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American Academy of Implant Dentistry v. Parker

United States Court of Appeals, Fifth Circuit

June 19, 2017

AMERICAN ACADEMY OF IMPLANT DENTISTRY; AMERICAN SOCIETY OF DENTIST ANESTHESIOLOGISTS; AMERICAN ACADEMY OF ORAL MEDICINE; AMERICAN ACADEMY OF OROFACIAL PAIN; JAY E. ELLIOTT, D. D. S.; MONTY BUCK, D. D. S.; JAROM C. HEATON, D. D. S.; MICHAEL A. HUBER, D. D. S.; EDWARD F. WRIGHT, D. D. S., M. S., Plaintiffs-Appellees
v.
KELLY PARKER, in her official capacity as Executive Director of the Texas State Board of Dental Examiners, TAMELA L. GOUGH, D. D. S., M. S., in her official capacity as a Member of the Texas Board of Dental Examiners; STEVE AUSTIN, D. D. S., in his official capacity as a Member of the Texas Board of Dental Examiners; TIM O'HARE, in his official capacity as a Member of the Texas Board of Dental Examiners; KIRBY BUNEL, JR., D. D. S., in his official capacity as a Member of the Texas Board of Dental Examiners; WILLIAM R. BIRDWELL, D. D. S., in his official capacity as a Member of the Texas Board of Dental Examiners; EMILY A. CHRISTY, in her official capacity as a Member of the Texas Board of Dental Examiners; JAMES W. CHANCELLOR, D. D. S., in his official capacity as a Member of the Texas Board of Dental Examiners; RODOLFO G. RAMOS, JR., D. D. S., in his official capacity as a Member of the Texas Board of Dental Examiners; LEWIS WHITE, in his official capacity as a Member of the Texas Board of Dental Examiners; WHITNEY HYDE, in her official capacity as a Member of the Texas Board of Dental Examiners; RENEE CORNETT, R. D. H., in her official capacity as a Member of the Texas Board of Dental Examiners; D. BRADLEY DEAN, D. D. S., in his official capacity as a Member of the Texas Board of Dental Examiners; CHRISTIE LEEDY, D. D. S., in her official capacity as a Member of the Texas Board of Dental Examiners; LOIS PALERMO, R. D. H., in his official capacity as a Member of the Texas Board of Dental Examiners; EVANGELIA MOTE, in her official capacity as a Member of the Texas Board of Dental Examiners, Defendants-Appellants

         Appeals from the United States District Court for the Western District of Texas

          Before ELROD, SOUTHWICK, and GRAVES, Circuit Judges.

          LESLIE H. SOUTHWICK, Circuit Judge.

         The plaintiffs challenge a provision in the Texas Administrative Code regulating advertising in the field of dentistry. The district court held that the provision violated the plaintiffs' First Amendment right to engage in commercial speech. It therefore enjoined enforcement of the provision as applied to the plaintiffs. The defendants appealed. We AFFIRM.

         FACTUAL AND PROCEDURAL BACKGROUND

         Texas law prohibits dentists from advertising as specialists in areas that the American Dental Association ("ADA") does not recognized as specialties. See Tex. Admin. Code § 108.54. The plaintiffs seek to enjoin enforcement of Section 108.54, as they wish to advertise in areas recognized as specialties by other dental organizations but not by the ADA. They argue the First and Fourteenth Amendments give them the right to do so.

         This appeal involves several plaintiffs. The organizational plaintiffs include the American Academy of Implant Dentistry, the American Society of Dental Anesthesiologists, the American Academy of Oral Medicine, and the American Academy of Orofacial Pain. These organizations are national organizations with member dentists. The purpose of each organization is to advance the interests of dentists practicing in the organization's respective practice area. Each organization sponsors a credentialing board and offers credentials to members who demonstrate expertise in their respective field.

         The individual plaintiffs are five dentists, three of whom are in private practice and two of whom are professors at the University of Texas Health Science Center School of Dentistry. The individual plaintiffs limit their practice to one of the following practice areas: implant dentistry, dental anesthesiology, oral medicine, and orofacial pain. Each of the individual plaintiffs has been certified as a "diplomate" by one of the organizational plaintiffs' credentialing boards, indicating that the plaintiff has achieved that board's highest honor by meeting certain requirements set by the board "including training and experience beyond dental school."

         The Texas Occupations Code provides that the Texas State Board of Dental Examiners may "adopt and enforce reasonable restrictions to regulate advertising relating to the practice of dentistry . . . ." See Tex. Occ. Code § 254.002(b). The plaintiffs take issue with one of the Board's regulations, Texas Administrative Code Section 108.54. Section 108.54 provides:

A dentist may advertise as a specialist or use the terms "specialty" or "specialist" to describe professional services 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.

         Tex. Admin. Code § 108.54(a). Part (b) lists the ADA's nine recognized specialty areas as the ones that meet the requirements of part (a).[1] The Board does not itself certify specialties but instead relies exclusively on the ADA for that purpose. Section 108.54 also requires certain ADA-related education or board-certification qualifications in order to advertise as a specialist. See Tex. Admin. Code § 108.54(c).

         Section 108.54 prohibits the individual plaintiffs from advertising as specialists or referring to their practice areas as specialties because their practice areas are not recognized as such by the ADA. The ADA has considered whether to grant specialty recognition to the plaintiffs' respective practice areas, but thus far it has denied that recognition. Nevertheless, the plaintiffs are not completely forbidden from advertising their practice areas. In 2012, two of the individual plaintiffs in this case and the American Academy of Implant Dentistry challenged a separate provision of the Texas Administrative Code that restricted the plaintiffs from advertising their credentials and holding themselves out as specialists in implant dentistry. The Board responded by revising an existing regulation and adding another. See Tex. Admin. Code §§ 108.55, 108.56. Section 108.55 allows general dentists who do some work related to the specialty areas listed in Section 108.54(b) to advertise those services as long as they include a disclaimer that they are a general dentist and do not imply specialization. Section 108.56 provides that dentists may advertise "credentials earned in dentistry so long as they avoid any communications that express or imply specialization . . . ." See also Tex. Admin. Code § 108.57 (prohibiting false, misleading, or deceptive advertising).

         Under the current regulations, the plaintiffs may advertise credentials they have earned and the services they provide only if they clearly disclose that they are a "general dentist" and do not "imply specialization." See Tex. Admin. Code §§ 108.55, 108.56. The plaintiffs complain that this regime prevents them from truthfully holding themselves out as "specialists" in their fields.

         In March 2014, the plaintiffs brought this action against the executive director and members of the Board in their official capacities. The plaintiffs challenged Section 108.54 on First and Fourteenth Amendment grounds, and the parties eventually filed cross-motions for summary judgment. The district court granted summary judgment to the plaintiffs in part, concluding that Section 108.54 "is an unconstitutional restriction on Plaintiffs' First Amendment right to free commercial speech." The court enjoined the defendants "from enforcing Texas Administrative Code § 108.54 to the extent it prohibits Plaintiffs from advertising as specialists or using the terms 'specialty' or 'specialist' to describe an area of dentistry not recognized as a specialty by the American Dental Association, or any other provision of Texas law inconsistent with [the district court's] opinion." The court determined the plaintiffs' "remaining Fourteenth Amendment claims are without merit" and granted summary judgment to the defendants on those claims. The defendants appealed.

         DISCUSSION

         We review a judgment on cross-motions for summary judgment de novo "with evidence and inferences taken in the light most favorable to the nonmoving party." White Buffalo Ventures, LLC v. Univ. of Texas at Austin, 420 F.3d 366, 370 (5th Cir. 2005). Summary judgment is proper when "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a).

         This case involves commercial speech, which is protected by the First Amendment. See Virginia State Bd. of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748, 761-62 (1976). "Commercial expression not only serves the economic interest of the speaker, but also assists consumers and furthers the societal interest in the fullest possible dissemination of information." Central Hudson Gas & Elec. Corp. v. Pub. Serv. Comm'n of New York, 447 U.S. 557, 561-62 (1980).

         Though commercial speech is protected by the First Amendment, courts give to it "lesser protection . . . than to other constitutionally guaranteed expression." Id. at 563. A four-part test applies:

At the outset, we must determine whether the expression is protected by the First Amendment. For commercial speech to come within that provision, it at least must concern lawful activity and not be misleading. Next, we ask whether the asserted governmental interest is substantial. If both inquiries yield positive answers, we must determine whether the regulation directly advances the governmental interest asserted, and whether it is not more extensive than is necessary to serve that interest.

Id. at 566. "The party seeking to uphold a restriction on commercial speech carries the burden of justifying it." Bolger v. Youngs Drug Prods. Corp., 463 U.S. 60, 71 n.20 (1983). Within this framework, we consider the plaintiffs' challenge to Section 108.54. We conclude that the Board fails to justify Section 108.54 under the Central Hudson analysis. We do not reach the plaintiffs' Fourteenth Amendment argument.

         Before we begin our analysis, we measure the reach of the district court's ruling. The parties dispute whether the district court enjoined Section 108.54 facially or as applied. We find that answer in the district court's own words: Section 108.54 "is an unconstitutional restriction on Plaintiffs' First Amendment right to free commercial speech." We interpret that language to mean that Section 108.54 is held to be unconstitutional only as applied to these plaintiffs. Neither the district court nor we address whether this language would also fail a facial challenge.

         I. Lawful Activity, Not Misleading

         In order for commercial speech to be protected under the First Amendment, "it at least must concern lawful activity and not be misleading." Central Hudson, 447 U.S. at 566. "The first part of the test is really a threshold determination whether the speech is constitutionally protected . . . ." Byrum v. Landreth, 566 F.3d 442, 446 (5th Cir. 2009).

         The parties do not dispute that the relevant speech in this case concerns lawful activity. Texas law permits the individual plaintiffs to limit their practice to the fields of implant dentistry, dental anesthesiology, oral medicine, and orofacial pain. We agree, then, that advertising as a specialist in one of these practice areas concerns lawful activity.

         The parties disagree as to whether the speech would be misleading or just potentially misleading. The distinction is important. "States may not place an absolute prohibition on certain types of potentially misleading information . . . if the information also may be presented in a way that is not deceptive." In re R.M.J., 455 U.S. 191, 203 (1982). "But when the particular content or method of the advertising suggests that it is inherently misleading or when experience has proved that in fact such advertising is subject to abuse, the States may impose appropriate restrictions." Id.

         The Board argues that the relevant speech here is inherently misleading because the term "specialist, " in the context of unregulated dental advertising, is devoid of intrinsic meaning. The Board urges us to categorize the term "specialist" in a completely unregulated context, reasoning "the State need only show that an unregulated, unadorned, and unexplained claim of 'specialist' status in a particular practice area is inherently misleading[.]" In support, the Board offers witness testimony from several dentists regarding what they perceive "specialist" to mean. Observing that the witnesses characterize "specialist" differently, the Board reasons the term "specialist" has no agreed-upon meaning, is devoid of intrinsic meaning, and is therefore inherently misleading.

         It has been "suggested that commercial speech that is devoid of intrinsic meaning may be inherently misleading, especially if such speech historically has been used to deceive the public." Peel v. Attorney Registration & Disciplinary Comm'n of Illinois, 496 U.S. 91, 112 (1990) (Marshall, J. & Brennan, J., concurring in the judgment). The Court noted, for example, that a trade name is "a form of commercial speech that has no intrinsic meaning." Friedman v. Rogers, 440 U.S. 1, 12 (1979). "A trade name conveys no information about the price and nature of the services offered . . . until it acquires meaning over a period of time . . . ." Id. The term "specialist, " by contrast, is not devoid of intrinsic meaning. All of the testimony offered by the Board demonstrates that the term "specialist" conveys a degree of expertise or advanced ability. Although different consumers may understand the degree of expertise in different ways, that only shows the term has the potential to mislead. It does not mean the term is devoid of intrinsic meaning and, therefore, inherently misleading.

         The Board nevertheless urges that the use of the term "specialist" is unprotected because, unlike in Peel, the "specialist" designation might be used without reference to any certifying organization. The Court in Peel considered a claim of "certification as a 'specialist' by an identified national organization[.]" Peel, 496 U.S. at 105. The problem here is the absence of any group imprimatur behind the label "specialist." Nonetheless, the term "specialist" is not rendered devoid of intrinsic meaning, and thereby inherently misleading, simply because the organization responsible for conferring specialist credentials on a particular dentist is not identified in the advertisement. See Ibanez v. Florida Dep't of Bus. & Prof'l Regulation, Bd. of Accountancy, 512 U.S. 136, 145 & n.9 (1994). Whether the absence of that information contributes to the potentially misleading character of the speech is a separate question.

         Moreover, there is no evidence that the term "specialist" has been or will be used in a way that is distinct from its ordinary meaning. In one appeal, we held that the use of the term "invoice" in automobile advertising was inherently misleading because it was "calculated to confuse the consumer[.]" Joe Conte Toyota, Inc. v. Louisiana Motor Vehicle Comm'n, 24 F.3d 754, 757 (5th Cir. 1994) (quotation marks omitted). It was misleading because an advertised price of "$49.00 over invoice" could mean a multitude of prices other than the dealer's true cost because "holdbacks, incentives, and rebates" were included in the dealer's cost. Id. The word "invoice" did "not mean what it appear[ed] to mean" and conveyed no useful information to the consumer. Id.

         Here, the individual plaintiffs intend to use "specialist" in the same manner as dentists practicing in ADA-recognized specialties, namely, to convey useful, truthful information to the consumer. Unlike in Joe Conte, the relevant term - "specialist" as opposed to "invoice" - will be used in a way that is consistent with its ordinary meaning.

         Finally, the Board suggests that the plaintiffs' proposed speech is inherently misleading simply because it does not comply with the regulatory requirements imposed by the Board. According to the Board, Section 108.54 "is what gives 'specialist' a standardized, reliable meaning in dental advertising in Texas." The Board's argument would grant it the ability to limit the use of the term "specialist" simply by virtue of having created a regime that defines recognized and non-recognized specialties. See Byrum, 566 F.3d at 447. Even if appropriate regulation is warranted because the "specialist" designation might be potentially misleading, it is not inherently misleading merely because it does not align with the Board's preferred definition of that term.

         Our fundamental issue is whether the speech is subject to First Amendment protection. "Truthful advertising related to lawful activities is entitled to the protections of the First Amendment." In re R.M.J., 455 U.S. at 203. The dentists' proposed speech "may be presented in a non-deceptive manner and [is] not 'inherently likely to deceive' the public." See Pub. Citizen, Inc. v. Louisiana Attorney Disciplinary Bd., 632 F.3d 212, 219 (5th Cir. 2011) (quoting In re R.M.J., 455 U.S. at 202). "Given the complete absence of any evidence of deception, the Board's concern about the possibility of deception in hypothetical cases is not sufficient to rebut the constitutional presumption favoring disclosure over concealment." Ibanez, 512 U.S. at 145 (quotation marks and citations omitted). By completely prohibiting dentists from advertising as specialists simply because their practice area is one not recognized as a specialty by the ADA, "truthful and nonmisleading expression will be snared along with fraudulent or deceptive commercial speech[.]" See Edenfield v. Fane, 507 U.S. 761, 768-69 (1993).

         The plaintiffs' proposed speech is not inherently misleading. Even so, the Board may regulate potentially misleading speech if the regulation satisfies the remaining elements of the Central Hudson test. See id. at 769. In order to meet its burden, the Board must "show[] that the restriction directly and materially advances a substantial state interest in a manner no more extensive than necessary to serve that interest." Ibanez, 512 U.S. at 142 (citing Central Hudson, 447 U.S. at 566). We now look at those issues.

         II. Substantial Interests

         The parties agree that the Board has asserted substantial interests. The plaintiffs dispute two of the interests articulated by the Board: "preventing the public from being misled to believe that qualification as a 'specialist' under non-ADA-approved criteria is equivalent to qualification as a 'specialist' under ADA-approved criteria, " and "exercising its 'power to establish standards for licensing practitioners, ' Goldfarb v. Virginia State Bar, 421 U.S. 773, 792 (1975)[.]" The plaintiffs argue that these are not substantial interests.

         These interests appear to be related to the state's interest in "ensuring the accuracy of commercial information in the marketplace, establishing uniform standards for certification and protecting consumers from misleading professional advertisements." The Board considers the plaintiffs' objections to be "inconsequential" because the plaintiffs concede "the State has a substantial interest in protecting the public from misleading advertising[.]" As the plaintiffs point out, however, the Board may not assert a substantial interest in Section 108.54 itself simply because "States have a compelling interest in the practice of professions within their boundaries[.]" See also Goldfarb, 421 U.S. at 792.

         Regardless of these questions, we agree with the district court that the Board has a substantial interest in "ensuring the accuracy of commercial information in the marketplace, establishing uniform standards for certification and protecting consumers from misleading professional ...


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