American Academy of Implant Dentistry et al v. Parker et al
Filing
23
ORDER DENYING 7 Motion to Partial Dismissal; DENYING 12 Motion for Partial Judgment on the Pleadings. Signed by Judge Sam Sparks. (kkc)
FILED
IN THE UNITED STATES DISTRICT
COU9* JUN 20
AM 10: 13
FOR THE WESTERN DISTRICT OF TEXAS
CLERK Us DISTRUCT COURT
AUSTIN DIVISION
WESTERN DISTRICT OF TEXAS
BY
AMERICAN
ACADEMY
OF
IMPLANT
-
DEPUTY
DENTISTRY, et al.,
Plaintiffs,
Case No. A-14-CA-191-SS
-vs-
GLENN PARKER, Executive Director, Texas
State Board of Dental Examiners, ci aL,
Defendants.
ORDER
BE IT REMEMBERED on the 17th day of June, 2014, the Court held a hearing in the above-
styled cause, and the parties appeared by and through counsel. Before the Court are Defendants'
Motion for Partial Dismissal [#7], Plaintiffs' Response [#11], and Defendants' Reply [#13]; and
Defendants' Motion for Partial Judgment on the Pleadings [#12], Plaintiffs' Response [#14], and
Defendants' Reply [#15]. Having considered the documents, the file as a whole, the governing law,
and the parties' arguments at the hearing, the Court enters the following opinion and orders
DENYING the motions.
Background
This case involves four private dentistry-related organizations and five individual dentists
suing the executive director and members of the Texas State Board of Dental Examiners (the State
Dental Board), in their official capacities, challenging the constitutionality of a rule promulgated by
the State Dental Board. The rule at issue is Rule 108.54, which provides that a "dentist may
advertise as a specialist or use the terms 'specialty' or 'specialist' to describe professional services
[only] in recognized specialty areas that are: (1) recognized by a board that certifies specialists in the
area of specialty; and (2) accredited by the Commission on Dental Accreditation of the American
Dental Association." 22 TEx. ADMIN. CODE § 108.54. In essence, Plaintiffs take issue with the State
Dental Board delegating the power to control who may advertise as a "specialist" to the American
Dental Association (ADA), a private organization comprised of members in competition with
Plaintiffs and with a direct financial stake in restricting who may represent themselves as a
"specialist" to the consuming public.' The individual Plaintiffs have received intensive training in
areas of dentistry represented by the organizational Plaintiffs, and they would like to be able to
advertise these areas of expertise as "specialties." Apparently, however, the ADA will not give these
dentistry disciplines "specialty" status, and if Plaintiffs were to advertise themselves as "specialists"
in violation
of these prohibitions, they would be subject
to various penalties up to and including
revocation of their licenses to practice dentistry in Texas.
Based on this state of affairs, Plaintiffs assert the following constitutional claims:
(1)
Rule 108.54 violates Plaintiffs' rightto free speechbybanningtruthful, nonmisleading commercial speech. Even if the regulation does not constitute an
absolute ban, it has a chilling effect on Plaintiffs' lawful exercise of their right
to engage in truthful, non-misleading commercial speech.
(2)
Rule 108.54 violates Plaintiffs' due process rights because they have
protected liberty and property interests in their licenses to practice dentistry
and to be rewarded for their industry. Under the regulation, Plaintiffs are
deprived of any neutral, state-sponsored mechanism to determine dental
'As a matter ofbackground,this lawsuit is notthe first encountered by this Court involvingthese parties. Three
of the plaintiffs in this case previously sued these same defendants challenging a different rule promulgated by the State
Dental Board, 22 TEx. ADMIN. CODE § 108.55. See Elliot v. Parker, No. 12-CV-330-LY (W.D. Tex. May 3, 2013).
Rule 108.55 restricted advertisement of credentials, and the case ended when the State Dental Board revised Rule 108.55
and added a new Rule 108.56. Together these rule changes essentially allowed credential advertising so long as the
advertisements avoided communications expressing or implying specialization. Upon revision of the rules, the parties
stipulated to dismissal of the case without prejudice in May 2013. Plaintiffs now bring this lawsuit challenging Rule
108.54, which addresses who can advertise as a "specialist" and what can be advertised as a "specialty."
-2-
specialties, evaluate the credentials earned in areas of dentistry not recognized
by the ADA as a specialty, and are further deprived of any mechanism for
appealing the ADA's denial of recognition of any credentialing organization
which issues bona Jlde credentials upon which Plaintiffs could declare
themselves "specialists" in their respective fields. The Defendants have
unlawfully delegated Plaintiffs' past, present, and prospective rights to
commercial free speech to a private trade association in which many
Texas licensed dentists are not even members. The Defendants issue only
one dental license in Texas, and the individual Plaintiffs and those
permitted by the regulation to advertise themselves as "specialists" both have
the same license.
(3)
Compi.
Rule 108.54 violates Plaintiffs' equal protection rights and because it
impinges on Plaintiffs' fundamental constitutional rights, it is subject to
heightened judicial scrutiny.
[#1],2.
Defendants have filed a Motion for Partial Dismissal under 12(b)(6), seeking dismissal of
the due process and equal protection claims. With respect to the due process claim, Defendants
argue there is no property interest in the practice of dentistry, only in the licenses, and then only to
a limited extent. The revocation
of a professional license would constitute the deprivation of a
property interest, but incidental burdens imposed by state regulations would not. Defendants
contend Rule 108.54 imposes only incidental burdens, and there has been no action taken to revoke
Plaintiffs' dentistry licenses. With respect to the equal protection claim, Defendants argue the right
to engage in commercial free speech is not a fundamental right, which means rational basis scrutiny
applies. According to Defendants, relying on the ADA for specialty determinations is rational for
a variety of reasons including consumer protection.
Plaintiffs respond that the State Dental Board has delegated to the private ADA the
exclusive authority to determine the State's official position on which specialties to recognize. This
kind of total governmental delegation, with no guiding standard, to private actors, they argue,
-3-
violates due process. Plaintiffs argue this standardless delegation allows the ADA to act on behalf
of its own selfish interests and those of its private membership. With respect to the equal protection
claim, Plaintiffs insist intermediate scrutiny applies to their commercial speech claim. Even under
rational basis review, however, Plaintiffs contend dismissal would be inappropriate because they
are entitled to an evidentiary record to demonstrate a lack of a rational basis.
Defendants have also filed a Motion for Partial Judgment on the Pleadings, seeking
dismissal of the "standardless delegation" claim. Defendants argue deference to ADA accreditation
is not a "delegation" at all. First, Defendants point out the state board does not have the authority
to determine "specialty" designations; rather it has the authority to prohibit misleading
communications to the public by dentists.
Second, Defendants highlight the fact the ADA
determines "specialties" independent of the State Dental Board.
Defendants also argue
"standardless delegation" claims have primarily been applied as a federal constitutional limit on
Congress and as a state constitutional limitation on the legislature, but have only rarely been applied
as a federal constitutional limitation on state government through the Fourteenth Amendment.
Plaintiffs respond that whether an advertisement is misleading depends on whether it is
recognized as a specialty, and the State Dental Board has given total deference to the ADA to
determine specialties. If the ADA recognizes the specialty, it is not misleading. If the ADA does
not recognize the specialty, then it is misleading. Therefore, according to Plaintiffs, there is no way
to see this arrangement other than as a delegation.
Also, Plaintiffs contend the doctrine of
nondelegation of public power to private groups is a constitutional limitation that is alive and well.
Defendants have indicated they have reserved their arguments concerning the First
Amendment and commercial free speech for summary judgment.
El
Analysis
I.
Rules 12(b)(6) and
12(c)Legal Standard
A motion under Federal Rule of Civil Procedure 1 2(b)(6) asks a court to dismiss a complaint
for 'failure to state a claim upon which relief can be granted."
FED.
R. Civ. P. 12(b)(6). In deciding
a motion to dismiss under 1 2(b)(6), a court generally accepts as true all factual allegations contained
within the complaint. Leatherman
v.
Tarrant Cnty. Narcotics Intelligence & Coordination Unit,
507 U.S. 163, 164 (1993). However, a court is not bound to accept legal conclusions couched as
factual allegations. Papasan
v.
A/lain, 478 U.S. 265, 286 (1986). Although all reasonable
inferences will be resolved in favor of the plaintiff the plaintiff must plead "specific facts, not mere
conclusory allegations." Tuchman
v.
DSC Commc'ns Corp., 14 F.3d 1061, 1067 (5th Cir. 1994).
The plaintiff must plead sufficient facts to state a claim for relief that is facially plausible. Ashcroft
v.
Iqbal, 556 U.S. 662, 678 (2009); Bell Atl. Corp.
v.
Twombly, 550 U.S. 544, 570 (2007). "A claim
has facial plausibility when the plaintiff pleads factual content that allows the court to draw the
reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at
678. Although a plaintiff's factual allegations need not establish the defendant is probably liable,
they must establish more than a "sheer possibility" that a defendant has acted unlawfully. Id.
Determining plausibility is a "context-specific task," that must be performed in light of a court's
judicial experience and common sense."
Id. at 679. In deciding a motion to dismiss, courts may
consider the complaint, as well as other sources courts ordinarily examine when ruling on Rule
I
2(b)(6) motions to dismiss, such as documents incorporated into the complaint by reference, and
matters of which a court may take judicial notice. Tellabs, Inc.
U.S. 308, 322 (2007).
-5-
v.
Makor Issues & Rights, Ltd., 551
Federal Rule of Civil Procedure 12(c) provides: "After the pleadings are closedbut early
enough not to delay triala party may move forjudgment on the pleadings."
FED. R.
Civ. P. 12(c).
Motions forjudgment on the pleadings are "designed to dispose of cases where the material facts
are not in dispute and a judgment on the merits can be rendered by looking to the substance of the
pleadings and any judicially noticed facts." Great Plains Trust Co.
& Co., 313 F.3d 305, 312 (5th Cir. 2002) (internal
v.
Morgan Stanley Dean Wilter
quotation marks omitted). "A motion for
judgment on the pleadings under Rule 12(c) is subject to the same standard as a motion to dismiss
under Rule 12(b)(6)." Doe
II.
v.
MySpace, Inc., 528 F.3d 413, 418 (5th Cir. 2008).
Application
At the hearing held June 17, 2014, defense counsel explained his motion strategy.
Essentially, his intent with the two motions currently before the Court was to trim from this case
the due process and equal protection claims, leaving only the free speech claim to be handled at
summary judgment. In defense counsel's view, the crux of this case is whether Rule 108.54
impermissibly infringes Plaintiffs' rights to commercial free speech under the First Amendment.
He urges the Court to get rid of the relatively weaker due process and equal protection claims,
which serve as distractions from the main event: the free speech issue.
The Court sympathizes with this line of argument especially when it comes to the equal
protection claim. Nevertheless, the Court concludes Defendants have satisfied Rule 12's pleading
standards on all three constitutional claims. The rub of this case is the First Amendment claim, and
the parties agree this issue must survive at least until summary judgment. Since there is significant
overlap between the free speech claim and the other two claims (due process and equal protection),
the Court sees little point in dismissing the latter two at this point in time. All three constitutional
claims will be better developed and addressed after full discovery. The Court makes no substantive
determinations on the due process and equal protection claims at this juncture although it briefly
outlines what it understands to be the nature of the claims.
A.
Due Process
Defendants originally sought dismissal of three types of due process claims: (I) procedural,
(2) substantive, and (3) standardless delegation. After reviewing Plaintiffs' Response to the Motion
for Partial Dismissal, Defendants suggest the only due process claim at issue is the standardless
delegation claim. Plaintiffs never clarified they were only pursuing a standardless delegation claim,
and not ones based on procedural or substantive due process. As far as the Court can tell, the three
are not easily distinguishable. First, Plaintiffs essentially are complaining that a state agency, the
State Dental Board, has delegated to a private entity, the ADA, the exclusive authority to determine
"specialties," which in turn controls who may advertise as a "specialist."
This contention
encapsulates the standardless delegation claim. Second, this arrangement cedes power to the ADA
to determine the nature of Plaintiffs' property rights, i.e., what licensed dentists can say publicly
about what they are specially able to do under their dental licenses. Moreover, violation of these
regulations potentially results in the revocation of Plaintiffs' property rights, i.e., their dental
licenses. These contentions implicate substantive due process. Third, Plaintiffs allege there is no
neutral, state-sponsored fact-finding procedure in place for determinations of "specialties," and
there is no mechanism for appealing these designations. Instead, Plaintiffs contend the ADA has
exclusive, carte blanche control. These allegations encompass procedural due process.
-7-
In the Court's view, these concepts all overlap, and there is no reason to limit the nature of
Plaintiffs' due process claim to one based on "standardless delegation" at this time. Plaintiffs have
stated facts sufficient to withstand Rule 12 on their due process allegations.
B.
Equal Protection
Plaintiffs allege Rule 108.54 creates discriminatory classifications between dentists who
have obtained designations as ADA-recognized specialists and those who have obtained
professional dental credentials in an area of dentistry not recognized by the ADA as a specialty.
The primary dispute on the equal protection claim appears to be what level of scrutiny applies.
Both sides agree a First Amendment commercial free speech claim merits intermediate scrutiny.
Defendants, though, argue the right to commercial free speech is not a fundamental one for purposes
of equal protection. Therefore, when commercial free speech provides the basis for an equal
protection claim, or is the "companion claim," it only receives rational basis scrutiny. See Defs.'
Mot. Partial Dismissal
[117],
at 6-7 (citing cases). Defendants argue this highly deferential standard
is easily satisfied.
In response, Plaintiffs rely on a case from the Sixth Circuit, which holds that since a
"'regulation of commercial free speech is subject to intermediate scrutiny in a First Amendment
challenge, it follows that equal protection claims involving commercial speech also are subject to
the same level of review." See Pls.' Resp. to Mot. Partial Dismissal [11111, at 7 (quoting Chambers
v.
Stengel, 256 F.3d 397, 401 (6th Cir. 2001) (citing RA. V.
v.
City ofSt. Paul, 505 U.S. 377, 384
n.4 (1992)). Plaintiffs contend the disputed rule does not survive intermediate scrutiny, but even
if rational basis review applied, they would still be entitled to an evidentiary record.
As the Court explained above, there is significant overlap between the First Amendment
claim based on commercial free speech and the equal protection claim also based on commercial
free speech. At the moment, there is no compelling reason not to allow the equal protection claim
to proceed alongside the First Amendment claim when they will likely involve litigation of the same
issues. The Court does not decide at this stage what level of scrutiny applies to the equal protection
claim, much less whether Rule 108.54 satisfies the applicable standard.
Conclusion
While the Court agrees with Defendants that the First Amendment free speech claim should
be the focus of this lawsuit, it concludes Plaintiffs have adequately pleaded due process and equal
protection claims. Since the case is proceeding to discovery on the First Amendment claim and
since there is significant overlap amongst all three constitutional claims, the Court sees no harm in
allowing all three to proceed. Dismissal as requested by Defendants would be premature.
Accordingly,
IT IS ORDERED that Defendants' Motion for Partial Dismissal [p7] is DENIED;
IT IS FINALLY ORDERED that Defendants' Motion for Partial Judgment on the
Pleadings [#12] is DENIED.
SIGNED this the
0Way of June 2014
V
SAM SPARKS
UNITED STATES DISTRICT JUDGE
191
rntd and niot judg
ordjtw.frni
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