Date: 03-18-2010

Case Style: Columbia Physical Therapy, Inc. v. Benton Franklin Orthopedic Assocs.

Case Number: 81734-1

Judge: Owen

Court: Supreme Court of Washington on appeal from the Superior Court for Benton County

Plaintiff's Attorney: Darrin E. Bailey, Stafford Frey Cooper, P.C., Seattle, Washington

Defendant's Attorney: Michael H. Church, Spokane, Washington

Description: Columbia Physical Therapy, Inc. (Columbia), a professional

service corporation owned by a group of physical therapists, brought this action

against Benton Franklin Orthopedic Associates (BFOA), a professional limited liability

company owned by physicians and employing physical therapists. Columbia asserts

that BFOA and its doctors and physical therapists are violating (1) the corporate

practice of medicine doctrine, (2) The Professional Service Corporation Act

(PSCA), chapter 18.100 RCW, (3) the antirebate statute, chapter 19.68 RCW, and (4)

the Consumer Protection Act (CPA), chapter 19.86 RCW. The statutory law has

developed and evolved around the existing common law and carefully balances the

competing interests at stake in the delivery of health care services. For the reasons

discussed below, BFOA is entitled to summary judgment on Columbia's claims under

the corporate practice of medicine doctrine, the PSCA, and the antirebate statute. We

also affirm the trial court's denial of BFOA's summary judgment motion with respect

to Columbia's CPA claim.

Facts

BFOA is a professional limited liability company owned by five members, all of

whom are licensed to practice medicine in the state of Washington.1 In 2003, three of

these physicians served as the officers and exclusive shareholders of the newly

incorporated Benton Franklin Physical Therapy, Inc. (BFPT). In 2004, BFPT ceased

to operate as an independent corporation and began to operate as part of BFOA but

continued to do business under the name Benton Franklin Physical Therapy.

BFOA currently employs three physical therapists at BFPT who work in a

separate facility from the physicians. In 2006, BFOA referred approximately 33

percent of its patients to physical therapists at BFPT. This constituted around 86

percent of BFPT's clients. When referring patients to physical therapy, BFOA claims

to advise patients, both verbally and in writing, of their ownership interest in BFPT

and to provide patients with a list of other physical therapy providers. Columbia has

produced some evidence that, when a patient told his BFOA physician that he wanted

a referral to a physical therapist at Columbia, the physician said he could not provide a

referral anywhere other than BFPT. Columbia also produced evidence that another

patient asked a BFOA physician where to go with his physical therapy referral and the

physician pointed to BFPT.

Columbia sued BFOA and its physician-members and physical therapists.

Columbia's lawsuit consisted of four claims: (1) violation of the corporate practice of

medicine doctrine, (2) violation of the PSCA, (3) violation of the antirebate statute,

and (4) violation of the CPA. Columbia and BFOA both moved for summary

judgment on each of the claims, except for the CPA claim, on which only BFOA

moved for summary judgment. The trial court granted BFOA's motion for summary

judgment on the PSCA claim and denied BFOA's motions for summary judgment on

the CPA and antirebate statute claims. The trial court denied Columbia's motion for

summary judgment with respect to the PSCA and the antirebate statute claims. The

court declined to grant or deny either party's summary judgment motion on the

application of the corporate practice of medicine claim. Pursuant to stipulation by the

parties, the trial court certified the issues to the Court of Appeals, which denied

review. The parties then filed a joint motion for review with this court, which we

granted as to four issues. Columbia Physical Therapy, Inc. v. Benton Franklin

Orthopedic Assocs., 164 Wn.2d 1008 (2008).

IssueS

1. Does BFOA violate the corporate practice of medicine doctrine?

2. Does BFOA violate the PSCA?

3. Do BFOA's employees violate the antirebate statute?

4. Did BFOA violate the CPA?

STANDARD OF REVIEW

We review summary judgment orders and the meaning of statutes de novo.

Wright v. Jeckle, 158 Wn.2d 375, 379, 144 P.3d 301 (2006) (meaning of statutes);

Hisle v. Todd Pac. Shipyards Corp., 151 Wn.2d 853, 860, 93 P.3d 108 (2004)

(summary judgment orders). Summary judgment is appropriate if "there is no genuine

issue as to any material fact and . . . the moving party is entitled to judgment as a

matter of law." CR 56(c). All facts and reasonable inferences therefrom must be

viewed in the light most favorable to the nonmoving party. Hisle, 151 Wn.2d at 860-

61.

Analysis

I. The Corporate Practice of Medicine Doctrine and the PSCA


Columbia asserts that BFOA has violated both the corporate practice of

medicine doctrine and the PSCA. Though these are independent causes of action, they

are closely related and we therefore combine our analysis of the two claims. Because

we find that the PSCA authorizes BFOA's employment of physical therapists, there is

no violation of either the PSCA or the corporate practice of medicine doctrine. As a

result, Columbia's claims under the corporate practice of medicine doctrine and the

PSCA both fail as a matter of law and BFOA is entitled to summary judgment.

The corporate practice of medicine doctrine provides that, absent legislative

authorization, a business entity may not employ medical professionals to practice their

licensed professions. This doctrine is derived of much broader principles "addressed

by both the statutory and common law of Washington." Morelli v. Ehsan, 110 Wn.2d

555, 558, 756 P.2d 129 (1988). In the abstract, these broader principles are relatively

straightforward. The practice of certain professions requires a license. See, e.g.,

RCW 18.71.021 (medicine); RCW 18.74.150 (physical therapy). A person or entity

practices a profession by either directly engaging in statutorily defined conduct or by

employing a licensed individual to engage in such conduct. See Morelli, 110 Wn.2d at

561; State ex rel. Standard Optical Co. v. Superior Court, 17 Wn.2d 323, 328-33, 135

P.2d 839 (1943). The legislature may, of course, authorize exceptions to this general

scheme. This interpretation of the corporate practice of medicine doctrine is

supported by legislative acquiescence, RCW 18.100.030(1) (stating that prior to the

passage of the PSCA certain professional services could not be performed by

corporations), and earlier precedent of this court, Deaton v. Lawson, 40 Wash. 486,

489-90, 82 P. 879 (1905); State ex rel. Lundin v. Merchs. Protective Corp., 105 Wash.

12, 17-18, 177 P. 694 (1919).

Two cases are instructive in understanding the application of the corporate

practice of medicine doctrine: Standard Optical, which addresses a corporation

employing an optometrist, and Morelli, which addresses a partnership employing a

physician. In Standard Optical, a corporation employed a licensed optometrist, who

engaged in the practice of optometry in the course of business. 17 Wn.2d at 325-26.

The practice of optometry was limited by statute to licensed persons. Id. at 327.

Though noting that the corporation exercised no control over the optometrist's

professional judgment, this court nonetheless held that the corporation impermissibly

engaged in the practice of optometry by employing the optometrist. Id. at 326, 328-33.

As justification for its holding, this court cited a decision by the South Carolina

Supreme Court, which argued that the commercialization of professions would destroy

professional standards and that the duties of professionals to their clients are

incompatible with the commercial interests of business entities. Id. at 331-32 (citing

Ezell v. Ritholz, 188 S.C. 39, 198 S.E. 419, 424 (1938)). At bottom, the doctrine exists

to protect the relationship between the professional and the client.

In Morelli, a physician and a nonphysician entered into a limited partnership

agreement and operated a medical clinic together. 110 Wn.2d at 556. In the course of

finding that the partnership was illegal, we noted "the common law rule that a

corporation cannot engage in the practice of a learned profession through licensed

employees unless legislatively authorized." Id. at 561. We then proceeded to extend

that rule to limited partnerships. Id.

BFOA disagrees with this understanding of the corporate practice of medicine

doctrine, arguing that the doctrine restricts only who may own a medical practice and

does not address whom that practice may employ. In support of this conclusion,

BFOA cites language in Morelli indicating that the court was there concerned with lay

participation in professional services, see id. at 562. To be sure, this is one evil the

doctrine seeks to avoid, but, as discussed above, this court expressed much broader

concerns in Standard Optical. We reject BFOA's argument and adhere to the

traditional understanding that the corporate practice of medicine doctrine forbids

employment of health care professionals by business entities or nonprofessionals

absent legislative authorization.

In the present case, there is no dispute that BFOA is a business entity that

employs licensed health care professionals. Applying the principles of the corporate

practice of medicine doctrine, this establishes that BFOA is engaged in the practice of

medicine and physical therapy. This is impermissible absent legislative authorization.

The parties disagree as to whether any statute authorizes BFOA's employment of

physical therapists.2

In 1969, the legislature enacted the PSCA and thereby carved out "a narrow

statutory exception" to the general rule prohibiting corporations from practicing

learned professions. Id. at 561. The PSCA contains two provisions of potential importance here.3 First, BFOA argues that RCW 18.100.050(1) authorizes its

employment of physical therapists:

An individual or group of individuals duly licensed . . . to render the same professional services within this state may organize and become a shareholder or shareholders of a professional corporation for pecuniary profit under the provisions of Title 23B RCW for the purpose of rendering professional service.

Second, Columbia argues that RCW 18.100.080 prohibits BFOA's employment of

physical therapists:

No professional service corporation organized under this chapter shall engage in any business other than the rendering of the professional services for which it was incorporated.

In deciding between these mutually exclusive readings of the statute, we are guided by

familiar principles of statutory interpretation.

Our purpose in interpreting a statute is "'to discern and implement the intent of

the legislature.'" City of Olympia v. Drebick, 156 Wn.2d 289, 295, 126 P.3d 802

(2006) (quoting State v. J.P., 149 Wn.2d 444, 450, 69 P.3d 318 (2003)). Our first

inquiry is whether, looking to the entire statute in which the provision is found and to

related statutes, the meaning of the provision in question is plain. Cosmopolitan

Eng'g Group, Inc. v. Ondeo Degremont, Inc., 159 Wn.2d 292, 298-99, 149 P.3d 666

(2006). If so, our inquiry is at an end. Estate of Haselwood v. Bremerton Ice Arena,

Inc., 166 Wn.2d 489, 498, 210 P.3d 308 (2009). If, however, the statute is susceptible

to more than one reasonable interpretation, it is ambiguous, and we "'may resort to

statutory construction, legislative history, and relevant case law.'" Id. (quoting

Christensen v. Ellsworth, 162 Wn.2d 365, 373, 173 P.3d 228 (2007)). It is also true

that "[w]henever possible, statutes must be read in harmony and each must be given

effect." Livingston v. Cedeno, 164 Wn.2d 46, 52, 186 P.3d 1055 (2008). With these

principles in mind, we turn to the task of interpreting the PSCA as it applies to the

present case.

Beginning with the prohibition provided in RCW 18.100.080, the prohibited

conduct is "engag[ing] in any business other than the rendering of the professional

services for which [the professional service corporation] was incorporated." The

question that immediately presents itself is what professional services a professional

service corporation is incorporated to render. At the outset, we reject the proposition

that this is solely determined by a corporation's articles of incorporation. A

professional service corporation composed of dentists could not, for instance, state in

its articles of incorporation that it is incorporated to render dental and legal advice and

thereby be permitted to practice both dentistry and law. In coming to the proper

interpretation, we turn to related provisions of the same statute.

Two provisions in chapter 18.100 RCW provide insight as to what professional

services a professional service corporation is incorporated to render. In RCW

18.100.010, the legislature declared that its intent in passing the PSCA was "to provide

for the incorporation of an individual or group of individuals to render the same

professional service to the public for which such individuals are required by law to be

licensed or to obtain other legal authorization." In RCW 18.100.050(1), the legislature

authorizes the formation of a professional service corporation by professionals "duly

licensed or otherwise legally authorized to render the same professional services . . .

for the purpose of rendering professional service." Reading the relevant provisions in

harmony, it is clear that the professional services for which a professional service

corporation is incorporated, and in which it may therefore engage, are those for which

the shareholders (or, in the case of a professional limited liability company, members,

RCW 25.15.045(3)) are licensed. Thus, under RCW 18.100.080, BFOA may not

engage in any business other than the rendering of the professional service that its

members are licensed to practice: medicine.

BFOA argues that the PSCA is concerned with only who may own a

professional service corporation, not whom that corporation may employ. The PSCA,

however, addresses both. Multiple sections address what services the professional

service corporation may render. RCW 18.100.010, .050(2)-(5), .060, .065, .080. A

corporation renders services through its employees. Thus, the PSCA impacts whom

the corporation may employ.

Whether BFOA violates the PSCA therefore comes down to a single question:

does it engage in any business other than the practice of medicine? Columbia argues

that by employing physical therapists, BFOA is engaged in the practice of physical

therapy, which Columbia contends is a different professional service. Columbia's

argument relies chiefly on the fact that the practice of medicine and the practice of

physical therapy are governed by different chapters of the RCW. Medicine is

governed by chapter 18.71 RCW while physical therapy is governed by chapter 18.74

RCW. Columbia argues that this fact establishes that medicine and physical therapy

are separate professional services. Columbia misunderstands the statutory interplay of

these professions.

Physical therapy is one aspect of the practice of medicine. The practice of

medicine is defined by RCW 18.71.011(1) as "[o]ffer[ing] or undertak[ing] to

diagnose, cure, advise or prescribe for any human disease, ailment, injury, infirmity,

deformity, pain or other condition, physical or mental, real or imaginary, by any means

or instrumentality." This broad definition readily encompasses all the acts constituting

the statutory definition of the practice of physical therapy. RCW 18.74.010(8). The

physical therapy licensing statute simply permits nonphysicians to engage in a limited

practice of medicine without liability for the unauthorized practice of medicine. Cf.

RCW 18.71.030(4) (providing that the prohibition on the unauthorized practice of

medicine does not prohibit the practice of any healing art for which the practitioner is

licensed). The upshot is that physical therapy is part of the practice of medicine and,

by extension, part of "the same professional service . . . for which" BFOA's members

are licensed. RCW 18.100.010. The practice of medicine is the purpose for which

BFOA was incorporated and, even when employing physical therapists, BFOA does

not engage in any business other than the practice of medicine. As such, BFOA's

employment of physical therapists does not violate RCW 18.100.080 but is instead

authorized by RCW 18.100.050(1), which allows the creation of a professional service

corporation for the purpose of rendering the same professional service for which its

organizers are duly licensed.


Our conclusion that the practice of physical therapy is included within the

practice of medicine, as those terms are defined by the legislature, is reinforced by

other statutory provisions. First, the physical therapy licensing statute expressly

provides that "[n]othing in this chapter prohibits any person licensed in this state

under any other act from engaging in the practice for which he or she is licensed."

RCW 18.74.090(1). This contemplates that other professionals are licensed to

perform acts overlapping with or including those that physical therapists are licensed

to perform. Second, the legislature knew how to create a field of the healing arts that

does not fall within the practice of medicine. The legislature specifically provided,

within the definition of the practice of medicine, that "a person licensed under this

chapter shall not engage in the practice of chiropractic as defined in RCW 18.25.005."

RCW 18.71.011(4). This resulted in chiropractic being a distinct practice separate

from the practice of medicine, not a mere subset of it. The legislature has not created

a similar provision with respect to physical therapy.

In an effort to avoid this result, Columbia makes three additional arguments:

that the use of the term "physical therapy" means it is a separate professional service;

that professional services are not the "same" unless they are co-extensive; and that

RCW 18.100.050(5) is a legislative determination that the practices of medicine and

physical therapy are separate professional services. None of these arguments are

availing.

First, Columbia points to RCW 18.74.090(1), which prohibits the use of the

term "physical therapy" in connection with the name of any person not licensed as a

physical therapist pursuant to that chapter. Columbia has not asserted a violation of

RCW 18.74.090(1) as one of its claims. The question, therefore, is whether, by using

the term "physical therapy" in connection with its business, it is engaged in a separate

business from the practice of medicine, notwithstanding the fact the practice of

medicine includes the acts constituting physical therapy. We do not read RCW

18.74.090(1) to stand for the proposition that calling an activity "physical therapy" is a

separate professional service while performing the acts constituting physical therapy is

not a separate professional service. We avoid such strained readings of statutes. State

v. Neher, 112 Wn.2d 347, 351, 771 P.2d 330 (1989).

Second, Columbia argues that physical therapy and medicine cannot be the

same professional service because, while medicine includes physical therapy, physical

therapy does not include medicine. In other words, Columbia argues that to be the

same professional service, two professions must be coextensive. This reasoning

misses the point. Nothing in the PSCA requires that the professional services

performed by the business be the "same professional service." Instead, it requires that

the individuals organizing the business entity be licensed to render the same

professional service, RCW 18.100.050(1), and prohibits the professional service

corporation from engaging in any business other than that for which the business was

organized (i.e., any business other than that professional service for which its owners

are licensed), RCW 18.100.080. The important fact is not that physical therapy and

medicine are the "same" professional service, but rather that physical therapy falls

within the "same professional service" for which the owners of BFOA are licensed.

Finally, Columbia argues that RCW 18.100.050(5), which places those licensed

to practice medicine in a separate list from those licensed to practice physical therapy,

amounts to a legislative determination that medicine and physical therapy may not be

practiced by a single professional service corporation. RCW 18.100.050(5)4 creates

two lists of licensed professional services and provides that persons licensed pursuant

to the listed chapters "may own stock in and render their individual professional

services through one professional service corporation" with others licensed pursuant to

statutes in the same list. Importantly, physicians are listed in subsection (a) but not

subsection (b); physical therapists are not listed in subsection (a) but are listed in

subsection (b). The legislation creating these lists of licensed professionals who "may

own stock in and render their professional services through a single professional

service corporation" was first enacted in 19965 and had the effect of broadening the

professions that could come together and form a single professional service

corporation. See Laws of 1997, ch. 390, § 3. This, in turn, broadened the professional

services that a single professional service corporation could provide. That is, these

lists do not, as Columbia suggests, limit the services that a single professional service

corporation may provide but rather broaden those services. As a result, RCW

18.100.050(5) does not alter our conclusion.

In sum, the PSCA does not prohibit BFOA's employment of physical therapists.

In employing physical therapists, BFOA does not go beyond the practice of medicine,

the professional service for which it was formed. Moreover, RCW 18.100.050(1)

authorizes BFOA's employment of physical therapists, since it permits the formation

of a professional limited liability company to render the professional service --

medicine -- for which its members are licensed. As there is legislative authorization

for BFOA's employment of physical therapists, BFOA does not violate the corporate

practice of medicine doctrine. We therefore affirm the trial court's grant of summary

judgment to BFOA on Columbia's PSCA claim and direct the trial court to enter

summary judgment for BFOA on Columbia's common law corporate practice of

medicine claim.

II. The Antirebate Statute


Columbia's third claim is that the physician-members and the physical

therapists of BFOA violate the antirebate statute, chapter 19.68 RCW, by receiving

and paying unearned profits. Though the antirebate statute applies to a referring

physician with an ownership interest in the business to which patients are referred,

Day v. Inland Empire Optical, Inc., 76 Wn.2d 407, 456 P.2d 1011 (1969), the statute

exempts from its coverage profits earned by an employee of a firm and flowing to the

firm's owners, provided the owners practice in the firm, RCW 19.68.040. As such,

BFOA is entitled to summary judgment on Columbia's antirebate statute claim.6

Though we have previously noted that the antirebate statute is "not a model of

clarity by any means," we have nonetheless determined that it prohibits both paying

and receiving anything of value, including unearned profits, in return for a referral of

patients. Wright, 158 Wn.2d at 381. The benefit of such a law is that it discourages

unnecessary referrals, thereby lowering health care costs. Our most extensive and on-

point discussion of the statute came in Day. In Day, a group of ophthalmologists

practiced together in the Spokane Eye Clinic, a medical partnership. 76 Wn.2d at 410.

Those ophthalmologists also owned all the capital stock of the Inland Empire Optical

Company, which was located on the lower floor of the same building and operated an

optical dispensing business, employing four licensed dispensing opticians. Id. In the

eye clinic, the ophthalmologists advertised on a sign that they owned an optical shop

downstairs but that patients were free to take their prescriptions to other opticians. Id.

at 412. The court in Day found that this arrangement violated the antirebate statute,

reasoning that the sign constituted a referral by the ophthalmologists and that any

benefit to Inland Empire Optical ultimately benefited its owners. Id. at 418-19.

The present case largely parallels Day. The physician-owners of BFOA refer

patients to physical therapists employed by a business entity owned by the referring

physicians and the owners thereby benefit from the referral. Without more, this would

violate the antirebate statute since any profit from the work by the physical therapists

would, absent the exception contained in RCW 19.68.040, be unearned as to the

referring physicians. A physician may receive compensation only for services

rendered by that particular physician. RCW 19.68.040.

Unlike Day, which involved two entirely distinct entities, the referring physician-

members here provided their own professional services through the same firm as the

physical therapists to whom they referred patients. RCW 19.68.040 instructs that the

chapter is "not intended to prohibit two or more licensees who practice their

profession as copartners to charge or collect compensation for any professional

services by any member of the firm." The antirebate statute was enacted in 1949. At

that time, 20 years prior to passage of the PSCA, the corporate practice of medicine

doctrine prohibited corporations from practicing medicine through their employees.

As such, the only business arrangement under which two or more licensees could

practice together was a partnership. The PSCA expressly provides that professional

service corporations remain subject to the antirebate statute, RCW 18.100.140,

thereby establishing that the antirebate statute's terms are no longer limited to

partnerships. In line with basic principles of statutory interpretation, we read the

antirebate statute in harmony with the PSCA. Doing so, it becomes clear that the

legislature did not intend to prohibit licensees practicing their profession together

through a lawful business arrangement from receiving compensation for the

professional services of other members of the firm. The result is that profits from

professional services rendered by employees of a firm are not "unearned" by the

owners, as that term is used in RCW 19.68.010(1), so long as the owners practice as

part of that firm. The physician-members of BFOA do practice as part of the firm and

thus any profit they receive from their referrals to BFOA-employed physical therapists

is not "unearned" and, therefore, not barred by the antirebate statute.

The trial court declined to grant BFOA's summary judgment motion on the

antirebate statute claim because it believed that there remained a question of fact as to

whether BFOA physicians adequately supervised the physical therapists employed by

BFOA, and Columbia advances that argument here. The antirebate statute, however,

contains no supervision requirement. The mistaken belief to the contrary appears to

stem from a misreading of Day. In Day, the court first determined that the referrals by

the ophthalmologists ran afoul of the prohibitions in RCW 19.68.010 and .020. 76

Wn.2d at 418-19. It then noted, however, that a separate statute, RCW 18.34.010,

specifically permitted employment of a licensed optician by an ophthalmologist,

provided the ophthalmologist provided "personal supervision" of the optician. Id. at

419-20. The court then determined that in order for the ophthalmologists in that case

to take advantage of RCW 19.68.040, they would have to demonstrate that they met

the requirements of RCW 18.34.010 (i.e., that they personally supervised the

opticians). Id. It was a separate statute that imposed a personal supervision

requirement in Day, not the antirebate statute. There is no independent personal

supervision requirement in either the PSCA or chapter 18.74 RCW. BFOA physicians

therefore need not show that they personally supervised the physical therapists

employed by BFOA.

In sum, even construing all material facts in the light most favorable to

Columbia, BFOA physicians and physical therapists have not violated the antirebate

statute. On remand, the trial court is directed to enter summary judgment for BFOA

physicians and physical therapists on Columbia's antirebate statute claim.

III.The CPA

The final issue we consider in this case is whether BFOA has violated the CPA.

On this issue, only BFOA has moved for summary judgment. Columbia argues that

BFOA violated the CPA both by engaging in particular acts that were unfair or

deceptive and by violating the corporate practice of medicine doctrine, the PSCA, and

the antirebate statute. Having already determined that BFOA has not violated these

statutes and this doctrine, we confine our analysis to whether, taking the facts in the

light most favorable to Columbia, BFOA committed unfair or deceptive acts or

practices.7 We conclude that, if found credible, the facts alleged by Columbia would

constitute unfair or deceptive acts or practices, and, as a result, BFOA is not entitled to

summary judgment on Columbia's CPA claim.

To establish a violation of the CPA, a private plaintiff must prove five elements:

(1) an unfair or deceptive act or practice occurred, (2) the act or practice occurred in

the conduct of trade or commerce, (3) the act or practice impacted the public interest,

(4) the plaintiff suffered an injury to business or property, and (5) the plaintiff can

demonstrate a causal link between the unfair or deceptive act or practice and the

injury. Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 105 Wn.2d

778, 784-93, 719 P.2d 531 (1986). The only element challenged by BFOA before this

court is the first one. Whether an action constitutes an unfair or deceptive practice is a

question of law. Leingang v. Pierce County Med. Bureau, Inc., 131 Wn.2d 133, 150,

930 P.2d 288 (1997). An act is deceptive if it has "the capacity to deceive a

substantial portion of the public." Hangman Ridge, 105 Wn.2d at 785. Even accurate

information may be deceptive "'if there is a representation, omission or practice that is

likely to mislead' a reasonable consumer." Panag v. Farmers Ins. Co. of Wash., 166

Wn.2d 27, 50, 204 P.3d 885 (2009) (quoting Sw. Sunsites, Inc. v. Fed. Trade Comm'n,

785 F.2d 1431, 1435 (9th Cir. 1986) (emphasis omitted)).

There is evidence in the record of two acts that Columbia claims are unfair or

deceptive. The material facts of both are disputed, so we must view them in the light

most favorable to Columbia. The first involves a BFOA physician telling a patient

who had requested a referral to Columbia that the patient had to receive treatment

from BFOA's physical therapists. This undoubtedly has "the capacity to deceive a

substantial portion of the public," Hangman Ridge, 105 Wn.2d at 785 (emphasis

omitted), into believing that it cannot receive physical therapy elsewhere. It is no

answer that the majority of BFOA patients take their referrals elsewhere, for it is

conceivable that BFOA physicians make such deceptive representations only to

patients with the most lucrative physical therapy referrals or until BFOA's physical

therapists have reached capacity. The act of informing patients that they could receive

physical therapy only from BFOA physical therapists, if proved, would constitute an

unfair or deceptive practice. The act of pointing to BFOA's physical therapy location

in response to a patient's question about where he could take the prescription carries a

similar implication and would also, absent more, constitute an unfair and deceptive

practice.

In sum, BFOA has failed to show that Columbia's CPA claim fails on the basis

alleged since some of the alleged conduct could amount to an unfair or deceptive trade

practice. We therefore affirm the trial court's refusal to grant summary judgment to

BFOA on Columbia's CPA claim. In order to prevail on remand, Columbia must still

demonstrate that the facts it alleges are true and that the remaining Hangman Ridge

factors apply.

* * *

See: http://www.courts.wa.gov/opinions/index.cfm?fa=opinions.showOpinion&filename=817341MAJ

Outcome: This case presents numerous issues relating to the important issue of delivery of

health care services in the state of Washington. In resolving the matters before us, we

have relied upon the intent of the legislature. The legislature remains free to adopt

another course should it see fit to do so. With respect to the case before us, we affirm

the trial court's grant of summary judgment to BFOA on Columbia's PSCA claim and

direct the trial court to enter summary judgment for BFOA on Columbia's corporate

Columbia Physical Therapy, Inc., P.S. v. Benton Franklin Orthopedic Assocs., PLLC No. 81734-1

practice of medicine doctrine and antirebate statute claims. We affirm the trial court's

denial of the remaining summary judgment motions, including the court's denial of

summary judgment on Columbia's CPA claim.

Plaintiff's Experts:

Defendant's Experts:

Comments: