               IN THE SUPREME COURT OF NORTH CAROLINA

                                   No. 251PA18

                                Filed 14 June 2019
SUSAN SYKES d/b/a ADVANCED CHIROPRACTIC AND HEALTH CENTER,
DAWN PATRICK, TROY LYNN, LIFEWORKS ON LAKE NORMAN, PLLC,
BRENT BOST, and BOST CHIROPRACTIC CLINIC, P.A.
              v.
HEALTH NETWORK SOLUTIONS, INC. f/k/a CHIROPRACTIC NETWORK OF
THE CAROLINAS, INC., MICHAEL BINDER, STEVEN BINDER, ROBERT
STROUD, JR., LARRY GROSMAN, MATTHEW SCHMID, RALPH RANSONE,
JEFFREY K. BALDWIN, IRA RUBIN, RICHARD ARMSTRONG, BRAD
BATCHELOR, JOHN SMITH, RICK JACKSON, and MARK HOOPER



      On discretionary review pursuant to N.C.G.S. § 7A-31, prior to a determination

by the Court of Appeals, of orders and opinions dated 18 August 2017 and 5 April

2018 entered by Judge James L. Gale, Chief Business Court Judge, in Superior Court,

Forsyth County, after the case was designated a mandatory complex business case

by the Chief Justice under N.C.G.S. § 7A-45.4. Heard in the Supreme Court on 5

March 2019.


      Oak City Law LLP, by Samuel Pinero II and Robert E. Fields III; and Doughton
      Blancato PLLC, by William A. Blancato, for plaintiff-appellants.

      Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P., by Jennifer K. Van
      Zant, Benjamin R. Norman, and W. Michael Dowling, for defendant-appellees.


      HUDSON, Justice.


      Plaintiffs appeal the North Carolina Business Court’s 18 August 2017 order

and opinion granting in part and denying in part defendants’ motions to dismiss and
                             SYKES V. HEALTH NETWORK SOLS., INC.

                                          Opinion of the Court



for partial summary judgment and its 5 April 2018 order and opinion dismissing

plaintiffs’ remaining claims under Rule of Civil Procedure 12(b)(6). Plaintiffs are

licensed chiropractic providers in North Carolina who allege that defendants Health

Network Solutions, Inc. (HNS) and HNS’s individual owners have engaged in

unlawful price fixing ultimately resulting in a reduction of output of chiropractic

services in North Carolina. Specifically, plaintiffs allege that defendant HNS has

committed antitrust and other violations in its role as intermediary between

individual chiropractors and several insurance companies and third-party

administrators,1 who are the defendants in a separate action also before this Court.

        In their Second Amended Class Action Complaint (the second amended

complaint), plaintiffs raise the following claims for relief: (1) declaratory judgment,

(2) price fixing, monopsony, and monopoly (the antitrust claims), (3) unfair and

deceptive trade practices and acts, (4) civil conspiracy, and (5) breach of fiduciary

duty. In addition, plaintiffs seek punitive damages, a remedy styled in the complaint

as a separate claim for relief.

        Today, we affirm the Business Court’s dismissal of plaintiffs’ antitrust claims,

including the derivative claim of civil conspiracy, by an equally divided vote, meaning

that the Business Court’s opinion as to those claims will stand without precedential




        1 Plaintiffs refer to these entities as the Insurers, while defendants refer to them as the Payors.

Several of these entities are defendants in a separate action filed by the same plaintiffs on 26 May
2015. An appeal from the Business Court in that companion case, Sykes v. Blue Cross & Blue Shield
of North Carolina (No. 248A18) (Sykes II), is also before this Court.

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                                   Opinion of the Court



value. We also hold that the Business Court did not err in dismissing each of

plaintiffs’ other claims. As for plaintiffs’ unfair trade practices claim, we hold that

this claim is barred by the learned profession exemption set out in N.C.G.S. § 75-

1.1(b). Regarding plaintiffs’ declaratory judgment claim, we hold that the relevant

statutes do not provide plaintiffs a private right of action to obtain the declaratory

relief that they seek. As for plaintiffs’ breach of fiduciary duty claim, we hold that no

fiduciary relationship existed between the parties, meaning no fiduciary duty was

ever created. The Business Court correctly noted that no freestanding claim exists

for punitive damages, see Funderburk v. JPMorgan Chase Bank, N.A., 241 N.C. App.

415, 425, 775 S.E.2d 1, 8 (2015), and plaintiffs have no remaining legal claim to which

punitive damages might attach.       As so described, we affirm the decision of the

Business Court dismissing plaintiffs’ entire action.

                         Factual and Procedural Background

      Plaintiffs brought this action as a putative class action lawsuit, defining the

class as “all licensed chiropractors practicing in North Carolina from 2005 to the

present who provided services in the North Carolina Market” and identifying as three

subsets of that class all licensed chiropractors participating in the HNS Market, the

Comprehensive Health Market, and the Insurance Market.             Plaintiffs made the

following allegations in their second amended complaint, and for the purposes of our

review they are taken as true.




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                                  Opinion of the Court



      Defendant HNS serves as an intermediary between individual chiropractors in

North Carolina and various insurance companies and third-party administrators for

insurance companies. Essentially, HNS contracts with various chiropractors, who,

as part of the HNS network, are able to provide chiropractic services “in-network” for

the various insurance payors with whom HNS has separately contracted.              In

exchange for in-network access, members of the HNS network agree to permit HNS

to negotiate with the payors the prices to be charged for in-network chiropractic

services. A chiropractor must maintain an average per-patient cost at a certain level

or risk termination from the network. Individual defendants are themselves licensed

chiropractors who are current or former owners of HNS.

      Plaintiffs are licensed North Carolina chiropractors (and their businesses) who

previously participated in the HNS network or have never participated in the

network. Plaintiffs fall within one of these three categories: they were removed from

the HNS network because their per-patient cost was too high, left the network based

on HNS’s policies, or declined to join the network because of HNS’s practices and

restraints. Plaintiffs argue that because HNS is the sole path to becoming an in-

network provider for the various participating insurance companies and other payors,

they are being deprived of access to the large number of patients that receive health

care coverage via the networks of the various payors.

      Plaintiffs’ claims are largely based on the following allegations. Plaintiffs

contend that HNS, despite representing that it is an integrated independent practice


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                                       Opinion of the Court



association (IPA), in fact “operat[es] an involuntary cartel to control competition,

supply, and pricing of chiropractic services in North Carolina made possible by the

exclusive contracts with the Insurers and the market power provided by those

contracts.” Plaintiffs contend that HNS is operating as a medical service corporation,

as described in N.C.G.S. § 58-65-1, that has not become licensed as required by

N.C.G.S. § 58-65-50. In addition, they contend that HNS is conducting utilization

review based only on providers’ average per-patient cost, which does not take into

account medical necessity or appropriateness of treatment, in violation of N.C.G.S.

§ 58-50-61 (2017). Thus, they contend, in addition to its failure to obtain proper

licensure, HNS is violating North Carolina’s antitrust statutes by fixing the prices

charged by more than one-half of the licensed chiropractors in the state and by

monopsony, a buyer-side form of monopoly,2 in which, rather than using its market

power as a sole seller to increase the price of services, HNS is using its market power

as a buyer of those services to restrict output of services. Plaintiffs allege four

relevant markets that have been adversely affected by the conduct of defendant HNS:

the North Carolina market, defined as the market for chiropractic services provided


       2 Monopsony is “a market situation in which one buyer controls the market.” In re Duke
Energy Corp., 232 N.C. App. 573, 583, 755 S.E.2d 382, 389 (2014) (quoting BLACK’S LAW DICTIONARY
1023 (7th ed. 1999)). “[A] monopsony is to the buy side of the market what a monopoly is to the sell
side and is sometimes colloquially called a ‘buyer’s monopoly.’ ” Weyerhaeuser Co. v. Ross-Simmons
Hardwood Lumber Co., 549 U.S. 312, 320, 127 S. Ct. 1069, 1075, 166 L. Ed. 2d 911, 919 (2007) (citing
Roger D. Blair & Jeffrey L. Harrison, Antitrust Policy and Monopsony, 76 CORNELL L. REV. 297, 301,
320 (1991) and Thomas A. Piraino, Jr., A Proposed Antitrust Approach to Buyers’ Competitive Conduct,
56 HASTINGS L.J. 1121, 1125 (2005)).




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                                   Opinion of the Court



in North Carolina, and three submarkets within the North Carolina Market. Those

submarkets are (1) the HNS Market, “the market in which in-network managed care

chiropractic services . . . are provided to the Insurers and their North Carolina

patients through HNS”; (2) the Comprehensive Health Market, “the market for in-

network chiropractic services provided to individual and group comprehensive

healthcare insurers and their patients in North Carolina”; and (3) the Insurance

Health Market, “the market for insurance reimbursed chiropractic services in North

Carolina.”

      The original complaint in this action was filed on 30 April 2013, and the case

was designated a mandatory complex business case on 31 May 2013, before passage

of the Business Court Modernization Act (BCMA). The BCMA established that, for

all cases designated as mandatory complex business cases after 1 October 2014,

appeals from the North Carolina Business Court would come directly to this Court,

rather than to the Court of Appeals. A second action involving essentially the same

factual allegations and similar legal claims, Sykes v. Blue Cross & Blue Shield of

North Carolina (Sykes II), was filed after the effective date of the BCMA, and

therefore the appeal in that case lay in this Court. We granted review of this case

before a determination by the Court of Appeals, thus giving us jurisdiction over the

appeals in both Sykes actions. Plaintiffs filed a motion to consolidate the two actions

in the Business Court, which the Business Court never addressed before dismissing

both lawsuits entirely.


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                                   Opinion of the Court



      The Business Court dismissed the claims here (Sykes I) in two different stages.

Several months after plaintiffs filed their first amended complaint, the court on 5

December 2013 ordered limited discovery on the issue of market definition for the

purposes of plaintiffs’ antitrust claims. This limited discovery took place between

February 2014 and August 2015. Following fact and expert discovery on market

definition, plaintiffs filed their Sykes II complaint on 26 May 2015 and their second

amended complaint in this action on 16 July 2015. Defendants here filed a motion to

dismiss and for partial summary judgment, which the court granted in part and

denied in part in its 18 August 2017 order and opinion. In that document, the court

granted summary judgment for defendants on any claims stemming from their

participation in plaintiffs’ three proffered relevant submarkets but denied summary

judgment on antitrust claims related to the North Carolina Market and on other

claims connected to those remaining antitrust claims. The court also dismissed

plaintiffs’ breach of fiduciary duty claim as well as plaintiffs’ claim for declaratory

relief to the extent that claim was based on violations of Chapter 58. Finally, the

court ordered supplemental briefing on whether plaintiffs had adequately alleged

market power within the one relevant market, the North Carolina Market. Following

receipt of that supplemental briefing, the court filed a second decision on 5 April 2018

dismissing all of plaintiffs’ remaining claims. Plaintiffs appeal from both the 18

August 2017 and the 5 April 2018 orders and opinions of the Business Court.




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                        SYKES V. HEALTH NETWORK SOLS., INC.

                                   Opinion of the Court



                                       Analysis

   I.      Standard of Review

        This Court reviews de novo legal conclusions of a trial court, including orders

granting or denying a motion to dismiss for failure to state a claim upon which relief

can be granted under Rule 12(b)(6) or a motion for summary judgment under Rule

56. See, e.g., Azure Dolphin, LLC v. Barton, ___ N.C. ___, ___, 821 S.E.2d 711, 725

(2018); Variety Wholesalers, Inc. v. Salem Logistics Traffic Servs., LLC, 365 N.C. 520,

523, 723 S.E.2d 744, 747 (2012).

        “We review a dismissal under Rule 12(b)(6) de novo, ‘view[ing] the allegations

as true and . . . in the light most favorable to the non-moving party.’ Dismissal is

proper when the complaint ‘fail[s] to state a claim upon which relief can be granted.’

‘When the complaint on its face reveals that no law supports the claim . . . or discloses

facts that necessarily defeat the claim, dismissal is proper.’ ” Christenbury Eye Ctr.,

P.A. v. Medflow, Inc., 370 N.C. 1, 5, 802 S.E.2d 888, 891 (2017) (first, second, and

fourth alterations in original) (first quoting Kirby v. N.C. DOT, 368 N.C. 847, 852,

786 S.E.2d 919, 923 (2016); then quoting Arnesen v. Rivers Edge Golf Club &

Plantation, Inc., 368 N.C. 440, 448, 781 S.E.2d 1, 7-8 (2015) (third alteration in

original)). Summary judgment is appropriate “if the pleadings, depositions, answers

to interrogatories, and admissions on file, together with the affidavits, if any, show

that there is no genuine issue as to any material fact and that any party is entitled

to a judgment as a matter of law.” N.C.G.S. § 1A-1, Rule 56(c) (2017). “All facts


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                                     Opinion of the Court



asserted by the adverse party are taken as true, and their inferences must be viewed

in the light most favorable to that party.          The showing required for summary

judgment may be accomplished by proving an essential element of the opposing

party’s claim does not exist, cannot be proven at trial, or would be barred by an

affirmative defense . . . .” Variety Wholesalers, 365 N.C. at 523, 723 S.E.2d at 747

(ellipsis in original) (quoting Dobson v. Harris, 352 N.C. 77, 83, 530 S.E.2d 829, 835

(2000)). Thus, we do not defer to the conclusions of the Business Court but conduct

our own independent inquiry into the legal issues that resulted in the Business

Court’s orders dismissing all of plaintiffs’ claims. We now affirm the Business Court’s

rulings for the reasons set out below.

   II.      Antitrust Claims

         As to plaintiffs’ antitrust claims, the members of the Court are equally divided;

accordingly, the decision of the Business Court on these claims stands without

precedential value. See, e.g., Faires v. State Bd. of Elections, 368 N.C. 825, 825, 784

S.E.2d 463, 464 (2016) (per curiam) (affirming on this basis the judgment of a three-

judge panel of the Superior Court, Wake County); Burke v. Carolina & Nw. Ry. Co.,

257 N.C. 683, 683, 127 S.E.2d 281, 281 (per curiam) (1962) (“The other Justices, being

equally divided as to the propriety of the nonsuit, the judgment of the superior court

is affirmed without the decision becoming a precedent.”); see also Piro v. McKeever,

369 N.C. 291, 291, 794 S.E.2d 501, 501 (2016) (per curiam) (affirming a Court of

Appeals opinion without precedential value by an equally divided vote); CommScope


                                             -9-
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                                        Opinion of the Court



Credit Union v. Butler & Burke, LLP, 369 N.C. 48, 56, 790 S.E.2d 657, 663 (2016)

(same).

   III.    Unfair Trade Practices

       Plaintiffs allege that defendants have committed a number of unfair trade

practices in violation of N.C.G.S. § 75-1.1. Some of these allegations describe the

same conduct that is the subject of plaintiffs’ antitrust claims.                  Thus, per our

discussion above, to the extent that these allegations overlap, we affirm the trial

court’s dismissal of plaintiffs’ N.C.G.S. § 75-1.1 claims.                 Plaintiffs’ remaining

allegations under section 75-1.1 are rooted in various provisions of the Insurance

Law, found in Chapter 58 of the North Carolina General Statutes. Specifically,

plaintiffs allege that HNS has engaged in unfair trade practices through its failure

to meet the licensure and utilization review requirements set out in N.C.G.S. §§ 58-

65-50 and 58-50-61 and through other acts, which plaintiffs contend fall within the

unfair and deceptive insurance practices that are catalogued at N.C.G.S. § 58-63-15.

We do not need to directly address whether the alleged violations of Chapter 58 can

support plaintiffs’ claims of unfair trade practices because we conclude, as the

Business Court did, that plaintiffs’ claims are barred by the learned profession

exemption.3

       Section 75-1.1 states, in pertinent part:


       3 We will address plaintiffs’ reliance on the Insurance Law further in our discussion of their
claims for declaratory relief.



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                       SYKES V. HEALTH NETWORK SOLS., INC.

                                  Opinion of the Court



                 (a) Unfair methods of competition in or affecting
             commerce, and unfair or deceptive acts or practices in or
             affecting commerce, are declared unlawful.

                (b) For purposes of this section, “commerce” includes all
             business activities, however denominated, but does not
             include professional services rendered by a member of a
             learned profession.

             ....

                 (d) Any party claiming to be exempt from the provisions
             of this section shall have the burden of proof with respect
             to such claim.

N.C.G.S. § 75-1.1 (2017) (emphasis added).

      This Court has not previously addressed the language of section 75-1.1(b)

exempting professional services rendered by “learned professionals” from the

coverage of our state’s unfair and deceptive trade practices (UDTP) statute. However,

as our Court of Appeals has recognized, we conduct a two-part inquiry to determine

whether the “learned profession” exemption applies: “[F]irst, the person or entity

performing the alleged act must be a member of a learned profession. Second, the

conduct in question must be a rendering of professional services.” Wheeless v. Maria

Parham Med. Ctr., Inc., 237 N.C. App. 584, 589, 768 S.E.2d 119, 123 (2014) (quoting

Reid v. Ayers, 138 N.C. App. 261, 266, 531 S.E.2d 231, 235 (2000)), appeal dismissed

and disc. rev. denied, 368 N.C. 247, 771 S.E.2d 284 (2015). In determining what sort

of conduct is exempted, the Court of Appeals has also explained that “a matter

affecting the professional services rendered by members of a learned profession



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                                   Opinion of the Court



. . . falls within the exception in N.C.G.S. § 75-1.1(b).” Burgess v. Busby, 142 N.C.

App. 393, 407, 544 S.E.2d 4, 11-12 (citations omitted), appeal dismissed, 353 N.C.

525, 549 S.E.2d 216, and disc. rev. improvidently allowed per curiam, 354 N.C. 351,

553 S.E.2d 679 (2001).

      Our Court of Appeals has long held that members of health care professions

fall within the learned profession exemption to N.C.G.S. § 75-1.1, and “[t]his

exception for medical professionals has been broadly interpreted.” Shelton v. Duke

Univ. Health Sys., Inc., 179 N.C. App. 120, 126, 633 S.E.2d 113, 117 (2006) (first citing

Phillips v. A Triangle Women’s Health Clinic, Inc., 155 N.C. App. 372, 377-79, 573

S.E.2d 600, 604-05 (2002); then citing Burgess, 142 N.C. App. 393, 544 S.E.2d 4

(2001); then citing Gaunt v. Pittaway, 139 N.C. App. 778, 534 S.E.2d 660 (2000); then

citing Abram v. Charter Med. Corp. of Raleigh, Inc., 100 N.C. App. 718, 722-23, 398

S.E.2d 331, 334 (1990); and then citing Cameron v. New Hanover Mem’l Hosp., Inc.,

58 N.C. App. 414, 447, 293 S.E.2d 901, 921 (1982)), disc. rev. denied, 643 S.E.2d 591

(N.C. 2007). For example, in Wheeless v. Maria Parham Medical Center, Inc., the

Court of Appeals determined that the learned profession exemption barred a

section 75-1.1 claim by a medical doctor against a hospital and individual physicians

in which the plaintiff physician alleged that the defendants had made an anonymous

complaint about him to the North Carolina Medical Board. 237 N.C. App. at 585-86,

768 S.E.2d at 121. The court rejected Wheeless’s argument that the exemption did

not apply “because, by ‘illegally access[ing], shar[ing], and us[ing] Plaintiff's peer


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                                   Opinion of the Court



review materials and patients’ confidential medical records out of malice and for

financial gain for illegal improper purpose[,]’ ” defendants did not render professional

services. Id. at 589, 768 S.E.2d at 123 (alterations in original). Rather, the court

viewed “defendants’ alleged conduct in making a complaint to the Medical Board as

integral to their role in ensuring the provision of adequate medical care”; accordingly,

the learned profession exemption barred plaintiff’s action. Id. at 591, 768 S.E.2d at

124.

       Plaintiffs argue that the exemption should not apply here because, although

the individual defendants are all licensed chiropractors, HNS itself is not a member

of a learned profession and, in any event, HNS’s role as an intermediary between

providers and insurers is a business activity that cannot be properly described as

“render[ing]” professional services.

       Plaintiffs point us to the recently decided case of Hamlet H.M.A., LLC v.

Hernandez, ___ N.C. App. ___, 821 S.E.2d 600 (2018), disc. rev. denied, ___ N.C. ___,

822 S.E.2d 637 (2019), and disc. rev. denied, ___ N.C. ___, 822 S.E.2d 640 (2019), in

support of their argument that the activities alleged in this case do not fall within the

ambit of “professional services rendered.” In Hamlet the Court of Appeals considered

whether a physician’s UDTP counterclaim rooted in a dispute over an employment

contract was barred by the learned profession exemption. Id. at ___, 821 S.E.2d at

602-03. The Court of Appeals concluded that the learned profession exemption did

not bar the claim, reasoning that “cases addressing UDTP claims in a medical context


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                                  Opinion of the Court



do not suggest that negotiations regarding a business arrangement, even between a

physician and a hospital, are ‘professional services rendered by a member of a learned

profession’ ” under N.C.G.S. § 75-1.1(a). Id. at ___, 821 S.E.2d at 608. The Court of

Appeals further concluded: “If we were to interpret the learned profession exception

as broadly as plaintiffs suggest we should, any business arrangement between

medical professionals would be exempted from UDTP claims. The learned profession

exception does not cover claims simply because the participants in the contract are

medical professionals.” Id. at ___, 821 S.E.2d at 608.

      While we agree that the mere status of a defendant as a member of a “learned

profession” does not shield that defendant from any claim under N.C.G.S. § 75-1.1

regardless of how far removed the claim is from that defendant’s professional

practice, we conclude that the conduct alleged here does fall within the exemption.

All individual defendants, as well as all members of HNS, are licensed chiropractors,

thus meeting the exemption’s first prong. We also agree with defendants and the

court below that the activity alleged in the second amended complaint constitutes

rendering of professional services under the statute.

      The alleged conduct that is at the heart of this action is directly related to

providing patient care. Plaintiffs argue that HNS is engaged both in violations of our

state’s antitrust laws and in conduct forbidden under our Insurance Law, in that HNS

terminates providers’ in-network access to patients when those providers exceed a

certain average cost per patient. Thus, plaintiffs contend, in order to retain in-


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                                   Opinion of the Court



network status with the insurance payors with whom HNS contracts, chiropractic

providers must limit their average cost of services per patient and, thus, the number

of treatments provided to their patients. If a particular chiropractor renders services

to patients who require, on average, more extensive chiropractic care than the

patients of other providers who contract with HNS, that provider risks exceeding

HNS’s allowable average cost and losing access to patients served via the networks

of the various payors.

         In addition, plaintiffs allege that—through the operation of HNS’s

monopsony—chiropractic       services are    being    reduced,   meaning   that   North

Carolinians who were previously receiving care from providers in HNS’s network

have either ceased receiving this care or have received fewer services due to HNS’s

enforcement of its average cost cap on providers. Since the basis for plaintiffs’ UDTP

claim is that chiropractors are reducing the level of services patients receive, we

conclude that the conduct alleged in the second amended complaint is sufficiently

related to patient care to fall within the rendering of professional services, as that

term has been previously interpreted by the courts of this state. Thus, we affirm the

Business Court’s dismissal of plaintiffs’ unfair trade practice claims under N.C.G.S.

§ 75-1.1.

   IV.      Declaratory Judgment

         In their second amended complaint, plaintiffs also sought relief under the

Declaratory Judgment Act as follows:


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                     Opinion of the Court



a.    HNS is an unlicensed medical service corporation
without the authority to enter into an agreement to provide
chiropractic services to the Insurers;

b.    HNS is an unlicensed medical service corporation
without the authority to enter into participation
agreements with Providers;

c.     HNS is not licensed or authorized to provide
utilization review of chiropractors including the Providers;

d.    The purported agreements between HNS and
Providers are illegal and unenforceable;

e.    The purported agreements between HNS and
Providers are an illegal restraint of trade and anti-
competitive;

f.    The purported agreements between HNS and the
Insurers are illegal and unenforceable;

g.    The purported agreements between HNS and the
Insurers are an illegal restraint of trade and anti-
competitive;

h.      The exclusivity provisions of the contracts and the
exclusivity practices between HNS and the Insurers are
illegal, anti-competitive unreasonable restraints of trade,
unfair trade practices, and unenforceable;

i.    HNS’s Utilization Review Process is an illegal unfair
trade practice;

and

j.    Defendants have restrained trade, committed unfair
trade practices, and monopsonized the market for
chiropractic services in violation of N.C. Gen. Stat. §§ 75-2
and 75-2.1.




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As demonstrated above, much of the declaratory relief plaintiffs seek comes in the

form of legal conclusions that we have already addressed in our earlier discussion of

plaintiffs’ antitrust claims and their claim that defendants have engaged in unfair

trade practices under N.C.G.S. § 75-1.1. Thus, we also affirm the Business Court’s

denial of declaratory relief to the extent that claim relates to plaintiffs’ Chapter 75

claims.

         Several of the declarations sought by plaintiffs, however, relate to their claims

that defendants fail to comply with various provisions of the state’s Insurance Law

found in Chapter 58 of the North Carolina General Statutes. The Business Court

ruled that Chapter 58 does not provide plaintiffs a private cause of action, meaning

that their claims for declaratory relief under Chapter 58 must be dismissed. We

agree.

         As discussed by the Business Court, a statute may authorize a private right of

action either explicitly or implicitly, see Lea v. Grier, 156 N.C. App. 503, 508-09, 577

S.E.2d 411, 415-16 (2003), though typically, “a statute allows for a private cause of

action only where the legislature has expressly provided a private cause of action

within the statute,” Time Warner Entm’t Advance/Newhouse P’ship v. Town of

Landis, 228 N.C. App. 510, 516, 747 S.E.2d 610, 615 (2013) (quoting Vanasek v. Duke

Power Co., 132 N.C. App. 335, 338 n.2, 511 S.E.2d 41, 44 n.2, cert. denied, 350 N.C.

851, 539 S.E.2d 13 (1999).




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      Chapter 58 does not explicitly provide a private cause of action and, as noted

by the Business Court, several decisions in recent years from both our Court of

Appeals and our state’s federal district courts have determined that no private cause

of action exists under other portions of Chapter 58. See, e.g., Cobb v. Pa. Life Ins. Co.,

215 N.C. App. 268, 281, 715 S.E.2d 541, 552 (2011) (finding no private cause of action

under N.C.G.S. § 58-3-115); Defeat the Beat, Inc. v. Underwriters at Lloyd’s London,

194 N.C. App. 108, 117-18, 669 S.E.2d 48, 54 (2008) (stating that no private right of

action exists under N.C.G.S. § 58-21-45(a)). Rather, courts have previously concluded

that alleged violations of this Chapter may only be remedied through action by the

Commissioner of Insurance. Thus, the Business Court concluded that there was “no

legislative implication that sections 58-50-61, 58-65-1, and 58-65-50 allow for

enforcement by a private party.”

      Plaintiffs seek declarations that HNS is required to be licensed as a medical

service corporation under N.C.G.S. § 58-65-50 or as a utilization review organization

defined by N.C.G.S. § 58-50-61(a)(18). Section 58-65-50 states that “[n]o corporation

subject to the provisions of this Article and Article 66 of this Chapter shall issue

contracts for the rendering of hospital or medical and/or dental service to subscribers,

until the Commissioner of Insurance has, by formal certificate or license, authorized

it to do so” and then describes the materials to be provided to the Commissioner as

part of the licensure application. N.C.G.S. § 58-65-50 (2017).




                                          -18-
                        SYKES V. HEALTH NETWORK SOLS., INC.

                                   Opinion of the Court



      Section 58-50-61 governs the procedures for utilization review, defined as “a

set of formal techniques designed to monitor the use of or evaluate the clinical

necessity, appropriateness, efficacy or efficiency of health care services, procedures,

providers, or facilities.”    Id. § 58-50-61(a)(17) (2017).      A “utilization review

organization” is “an entity that conducts utilization review under a managed care

plan, but does not mean an insurer performing utilization review for its own health

benefit plan.” Id. § 58-50-61(a)(18). According to N.C.G.S. § 58-50-61(o), a violation

of the utilization review provisions is subject to the penalties set out in N.C.G.S. § 58-

2-70. Section 58-2-70, in turn, provides that “[w]henever the Commissioner has

reason to believe that any person has violated any of the provisions of this

Chapter, . . . the Commissioner may, after notice and opportunity for a hearing,

proceed under the appropriate subsections of this section.” Id. § 58-2-70(b) (2017).

      Plaintiffs argue that our state’s Declaratory Judgment Act gives them a path

to declaratory relief, notwithstanding Chapter 58’s language vesting enforcement

authority in the Commissioner of Insurance. In addition, plaintiffs argue that the

Business Court erred in ignoring a line of cases declining to enforce contracts entered

into by unlicensed professionals. For example, plaintiffs point us to Bryan Builders

Supply v. Midyette, 274 N.C. 264, 162 S.E.2d 507 (1968) (recognizing that state law

bars an unlicensed contractor from maintaining a breach of contract action against

the owner of a building valued at more than the minimum sum specified in the

licensing statutes governing general contractors) and Gower v. Strout Realty, Inc., 56


                                          -19-
                          SYKES V. HEALTH NETWORK SOLS., INC.

                                       Opinion of the Court



N.C. App. 603, 289 S.E.2d 880 (1982) (recognizing that our courts have held contracts

by unlicensed real estate brokers to be invalid).

        We conclude that the language of the statutory provisions, as well as the

previous cases interpreting other portions of Chapter 58, vest enforcement of the

requirements of the statutory sections identified by plaintiffs in the Commissioner of

Insurance, meaning that plaintiffs do not have a private right of action for declaratory

relief under these provisions. We also agree with the Business Court that the cases

cited by plaintiffs are distinguishable in that “[t]hose cases did not seek to substitute

a court’s judgment for that of a regulatory agency to which the legislature has

entrusted enforcement.” Thus, we conclude that the Business Court properly denied

all of plaintiffs’ claims for declaratory relief.

   V.       Breach of Fiduciary Duty

        Finally, plaintiffs contend that defendants breached a fiduciary duty that they

owed to plaintiffs and all members of the putative class.4 To establish a claim for

breach of fiduciary duty, a plaintiff must show that: (1) the defendant owed the

plaintiff a fiduciary duty; (2) the defendant breached that fiduciary duty; and (3) the

breach of fiduciary duty was a proximate cause of injury to the plaintiff. Green v.

Freeman, 367 N.C. 136, 141, 749 S.E.2d 262, 268 (2013). Thus, to make out a claim




       This claim necessarily applies only to those plaintiffs who participated at one time in the
        4

HNS network.



                                              -20-
                       SYKES V. HEALTH NETWORK SOLS., INC.

                                  Opinion of the Court



for breach of a fiduciary duty, plaintiffs must first allege facts that, taken as true,

demonstrate that a fiduciary relationship existed between the parties. A fiduciary

relationship “has been broadly defined by this Court as one in which ‘there has been

a special confidence reposed in one who in equity and good conscience is bound to act

in good faith and with due regard to the interests of the one reposing confidence.’ ”

Dalton v. Camp, 353 N.C. 647, 651, 548 S.E.2d 704, 707 (2001) (quoting Abbitt v.

Gregory, 201 N.C. 577, 598, 160 S.E. 896, 906 (1931)). “The very nature of some

relationships, such as the one between a trustee and the trust beneficiary, gives rise

to a fiduciary relationship as a matter of law. The list of relationships that we have

held to be fiduciary in their very nature is a limited one, and we do not add to it

lightly.” CommScope Credit Union, 369 N.C. at 52, 790 S.E.2d at 660 (first citing

Wachovia Bank & Tr. Co. v. Johnston, 269 N.C. 701, 711, 153 S.E.2d 449, 457 (1967);

then citing Dallaire v. Bank of Am., N.A., 367 N.C. 363, 367, 760 S.E.2d 263, 266

(2014)). Our courts have been clear that general contractual relationships do not

typically rise to the level of fiduciary relationships. “[P]arties to a contract do not

thereby become each other’s fiduciaries; they generally owe no special duty to one

another beyond the terms of the contract . . . .”        Branch Banking & Tr. Co. v.

Thompson, 107 N.C. App. 53, 61, 418 S.E.2d 694, 699 (citations omitted), disc. rev.

denied, 332 N.C. 482, 421 S.E.2d 350 (1992).

      Plaintiffs allege that they have a fiduciary relationship with defendants

because they entered into a joint venture with HNS. In the alternative, plaintiffs


                                         -21-
                       SYKES V. HEALTH NETWORK SOLS., INC.

                                   Opinion of the Court



argued before the Business Court and this Court that a fiduciary relationship was

created under agency law, in that HNS purported to act as plaintiffs’ agent in

negotiations with the insurance payors. We agree with the Business Court that

plaintiffs’ allegation of a fiduciary duty—and, therefore, their claim of a breach of

that duty—fails as a matter of law.

      We begin by addressing plaintiffs’ alternative argument:            that agency

principles dictate that HNS was acting as an agent for plaintiffs as a matter of law

when negotiating the terms governing in-network providers’ relationship with the

medical payors. As discussed above, typical contractual relationships do not give rise

to the special status of a fiduciary relationship. We believe that plaintiffs’ agency

argument ignores this principle and seeks to establish a fiduciary relationship arising

out of the operation of a general business relationship.

      Next we address plaintiffs’ argument that they are in a fiduciary relationship

with HNS by virtue of a joint venture. As the Business Court pointed out, plaintiffs

cannot show that they are in a joint venture with defendants for two reasons. First,

“[a] joint venture exists when there is: ‘(1) an agreement, express or implied, to carry

out a single business venture with joint sharing of profits, and (2) an equal right of

control of the means employed to carry out the venture.’ ” Rifenburg Constr., Inc. v.

Brier Creek Assocs. Ltd. P’ship, 160 N.C. App. 626, 632, 586 S.E.2d 812, 817 (2003),

aff’d per curiam, 358 N.C. 218, 593 S.E.2d 585 (2004) (quoting Rhoney v. Fele, 134

N.C. App. 614, 620, 518 S.E.2d 536, 541 (1999), disc. rev. denied, 351 N.C. 360, 542


                                          -22-
                       SYKES V. HEALTH NETWORK SOLS., INC.

                                  Opinion of the Court



S.E.2d 217 (2000)). Plaintiffs’ own allegations of lack of control and unequal sharing

of profits and losses defeat this argument. Second, as the Business Court points out,

plaintiffs’ own agreements with HNS specifically disclaim any joint venture between

the parties, stating that “[n]o work, act, commission, or omission of either party

pursuant to the terms and conditions of this Agreement shall make or render HNS or

Participant an agent, servant, or employee of, or joint venture with the other.”

(Emphasis added.) Thus, on the face of their contracts with HNS, plaintiffs agreed

that no joint venture was formed via the parties’ contractual relationship.

      Plaintiffs seek to avoid the plain language of their agreements with HNS

through their broader argument that these contracts are illegal because HNS has not

complied with the licensure requirements of Chapter 58 and thus had no authority to

enter into the agreements at issue here.        Because we have concluded that the

licensure provisions of Chapter 58 fall squarely within the purview of the

Commissioner of Insurance and that, therefore, the General Statutes do not provide

plaintiffs a private right of action to seek a declaratory judgment that their

agreements with HNS are void, we have already rejected plaintiffs’ collateral

challenge to the contracts. Thus, based on the joint venture elements that are not

met here as well as the language of the contracts, we are persuaded that plaintiffs

have no joint venture with defendants. Because plaintiffs’ contractual relationship

with HNS is insufficient to establish a fiduciary relationship as a matter of law, we

affirm the Business Court’s dismissal of plaintiffs’ breach of fiduciary duty claim.


                                         -23-
                       SYKES V. HEALTH NETWORK SOLS., INC.

                                  Opinion of the Court



                                     Conclusion

      Because we affirm the Business Court’s rulings dismissing each of plaintiffs’

substantive claims alleged in their second amended complaint, as well as all

derivative claims, we affirm the Business Court’s orders dismissing plaintiffs’ entire

action. As noted above, the members of the Court being equally divided on plaintiffs’

antitrust claims, including the derivative claim of civil conspiracy, the Business

Court’s dismissal of these claims stands without precedential value.



      AFFIRMED.

      Justice DAVIS did not participate in the consideration or decision of this case.




                                         -24-
      Justice EARLS concurring in part and dissenting in part.

      I dissent from the holding of Section III of the majority opinion concerning the

extent to which plaintiffs’ allegations of unfair and deceptive trade practices that are

not based on the same allegations as their antitrust claims are barred by the “learned

profession” exclusion of N.C.G.S. § 75-1.1(a). In all other respects I concur with the

remainder of the opinion. This Court has not previously interpreted the scope of the

statutory learned profession exception to the general prohibition on unfair methods

of competition and unfair and deceptive trade practices. In my view, the specific

allegations of the complaint relating to that claim in this case do not properly fall

within the scope of that exception because the alleged unfair and deceptive conduct

in question was not the rendering of professional services, namely chiropractic

services, to patients. Therefore, I would reverse the 18 August 2017 ruling of the

business court, Sykes v. Health Network Solutions, Inc., No. 13 CVS 2595, 2017 WL

3601347 (N.C. Super. Ct. Forsyth County (Bus. Ct.) Aug. 18, 2017) (Sykes I), with

regard to claims under the unfair and deceptive trade practices act, N.C.G.S. § 75-1.1

(UDTP) that are based on allegations separate and distinct from the antitrust claims,

and remand for further proceedings on those claims.

      Most of the allegations in this case relate to plaintiffs’ claims that defendant

Health Network Solutions, Inc. (HNS) operates an intermediary network for

chiropractic services that functions as a monopsony, a buyer-side form of restraint of

trade to control competition, supply, and the pricing of chiropractic services in North
                         SYKES V. HEALTH NETWORK SOLS., INC.

                      Earls, J., concurring in part, and dissenting in part



Carolina.   Indeed, almost all of the trial court’s first order, which is the order

dismissing the UDTP claims, actually addresses the antitrust claims. There has been

scant attention to the UDTP allegations that are separate and apart from the

antitrust claims.

       The UDTP claim for relief in plaintiffs’ second amended complaint alleges

thirteen grounds, of which seven relate to antitrust violations and anticompetitive

conduct.1 Of the remaining six, one is a conclusory characterization that does not

specify any particular behavior.2 The five allegations based on distinct conduct not

encompassed by the antitrust claims are that “Defendants’ actions and conduct that

constitute unfair and deceptive trade practices include, but are not limited to:”

              d.     implementing a utilization review procedure
                     without being authorized or licensed to do so;

              e.     failing to follow         statutory     requirements     for
                     utilization review;

                     ....

              g.     organizing a medical service corporation without
                     being licensed to do so;

                     ....

              i.     failing to disclose their conflicts of interest;

       1 The antitrust and anticompetitive conduct are alleged in subparagraphs a-c, f, h, k.
& l of paragraph 162 of the Second Amended Class Action Complaint filed on 20 July 2015.

       2 Paragraph 162(m) alleges that defendants have violated the UDTP by “acting
unfairly and oppressively toward Plaintiff and the Class in their dealings with them in an
abuse of power and position to achieve ends and using means contrary to the public policy of
this State.”

                                              -2-
                          SYKES V. HEALTH NETWORK SOLS., INC.

                        Earls, J., concurring in part, and dissenting in part




                j.    misrepresenting their services and the benefits
                      provided to Providers participating in the HNS
                      Network[.]

Plaintiffs make additional allegations relevant to this claim, including that

defendants were engaged in commerce and that these unfair and deceptive practices

have caused plaintiffs damages in excess of $10,000. Thus, on a motion to dismiss

under Rule 12(b)(6), reviewed de novo by this Court, the question is whether, if true,

the allegations state a claim for relief under some legal theory. Corwin ex rel. Corwin

Tr. v. British Am. Tobacco PLC, ___ N.C. ___, ___, 821 S.E.2d 729, 736 (2018) (citing

CommScope Credit Union v. Butler & Burke, LLP, 369 N.C. 48, 51, 790 S.E.2d 657,

659 (2016)).

      The General Assembly enacted N.C.G.S. § 75-1.1 almost exactly fifty years ago,

stating that:

                The purpose of this Section is to declare, and to provide
                civil legal means to maintain, ethical standards of dealings
                between persons engaged in business, and between persons
                engaged in business and the consuming public within this
                State, to the end that good faith and fair dealings between
                buyers and sellers at all levels of commerce be had in this
                State.

Act of June 12, 1969, ch. 833, sec. 1(b), 1969 N.C. Sess. Laws 930, 930. In 1977 the

statute was “amended . . . to define ‘commerce’ inclusively as ‘business activit[ies],

however denominated,’ ” Bhatti v. Buckland, 328 N.C. 240, 245, 400 S.E.2d 440, 443

(1991), subject to the express limitation for “professional services rendered by a



                                                -3-
                       SYKES V. HEALTH NETWORK SOLS., INC.

                     Earls, J., concurring in part, and dissenting in part



member of a learned profession,” Act of June 27, 1977, ch. 747, sec. 2, 1977 N.C. Sess.

Laws 984, 984. As this Court explained in Bhatti, consistent with the purpose of the

law to protect the consuming public and the generally broad definition of the term

“business,” the statute is intended to have an inclusive scope, 328 N.C. at 245-46, 400

S.E.2d at 443-44, and the 1977 amendments in particular were “intended to expand

the potential liability for certain proscribed acts,” United Roasters, Inc. v. Colgate-

Palmolive Co., 485 F. Supp. 1049, 1057 (E.D.N.C. 1980), aff’d, 649 F.2d 985 (4th Cir.),

cert. denied, 454 U.S. 1054 (1981).

      The statute is not limited to cases involving consumers only. “After all, unfair

trade practices involving only businesses affect the consumer as well.” United Labs.,

Inc. v. Kuykendall, 322 N.C. 643, 665, 370 S.E.2d 375, 389 (1988). The Court has

previously explained that “ ‘[b]usiness activities’ is a term which connotes the manner

in which businesses conduct their regular, day-to-day activities, or affairs, such as

the purchase and sale of goods, or whatever other activities the business regularly

engages in and for which it is organized.” HAJMM Co. v. House of Raeford Farms,

Inc., 328 N.C. 578, 594, 403 S.E.2d 483, 493 (1991). Moreover, “ ‘[c]ommerce’ in its

broadest sense comprehends intercourse for the purposes of trade in any form.” Sara

Lee Corp. v. Carter, 351 N.C. 27, 32, 519 S.E.2d 308, 311 (1999) (quoting Johnson v.

Phoenix Mut. Life Ins. Co., 300 N.C. 247, 261, 266 S.E.2d 610, 620 (1980)).

      Our courts have employed a three-prong test to establish a prima facie case

under this statute. Spartan Leasing Inc. of N.C. v. Pollard, 101 N.C. App. 450, 400


                                             -4-
                       SYKES V. HEALTH NETWORK SOLS., INC.

                     Earls, J., concurring in part, and dissenting in part



S.E.2d 476 (1991). A plaintiff must show “(1) an unfair or deceptive act or practice,

or an unfair method of competition, (2) in or affecting commerce, (3) which

proximately caused actual injury to the plaintiff.” Id. at 460-61, 400 S.E.2d at 482

(citing Marshall v. Miller, 302 N.C. 539, 276 S.E.2d 397 (1981)); see also First Atl.

Mgmt. Corp. v. Dunlea Realty Co., 131 N.C. App. 242, 252, 507 S.E.2d 56, 63 (1998)

(same). Unfair competition has been described generally as conduct “which a court

of equity would consider unfair.” Pinehurst, Inc. v. O’Leary Bros. Realty, Inc., 79 N.C.

App. 51, 59, 338 S.E.2d 918, 923 (citing William B. Aycock, North Carolina Law on

Antitrust and Consumer Protection, 60 N.C. L. Rev. 207, 217 (1982)), disc. rev. denied,

316 N.C. 378, 342 S.E.2d 896 (1986).            “[A] practice is unfair when it offends

established public policy as well as when the practice is immoral, unethical,

oppressive, unscrupulous, or substantially injurious to consumers.” Barbee v. Atl.

Marine Sales & Serv., 115 N.C. App. 641, 646, 446 S.E.2d 117, 121 (quoting Marshall,

302 N.C. at 548, 276 S.E.2d at 403), disc. rev. denied, 337 N.C. 689, 448 S.E.2d 516

(1994). “[A]ll the facts and circumstances surrounding the transaction” are relevant

to determining “[w]hether an act or practice is unfair or deceptive.” Id. at 646, 436

S.E.2d at 121 (citing Marshall, 302 N.C. at 548, 276 S.E.2d at 403). Bad faith or

deliberate acts of deceit do not need to be shown. Boyd v. Drum, 129 N.C. App. 586,

593, 501 S.E.2d 91, 97 (1998) (citing Forsyth Mem’l Hosp., Inc. v. Contreras, 107 N.C.

App. 611, 614, 421 S.E.2d 167, 169-70 (1992), disc. rev. denied, 333 N.C. 344, 426

S.E.2d 705 (1993)), aff’d per curiam, 350 N.C. 90, 511 S.E.2d 304 (1999).


                                             -5-
                        SYKES V. HEALTH NETWORK SOLS., INC.

                      Earls, J., concurring in part, and dissenting in part



      In this case, plaintiffs’ allegations, as summarized in subparagraphs d, e, g, i,

and j of the claim for relief (hereinafter “the non-antitrust conduct”) if true, establish

all three elements of a prima facie case of unfair and deceptive trade practices

affecting commerce that have injured plaintiffs.              The only argument made by

defendants on the motion to dismiss, and the only ground found by the trial court,

was that none of these allegations can support a claim for relief because chiropractors

are learned professionals and “[t]he impact of the Plaintiffs’ claim is to fundamentally

change the marketplace in which chiropractors deliver their services and the way in

which insurance companies contract for the delivery of those services.” Thus, the only

question before this Court is whether defendants’ actions as alleged, summarized in

those five counts of the claim for relief and as more fully described throughout the

second amended complaint, are subject to the exception for “professional services

rendered by a member of a learned profession.” N.C.G.S. § 75-1.1(b) (2017).

      I agree with the majority that our Court of Appeals has followed, and we do

well to adopt, a two-part inquiry to determine whether the “learned profession”

exclusion applies: “[F]irst, the person or entity performing the alleged act must be a

member of a learned profession. Second, the conduct in question must be a rendering

of professional services.” Wheeless v. Maria Parham Med. Ctr., Inc., 237 N.C. App.

584, 589, 768 S.E.2d 119, 123 (2014) (quoting Reid v. Ayers, 138 N.C. App. 261, 266,

531 S.E.2d 231, 235 (2000) (citation omitted)). I also agree that the first prong is met

here even though HNS is itself an association of chiropractors acting as an


                                              -6-
                        SYKES V. HEALTH NETWORK SOLS., INC.

                      Earls, J., concurring in part, and dissenting in part



intermediary between providers and insurers. What seems clear to me is that the

non-antitrust conduct alleged in the complaint does not involve providing

professional services. Therefore, the second prong of the test is not met here.

        The Court of Appeals cases addressing this question have held that when a

doctor or lawyer or other member of a learned profession is engaging in business

negotiations or contractual arrangements, advertising his or her practice, or buying

real estate, even though those activities “affect” the provision of professional services,

they are not themselves professional services entitled to an exemption. See Hamlet

H.M.A., LLC v. Hernandez, ___ N.C. App. ___, ___ 821 S.E.2d 600, 608 (2018) (“This

case involves a business deal, not rendition of professional medical services.”), disc.

rev. denied, ___ N.C. ___, 822 S.E.2d 637, and disc. rev. denied, ___ N.C. ___, 822

S.E.2d 640 (2019). In Reid v. Ayers, for example, while the conduct at issue involved

the provision of professional services by an attorney, the Court of Appeals explained

that:

              [N]ot all services performed by attorneys will fall within
              the exemption. Advertising is not an essential component
              to the rendering of legal services and thus would fall
              outside the exemption. See 47 N.C. Op. Att’y Gen. 118, 120
              (1977) (“Advertising by an attorney is a practice apart from
              his actual performance of professional services. Indeed, it
              is not a professional practice at all, but rather a commercial
              one.”). Likewise, the exemption would not encompass
              attorney price-fixing. Id. Although no bright line exists,
              we think that the exemption applies anytime an attorney
              or law firm is acting within the scope of the traditional
              attorney-client role. It would not apply when the attorney
              or law firm is engaged in the entrepreneurial aspects of


                                              -7-
                       SYKES V. HEALTH NETWORK SOLS., INC.

                     Earls, J., concurring in part, and dissenting in part



             legal practice that are geared more towards their own
             interests, as opposed to the interests of their clients.

138 N.C. App. at 267-68, 531 S.E.2d at 236 (citing Short v. Demopolis, 103 Wash. 2d

52, 60-61, 691 P.2d 163, 168 (1984) (en banc)). The dividing line between what is,

and what is not, the rendering of professional services should turn on whether

learned professional knowledge and judgment that the ordinary person does not

possess is required to provide the services at issue. That is what distinguishes cases

involving staff privileges at hospitals and complaints to medical boards, as were at

issue in Cameron v. New Hanover Memorial Hospital, Inc., 58 N.C. App. 414, 293

S.E.2d 901, appeal dismissed and disc. rev. denied, 307 N.C. 127, 297 S.E.2d 399

(1982), and Wheeless, respectively, from this case and from Hamlet H.M.A. “The

rendering of a professional service is limited to the performance of work ‘[c]onforming

to the standards of a profession’ and ‘commanded or paid for by another.’ ” Phillips

v. A Triangle Women’s Health Clinic, Inc., 155 N.C. App. 372, 381, 573 S.E.2d 600,

605 (2002) (citations omitted), aff’d per curiam in part and disc. rev. improvidently

allowed in part, 357 N.C. 576, 597 S.E.2d 669 (2003). In Cameron, the Court of

Appeals explained that the actions complained of by the plaintiffs were not

commercial activities subject to UDTP coverage because they involved professional

judgments about the competency of podiatrists.

                    This evidence indicates that defendants were acting
             in large measure pursuant to an “important quality control
             component” in the administration of the hospital. As one
             court described it, the hospital’s obligation is “to exact


                                             -8-
                       SYKES V. HEALTH NETWORK SOLS., INC.

                     Earls, J., concurring in part, and dissenting in part



             professional competence and the ethical spirit of
             Hippocrates as conditions precedent to . . . staff privileges.”
             We conclude that the nature of this consideration of whom
             to grant hospital staff privileges is a necessary assurance
             of good health care; certainly, this is the rendering of
             “professional services” which is now excluded from the
             aegis of G.S. 75-1.1.

Cameron, 58 N.C. App. at 446-447, 293 S.E.2d at 920-921 (alteration in original) (first

quoting Walter Wadlington, Jon R. Waltz, & Roger B. Dworkin, Cases and Materials

on Law and Medicine 209 (1980); then quoting Sosa v. Bd. of Managers of Val Verde

Mem’l Hosp., 437 F.2d 173, 174 (5th Cir. 1971)). Clearly it takes medical knowledge

to be able to assess the skills and competency of medical doctors. But, in this case,

ironically, it is precisely the lack of professional judgment in HNS’s utilization

management procedures that has led plaintiffs here to allege that the organization is

committing an unfair trade practice.           Plaintiffs allege that, instead of using

professional judgment to decide what services in-network patients need, HNS is

simply using a mathematical formula based on the average costs of all its providers.

But more fundamentally, if HNS is indeed failing to identify conflicts of interest in

some manner that is deceptive, or misrepresenting its services and benefits to

providers, those are matters relating to how it conducts its business dealings. To

illustrate this principle, if HNS had a routine practice of repeatedly leasing medical

office space without disclosing that the buildings were uninhabitable, the learned

professions exception would not apply even though the routine practice might keep

them in business, which, in turn, would facilitate insured patients receipt of


                                             -9-
                        SYKES V. HEALTH NETWORK SOLS., INC.

                     Earls, J., concurring in part, and dissenting in part



chiropractic services. Cf. Creekside Apts. v. Poteat, 116 N.C. App. 26, 36-38, 446

S.E.2d 826, 833-34 (failure to maintain dwellings in a safe, fit, and habitable

condition while demanding rent is an unfair and deceptive trade practice), disc. rev.

denied, 338 N.C. 308, 451 S.E.2d 632 (1994).                Typically, specialized medical

knowledge is not necessary to ascertain that a building is uninhabitable. Similarly,

specialized medical knowledge is not necessary to determine whether HNS is

implementing a utilization review procedure without being authorized or licensed to

do so or is failing to follow statutory requirements for utilization review.

      It may be that plaintiffs cannot prove their allegations, but the sufficiency of

their evidence is not at issue here. The allegations of the complaint, taken as true,

establish a UDTP claim independent of the antitrust allegations. Expanding the

learned profession exception to apply here goes further than what the General

Assembly intended when it amended the statute in 1977. When chiropractors are

treating patients, the learned profession exception should apply. But when they are

running a business processing, administering, and negotiating payments by

insurance companies to networked chiropractors, they are in commerce like every

other business and should be governed accordingly.

      Chief Justice BEASLEY joins in this opinion.




                                             -10-
