                                                                                         05/01/2020
                 IN THE SUPREME COURT OF TENNESSEE
                             AT JACKSON
                              November 6, 2019 Session

                ROY FRANKS ET AL. v. TIFFANY SYKES ET AL.

                 Appeal by Permission from the Court of Appeals
                       Circuit Court for Madison County
                      No. C-16-171      Kyle Atkins, Judge
                    ___________________________________

                           No. W2018-00654-SC-R11-CV
                   _________________________________________


        A person who is injured because of an unfair or deceptive act or practice that
affects the conduct of any trade or commerce has a cause of action under the Tennessee
Consumer Protection Act of 1977 (“the Act”), Tennessee Code Annotated sections 47-
18-101 to -132 (2013 & Supp. 2019). We granted review to determine whether the Act
applies to the business aspects of a health care provider’s practice. The plaintiffs were
injured in car accidents and received hospital medical services. The hospitals did not bill
the plaintiffs’ health insurance companies but filed hospital liens against the plaintiffs’
claims for damages arising from the accidents. The hospital liens were for the full amount
of the hospital bills with no reduction for the plaintiffs’ health insurance benefits. The
plaintiffs sued the hospitals, asserting the filing of undiscounted hospital liens was an
unlawful practice under the Act. The trial court dismissed the case, ruling that the
plaintiffs had failed to state a cause of action. The Court of Appeals affirmed, holding
that the Act did not apply to a claim in which the underlying transactions involved
medical treatment. We hold that the Act applies to health care providers when they are
acting in their business capacities. The plaintiffs, who were consumers of medical
services, may state a claim under the Act against the hospitals for conduct arising out of
the hospitals’ business practices. We reverse and remand this case to the trial court for
further proceedings.

   Tenn. R. App. P. 11 Appeal by Permission; Judgment of the Court of Appeals
  Reversed; Judgment of the Trial Court Reversed; Remanded to the Trial Court

SHARON G. LEE, J., delivered the opinion of the Court, in which JEFFREY S. BIVINS, C.J.,
and CORNELIA A. CLARK, HOLLY KIRBY, and ROGER A. PAGE, JJ., joined.
Charles L. Holliday, Jackson, Tennessee, for the appellants, Roy Franks and Cindy
Edwards.

Michael L. Mansfield, Jackson, Tennessee, for the appellees, Professional Account
Services, Inc., Dyersburg Hospital Corporation, and Martin Hospital Corporation,
individually and d/b/a Tennova Healthcare.

Ashley Holliday, Jackson, Tennessee, David Kozlowski, Columbia, Tennessee, and
David Tarpley, Nashville, Tennessee, for the amicus curiae, Tennessee Alliance for Legal
Services.

                                             OPINION

                                                   I.

       In 2015, Roy Franks was treated at Tennova-Dyersburg, which previously did
business as Dyersburg Regional Medical Center,1 for injuries he received in a collision
with a vehicle driven by Tiffany Sykes. Professional Account Services, Inc., acting for
Dyersburg Hospital Corporation, filed a hospital lien against Franks’ cause of action
against Sykes for the full amount of the $3,812.92 hospital bill, and did not file a claim
with Franks’ health insurance company. In 2014, Cindy Edwards was injured in an
automobile accident caused by the negligence of another driver. Edwards received
medical treatment at Tennova-Martin, which previously did business as Volunteer
Community Hospital.2 Professional Account Services, Inc., acting for Martin Hospital
Corporation, filed a hospital lien against Edwards’ cause of action for the full amount of
the $408 hospital bill, and did not file a claim with Edwards’ health insurance company.

      After Franks sued Sykes for his personal injuries, he amended his complaint to add
Edwards as a plaintiff3 and as defendants, Professional Account Services, Inc., Dyersburg
Hospital Corporation, and Martin Hospital Corporation, individually and d/b/a Tennova

       1
          Tennova-Dyersburg is referenced in the record several different ways due to name changes at
various times. The facility’s parent company at the time was Dyersburg Hospital Corporation.
       2
          Tennova-Martin is also referenced in the record several different ways due to name changes at
various times. The facility’s parent company at the time was Martin Hospital Corporation.
       3
          Franks also added Tony Cooke as a plaintiff and Jackson, Tennessee Hospital Company, LLC
as a defendant. Cooke, who had been injured in a collision, received treatment at Tennova-Jackson, which
previously did business as Regional Hospital of Jackson. Tennova-Jackson did not bill Cooke’s health
insurance company and filed a hospital lien for the full amount of his hospital bill. The trial court
dismissed Cooke’s claim, and he did not appeal.


                                                 -2-
Healthcare (“the Hospitals”). Franks’ amended complaint alleged that the Hospitals
violated section 104(b)(12)4 of the Act by filing hospital liens under the Hospital Lien
Act,5 Tennessee Code Annotated sections 29-22-101 to -107 (2012 & Supp. 2019), for
the full, undiscounted amount of the Hospitals’ charges rather than billing Franks’ and
Edwards’ health insurance companies and accepting the negotiated discounted charges.

      The trial court granted the Hospitals’ motion for judgment on the pleadings and
dismissed Franks’ case for failure to state a claim under the Act.6 The trial court
dismissed Edwards’ claim for lack of venue.

        The Court of Appeals affirmed the dismissal of Franks’ case, noting that the filing
of a hospital lien constitutes a debt collection activity, and the Act does not apply unless
the underlying transaction is a consumer transaction as defined by the Act. Franks v.
Sykes, No. W2018-00654-COA-R3-CV, 2018 WL 6253820, at *4–5 (Tenn. Ct. App.
Nov. 28, 2018) (citing West v. Shelby Cnty. Healthcare Corp., 459 S.W.3d 33, 37, 40
(Tenn. 2014); Wright v. Linebarger Googan Blair & Sampson, LLP, 782 F. Supp. 2d 593,
609 (W.D. Tenn. 2011)). The Court of Appeals determined that “the underlying
transaction—the treatment of Mr. Frank’s [sic] injuries from a motor vehicle accident—
epitomizes a doctor’s practice of their [sic] profession” and therefore did not fit within
the Act’s definition of a “consumer transaction.” Id. at *5. The Court of Appeals reversed
the trial court’s dismissal of Edwards’ claim based on lack of venue and directed the trial
court on remand to dismiss Edwards’ case for failure to state a claim under the Act. Id. at
*6. We granted Franks and Edwards’ application for permission to appeal under Rule 11
of the Tennessee Rules of Appellate Procedure.




        4
          It is a deceptive act or practice under the Act to “[r]epresent[] that a consumer transaction
confers or involves rights, remedies or obligations that it does not have or involve or which are prohibited
by law.” Tenn. Code Ann. § 47-18-104(b)(12) (2013 & Supp. 2019).
        5
           The Hospital Lien Act provides that any Tennessee hospital “shall have a lien for all reasonable
and necessary charges for hospital care . . . upon any and all causes of action . . . accruing to the person to
whom such care . . . was furnished . . . on account of illness or injuries giving rise to such causes of action
. . . and which necessitated such hospital care . . . .” Tenn. Code Ann. § 29-22-101(a) (2012). The hospital
can collect up to one-third of the damages the plaintiff obtains in a lawsuit by judgment or settlement. Id.
§ 29-22-101(b). The hospital must file the notice of its lien in the circuit court of the county where the
hospital is located and of the county where the patient lives. Id. § 29-22-102(a). To contest the lien or the
reasonableness of the charges, a patient can move to quash or reduce the lien. Id. § 29-22-102(d).
        6
            Franks had previously settled and voluntarily dismissed his personal injury claim against Sykes.


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                                                  II.

        We review a trial court’s dismissal of a claim on a motion for judgment on the
pleadings under Tennessee Rule of Civil Procedure 12.03 using the same standard that
governs our review of a dismissal under Rule 12.02(6) for failure to state a claim. Young
v. Barrow, 130 S.W.3d 59, 63 (Tenn. Ct. App. 2003) (citing Waller v. Bryan, 16 S.W.3d
770, 773 (Tenn. Ct. App. 1999)). The standard of review requires us to review the trial
court’s ruling de novo with no presumption of correctness and “construe the complaint
liberally in favor of” the plaintiffs, taking all allegations of fact as true. Id. (citing Stein v.
Davidson Hotel Co., 945 S.W.2d 714, 716 (Tenn. 1997)); Waller, 16 S.W.3d at 773. We
review a trial court’s interpretation of a statute de novo with no presumption of
correctness. In re Estate of Davis, 308 S.W.3d 832, 836–37 (Tenn. 2010) (citing In re
Estate of Tanner, 295 S.W.3d 610, 613 (Tenn. 2009)).

        At issue is whether the Act applies to the business aspects of a health care
provider’s practice. Courts in jurisdictions throughout the country have held that their
states’ consumer protection laws apply to health care providers when the providers are
acting in their business capacities.

        The United States Supreme Court cleared the way for the business – professional
distinction in Goldfarb v. Virginia State Bar, 421 U.S. 773 (1975). In Goldfarb, the
Supreme Court held that the Virginia State Bar was not exempt from a price-fixing claim
under the Sherman Act.7 Id. at 791–92. Rejecting the argument that lawyers did not
engage in “trade or commerce,” the Supreme Court recognized that learned professionals,
such as lawyers, engage in business roles as well as professional roles. Id. at 787–88. In
their business roles, lawyers are “subject to the same antitrust and consumer protection
laws as any other business.” Brookins v. Mote, 292 P.3d 347, 358 (Mont. 2012) (quoting
Goldfarb, 421 U.S. at 787–88). Before Goldfarb, learned professionals were historically
exempt from federal consumer protection laws because they were not considered to be
engaged in trade or commerce. Brookins, 292 P.3d at 358 (citations omitted). The
reasoning behind the exemption was that, unlike those practicing a trade or running a
business, “competition is inconsistent with the practice of a profession because enhancing
profit is not the goal of professional activities; the goal is to provide services necessary to
the community.” Id. (citations omitted) (internal quotation marks omitted).

       The Goldfarb business distinction has been extended to other learned
professionals, including health care providers. Brookins, 292 P.3d at 359 (citations
omitted). See also Dorn v. McTigue, 157 F. Supp. 2d 37, 46–48 (D.D.C. 2001)

        7
          The federal Sherman Anti-Trust Act, 15 U.S.C. §§ 1-7, makes it a felony to engage “in restraint
of trade or commerce among the several States, or with foreign nations.” 15 U.S.C. § 1 (2018).


                                                  -4-
(explaining that the consumer protection statute applies when a plaintiff establishes by
clear and convincing evidence the threshold requirements of a merchant/consumer
relationship and a nexus between the plaintiff’s claim and the entrepreneurial aspects of
the medical practice); Haynes v. Yale-New Haven Hosp., 699 A.2d 964, 972–73 (Conn.
1997) (finding that the consumer protection statute applied to the entrepreneurial and
commercial aspects of medical and legal practices); Henderson v. Gandy, 623 S.E.2d
465, 468 (Ga. 2005) (holding that the consumer protection statute applied to physicians in
the entrepreneurial, commercial, or business aspects of medical practice); Barnett v.
Mercy Health Partners-Lourdes, Inc., 233 S.W.3d 723, 730 (Ky. Ct. App. 2007) (stating
that the consumer protection act applied to business aspects of medical practice—e.g.,
advertising a particular treatment then failing to advise of risks or alternatives, financial
arrangements intended to increase profits although possibly detrimental to patients, or
advertising services at one price then charging a higher price); Darviris v. Petros, 812
N.E.2d 1188, 1193–94 (Mass. 2004) (finding that the consumer protection statute may
apply to entrepreneurial aspects of medical practice, including an informed consent
claim, if the doctor’s sole motive for selecting the treatment was financial gain); Nelson
v. Ho, 564 N.W.2d 482, 486 (Mich. Ct. App. 1997) (stating that the consumer protection
statute applies to the entrepreneurial, commercial, or business aspects of medical practice,
reasoning that since “the practice of medicine clearly has a business aspect, a blanket
exemption for the learned professions would be improper”); Karlin v. IVF Am., Inc., 712
N.E.2d 662, 666–68 (N.Y. 1999) (declaring that there is no blanket exemption for
medical providers and that when physicians “choose to reach out to the consuming public
at large in order to promote business . . . they subject themselves to the standards of an
honest marketplace secured by” the consumer protection statute); Investigators, Inc. v.
Harvey, 633 P.2d 6, 8–9 (Or. Ct. App. 1981) (holding that “a dentist who regularly offers
his services to the public is engaged in a ‘business, vocation[,] or occupation’” and is
therefore subject to the consumer protection statute, even though dentistry is a profession
regulated by the state); Walter v. Magee-Womens Hosp. of UPMC Health Sys., 876 A.2d
400, 407–08 (Pa. Super. Ct. 2005), aff’d per curiam, 906 A.2d 1194 (Pa. 2006) (holding
that the processing of lab reports was more like providing medical treatment than
consumer-oriented commercial or business activities of health care providers that the
consumer protection statute would cover); Quimby v. Fine, 724 P.2d 403, 406 (Wash. Ct.
App. 1986) (stating that the consumer protection statute applies to entrepreneurial aspects
of medical practice, including an informed consent claim if the medical provider obtained
the consent to promote a service to increase profits or patient volume without adequately
advising of risks or alternatives).

       The Tennessee Court of Appeals and federal courts have recognized the
distinction between the business and professional roles of medical providers under the
Act. In Constant v. Wyeth, 352 F. Supp. 2d 847 (M.D. Tenn. 2003), the United States
District Court for the Middle District of Tennessee considered whether the Act applied to


                                            -5-
medical malpractice claims.8 In holding the Act inapplicable, the court noted that the Act
states that it only applies to unfair or deceptive acts or practices involving “the sale or
distribution of goods or services.” Id. at 853 (citing Tenn. Code Ann. § 47-18-103(9)).
The Constant court cited decisions from other states holding that their consumer
protection statutes, which have language similar to the Act, do not apply to medical
malpractice claims “because the actual practice of medicine does not affect trade or
commerce.” Id. at 853–54 (citing Simmons v. Stephenson, 84 S.W.3d 926, 927–28 (Ky.
Ct. App. 2002); Janusauskas v. Fichman, 793 A.2d 1109, 1115–16 (Conn. App. Ct.
2002)). The Constant court agreed that although “medical malpractice claims may not be
recast as consumer protection act claims,” physicians are not subject to the Act only
when they are providing medical treatment. Id. at 853 & n.10, 854.

       The United States District Court for the Western District of Tennessee relied on
Constant in ruling that a doctor’s conduct of inducing a patient to buy an unnecessary
medical device implicated the doctor’s business practices rather than his practice of
medicine. Roberson v. Medtronic, Inc., 494 F. Supp. 2d 864, 869 (W.D. Tenn. 2007). The
Roberson court noted that the Constant court made clear that a physician does not have
immunity from claims under the Act and that “‘allegations of unfair, unconscionable, or
deceptive methods, acts, or practices in the conduct of the entrepreneurial, commercial, or
business aspect of a physician’s practice’” may be actionable under the Act. Id. (quoting
Constant, 352 F. Supp. 2d at 854 n.10). For that reason, the Roberson court did not
dismiss the plaintiff’s claim under the Act. Id.

        The Tennessee Court of Appeals also relied, in part, on Constant in deciding
Proctor v. Chattanooga Orthopaedic Group, P.C., 270 S.W.3d 56 (Tenn. Ct. App.
2008).9 The plaintiff in Proctor alleged that the defendant medical group had billed his
insurance company for a more expensive surgical procedure than the surgeon had
performed. Id. at 58. The trial court dismissed the plaintiff’s case, finding that he had
failed to state a claim for which relief could be granted under the Act. Id. The Court of
Appeals reversed, noting that “‘[i]t would be a dangerous form of elitism, indeed, to dole
out exemptions to our [consumer protection] laws merely on the basis of the educational
level needed to practice a given profession, or for that matter, the impact which the
profession has on society’s health and welfare.’” Id. at 59 (alteration in original) (quoting

       8
           The court decided Constant under the Tennessee Medical Malpractice Act, before the enactment
of the Tennessee Civil Justice Act of 2011, which replaced “medical malpractice” with “health care
liability.” See Ellithorpe v. Weismark, 479 S.W.3d 818, 826 (Tenn. 2015).
       9
           No Rule 11 application for review was filed in Proctor.




                                                   -6-
Constant, 352 F. Supp. 2d at 853–54 n.10). The Proctor court also observed that, along
with directing that the Act be “liberally construed,” the General Assembly made clear its
intention that the Act “shall be interpreted and construed consistently with” the Federal
Trade Commission Act and that the Act applies to attorneys. Id. at 60–61 (citations
omitted). By analogy, the Proctor court held that the defendants were “not exempt
because they [were] learned professionals from claims relating to their business practices
brought under the [Act].” Id. at 61.

        Similarly, and relying on Proctor, the Court of Appeals recently held that the Act
applied to claims against a company operating hormone replacement therapy centers for
falsely advertising the treatments they administered. State ex rel. Slatery v. HRC Med.
Ctrs., Inc., No. M2017-02559-COA-R3-CV, 2019 WL 3992735, at *6–7 (Tenn. Ct. App.
Aug. 23, 2019), perm. app. denied (Tenn. Apr. 16, 2020). The HRC court emphasized the
distinction made in Proctor between a claim that HRC had deviated from the applicable
standard of care in administering treatments, which would fall under the Tennessee
Health Care Liability Act, and the claim that HRC had falsely advertised its treatments to
patients in violation of the Act. Id. The HRC court noted that the allegations of false
advertising were “focused on the deceptiveness of HRC’s business practices,” which was
the harm that the Act was enacted to remedy. Id. at *7.

        We agree with the reasoning of these cases. Thus, in determining whether a
consumer has stated a cause of action under the Act against a health care provider, we
must determine whether the health care provider was acting in a business or in a
professional capacity. Under this analysis, when a plaintiff alleges an injury caused by a
health care provider’s business practices—including, but not limited to, deceptive
practices in advertising, billing, or collections—the plaintiff may state a claim under the
Act. When a plaintiff asserts a claim that an injury is caused by a health care provider’s
professional conduct, such as a deviation from the applicable standard of medical care,
then the Act does not apply because that claim would be based on medical negligence
under the Tennessee Health Care Liability Act. As the Proctor court noted, “[t]hese two
types of claims are wholly separate and distinct claims governed by separate statutory
schemes,” 270 S.W.3d at 60, and a health care provider cannot be held liable under both
the Act and the Tennessee Health Care Liability Act for the same conduct. See id. at 60
(plaintiffs’ claims were covered under the Act because they had not alleged that the
surgeon deviated from the standard of care, which would have been a claim for medical
malpractice, but had alleged improper business practices—misrepresentation to keep their
business and improperly charging for a more expensive procedure); Roberson, 494 F.
Supp. 2d at 869 (holding that inducing a patient to buy a medical device the patient did
not need related to the defendant’s business practices and not to the medical services that
he provided); see also Henderson, 623 S.E.2d at 468 (quoting Haynes, 699 A.2d at 973)
(stating that the “touchstone” of a claim against a health care provider is an allegation


                                           -7-
based on the entrepreneurial or business aspects of the medical practice “aside from
medical competence . . . or aside from medical malpractice based on the adequacy of
staffing, training, equipment or support personnel”); Barnett, 233 S.W.3d at 730–31
(stating that consumer protection statute did not apply to claims for treatment falling
below the standard of care because these claims did not relate to the business aspects of
medical practice such as advertising and billing for services); Darviris, 812 N.E.2d at
1193–94 (acknowledging that not “all conduct of medical care providers [was] beyond
the reach of [the consumer protection] statute,” but holding that for the plaintiff to state a
claim under that statute, she had to show that the physician’s decision to perform a
different procedure than planned was solely for financial gain); Nelson, 564 N.W.2d at
486–87 (concluding that the defendant’s alleged failure to disclose to the patient the kind
of sutures that would be used in a procedure or the risks involved with the sutures and
misrepresenting to the patient after the procedure that there was no problem with the
sutures was a claim based on the provision of medical services and not a claim subject to
the consumer protection statute).

       The Hospitals rely on Pursell v. First American National Bank, 937 S.W.2d 838
(Tenn. 1996) and its progeny. The Hospitals, however, fail to recognize that the Pursell
Court expressly limited the opinion’s application to the particular facts and circumstances
of the case. (“This holding is confined to the facts and circumstances of this case, and we
do not, by this Opinion, generally exempt banking activities from the Tennessee
Consumer Protection Act.” Id. at 842 (citation omitted)). Thus, Pursell cannot be
interpreted to say that no collection activities are covered by the Act. Collection activities
can be covered, provided they “affect[] the conduct of any trade or commerce.” Tenn.
Code Ann. § 47-18-104(a). This is a fact-intensive inquiry.

        This Court has applied the Act to certain debt collection activities. In Discover
Bank v. Morgan, 363 S.W.3d 479, 495–96 (Tenn. 2012), we held that a credit card
company was liable under the Act for the loss of credit sustained by the widow of a credit
card holder because of the company’s collection activities. Similarly, in Searle v.
Harrah’s Entertainment, Inc., No. M2009-02045-COA-R3-CV, 2010 WL 3928632, at
*11 (Tenn. Ct. App. Oct. 6, 2010), the Tennessee Court of Appeals held that the Act
applied to the defendant’s efforts to collect on a bad check because the underlying
transaction involved “trade, commerce, and a consumer transaction,” and the collection
efforts were a continuation of the consumer transaction.

      Also, the Act “explicitly provides that it is to be interpreted and construed in
accordance with interpretations of” the Federal Trade Commission Act. Tucker v. Sierra
Builders, 180 S.W.3d 109, 114–15 (Tenn. Ct. App. 2005). With this directive in mind, it
follows that the Act should apply to collection activities because courts have applied the
Federal Trade Commission Act to claims involving collection activities. See, e.g., FTC v.


                                            -8-
LoanPointe, LLC, 525 Fed. App’x 696, 700–01 (10th Cir. 2013); FTC v. Check Investors,
Inc., 502 F.3d 159, 174–75 (3rd Cir. 2007), abrogated on other grounds by Henson v.
Santander Consumer USA, Inc., ___ U.S. ___, 137 S. Ct. 1718, 198 L. Ed. 2d 177
(2017); Trans World Accounts, Inc. v. FTC, 594 F.2d 212, 214 (9th Cir. 1979); Spiegel,
Inc. v. FTC, 540 F.2d 287, 290 (7th Cir. 1976); Slough v. FTC, 396 F.2d 870, 871–72
(5th Cir. 1968); In re Carlsbad Physician Ass’n, No. 031 0002, 2003 WL 21043066, at
*2 (F.T.C. May 2, 2003); State v. O’Neill Investigations, Inc., 609 P.2d 520, 529 (Alaska
1980).

        In sum, a health care provider, when acting in its business capacity rather than in
its professional capacity, is subject to claims under the Act. As noted in Goldfarb, the
exchange of professional services “for money is ‘commerce’ in the most common usage
of that word.” 421 U.S. at 787–88. Franks and Edwards do not allege that the Hospitals
failed to provide proper medical care. Instead, Franks’ and Edwards’ consumer claims are
based on the Hospitals’ efforts in their business capacities to collect payment for the
distribution and sale of medical goods and services. The parties do not dispute that the
filing of a hospital lien is a collection activity, but only whether the filing is covered by
the Act. See West, 459 S.W.3d at 37–38.

       The trial court did not decide, and therefore we do not address, whether the section
of the Act relied on by Franks and Edwards encompasses conduct under the Hospital
Lien Act and whether the liens filed by the Hospitals were false or deceptive under the
Act.

                                            III.

       We are required to take all of the factual allegations in the amended complaint as
true and construe the amended complaint liberally in favor of Franks and Edwards. After
doing so, we find that Franks and Edwards have stated a cause of action under the Act by
alleging that they were injured by unfair or deceptive acts of the Hospitals that affect the
conduct of trade or commerce. We reverse the judgments of the trial court and the Court
of Appeals, and we remand this case to the trial court for further proceedings. We tax the
costs of this appeal to Professional Account Services, Inc., Dyersburg Hospital
Corporation, and Martin Hospital Corporation, individually and d/b/a Tennova
Healthcare, for which execution may issue if necessary.



                                                   ________________________________
                                                   SHARON G. LEE, JUSTICE



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