that

this case and the State Lawsuit are not parallel proceedings
because the issues are different.

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2.

Balancing Factors

This court now turns to the second consideration for
Colorado River abstention, as described by Chase Brexton,
specifically focusing on factors “(5) whether state law or
federal law provides the rule of decision on the merits; and (6)
the adequacy of the state proceeding to protect the parties’
rights.” 411 F.3d at 463–64.
With regards to factor (5), antitrust jurisdiction
(including claims arising under the Sherman Act, such as Count
1) is exclusively federal. Kruse v. Snowshoe Co., 715 F.2d 120,
124 (4th Cir. 1983). As such, factor (6) weighs heavily against
abstention in the present case. “While the Fourth Circuit has
yet to address the impact of claims subject to exclusive federal
jurisdiction on the Colorado River analysis, some courts have
declined to abstain when a lawsuit includes a claim that is
subject to exclusive federal jurisdiction.” Krieger v. Harris
Teeter Supermarkets, Inc., No. 3:13CV453, 2013 WL 5304847, at *4
(W.D.N.C. Sept. 19, 2013) (collecting cases). On at least one
occasion, the Fourth Circuit has recognized this reasoning when
a “case involves federal antitrust claims. Thus, not only is the
source of law on that portion of the action federal, but the
district court has exclusive jurisdiction over those claims.”

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Kruse, 715 F.2d at 124; see also Andrea Theatres, Inc. v.
Theatre Confections, Inc., 787 F.2d 59, 63 (2d Cir. 1986)
(“Claims 1 and 2 of the complaint seek relief under the private
enforcement provision of the Clayton Act, which is only
available in federal court and is predicated on federal rights.
Even apart from the grant of exclusive federal jurisdiction, the
possibility that the state court will conclusively resolve the
Theaters’ anti-trust claims is slim.”). Further, one court noted
that the “only forum available for Plaintiffs to bring their
Sherman Act claims is in federal court. . .[and] that the issues
presented in the federal case will most likely have to be
litigated in a federal forum regardless of the result in the
state case.”

W.W. Enter., 753 F. Supp. at 1332 (internal

quotations omitted).
Because the issues between the state and federal
proceedings are not “parallel” and because Plaintiffs could not
vindicate their rights under the Sherman Act in state court,
this court finds that abstention, even temporarily, is improper
under Colorado River.
C.

The Landis Doctrine

Turning to the Landis doctrine, the
[Power to grant a discretionary stay pending state
court proceedings under Landis] in the district courts
- 24 -

is well recognized. It is not, however, without
limitation. . . . [P]roper use of this authority calls
for the exercise of judgment which must weigh
competing interests and maintain an even balance. The
party seeking a stay must justify it by clear and
convincing circumstances outweighing potential harm to
the party against whom it is operative. The suppliant
for a stay must make out a clear case of hardship or
inequity in being required to go forward, if there is
even a fair possibility that the stay for which he
prays will work damage to someone else.
Williford v. Armstrong World Indus., Inc., 715 F.2d 124, 127
(4th Cir. 1983) (internal quotation marks omitted). “The grant
or denial of a request to stay proceedings calls for an exercise
of the district court’s judgment to balance the various factors
relevant to the expeditious and comprehensive disposition of the
causes of action on the court’s docket.” Maryland v. Universal
Elections, Inc., 729 F.3d 370, 375 (4th Cir. 2013) (internal
quotation marks omitted). “Courts have identified these various
factors to include the interests of judicial economy, the
hardship and inequity to the moving party in the absence of a
stay, and the potential prejudice to the non-moving party in the
event of a stay.” Yadkin Riverkeeper, Inc. v. Duke Energy
Carolinas, LLC, 141 F. Supp. 3d 428, 452 (M.D.N.C. 2015); White
v. Ally Fin. Inc., 969 F. Supp. 2d 451, 462 (S.D. W. Va. 2013);
Sehler v. Prospect Mortg., LLC, No. 1:13cv473 (JCC/TRJ), 2013 WL
5184216, at *2 (E.D. Va. Sept. 16, 2013); Johnson v. DePuy

- 25 -

Orthopaedics, Inc., C/A No. 3:12-cv-2274-JFA, 2012 WL 4538642,
at *2 (D.S.C. Oct. 1, 2012).
First, this court must consider “the interests of judicial
economy.” Yadkin Riverkeeper, 141 F. Supp. 3d at 452.
Defendants argue that “[i]f the prior pending State Court Action
results in a determination that dry needling is the practice of
acupuncture (which would establish that Defendants’ alleged
conduct was within its statutory authority) then all of
Plaintiffs’ claims in this action will fail.” (Stay Br. (Doc.
21) at 11.) As analyzed above, this court concludes that the
State Lawsuit and the present proceedings revolve around
different issues, so the potential for “needless duplication of
work and the possibility of inconsistent rulings” do not weigh
heavily in favor of granting a stay because the present
litigation will continue regardless of the result of the State
Lawsuit. Sehler, 2013 WL 5184216, at *2. This court assumes the
veracity of plausibly-pleaded facts, and the Amended Complaint
alleged that dry needling is presently considered physical
therapy and regulated by the Physical Therapy Board. (Am. Compl.
(Doc. 19) ¶¶ 38-45.) The state court’s determination is
therefore not irrelevant; but on balance, the limited relevance
is not sufficient to suggest judicial economy would be served

- 26 -

significantly by a stay. Further, as suggested above, Defendants
have presented no authority suggesting that a favorable
resolution of the State Lawsuit would retroactively relieve them
of antitrust liability.
Second, this court must consider “the hardship and inequity
to the moving party in the absence of a stay.” Yadkin
Riverkeeper, 141 F. Supp. 3d at 452. Without a stay, Defendants
will have to continue to defend this litigation while pursuing
their claims in the State Lawsuit. However, Defendants do not
face the risk of duplicative or inconsistent verdicts against
them, as they are the plaintiffs in the State Lawsuit. Further,
because the State Lawsuit and the present litigation may concern
similar issues of fact (despite different issues of law),
Defendants will be working with at least some of the same
witnesses and producing the same documents during discovery,
which would not result in significant prejudice.
Finally, this court must consider “the potential prejudice
to the non-moving party in the event of a stay.” Yadkin
Riverkeeper, 141 F. Supp. 3d at 452. If this court were to
impose a stay, any injury that Plaintiffs are allegedly
suffering or have already suffered as a result of Defendants’
allegedly anticompetitive conduct would be allowed to persist

- 27 -

for the pendency of the State Lawsuit and any ensuing appeals.
See id. at 453. Further, as noted above, because Plaintiffs’
antitrust claims are claims of exclusively federal jurisdiction,
to delay these proceedings would be to deprive Plaintiffs of
their only method of pursuing these rights. While Defendants
would remain free to present evidence that dry needling is
acupuncture, thereby limiting injury in the absence of a stay,
Plaintiffs’ injury in the face of a stay is significant and this
factor therefore weighs in favor of denying the motion.
“In short, the defendant has failed to make a ‘clear case
of hardship or inequity’ as required by Landis and Williford.”
White v. Ally Fin. Inc., 969 F. Supp. 2d 451, 463 (S.D. W. Va.
2013). As such, Defendants’ motion to stay will be denied under
both the Colorado River and Landis doctrines.
IV.

DEFENDANTS’ MOTION TO DISMISS
A.

Standard of Review

“To survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to ‘state a claim
to relief that is plausible on its face.’” Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 570 (2007)). A claim is facially
plausible provided the plaintiff provides enough factual content

- 28 -

to enable the court to reasonably infer that the defendant is
liable for the misconduct alleged. Id. The pleading setting
forth the claim must be “liberally construed” in the light most
favorable to the nonmoving party, and allegations made therein
are taken as true. Jenkins v. McKeithen, 395 U.S. 411, 421
(1969).
However, “the requirement of liberal construction does not
mean that the court can ignore a clear failure in the pleadings
to allege any facts [that] set forth a claim.” Estate of
Williams-Moore v. Alliance One Receivables Mgmt., Inc., 335
F. Supp. 2d 636, 646 (M.D.N.C. 2004).
Rule 12(b)(6) protects against meritless litigation by
requiring sufficient factual allegations “to raise a right to
relief above the speculative level” so as to “nudge[] the[]
claims across the line from conceivable to plausible.” Twombly,
500 U.S. at 555, 570; see Iqbal, 556 U.S. at 662.
Under Iqbal, the court performs a two-step analysis. First,
it separates factual allegations from allegations not entitled
to the assumption of truth (i.e., conclusory allegations, bare
assertions amounting to nothing more than a “formulaic
recitation of the elements”). Iqbal, 556 U.S. at 681. Second, it
determines whether the factual allegations, which are accepted

- 29 -

as true, “plausibly suggest an entitlement to relief.” Id. “At
this stage of the litigation, a plaintiff’s well-pleaded
allegations are taken as true and the complaint, including all
reasonable inferences therefrom, are liberally construed in the
plaintiff’s favor.”

Estate of Williams-Moore, 335 F. Supp. 2d

at 646.
B.

Sherman Act Claim

In support of their motion to dismiss Count 1 of
Plaintiffs’ Amended Complaint, Defendants contend that
“Plaintiffs fail to sufficiently allege that (1) Defendants’
conduct has a substantial effect on interstate commerce; (2) the
necessary antitrust injury; or (3) the specific conduct of each
individual defendant regarding the alleged conspiracy.” (Defs.’
Br. in Supp. of Mot. to Dismiss Am. Compl. (“Mot. to Dismiss
Br.”) (Doc. 23) at 8.) Plaintiffs respond to each argument in
turn (Pls.’ Resp. in Opp’n to Defs.’ Mot. to Dismiss (“Pls.’
Resp.”) (Doc. 28) at 4-13.) As discussed above, in addition to
further arguing the sufficiency of Plaintiffs’ injury
allegations, Defendants raise new arguments regarding relevant
market and market power in their reply. (Doc. 32 at 3-8.)

- 30 -

i.

Substantial Effect on Interstate Commerce

First, Defendants argue that “Plaintiffs Do Not Allege a
Substantial Effect on Interstate Commerce.” (Mot. to Dismiss Br.
(Doc. 23) at 8.) Defendants assert that Plaintiffs’ use of the
phrase “‘in North Carolina’ more than thirty times to describe
the purely intrastate conduct at issue, is again selfdefeating.” (Id. at 8-9.) Defendants also argue that Plaintiffs’
use of the phrase “‘upon information and belief’” are “‘legal or
speculative’ conclusory allegations [which] do not identify any
actual harm with the requisite plausibility and cannot support
an anti-trust claim.” (Id. at 9-10.)
Plaintiffs agree that, “[t]o state a violation of the
Sherman Act, a plaintiff must allege a ‘substantial effect on
interstate commerce.’” (Pls.’ Resp. (Doc. 28) at 5) (citing
Hosp. Bldg. Co. v. Trustees of Rex Hosp., 425 U.S. 738, 744
(1976)).) Plaintiffs argue that “the complaint contains over
three pages of allegations that describe the substantial effects
on interstate commerce that the [Acupuncture] Board’s conduct
has caused, and will cause . . . .” (Id. at 6.) In the Amended
Complaint, Plaintiffs allege six “substantial effects on
interstate commerce” and twelve “threatened additional
substantial effects on interstate commerce.” (Am. Compl. (Doc.

- 31 -

19) ¶¶ 173-74.) Plaintiffs allege that physical therapists have
refrained from purchasing dry needling equipment from out-ofstate manufacturers or from taking dry needling classes from
out-of-state education programs as a result of Defendants’
actions. (Id.) Further, Plaintiffs allege that Defendants’
behaviors have affected the revenues of out-of-state insurance
companies that reimburse North Carolina physical therapists who
would be performing dry needling. (Id.) Whether these
allegations are in fact true or accurate, they are at least
plausibly alleged and therefore sufficient.
Contrary to Defendants’ assertions regarding the
purportedly “intrastate” nature of Plaintiffs’ claims, “the fact
that an effect on interstate commerce might be termed ‘indirect’
because the conduct producing it is not ‘purposely directed’
toward interstate commerce does not lead to a conclusion that
the conduct at issue is outside the scope of the Sherman Act.”
Rex Hosp., 425 U.S. at 744. The Sherman Act is satisfied even
when alleged actions “substantially affected interstate commerce
. . . as a matter of practical economics” when more or less
purchases from out-of-state retailers or wholesalers occur as a
result of the alleged actions. Id.

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Further, complaints with similar allegations as to the
impact on interstate commerce have survived motions to dismiss.
See Ballard v. Blue Shield of S. W. Virginia, Inc., 543 F.2d
1075, 1077 (4th Cir. 1976) (“The complaint alleges that the
defendants’ violations of the Sherman Act adversely affect
interstate commerce by reducing the sale of therapeutic devices
and equipment that are manufactured outside of West Virginia and
purchased by chiropractors and their patients in the state . . .
[and] that the violations increase the cost of health care to a
substantial number of patients who travel in interstate commerce
for chiropractic treatment, and that the defendants’ monopoly
injures interstate insurance companies that pay chiropractic
claims.”); O’Leary v. Purcell Co., No. C-83-691-R, 1984 WL 1148,
at *4-5 (M.D.N.C. June 11, 1984) (“The conduct complained
of . . . occurred in the flow of interstate commerce or
substantially affected interstate commerce, the vast majority of
the purchasers of resort housing from both Plaintiffs and
Defendants coming from outside of North Carolina; many of the
purchasers of resort housing from Plaintiffs and Defendants not
having relocated to North Carolina, and continuing to pay
mortgages on the resort housing through interstate mail and
banking facilities; and the conduct of Defendants resulting in a

- 33 -

reduction of the amount of resort housing constructed by
Plaintiffs.”); In re Mid-Atl. Toyota Antitrust Litig., 525 F.
Supp. 1265, 1280 (D. Md.), modified, 541 F. Supp. 62 (D. Md.
1981), aff’d sub nom. Com. of Pa. v. Mid-Atl. Toyota
Distributors, Inc., 704 F.2d 125 (4th Cir. 1983).
Plaintiffs also point to the fact that some of their
alleged impacts on interstate commerce “are identical to the
interstate effects in Rex Hospital.” (Pls.’ Resp. (Doc. 28) at
6.) The complaint in Rex Hospital included allegations that “if
respondents and their coconspirators were to succeed in blocking
petitioner’s planned expansion, petitioner’s purchases of outof-state medicines and supplies as well as its revenues from
out-of-state insurance companies would be thousands and perhaps
hundreds of thousands of dollars less than they would otherwise
be.” 425 U.S. at 744. Additionally, the Rex Hospital complaint
alleged that “the management fees that petitioner pays to its
out-of-state parent corporation would be less if the expansion
were blocked. Moreover, the multimillion-dollar financing for
the expansion, a large portion of which would be from out of
State, would simply not take place if the respondents succeeded
in their alleged scheme.” Id. This court finds that Plaintiffs

- 34 -

have satisfied their obligation, at this stage, to plausibly
allege an impact on interstate commerce.
ii.

Injury in Fact and Antitrust Injury

Second, Defendants allege that “Plaintiffs have not
suffered any injury - dry needling is still being performed by
physical therapists . . . [and] the purported consumers . . .
affirmatively allege that they continue to receive dry needling
without interruption.” (Mot. to Dismiss Br. (Doc. 23) at 13.)
Defendants further argue that “Plaintiffs fail to allege that
the prices charged by physical therapists for dry needling have
changed or that acupuncturists . . . have increased the prices
charged for their services. . . . [Thus], the market has not
been injured.” (Id. at 13-14.)
Antitrust injury involves two distinct questions . . .
whether the plaintiff has indeed suffered harm, or injury-infact . . . [and] whether any such injury is injury of the type
the antitrust laws were intended to prevent and that flows from
that which makes defendants’ acts unlawful.” In re Titanium
Dioxide Antitrust Litig., 284 F.R.D. 328, 344-45 n.13 (D. Md.
2012), amended, 962 F. Supp. 2d 840 (D. Md. 2013) (internal
quotations omitted); see Atl. Richfield Co. v. USA Petroleum
Co., 495 U.S. 328, 334 (1990).

- 35 -

(a)

Injury in Fact

In support of the first question (injury in fact), the
Amended Complaint alleges that “[t]he Acupuncture Board has
dampened demand for dry needling through its anticompetitive
acts” and that these acts “have deterred North Carolina
consumers within the relevant market from seeking dry needling
services from [Plaintiffs].” (Am. Compl. (Doc. 19) ¶ 132.)
Additionally, “the Acupuncture Board’s anticompetitive
acts . . . have deterred Dr. Carter and Dr. Jones from entering
the relevant market,” depriving them of “substantial profits if
they and their respective practices had been able to enter the
relevant market.” (Am. Compl. (Doc. 19) ¶¶ 135, 139.) Finally,
Plaintiffs allege that the Acupuncture Board’s “anticompetitive
exclusion will deprive Ms. Burkhard-Catlin and Ms. Purrington of
the benefits of consumer choice and price competition in the
relevant market.” (Am. Compl. (Doc. 19) ¶ 153.)
Defendants’ arguments that Plaintiffs have not experienced
any injury, as evidenced by the fact that they continue to
perform and receive dry needling, is not persuasive, as “[t]he
‘injury’ in the typical antitrust case is relative in nature.”
Lee-Moore Oil Co. v. Union Oil Co. of California, 599 F.2d 1299,
1305 (4th Cir. 1979) (internal quotations omitted). The Fourth

- 36 -

Circuit has noted that “a plaintiff need not prove that
competition has actually been diminished in order to show
antitrust injury.”

Id. at 1304. “No matter how thriving his

business may be, no matter how large his rate of profit may be,
no matter how impressive his annual report may be, the substance
of his claim is that he would have been even Better off if the
defendant’s alleged misdeeds had never taken place.” Id. at
1305. This court finds that Plaintiffs have sufficiently alleged
injury in fact.
(b)

Antitrust Injury

The second question as to antitrust injury is whether
Plaintiffs’ alleged damages constitute “injur[ies] of the type
the antitrust laws were intended to prevent . . . .”

Atl.

Richfield Co., 495 U.S. at 334. Plaintiffs allege that “by
expelling a popular horizontal competitor from the relevant
market, the Acupuncture Board will eliminate price competition
for Ashi point needling services.” (Am. Compl. (Doc. 19) ¶ 155.)
Defendants contend that “injury to oneself is insufficient to
support an antitrust claim” and that “a party is not permitted

- 37 -

to allege lost profits ‘upon information and belief.’”4

(Mot. to

Dismiss Br. (Doc. 23) at 14.)
“[A]ntitrust laws were enacted for the protection of
competition, not competitors, [and] a plaintiff must show that
the net effect of a challenged restraint is harmful to
competition.” Cont’l Airlines, Inc. v. United Airlines, Inc.,
277 F.3d 499, 508 (4th Cir. 2002) (internal quotations omitted).
“Lost profits and the costs of finding alternatives to mitigate
the damages caused by an antitrust violation may constitute
antitrust injury.” Id. Antitrust liability exists when “the
challenged conduct is, at its core, concerted action excluding a
lower-cost and popular group of competitors, and no advanced
degree in economics is needed to recognize that the behavior is
likely to harm competition and consumers, absent a compelling
justification.” Dental Exam’rs, 717 F.3d at 374 (internal
quotations and citations omitted).

None of the cases that Defendants cite for this
proposition are antitrust cases. Specifically, “in antitrust
cases . . . dismissals prior to giving the plaintiff ample
opportunity for discovery should be granted very sparingly.”
Hosp. Bldg. Co. v. Trustees of Rex Hosp., 425 U.S. 738, 746
(1976). The reason for any alleged lost profits depends upon the
knowledge and actions within a relevant market involving third
parties. As a result, this court does not find allegations made
“upon information and belief” as to damages to be a basis for
dismissal in this case.
4

- 38 -

Plaintiffs allege that physical therapists performing dry
needling are “a popular type of horizontal competitor” to
acupuncturists and that, because the procedures are covered by
some insurance plans, dry needling is cheaper than acupuncture.
(Am. Compl. (Doc. 19) ¶¶ 54-56, 161.) Plaintiffs further allege
that “[w]ithout an alternative to Ashi point needling, there
will be no barrier to raising the price for Ashi point needling
services.” (Id. ¶ 155.) In Dental Examiners, the Fourth Circuit
imposed antitrust liability because “[i]t is not difficult to
understand that forcing low-cost teeth-whitening providers from
the market has a tendency to increase a consumer’s price for
that service.” 717 F.3d at 374. Here, Defendants similarly
attempt to “force low-cost [dry needlers] from the market,”
which this court recognizes would “[have] a tendency to increase
a consumer’s price . . . .” Id. This court agrees with
Plaintiffs and finds that the Amended Complaint adequately
alleges “the type of injuries the antitrust laws were intended
to prevent.” (Id. ¶ 156.)
iii. Existence of a Conspiracy
Third, Defendants argue that “Plaintiffs Fail to
Sufficiently Allege the Existence of a Conspiracy.” (Mot. to
Dismiss Br. (Doc. 23) at 15.) Relying upon district court cases

- 39 -

from Michigan and Ohio, Defendants argue that Plaintiffs are
required to individually assign wrongful acts to each named
defendant in the case and that “Plaintiffs do not allege
specific acts of each of the individual members.” (Id. at 16.)
In response, Plaintiffs point to paragraphs 65 to 129 of the
Amended Complaint (Doc. 19) and provide a list of examples,
which they allege “plead[] the details of explicit agreements
among the Defendants and their fellow acupuncturists.” (Pls.’
Resp. (Doc. 28) at 12.) Plaintiffs also allege that “e-mails
between [the Acupuncture Board’s] members, confirm that its
members, after extensive discussion, reached an explicit
agreement to engage in the anticompetitive conduct described
above.” (Am. Compl. (Doc. 19) ¶ 163.)
15 U.S.C. § 1 states: “Every contract, combination in the
form of trust or otherwise, or conspiracy, in restraint of trade
or commerce among the several States, or with foreign nations,
is declared to be illegal.” “Section [O]ne’s prohibition against
restraint of trade applies only to concerted action, which
requires evidence of a relationship between at least two legally
distinct persons or entities.” SD3, LLC v. Black & Decker (U.S.)
Inc., 801 F.3d 412, 424 (4th Cir. 2015), as amended on reh’g in
part (Oct. 29, 2015), cert. denied, ____ U.S. ____, 136 S. Ct.

- 40 -

2485 (2016) (internal quotations omitted). Stating a claim under
Section One of the Sherman Act “requires a complaint with enough
factual matter (taken as true) to suggest that an agreement was
made. Asking for plausible grounds to infer an agreement . . .
simply calls for enough fact to raise a reasonable expectation
that discovery will reveal evidence of illegal agreement.”
Twombly, 550 U.S. at 556. “[T]he complaint must specify how
these defendants were involved in the alleged conspiracy,
without relying on indeterminate assertions against all
defendants.”

SD3, LLC, 801 F.3d at 422 (internal quotation

marks omitted). “A reviewing court must take account of the
absence of a plausible motive to enter into the alleged
conspiracy.” Loren Data Corp. v. GXS, Inc., 501 F. App’x 275,
280 (4th Cir. 2012) (internal quotation marks omitted).
Further, as a general matter of policy, “[i]n antitrust cases in
particular, the Supreme Court has stated that ‘dismissals prior
to giving the plaintiff ample opportunity for discovery should
be granted very sparingly.’” Advanced Health-Care Servs., Inc.
v. Radford Cmty. Hosp., 910 F.2d 139, 144 (4th Cir. 1990)
(quoting Hospital Bldg. Co. v. Trustees of Rex Hosp., 425 U.S.
738, 747 (1976)).

- 41 -

Defendants allege that “Plaintiffs cannot escape their
burden of alleging that each defendant participated in the
alleged conduct.” (Mot. to Dismiss Br. (Doc. 23) at 16.) In
paragraphs 164 to 169 of the Amended Complaint (Doc. 19),
Plaintiffs specifically allege the individual involvement and
acquiescence of each named Defendant. Here, however, “Plaintiff
has alleged something more than bare allegations of parallel
conduct and a recitation of the elements. For instance,
Plaintiff alleges an actual agreement initiated by specific
persons. Further, Plaintiff identifies specific persons involved
in the conspiracy and provides an approximate time period for
the alleged conspiracy.” Milliken & Co. v. CNA Holdings, Inc.,
No. 3:08-CV-578, 2011 WL 3444013, at *5 (W.D.N.C. Aug. 8, 2011).
This court finds that Plaintiffs, in alleging each individual
Defendant’s involvement with the alleged conspiracy as well as
the existence of e-mail responses indicating the participation
and acquiescence of each, have sufficiently alleged a conspiracy
for purposes of surviving a motion to dismiss.
Plaintiffs have also named the Acupuncture Board as a
defendant. (Am. Compl. (Doc. 19) ¶ 15.) While not binding on
this court, the Third Circuit has held that, “in assessing
whether a trade association (or any other group of competitors)

- 42 -

has taken concerted action, a court must examine all the facts
and circumstances to determine whether the action taken was the
result of some agreement, tacit or otherwise, among members of
the association.” Alvord-Polk, Inc. v. F. Schumacher & Co., 37
F.3d 996, 1007–08 (3d Cir. 1994) (footnote and citations
omitted). “The actions of a group of competitors taken in one
name present the same potential evils as do the actions of a
group of competitors who have not created a formal organization
within which to operate.” Id. at 1007. Further, “[a trade
association] can only be held liable for concerted action if it
acted as an entity.” Id. Plaintiffs allege that the Acupuncture
Board issued the Publication, sent the cease-and-desist letters
and filed the State Lawsuit, as an entity, at the direction of
its members. (Am. Compl. (Doc. 19) ¶¶ 81, 108, 116.) This court
finds that the above allegations satisfy the pleading
requirement at this stage.
C.

Equal Protection Claim

In support of their motion to dismiss Count 2, Defendants
claim that “Plaintiffs have not: (1) been deprived of anything;
(2) identified any clearly established constitutional rights; or
(3) alleged specific conduct of each defendant.” (Mot. to

- 43 -

Dismiss Br. (Doc. 23) at 16-17.) Defendants also attempt5 to
incorporate a portion of the relevant analysis contained in
their brief in support of the motion to dismiss (Doc. 13) filed
December 22, 2015.
42 U.S.C. § 1983 provides:
Every person who, under color of any statute,
ordinance, regulation, custom, or usage, of any State
or Territory or the District of Columbia, subjects, or
causes to be subjected, any citizen of the United
States or other person within the jurisdiction thereof
to the deprivation of any rights, privileges, or
immunities secured by the Constitution and laws, shall
be liable to the party injured in an action at law,
suit in equity, or other proper proceeding for
redress . . . .
“To state a claim under § 1983, a plaintiff must allege the
violation of a right secured by the Constitution and laws of the
United States, and must show that the alleged deprivation was
committed by a person acting under color of state law.”

West v.

Atkins, 487 U.S. 42, 48 (1988).

Plaintiffs note that “[t]he Board incorporates 12
pages of substantive argument from its December 22, 2015 motionto-dismiss brief . . . for a total of 32 pages” and that “[t]he
Board’s 32-page brief violates this Court’s Local Rules.”
(Pls.’ Resp. (Doc. 28) at 2 n.1.) Local Rule 7.3(d) explicitly
states that “[b]riefs in support of motions and responsive
briefs are limited in length to 20 pages, and reply briefs are
limited to 10 pages.” LR7.3(d) (emphasis added). This court
agrees with Plaintiffs that Defendants’ incorporation is not
permitted by the rules.
5

- 44 -

Plaintiffs allege that they “have a liberty interest and a
property interest in pursuing their right to earn a living in
their current professions.” (Am. Compl. (Doc. 19) ¶ 185.)
Plaintiffs do not, however, provide any legal basis for the
conclusion that earning a living by performing dry needling is
“a right secured by the Constitution and laws of the United
States . . . .”

Brooks v. Siler, No. 1:14CV794, 2015 WL 136093,

at *2 (M.D.N.C. Jan. 9, 2015), appeal dismissed sub nom. Brooks
v. Diaz, 610 F. App’x 254 (4th Cir. 2015), cert. denied sub nom.
Brooks v. Dadma Lydia Diaz C., ____ U.S. ____, 136 S. Ct. 1177
(2016). In response to this argument, Plaintiffs reiterate that
“the complaint expressly alleges that the physical-therapist
plaintiffs have an interest in earning a living by pursuing the
work of their choice . . . .”6

(Pls.’ Resp. (Doc. 28) at 13.)

For this proposition, Plaintiffs rely primarily upon
Richardson v. Town of Eastover, 922 F.2d 1152 (4th Cir. 1991).
However, as Defendants point out, Richardson is about “[a]
license issued by the state [,] which can be suspended or

This court notes that simply alleging the existence of a
Constitutional right in a complaint (here, the purported right
to continue performing dry needling) is not sufficient, even for
purposes of a 12(b)(6) motion, to establish such a right. Doing
so would constitute pleading a “legal conclusion” under Iqbal,
which the court is not required to accept as true. See Iqbal,
556 U.S. at 678-79.
6

- 45 -

revoked only upon a showing of cause [and which] creates a
property interest protected by the Fourteenth Amendment.” Id. at
1156. In the present case, Plaintiffs do not allege any
deprivation of their license, which would support a finding that
Richardson controls. Further, despite Plaintiffs’ claim that
Richardson establishes “both a liberty interest and property
interest for substantive-due-process purposes” (Pls.’ Resp.
(Doc. 28) at 13), the case itself makes no mention of
substantive due process, instead seeming to focus on procedural
due process. Richardson, 922 F.2d at 1157. This court does not
read Richardson to create a blanket Constitutional right to
perform a certain kind of labor simply because a party had
already begun to perform that kind of work or may have a license
to perform that kind of work.
Plaintiffs provide no further support for their contention
that they have a Constitutional right to perform dry needling
and this court is unaware of any legal doctrine supporting such
a claim. As stated above, because 42 U.S.C. § 1983 requires the
allegation of an established Constitutional right and Plaintiffs
have not alleged such a right, this court grants Defendants’
Motion to Dismiss as to Count 2.

- 46 -

V.

CONCLUSION
For the reasons outlined above,
IT IS THEREFORE ORDERED that Plaintiffs’ Motion for Leave

to File Surreply (Doc. 33) is DENIED, that Defendants’ Motion to
Stay (Doc. 20) is DENIED, and that Defendants’ Motion to Dismiss
Amended Complaint (Doc. 22) is GRANTED IN PART AND DENIED IN
PART. The motion is DENIED as to Count One of Plaintiffs’
Amended Complaint and GRANTED as to Count Two of Plaintiffs’
Amended Complaint.
This the 30th day of January, 2017.

_______________________________
United States District Judge

- 47 -