Physician deceptive and unfair business practices.

• Author: Flynn, Michael
• Position: Florida

Forty-six states,[1] including Florida,[2] provide by statute for a private right of action against persons or businesses who commit deceptive or unfair trade practices. The question is does this statute apply to physicians and the practice of medicine?

Florida's Deceptive and Unfair Trade Practices Statute

The Federal Trade Commission (FTC) Act, 15 U.S.C. [sections] 45 (1995), is the model for Florida's Deceptive and Unfair Trade Practices statute. Florida's "Little FTC Act" specifically accords deference to the FTC and federal court decisions interpreting the FTC Act[3] and provides that a deceptive or unfair trade practice claim does not displace any common law or other statutory claim.[4]

The federal courts have defined a deceptive trade practice to be any act or practice that has the tendency or capacity to deceive consumers[5] and an unfair trade practice to be any act or practice that offends public policy and is immoral, unethical, oppressive, unscrupulous, or substantially injurious to consumers.[6] In contrast, the FTC defines a deceptive trade practice to be any act or practice that, in the view of the consuming public, would be material to a significant number of consumers and is likely to deceive a consumer who acts reasonably under the circumstances.[7] Further, the FTC defines an unfair trade practice to be any act or practice in which the substantial injury to consumers is not outweighed by the benefits of the act or practice to business or the competitive market and is the type of injury that a consumer could not have reasonably avoided.[8]

Florida case law has adopted the federal court definitions of deception and unfairness rather than the FTC definitions.[9] Regardless, neither the federal court nor the FTC definitions of deception or unfairness requires proof of actual fraud or deception or proof of intent or negligence.[10]

The "Learned Professions" Exemption

Historically, those practicing the "learned professions," including lawyers and doctors, were exempt from the antitrust laws until Goldfarb v. Virginia State Bar, 421 U.S. 773, reh`g denied, 423 U.S. 886 (1975). In Goldfarb, the U. S. Supreme Court ruled that if a profession involves the exchange of money for services, then the professional activity, in this case the practice of law, is not exempt from the FTC Act.

After Goldfarb, a few states addressed the application of state unfair and deceptive trade practice statutes to professionals. Most states started with lawyers and most states that did not address the issue by statute ruled that the business aspects of the practice of law were subject to the prohibitions of state unfair and deceptive trade practice statutes.[11] Perhaps the most well-reasoned case on point is the Washington state case of Short v. Demopolis, 691 P.2d 163 (Wash. 1989).[12] In Short, the plaintiff client of the defendant law firm claimed that the defendant committed a deceptive trade practice by switching lawyers on his case so that a lawyer other than the lawyer agreed to by the plaintiff and promised by the law firm represented the plaintiff.[13] The Washington Supreme Court ruled that this kind of conduct, akin to bait and switch selling,[14] is part of the entrepreneurial or business aspects of the practice of law and, thus, falls within the scope of the state unfair and...