Eight Circuit: No-Fault Advertising Restrictions On Chiropractor “Referral” Services Are Constitutional.

The Eight Circuit Court of Appeals recently upheld amendments to Minnesota’s No Fault Act that limited advertisements of healthcare referral services.  In 1-800-411-Pain Referral Serv., LLC v. Otto, 13-1167, 2014 WL 904190 (8th Cir. Mar. 10, 2014), plaintiffs, 1-800-411-Pain (“411-Pain) and several chiropractors, sought a preliminary injunction against the Minnesota Board of Chiropractors (the “Board”) to enjoin enforcing of amendments to Minnesota’s No-Fault Act.  The amendments sought to curtail unethical practices by licensed healthcare providers (e.g. chiropractors) by restricting the content of advertisements of medical services to accident victims. Minn. Stat. § 65B.44, subd. 6(d).  Plaintiffs’ claimed enforcement of the amendments will cause chiropractors to refuse to do business with 411-Pain, thereby chilling their commercial speech rights and causing economic harm.  The lower court denied plaintiffs’ motion to enjoin enforcement of the statute.  The court found that 411-Pain’s advertisements were inherently misleading, and potentially illegal under anti-kickback statutes, and thus is not entitled to First Amendment protection.  Plaintiffs appealed.

The Eight Circuit Court of Appeals affirmed, holding the Act’s prohibition of ads stating dollar amounts (e.g. “up to $40,000 in benefits”), implied endorsements by law enforcement (e.g. actor in police uniform advising entitlement to no-fault benefits), or requiring the advertisement to be at the direction of a licensed healthcare provider did not violate the First Amendment.  The court reasoned the restrictions were content-and-speaker restrictions aimed at licensed health care providers and referral services, such as 411-Pain, and were subject to more exacting scrutiny.  Nonetheless, the court held the amendments were constitutional because prohibited “inherently misleading” statements in advertisements.  And the challenged aspects were sufficiently related to inherently misleading conduct, and as such, the commercial speech restriction did not violate the Constitution.

This case is significant due to its effect on advertising benefits under the No-Fault Act.    We will continue to monitor this and other decisions impacting the No-Fault Act.  If you have any questions about this, or any other matter, please contact us.