The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site -



Opinion No. 5024

January 3, 1978


Free speech and commercial advertising


Advertising by licensed practitioners


Advertising by licensed practitioners


Advertising by licensed practitioners


Advertising by licensed practitioners


Advertising by licensed practitioners


Advertising by licensed practitioners


Advertising by licensed practitioners


Expulsion or censure of a member

Statutory restrictions on the rights of licensed professionals, osteopaths, chiropractors, podiatrists, medical doctors, dentists and accountants insofar as they impose blanket prohibitions on advertising, prohibit the advertising of prices or prohibit advertising of free or reduced price services in a non-deceptive manner violate the First Amendment to the Constitution of the United States.

Constitutional protection of commercial speech may not be thwarted by the regulated activities of professional associations. Suppression of lawful advertising by a professional association may give rise to the charge that it is illegally restraining trade.

Honorable H. Lynn Jondahl

State Representative

The Capitol

Lansing, Michigan

Honorable Thomas Guastello

State Senator

The Capitol

Lansing, Michigan

You have asked three questions. You first ask:

'Are the advertising restrictions on the rights of licensed professionals contained in M.C.L. 338.109 (osteopaths), 338.157 (chiropractors), 338.217 (dentists), 338.258 (optometrists), (1) 338.302 (podiatrists), 338.1811 (medical doctors), and any similar restrictions in Michigan law, constitutional?'

Each of the licensing acts which you cite prohibits advertising and enforces that prohibition with the threat of disciplinary action against the license issued thereunder.

The medical practice act, 1973 PA 185; MCLA 338.1801 et seq; MSA 14.542(1) et seq, Sec. 11(g), restricts advertising as follows:

'The board may revoke, suspend, place on probation, or reprimand the holder of a license or an approval to supervise a physician's assistant, or refuse to issue, renew, reregister, or reinstate a license or approval for any of the following causes:

' (g) Advertising for or soliciting patients.'

The podiatry act, 1915 PA 115; MCLA 338.301 et seq; MSA 14.661 et seq, Sec. 2(11)(h), contains an almost identical provision:

'The board may refuse to issue or continue and may revoke or suspend a certificate of qualification or license and may place on probation a person who has:

' (h) Advertised for or solicited patients.'

The osteopathy act, 1903 PA 162; MCLA 338.101 a et seq; MSA 14.571(1) et seq, Sec. 9(1)(d), provides in pertinent part:

'The board may revoke, suspend, place on probation, or reprimand the holder of a license or an approval to supervise a physician's assistant, or refuse to issue, renew, register, or reinstate a license or approval for any of the following causes:

' (d) For unprofessional conduct . . . As used in this subdivision, 'unprofessional conduct' means advertising for or otherwise soliciting patients, . . .'

In contrast to the foregoing, the chiropractic act, 1933 PA 145; MCLA 338.151 et seq; MSA 14.591 et seq, Sec. 7(h). permits advertising generally, but prohibits misleading advertising or the advertising of prices:

'The board may refuse, or suspend for a limited period, the license of any chiropractor for any of the following causes:

' (h) For being guilty of false, fraudulent or misleading advertising or advertising in which grossly improbable statements are made; or advertise in any publication or media free services or consultation, or the prices for which his services are available; or having professional connection with any person or any firm or corporation who advertises contrary to the provisions of this section.'

The dentistry act, 1939 PA 122; MCLA 338.201 et seq; MSA 14.629(1) et seq, Sec. 17(1)-(10)(12)(14), is unique in that it sets forth a series of specific advertising proscriptions:

'Excepting as in this act provided, it is unlawful for dentists to:

'(1) Make use of any advertising statements of a character tending to mislead or deceive the public.

'(2) Circulate any statement as to the skill or method of practicing dentistry of any dentist through any media, means, agencies or devices of an advertising nature.

'(3) Advertise professional superiority or the performance of professional services in a superior manner.

'(4) Advertise price, cost, charge, fee or terms of credit for professional services, or for materials used in the practice of dentistry, or comparative values thereof, since in a professional health service and because of the nature of the services involved, the prices must be variable.

'(5) Advertise bargains, cut rates, or special values in dental service or productions with or without specifying the time they shall apply.

'(6) Adverties any free dental work or free examinations.

'(7) Advertise to guarantee any dental services.

'(8) Advertise to perform any dental operation painlessly.

'(9) Advertise or circulate reports of cases or statements of patients in any way whatsoever.

'(10) Advertise by any means, the using of any secret anesthetic, drug, formula, medicine, method or system.

' (12) Advertise by any means of large display signs, or glaring light signs, electric or neon, or such signs containing as part thereof the representation of a tooth, teeth, bridgework, plates of teeth or any portion of the human head, or use specimens of such in display, directing the attention of the public to any such person engaged in the practice of dentistry.

' (14) Give a public demonstration of skill or methods of practicing dentistry for the purpose of securing patronage. Any dentist may publicly announce by way of newspaper or professional card that he is engaged in the practice of dentistry, giving his name, degree, office location where he is actually engaged in practice, office hours, telephone numbers and residence address, and, if he limits his practice to a specialty, he may state same.'

The advertising declared by 1939 PA 122, Sec. 17, supra, to be unlawful is made grounds for disciplinary action by 1939 PA 122, supra, Sec. 18(r), which provides:

'The board shall suspend for a limited period or revoke the license of a licensed dentist or licensed dental hygienist or the certificate of a dental assistant, for any of the following reasons:

' (r) For violating or assisting in a violation of a provision of this act.'

As your question suggests, similar provisions appear in other licensing acts. Indeed, such restraints have long been thought to fall within the permissible range of police power regulation. However, recent developments in the law have profoundly altered the scope of the state's authority to restrict advertising.

Bigelow v Virginia, 421 US 809; 44 L Ed 2d 600; 95 S Ct 2222 (1975), is the first in the series of recent United States Supreme Court cases which extended the protection of the United States Constitution First Amendment to commercial advertising. In that case, a newspaper editor who published an advertisement of an organization located in another state which offered services related to obtaining legal abortions in that state where the organization was located, was convicted under a statute which made it a misdemeanor to encourage or prompt the procuring of an abortion by the sale or circulation of any publication. The Court found the statute to be unconstitutional as violative of the United States Constitution First Amendment right of free speech, notwithstanding the commercial aspects of the advertisement. In so holding, the Court set forth many reasons for its opinion which need not be reviewed here. Pertinent to the instant inquiry, the Court indicated the limitations on the constitutional protection thereby extended to advertising by stating.:

'We conclude, therefore, that the Virginia courts erred in their assumptions that advertising, as such, was entitled to no First Amendment protection and that appellant Bigelow had no legitimate First Amendment interest. We need not decide in this case the precise extent to which the First Amendment permits regulation of advertising that is related to activities the State may legitimately regulate or even prohibit.' 421 US at 825; 44 L Ed 2d at 613; 95 S Ct at 2234

Subsequent to Bigelow, supra, in Virginia State Board of Pharmacy v Virginia Citizens Consumer Council, Inc., 425 US 748; 48 L Ed 2d 346; 96 S Ct 1917 (1976), the United States Supreme Court extended the protection of commercial speech provided by the United States Constitution First Amendment. The case involved a consumer challenge to a Virginia statute which declared it unprofessional conduct for a pharmacist to advertise the prices of prescription drugs. (2) In holding the prohibition against prescription drug price advertising unconstitutional, the Court stated:

'What is at issue is whether a State may completely suppress the dissemination of concededly truthful information about entirely lawful activity, fearful of that information's effect upon its disseminators and its recipients. Reserving other questions, we conclude that the answer to this one is in the negative.' 425 US at 773; 48 L Ed at 365; 96 S Ct at 1831

The Court stated the pertinent limitation on its opinion as follows:

'We stress that we have considered in this case the regulation of commercial advertising by pharmacists. Although we express no opinion as to other professions, the distinctions, historical and functional, between professions, may require consideration of quite different factors. Physicians and lawyers, for example, do not dispense standardized products; they render professional services of almost infinite variety and nature, with the consequent enhanced possibility for confusion and deception if they were to undertake certain kinds of advertising.' (footnote 25) 425 US at 772; 48 L Ed 2d at 365; 96 S Ct at 1831

On June 27, 1977 the Court confronted that deferred issue and decided the constitutional viability of a blanket proscription against advertising by attorneys in Bates v State Bar of Arizona, ---- US ----; 53 L Ed 2d 810; 97 S Ct 2691 (1977). In that case, orders of reprimand had been issued against two attorneys by the Arizona Supreme Court. The disciplinary action resulted from the attorneys violating a disciplinary rule by publishing an advertisement which included the representation: 'legal services at very reasonable fees' along with the recitation of specific fees for certain services such as uncontested divorces, bankruptcies and changes of name. The Arizona Supreme Court had rejected claims by the two attorneys that the disciplinary rule violated the Sherman Act, 26 Stat 201 et seq; 15 USC 1 et seq, Secs. 1 and 2, and infringed upon First Amendment rights to free speech. After upholding the Arizona Supreme Court in its rejection of the Sherman Act claim, the United States Supreme Court, in an opinion delivered by Justice Blackmun, addressed the United States Constitution First Amendment issue. Because of its direct relevance to your questions, I will review that opinion at length.

Before embarking upon its analysis, the Bates Court was careful to note that it was not addressing: 'claims relating to the quality of legal services' or 'the problems associated with inperson solicitation of clients' but instead:

'The heart of the dispute before us today is whether lawyers also may constitutionally advertise the prices at which routine services will be performed. . . .' ---- US at ----; 53 L Ed 2d at 826; 97 S Ct at 2701

The Court then evaluated a series of arguments raised in support of the advertising restrictions, including: the adverse effect on professionalism; the inherently misleading nature of attorney advertising; the undesirable economic effects of advertising; the adverse effect of advertising on the quality of service; and the difficulties of enforcement of less restrictive regulations. To understand the position of the Court in this area, it is necessary to review the Court's responses to each of those arguments and to consider the applicability of the response to the licensed professions which you have cited.

In support of the argument that advertising would impair professionalism, it was contended:

'Appellee places particular emphasis on the adverse effects that it feels price advertising will have on the legal profession. The key to professionalism, it is argued, is the sense of pride that involvement in the discipline generates. It is claimed that price advertising will bring about commercialization, which will undermine the attorney's sense of dignity and self-worth. The hustle of the marketplace will adversely affect the profession's service orientation, and irreparably damage the delicate balance between the lawyer's need to earn and his obligation selflessly to serve. Advertising is aslo said to erode the client's trust in his attorney: once the client perceives that the lawyer is motivated by profit, his confidence that the attorney is acting out of a commitment to the client's welfare is jeopardized. And advertising is said to tarnish the dignified public image of the profession.' (3) ---- US at ----; 53 L Ed 2d at 826; 97 S Ct at 2701

A similar argument might be advanced with regard to the health care professions herein at issue.

While the Court recognized and commended the spirit of public service inherent in a commitment to professionalism, it rejected the contention that advertising would have a deleterious effect, stating in part:

'Moreover, the assertion that advertising will diminish the attorney's reputation in the community is open to question. Bankers and engineers advertise, and yet these professions are not regarded as undignified. In fact, it has been suggested that the failure of lawyers to advertise creates public disillusionment with the profession. The absence of advertising may be seen to reflect the profession's failure to reach out and serve the community: studies reveal that many persons do not obtain counsel even when they perceive a need because of the feared price of services or because of an inability to locate a competent attorney. . . .' ---- US at ----; 53 L Ed 2d at 827; 97 S Ct at 2701, 2702

In addition to its alleged detrimental effect on professionalism, advertising by attorneys was asserted to be inherently misleading:

'It is argued that advertising of legal services inevitably will be misleading (a) because such services are so individualized with regard to content and quality as to prevent informed comparison on the basis of an advertisement, (b) because the consumer of legal services is unable to determine in advance just what services he needs, and (c) because advertising by attorneys will highlight irrelevant factors and fail to show the relevant factor of skill.' ---- US at ----; 53 L Ed 2d at 828; 97 S Ct at 2703

Finding that general contention unpersuasive, the Court noted that it was dealing with advertising of prices for routine services and stated:

'. . . Although the precise service demanded in each task may vary slightly, and although legal services are not fungible, these facts do not make advertising misleading so long as the attorney does the necessary work at the advertised price. The argument that legal services are so unique that fixed rates cannot meaningfully be established is refuted by the record in this case: the appellee, State Bar itself sponsors a Legal Services Program in which the participating attorneys agree to perform services like those advertised by the appellants at standardized rates. App. 459-478. Indeed, until the decision of this Court in Goldfarb v. Virginia State Bar, 421 U.S. 773, 95 S.Ct. 2004, 44 L.Ed.2d 572 (1975), the Maricopa County Bar Association apparently had a schedule of suggested minimum fees for standard legal tasks. App. 355. We thus find of little force the assertion that advertising is misleading because of an inherent lack of standardization in legal services.' ---- US at ----; 53 L Ed at 828, 829; 97 S Ct at 2703

Just as there existed fee schedules for legal services, there now exist fee schedules for medical services, such as those which are enforced by third party payors for health services. I find that the Court's analysis of this argument applies to the health care professions herein at issue.

The Court also rejected the contention that advertising of legal services is inherently misleading 'because such services are so individualized with regard to content and quality as to prevent informed comparison on the basis of an advertisement' stating:

'The second component of the argument--that advertising ignores the diagnostic role--fares little better. It is unlikely that many people go to an attorney merely to ascertain if they have a clean bill of legal health. Rather, attorneys are likely to be employed to perform specific tasks. Although the client may not know the detail involved in performing the task, he no doubt is able to identify the service he desires at the legal of generality to which advertising lends itself.'

'The same argument could be made about the advertising of abortion services. Although the layman may not know all the details of the medical procedure and may not always be able accurately to diagnose pregnancy, such advertising has certain First Amendment protection. Bigelow v. Virginia, 421 U.S. 809, 95 S.Ct. 2222, 44 L.Ed.2d 600 (1975).' (footnote 29) ---- US at ----; 53 L Ed 2d at 829; 97 S Ct at 2704

The footnoted reference to abortions illustrates the applicability of the Court's analysis to the healing art professions, such as those which you have cited in your question.

Finally, the Court rejected the argument that advertising by attorneys is inherently misleading because irrelevant factors would be highlighted to the detriment of relevant information, stating:

'The third component is not without merit: advertising does not provide a complete foundation on which to select an attorney. But it seems peculiar to deny the consumer, on the ground that the information is incomplete, at least some of the relevant information needed to reach an informed decision. The alternative--the prohibition of advertising--serves only to restrict the information that flows to consumers. Moreover, the argument assumes that the public is not sophisticated enough to realize the limitations of advertising, and that the public is better kept in ignorance than trusted with correct but incomplete information. We suspect the argument rests on an underestimation of the public. . . .' ---- US at ----; 53 L Ed 2d at 829, 830; 97 S Ct at 2704

Again, the reasoning of the Court is not limited to advertising by attorneys. The Court's position applies with equal force to physicians and other members of the healing arts community.

An economic argument was also made before the Bates Court. It was contended that advertising would increase overhead costs which would be passed along to consumers in the form of increased fees. Advertising was alleged to have a further undesirable economic effect in that the additional cost would create a substantial entry barrier hindering the ability of new attorneys to enter the market. Both assertions were rejected. The Court noted that an argument might as easily be made that the availability of advertising would increase competition and lower the cost of legal services to consumers. In addition, advertising might be helpful in making known the availability of a new attorney in the legal marketplace. Those responses by the Court are founded on general notions of economics and thus are of equal validity when applied to the healing art professions.

The contention that advertising would have an adverse effect on the quality of services was dismissed by the Court, stating in part:

'Restraints on advertising, however, are an ineffective way of deterring shoddy work. An attorney who is inclined to cut quality will do so regardless of the rule on advertising. . . .' ---- US at ----; 53 L Ed 2d 832; 97 S Ct at 2706

Note should be taken of the Court's earlier observation in Virginia State Board of Pharmacy v Virginia Citizens Consumer Council, Inc., supra:

'. . . Surely, any pharmacist guilty of professional dereliction that actually endangers his customer will promptly lose his license. . . .' 425 US at 768, 769; 48 L Ed 2d at 362; 96 S Ct at 1829

The Court has simply refused to accept the argument that the quality of professional practice may logically or lawfully be regulated through blanket restraints on advertising. The cost of such a regulatory measure was deemed too great in the face of what the Court believed to be its dubious value.

Finally, the Court addressed the argument:

'. . . (T)hat the wholesale restriction is justified by the problems of enforcement if any other course is taken. Because the public lacks sophistication in legal matters, it may be particularly susceptible to misleading or deceptive advertising by lawyers. After-the-fact action by the consumer lured by such advertising may not provide a realistic restraint because of the inability of the layman to assess whether the service he has received meets professional standards. Thus, the vigilance of a regulatory agency will be required. But because of the numerous purveyors of services, the overseeing of advertising will be burdensome.' ---- US at ----; 53 L Ed 2d at 832, 833; 97 S Ct at 2706, 2707

In response, the Court reached a position applicable as well to members of the healing arts as it is to attorneys:

'It is at least somewhat incongruous for the opponents of advertising to extol the virtues and altruism of the legal profession at one point, and, at another, to assert that its members will seize the opportunity to mislead and distort. We suspect that, with advertising, most lawyers will behave as they always have: they will abide by their solemn oaths to uphold the integrity and honor of their profession and of the legal system. For every attorney who overreaches through advertising, there will be thousands of others who will be candid and honest and straightforward. And, of course, it will be in the latters' interest, as in other cases of misconduct at the bar, to assist in weeding out those few who abuse their trust.' ---- US at ----; 53 L Ed 2d at 833; 97 S Ct at 2707

The Court found the advertisements published by the attorneys to be within the protection of the United States Constitution First Amendment, summarizing its conclusion as follows:

'The constitutional issue in this case is only whether the State may prevent the publication in a newspaper of appellants' truthful advertisement concerning the availability and terms of routine legal services. We rule simply that the flow of such information may not be restrained, and we therefore hold the present application of the disciplinary rule against appellants to be violative of the First Amendment.' ---- US at ----; 53 L Ed 2d at 836; 97 S Ct at 2709 (emphasis added)

I can conceive of no remaining argument, uniquely applicable to the field of health care, which, in the face of Bigelow, supra, Virginia State Board of Pharmacy, supra, and Bates, supra, would support a total restraint on advertising. The medical practice act, 1973 PA 185, Sec. 11(g), supra, the osteopathy act, 1903 PA 162, Sec. 9(1)(d), supra, and the podiatry act, 1915 PA 115, Sec. 2(11)(h), supra, each completely prohibits 'advertising for . . . patients.' The chiropractic act, 1933 PA 145, Sec. 7(h), supra, and the dentistry act, 1939 PA 122, Sec. 17, supra, completely prohibit advertising the price for services. It is my opinion that each of those blanket prohibitions is unconstitutional. Each of them represents an impermissible infringement of the United States Constitution First Amendment rights of both the affected healing arts professionals and the consumers of their services. It is my opinion that physicians, dentists, podiatrists and chiropractors, as well as attorneys, may publish truthful advertisements concerning the availability and price of routine services along with related factual information.

It should be noted that merely because advertising may not be completely prohibited does not mean that advertising may not be subjected to proper regulation. The Bates Court expressly so held, stating:

'Advertising that is false, deceptive, or misleading of course is subject to restraint. See Virginia Pharmacy Board v. Virginia Citizens Council, 425 U.S., at 771-772, and n. 24., 96 S.Ct., at 1830-1831. Since the advertiser knows his product and has a commercial interest in its dissemination, we have little worry that regulation to assure truthfulness will discourage protected speech. Id., at n. 24, 96 S.Ct., at 1830. And any concern that strict requirements for truthfulness will undesirably inhibit spontaniety seems inapplicable because commercial speech generally is calculated. Indeed, the public and private benefits from commercial speech derive from confidence in its accuracy and reliability. Thus, the leeway for untruthful or misleading expression that has been allowed in other contexts has little force in the commercial arena. Compare Gertz v. Robert Welch, Inc., 418 U.S. 323, 339-341, 94 S.Ct. 2997, 3006-3007, 41 L.Ed.2d 789 (1974), and Cantwell v. Connecticut, 310 U.S. 296, 310.60 S.Ct. 900, 906, 84 L.Ed. 1213 (1940), with NLRB v. Gissel Packing Co., 395 U.S., at 618, 89 S.Ct., at 1942. In fact, because the public lacks sophistication concerning legal services, misstatements that might be overlooked or deemed unimportant in other advertising may be found quite inappropriate in legal advertising. For example, advertising claims as to the quality of services--a matter we do not address today--are not susceptible to measurement or verification; accordingly, such claims may be so likely to be misleading as to warrant restriction. Similar objections might justify restraints on in-person solicitation. We do not foreclose the possibility that some limited supplementation, by way of warning or disclaimer or the like, might be required of even an advertisement of the kind ruled upon today so as to assure that the consumer is not misled. In sum, we recognize that many of the problems in defining the boundary between deceptive and nondeceptive advertising remain to be resolved, and we expect that the bar will have a special role to play in assuring that advertising by attorneys flows both freely and cleanly.

'As with other varieties of speech, it follows as well that there may be reasonable restrictions on the time, place, and manner of advertising. See Virginia Pharmacy Board v. Virginia Consumer Council, 425 U.S., at 771, 96 S.Ct., at 1830. Advertising concerning transactions that are themselves illegal obviously may be suppressed. See Pittsburgh Press Co. v. Human Relations Comm'n, 413 U.S. 376, 388, 93 S.Ct. 2553, 37 L.Ed.2d 669 (1973). And the special problems of advertising on the electronic broadcast media will warrant special consideration. Cf. Capital Broadcasting Co. v. Mitchell, 333 F.Supp. 582 (DC 1971), aff'd sub. nom. Capital Broadcasting Co. v. Acting Attorney General, 405 U.S. 1000, 92 S.Ct. 1289, 31 L.Ed.2d 472 (1972).'

'The determination whether an advertisement is misleading requires consideration of the legal sophistication of its audience. Cf. Feil v. FTC, 285 F.2d 879, 897 (CA9 1960). Thus different degrees of regulation may be appropriate in different areas. (footnote 37) ---- US at ----; 53 L Ed 2d at 835, 836; 97 S Ct at 2708, 2709

The legislature, therefore, may only enact restraints against advertising which are reasonably designed to facilitate the flow of accurate information and prevent confusion and deception.

It is, therefore, my opinion that the advertising restrictions on the rights of licensed professionals contained in 1903 PA 162, supra, Sec. 9(1)(d) (osteopaths), 1933 PA 145, supra, Sec. 7(h) (chiropractors), 1939 PA 122, supra, Sec. 17(4), (5), (6), (dentists), 1909 PA 71, supra, Sec. 8(i) (optometrists), 1915 PA 115, supra, Sec. 2(11)(h) (podiatrists), 1973 PA 183, supra, Sec. 11(g) (medical doctors), are unconstitutional insofar as they impose blanket prohibitions on advertising, prohibit the advertising of prices, or prohibit the advertising of free or reduced price services where such is not done in a deceptive manner. The advertising restrictions on licensed professionals contained in the various licensing acts which prohibit misleading or deceptive advertising are constitutional.

You next ask:

'Are advertising restrictions imposed by a licensed board under a general legislative mandate to set standards for professional conduct, such as the restrictions on accountants contained in the 'Board Rules', under the Michigan Accountancy Law--rules 338.515 and 338.518--constitutional?

The legislature has enacted the public accountancy act, 1976 PA 130; MCLA 338.2101 et seq; MSA 18.32(1) et seq. I have been advised that pursuant to that act, the Michigan State Board of Accountancy is in the process of promulgating an entirely new set of administrative rules which will, among other things, replace those rules which you cite. In accordance with the administrative procedures act of 1969, 1969 PA 306; MCLA 24.201 et seq; MSA 3.560(101) et seq, Sec. 45(1), my office will review those rules to determine their legality. With those newly developed circumstances in mind, I will defer consideration of specific rules until the complete new set of rules is scrutinized.

To avoid any possible confusion, I should note that administrative rules, including those which you cite, are subject to the same United States Constitution First Amendment limitations as are statutes. A rule which prohibits constitutionally protected speech is just as unenforceable as a statute. Moreover, regulation of the accountancy profession, just as the other professions herein considered, must pass constitutional muster.

Finally you ask:

'Is the explusion or censure of a member of a professional association by that association for advertising, when the advertisement otherwise is legal and truthful, an illegal restraint of trade?'

Members of professions and professional associations are not exempt from prosecution charging illegal restraint of trade. Goldfarb v Virginia State Bar, 421 US 773; 95 S Ct 2004; 44 L Ed 2d 572 (1975). Whether an illegal restraint of trade arose would be determined by evaluating the nature of advertising, the factual context of the restriction and the effect of the suppression to ascertain whether it is of such a kind and magnitude as to be prohibited by a pertinent statute, such as the Sherman Act, supra.

Boddicker v Arizona State Dental Ass'n, 549 F2d 626 (1977), considered a cause of action against a professional association alleged under the Sherman Act, supra. The complaint in the case alleged that an agreement by a national dental association and local dental associations to require membership in the national association as a condition precedent to membership in the local association created an anticompetitive typing arrangement by coupling participation in the local association's beneficial programs to membership in the national association and further alleged that the plaintiff dentists were excluded from participating in programs and activities of local associations because of their failure to pay dues to the national association. In commenting on the jurisdictional scope of the Sherman Act, supra, the Court stated:

'. . . The presence of Sherman Act jurisdiction depends on whether it is within the power of Congress to regulate the defendants' conduct of which the plaintiffs complain . . . Congressional power exists when the conduct exerts a 'substantial economic effect' on interstate commerce . . . Viewed from the jurisdictional standpoint of the Sherman Act, the Supreme Court recently indicated that the critical inquiry is 'the adequacy of the nexus between [defendant's] conduct and [the] interstate commerce that is alleged in the complaint.' . . .' 549 F2d at 629, citing Hospital Building Co v Trustees of Rex Hospital, 425 US at 742; 48 L Ed 2d at 343; 96 S Ct at 1851, n.1 (1976)

The Court then evalutated the factual context and found that the allegations were sufficient to state a cause of action under the Sherman Act, supra. As you will note, the Court stated that it is necessary to demonstrate an effect on interstate commerce to establish a Sherman Act case. The case also illustrates the fact that the regulations of a professional association may have the effect of unlawfully restraining trade. It further illustrates the principle that whether an unlawful restraint of trade exists depends upon the nature and effect of the particular restraint at issue. It is often not possible to determine in the abstract whether a particular course of conduct constitutes an illegal restraint of trade.

United States v National Society of Professional Engineers, 404 F Supp 457 (1975), considered alleged anticompetitive activity by a professional association. At issue was the legality of an engineering society's ban on its membership submitting competitive bids on engineering projects. In an earlier opinion, the Court had found the ban to constitute an unlawful restraint of trade. On appeal of that decision, the United States Supreme Court remanded the case for consideration in light of the recently decided Goldfarb case, supra. The Court found that its earlier opinion was consistent with Goldfarb, supra, and therefore reaffirmed the same. In that earlier opinion, United States v National Society of Professional Engineers, 389 F Supp 1193, 1198 (1974), the Court stated the purpose of the Sherman Act, supra, as follows:

'Congressional intent behind the Sherman Act focused on a desire to prevent restraints to 'free competition in business and commercial transactions which tended to . . . raise prices or otherwise control the market to the detriment of purchasers or consumers of goods and services . . ..' . . .'

Restrictions by professional societies against otherwise lawful advertising will be weighed with that legislative purpose in mind. In the words of the Court, to ascertain whether unlawful restraint of trade exists, the court will:

'. . . examine the nature and conduct involved in the profession on a case by case basis together with the context in which it is practiced.' Id.

Obviously, this particular area of the law does not lend itself to abstract statements which may then be applied to determine the legality of the vast array of private advertising standards and professional societies.

In summary, a total ban on advertising or a total ban on advertising of prices by physicians, dentists, podiatrists, optometrists, chiropractors or accountants constitutes an impermissible infringement of the United States Constitution First Amendment right to free speech enjoyed by both the providers and consumers of professional services. Whether the ban is set forth in a statute or administrative rule, it may not be enforced against protected speech. At the same time, considerable power remains in the legislature to regulate advertising. For example, the legislature may enact laws to enjoin verifiable misrepresentations as well as to regulate more subjective claims which foster confusion and deception while eluding specific proof of their falsity. Sufficient legislative authority exists to mandate not only a free, but a clean flow of economic information.

Furthermore, the constitutional sancitity of commercial speech may not be thwarted by the private regulatory activities of professional associations. Depending upon the circumstances, the suppression of lawful advertising by a professional association may give rise to a charge that it is illegally restraining trade.

Frank J. Kelley

Attorney General

(1) 1977-1978 OAG, No 5,113, p ---- (July 26, 1977), addressed the constitutionality of the prohibition against price advertising by optometrists and concluded that the restrictions were unconstitutional as violative of the free speech provisions of the Constitution.

(2) 1977-1978 OAG, No 5,192, p ___ (May 12, 1977), discussed Virginia State Board of Pharmacy v Virginia Citizens Consumer Council, Inc., supra, at some length and concluded that advertising which offered limited time discounts and premiums in connection with the purchase of prescription drugs could not constitutionally be prohibited.

(3) In footnote 2, the Court noted that the medical profession through a Statement of the Judicial Council of the American Medical Associated appearing in 235 J.A.M.A. 2328 (1976), had recently suggested a more permissive attitude toward advertising, which included approval nter alia of the supplying of fee information for listing in a reputable directory.