State v. Pacific Health Center, Inc.

• Decision Date: 25 September 2006
• Docket Number: No. 56886-8-I.,56886-8-I.
• Citation: 135 Wn. App. 149,143 P.3d 618
• Parties: STATE of Washington, Respondent, v. PACIFIC HEALTH CENTER, INC., a Washington for-profit corporation; Pacific Health Center Spokane, Inc., a Washington for-profit corporation; and Monte Kline, individually and on behalf of his marital community, as President and Secretary of Pacific Health Center, Inc. and Pacific Health Center Spokane, Inc., Appellants.
• Court: Washington Court of Appeals

143 P.3d 618

135 Wn. App. 149

STATE of Washington, Respondent, v. PACIFIC HEALTH CENTER, INC., a Washington for-profit corporation; Pacific Health Center Spokane, Inc., a Washington for-profit corporation; and Monte Kline, individually and on behalf of his marital community, as President and Secretary of Pacific Health Center, Inc. and Pacific Health Center Spokane, Inc., Appellants.

No. 56886-8-I.

Court of Appeals of Washington, Division 1.

September 25, 2006.

William R. Bishin, Seattle, for Appellants.

Paula Lillian Selis, Cheryl Deshon Kringle, Katherine M. Tassi, Attorney General's Office, Seattle, Richard A. McCartan, Melissa A. Burke-Cain, Attorney General's Office, Olympia, for Respondent.

AGID, J.

¶ 1 The trial court granted the State's motion for partial summary judgment, ruling that the defendants violated the Consumer Protection Act (CPA) because their alternative health care practice, based primarily on electrodermal testing, constituted the unlicensed practices of medicine, naturopathy, and acupuncture. The defendants appealed both the trial court's ruling and the penalty it imposed, arguing the award was excessive.

¶ 2 We agree with the trial court's ruling that, although the defendants use alternative practice methods and terminology, their actual practices fall under the statutory definitions of medicine, naturopathy, and acupuncture. But practicing any of these disciplines without a license is not a per se CPA violation. The State failed to prove defendants did not have the level of competence they represented to the public or that any member of the public was even potentially injured by their actions. As such, the State did not prove a violation of the Act. Because the State did not prove defendants violated the CPA, the trial court also erred in imposing penalties under that statute. We affirm in part and reverse in part.

FACTS

¶ 3 Monte Kline and his close corporation, Pacific Health Center (PHC), have operated a health care practice in Washington for over 15 years. They advertise through brochures, radio, the internet, and seminars. Their practice consists primarily of using electrodermal testing (EDT) to detect imbalances in "Qi", the Oriental medicine concept of energy flow in the body.¹ Essentially, EDT uses a computerized, signal-emitting galvanic skin response (GSR) device to measure changes in electrical conductance at acupuncture points on a person's hands. Based on the imbalances detected during EDT, PHC employees recommend and provide various remedies including dietary changes, nutritional supplements, homeopathic mixtures and herbs.

¶ 4 On the opening page of their website, PHC asks "Are you sick & tired ... of being sick & tired?" They claim they can help with a variety of conditions, including candida, high cholesterol, allergies, and immune deficiencies. They describe EDT as follows:

This revolutionary analysis technique ... was pioneered by renowned West German physician, Reinhold Voll, M.D. in 1953. Various methods of Electrodermal Testing are currently used by over 40,000 medical doctors in Europe and by an increasing number of health practitioners in the United States.

Electrodermal Testing involves taking simple, painless, electrical resistance readings on the surface of the skin at acupuncture points on the finger. The subtle differences in the electrical resistance detected by the sophisticated testing instrument determines specifics such as nutrient deficiencies, food and environmental sensitivities, toxicities, energetically weak organs....

... adding to the circuit homeopathic dilutions of various foods, environmental substances, nutrients, toxins, etc. [to] change the skin resistance readings, indicating a `yes' or `no' relative to a particular test. These filters, originally in test vials, are now recorded electronically in the computer for simpler testing.

The computerized Electrodermal Testing allows the practitioner to test vitamins, minerals, enzymes, herbs, and homeopathic remedies for their "balancing effect" on the body, measured by their improving previously poor test readings. Thus, the guesswork of nutritional programs is eliminated.

Electrodermal Testing has been described as a method of "conducting an electronic interview with the human body." Not too unlike the electronic measurements of Dr. McCoy of "Star Trek" fame, we believe Electrodermal Testing is the health care of the 21st century.

PHC offers a money-back guarantee. They also provide clients a form called a "Superbill" that lists various "Diagnostic Categories" including allergy, P.M.S., fibromyalgia and multiple vitamin deficiencies.

¶ 5 PHC's radio program, seminars, and website expressly state that Kline is not a physician or naturopath and that his Ph.D. and expertise are in holistic nutrition.² They provide prospective clients with a letter stating that PHC is a "non-medical, complementary health practice" which primarily uses EDT, which "measures the body on a different level than conventional medicine tests[.] ... It is considered an investigational technology.... We encourage our clients to have regular physical examinations and appropriate conventional tests from their medical doctor." At the first appointment, the client signs a disclosure/authorization form stating that the Food and Drug Administration (FDA) has not approved the GSR device to assess "nutritional deficiencies, food allergies, the presence of toxins, Candida, Epstein-Barr virus, or weakness of organs or glands."³ It also states:

I understand that the staff of Pacific Health Center are not medical or naturopathic physicians. I understand that Electrodermal Testing does not fall under state licensure requirements, and the staff of [PHC] function as nutritional consultants, as allowed by law. I do not seek nor have the [PHC] staff offered medical diagnosis, cure, advice, or treatment for any particular disease[,] ailment, injury, infirmity, deformity, pain, or other physical or mental condition. I understand that [PHC] staff will not administer or prescribe any drugs or medicinal preparations. Rather, I understand this program focuses on building health through nutritional balancing, desensitization and detoxification.⁴

No one at PHC holds any Washington health practice licenses.

¶ 6 The State began an action against PHC and Kline on September 29, 2003, alleging violations of the Consumer Protection Act, chapter 19.86 RCW, in three separate counts. Count one alleged appellants made unsubstantiated claims about what EDT could do, count two alleged they misled the public into thinking they were physicians practicing medicine, and count three alleged that the GSR device was deceptive because the FDA had not approved it for their chosen use. On February 7, 2005, the Department of Health (DOH) alleged in an administrative action that PHC and Kline engaged in the unlicensed practices of medicine, naturopathy, and acupuncture. On March 1, 2005, the State amended its complaint to delete the FDA-related count and add three new CPA counts, one for each of appellants' alleged unlicensed practices. DOH's administrative action was stayed, and on August 10, 2005, DOH filed an action for injunctive relief in Superior Court.

¶ 7 After the trial court consolidated the State and DOH actions, the State moved for partial summary judgment on the three alleged unlicensed practice-related CPA violations. At the hearing on the State's motion, the State said it was not asking the court to decide whether EDT was a valid modality, but only whether appellants were practicing medicine, naturopathy, and/or acupuncture. The court granted the motion, ruling that appellants violated the CPA by engaging in the unauthorized practices of medicine, naturopathy and acupuncture. The trial judge specifically found a violation of the CPA based on the Bowers decision.⁵ She said her ruling was a narrow one:

I didn't think there were any factual questions as to what the practices of the defendants were. So there [were] no factual questions. The sole question that came before me today is: Are those practices then required to be licensed under the statute? And the three statutory provisions that the State cited were ones, as we all know, governing certain practices, either of medicine, naturopathic medicine or acupuncture. I found those acts, as a matter of law, fall under those statutes. I didn't go further than that. And I honestly don't know what's left of the complaint.

She "found as a matter of law, because of the type of practices, that it was a violation of the Consumer Protection Act. We did not go any further than that in making any determination or assessment about the validity or treatments of these tools or modalities."⁶ The court granted injunctive relief enjoining appellants' unlawful actions, but permitted appellants to operate as nutritionists as allowed under RCW 18.138. It ordered a civil penalty of $1 million and restitution in the amount of $701,630.11.⁷ On November 29, 2005, the court entered a final judgment amount of $1,997,011.40, including civil penalties, restitution, costs and attorney fees.

DISCUSSION

I. Practice of Medicine, Naturopathy, and/or Acupuncture⁸

¶ 8 We review summary judgment orders de novo, making the same inquiry as the trial court.⁹ Summary judgment is proper only when there is no genuine issue about any material fact, and the moving party is entitled to a judgment as a matter of law.¹⁰ We consider all facts and reasonable inferences in the light most favorable to the nonmoving party.¹¹ Questions of fact may be determined as a matter of law when reasonable minds can reach only one conclusion.¹²

¶ 9 The first question this court must answer is whether PHC practices medicine, naturopathy, and/or acupuncture as the Washington Legislature has defined those professions. Statutory interpretation and the question whether a statute applies to a particular set of facts are issues of law we review de...