State ex rel. Stovall v. Confimed. Com, LLC, 87,177

• Decision Date: 25 January 2002
• Docket Number: No. 87,177,87,177
• Citation: 272 Kan. 1313,38 P.3d 707
• Parties: STATE OF KANSAS ex rel. CARLA J. STOVALL, Attorney General, Appellant, and KANSAS BOARD OF PHARMACY v. CONFIMED.COM, L.L.C., d/b/a VSOURCE and CONFIMED.COM., Defendants, and H. LEVINE, M.D., Appellee.
• Court: Kansas Supreme Court

272 Kan. 1313

38 P.3d 707

STATE OF KANSAS ex rel. CARLA J. STOVALL, Attorney General, Appellant, and KANSAS BOARD OF PHARMACY v. CONFIMED.COM, L.L.C., d/b/a VSOURCE and CONFIMED.COM., Defendants, and H. LEVINE, M.D., Appellee.

No. 87,177

Supreme Court of Kansas.

Opinion filed January 25, 2002.

David L. Harder, assistant attorney general, argued the cause, and Carla J. Stovall, attorney general, was with him on the brief for appellant.

James R. Jarrow, of Baker Sterchi Cowden & Rice, L.L.C., of Overland Park, argued the cause and was on the brief for appellee.

The opinion of the court was delivered by

LARSON, J.:

This appeal presents the narrow question of whether a nonresident medical doctor who was later enjoined from prescribing or dispensing prescription medicine within the state of Kansas also committed unconscionable acts under the Kansas Consumer Protection Act (KCPA), K.S.A. 50-623 et seq., when he dispensed the sexual enhancement drug Viagra to Kansas residents without any physical examination or direct contact other than through an out-of-state internet site. Highly summarized, the Kansas Attorney General conducted a "sting" operation whereby two individuals, one a minor, obtained Viagra from a website operated by Howard J. Levine, a state of Washington medical doctor. The trial court granted the State's request for an injunction against Dr. Levine but refused to hold his actions were unconscionable under the KCPA; from such ruling the State appeals.

The State contends the trial court erred in limiting its analysis to the statutory examples of unconscionability found in K.S.A. 2000 Supp. 50-627 and by failing to liberally construe the KCPA as required by K.S.A. 50-623. It also contends a $75 charge for an online medical consultation, prescribing Viagra without personal physical examination, and dispensing Viagra to a minor without consultation with the parents were individually or collectively unconscionable acts.

We first set forth the details of the transaction, which was done at the request of the Attorney General. One of the purchasers, Stuart Nelson, was a minor and the son of Special Agent Teresa Salts. The other purchaser was Special Agent Angelia Crawford. In attempting to purchase the product, both individuals accessed a website entitled Vsource. They were directed through numerous pages of information, including waivers, general information about the drug, credit card information, and an online consultation regarding medical and sexual history. The first page described the online consultation process as well as the potential for international consultation. The next page was a waiver, stating the reader releases "this service" from all liability associated with the reader's participation in "the Viagra program." To continue, the reader agrees he or she is over 21 years of age, does not live in a state that limits access to medication over the internet, has read all available information from the Viagra manufacturer about the potential side effects, is solely interested in personal use of the product for "treatment of compromised sexual performance," and has recently performed "complete annual history physical examinations and appropriate laboratory studies" to ensure good health. The waiver appeared to have a link to the information available from the pharmaceutical manufacturer. The general information page on the website stated the recommended dosage of Viagra and its indications and warned that individuals taking organic nitrates must not take Viagra.

The next area of the website set forth that an online consultation was available for patients without a prescription. In limiting the efficacy of the consultation, the website stated: "It is in no way a substitute for a general medical history and physical examination determining general good health with special attention to blood pressure and cardio-pulmonary (heart and lung) status." The screen further informed the reader that the fee for the online consultation was $75 and would be charged only if the buyer was approved.

The next series of pages viewed by potential buyers was the online consultation form which both Crawford and Nelson at separate times and in separate locations completed.

The parties affirmatively admitted when they filled out the online form that they understood the potential side effects of Viagra and that they would be billed $75 for this consultation only if their application was approved and that all information provided was "truthful and complete." Nelson left blank the questions concerning allergies and the taking of other prescription medication and did not indicate that he had any of the 15 specific medical problems listed. He left blank the questions concerning his sexual health and changes in sexual function but did answer affirmatively that he had problems achieving erection and stated he had not been evaluated for erectile dysfunction. He stated his date of birth was November 1982. His mother provided him her credit card number and personally supervised the entire order.

Agent Crawford filled out the same form, with similar answers. She stated she was a female on her first attempt to purchase the drug. An individual named Debra attempted to contact Crawford several times, with the call eventually taken by another agent who posed as Crawford. Debra stated that the order could not be processed for a female, but Debra suggested that Crawford could have a male friend order the drug for her. Agent Crawford resubmitted an order under the name of "Frederick Crawford," listing his birthdate as August 1972.

Both parties received the pills, and it was stipulated at trial that they were Viagra. The name "H. Levine, M.D." was typed on the pill bottles, and the website ConfiMed.com was printed at the top of the labels. Investigations revealed that Dr. Levine was not licensed to practice medicine in Kansas, nor was ConfiMed.com licensed to practice pharmacy in Kansas.

The parties were billed in accordance with the charges they had agreed upon for the pills, postage, and consultation.

The Kansas Attorney General on behalf of the State of Kansas and the Kansas Board of Pharmacy sued ConfiMed.com and Dr. Levine, contending he committed unconscionable acts under K.S.A. 2000 Supp. 50-627 and prescribed prescription medication without a physical exam or consultation and without explanation of the side effects. The State argued the entire transaction was unconscionable. Damages, attorney fees, investigative fees, civil penalties under K.S.A. 50-636(a), and a permanent injunction against further violations of the Kansas Pharmacy Act, K.S.A. 65-1626 et seq., were requested. The Board of Pharmacy was subsequently dismissed as a party in that its claims were solely made against ConfiMed.com, which was found to have been dissolved and no longer in existence.

The trial court did not find the acts of Dr. Levine to be unconscionable under the KCPA, but it did enjoin him from dispensing medication or practicing medicine in Kansas. The court held as follows:

"Plaintiff contends Defendant Levine, a doctor licensed only in the State of Washington, prescribed and sold Viagra to two undercover investigators for the Kansas Attorney General: one a woman and one a 16-year-old boy, all without a physical examination or other personal contact. These transactions are claimed to have occurred over the Internet. The transactions included misrepresentations by the investigators and contained waivers whereby the investigators indicated they had read manufacturer's information about the drug, understood its contraindications and assumed all risk of use.

...

"Notwithstanding, however, the Court is not satisfied these facts describe an `unconscionable act' as defined by K.S.A. 50-627, the claim made by the plaintiff. First, the conduct bears no resemblance to the statutory examples of such behavior and further, there was no actual harm done to anyone. Nothing was misrepresented. All drugs furnished were authentic. The pharmacy expert testified that if the waivers in the orders signed by the investigators were true, more would have been understood by them than `regular' doctors and druggists typically advise their patients or customers.

"This does not describe a deceptive, fraudulent or unconscionable consumer practice."

Our consideration of the question of whether actions are unconscionable under the KCPA is a legal question for the court, Waggener v. Seever Systems, Inc., 233 Kan. 517, 521-22, 664 P.2d 813 (1983), under which our review is unlimited. Babe Houser Motor Co. v. Tetreault, 270 Kan. 502, 506, 14 P.3d 1149 (2000).

We first look to the provisions of K.S.A. 2000 Supp. 50-627 which the State contends the trial court erroneously applied when it limited its analysis to the statutory examples of unconscionability. K.S.A. 2000 Supp. 50-627 and the statutory examples are as follows:

"(a) No supplier shall engage in any unconscionable act or practice in connection with a consumer transaction. An unconscionable act or practice violates this act whether it occurs before, during or after the transaction.

"(b) The unconscionability of an act or practice is a question for the court. In determining whether an act or practice is unconscionable, the court shall consider circumstances of which the supplier knew or had reason to know, such as, but not limited to the following that:

(1) The supplier took advantage of the inability of the consumer reasonably to protect the consumer's interests because of the consumer's physical infirmity, ignorance, illiteracy, inability to understand the language of an agreement or similar factor;

(2) when the consumer transaction was entered into, the price grossly exceeded the price at which similar property or services were readily obtainable in similar transactions by similar consumers;

(3) the consumer was unable to receive a material benefit from the subject of the transaction;

(4) when the consumer

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