N.C. Acupuncture Licensing Bd. v. N.C. Bd. of Physical Therapy Exam'rs

N.C. Acupuncture Licensing Bd. v. N.C. Bd. of Physical Therapy Exam’rs, 2017

NCBC 66.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE

SUPERIOR COURT DIVISION

WAKE COUNTY 16 CVS 9539

NORTH CAROLINA ACUPUNCTURE

LICENSING BOARD,

Petitioner,

v. ORDER AND OPINION ON

PETITION FOR JUDICIAL REVIEW

NORTH CAROLINA BOARD OF

PHYSICAL THERAPY EXAMINERS

Respondent.

1. THIS MATTER is before the Court upon the North Carolina Acupuncture

Licensing Board’s (the “Acupuncture Board” or “Petitioner”) Petition for Judicial

Review (the “Petition”) of a declaratory ruling (the “Declaratory Ruling”) issued

pursuant to N.C. Gen. Stat. § 150B-4 by the North Carolina Board of Physical

Therapy Examiners (the “Physical Therapy Board” or “Respondent”) in the above-

captioned case. For the reasons discussed below, the Court AFFIRMS the

Declaratory Ruling.

Everett Gaskins Hancock, LLP, by E.D. Gaskins, Jr., James M. Hash,

and Fiona K. Steer, and Stevens Martin Vaughn & Tadych, PLLC, by

Michael J. Tadych, for Petitioner North Carolina Acupuncture Licensing

Board.

Ellis & Winters LLP, by Matthew W. Sawchak, Stephen Daniel Feldman,

Troy D. Shelton, and James M. Weiss, for Respondent North Carolina

Board of Physical Therapy Examiners.

Bledsoe, Judge.

I.

BACKGROUND

A. Prior History

2. This action arises out of an ongoing disagreement between the Acupuncture

Board and the Physical Therapy Board over whether a procedure known as “dry

needling” is acupuncture and thus subject to the exclusive regulation of the

Acupuncture Board. Dry needling is the insertion of solid filament needles into

specific trigger points in a patient’s muscle tissue to relieve pain. (Declaratory Ruling

4–5; Pet. Judicial Review 2.) The Acupuncture Board views dry needling as indistinct

from the practice of acupuncture because both procedures use identical needles,

which are inserted at the same places in the body and manipulated in the same way

to achieve the same therapeutic results. (Pet. for Judicial Review 2.) The Physical

Therapy Board currently takes the position that dry needling falls within the scope

of physical therapy and may be performed by physical therapists in North Carolina.

3. The Acupuncture Board brought this dispute before the undersigned in a

previous case, N.C. Acupuncture Licensing Bd. v. N.C. Bd. of Physical Therapy

Examiners, No. 15 CVS 12012 (N.C. Super. Ct. Wake Cnty.), petitioning the Court for

a declaratory judgment that dry needling does not fall within the statutory scope of

physical therapy in North Carolina. The Court dismissed that case on jurisdictional

grounds; in particular, the Court held that it lacked jurisdiction because the

Acupuncture Board had not exhausted available administrative remedies under

North Carolina’s Administrative Procedure Act, including sections 150B-4 and 150B-

20. N.C. Acupuncture Licensing Bd. v. N.C. Bd. of Physical Therapy Examiners, 2016

NCBC LEXIS 33, at *24 (N.C. Super. Ct. Apr. 26, 2016) (hereinafter, “NC

Acupuncture I”).

4. The Acupuncture Board’s request draws on the history of the parties’

dispute about the regulation of dry needling. In 2002, the Physical Therapy Board,

as reflected in its newsletters for licensees, took the position that dry needling was a

form of acupuncture and outside the scope of practice of physical therapists. (R. at

233.) The Physical Therapy Board revised its view eight years later and issued a

position statement in September 2010 concluding that dry needling is within the

scope of practice of physical therapists. (R. at 297–99.)

5. In response, the Acupuncture Board sought a formal Attorney General

Opinion addressing whether dry needling is within the scope of practice of physical

therapists. In response, the Attorney General’s office issued an advisory letter (the

“Advisory Letter”) on December 1, 2011. The Advisory Letter took the position that

dry needling is distinct from acupuncture and that it is within the Physical Therapy

Board’s power to determine whether dry needling falls within the scope of practice of

physical therapists. (R. at 267.) The Advisory Letter cautioned that, in order to fulfill

the Board’s statutory mandate to safeguard the public health, the Physical Therapy

Board should adopt administrative rules and standards to ensure that dry needling

only be practiced by physical therapists with a requisite level of skill and competence.

(R. at 267–68.)

6. In 2014, the Physical Therapy Board undertook rulemaking procedures and

proposed a rule setting training standards for dry needling. (R. at 237.) The proposed

rule defined dry needling as “a technique using the insertion of a solid filament

needle, without medication, into or through the skin to treat various impairments,”

and would have required at least fifty-four additional hours of training for physical

therapists who wished to perform dry needling. (R. at 237.) The Physical Therapy

Board submitted the proposed rule to the Rules Review Commission in accordance

with N.C. Gen. Stat. § 150B-21.8. Representatives of the Acupuncture Board opposed

the proposed rule in writing and in person at a January 15, 2015 hearing. (R. at 307.)

At the hearing, the Rules Review Commission orally voted to object to the proposed

rule. (R. at 2075.) In a follow-up letter dated January 26, 2015, the Rules Review

Commission memorialized the basis for its objection: “The Commission objected to

this Rule based upon lack of statutory authority. [The Rule], as adopted by the

agency, addresses a matter not within the authority delegated to the agency by the

General Assembly, as required by [N.C. Gen. Stat. §] 150B-21.9(a).” (R. at 238.)

7. The Physical Therapy Board did not pursue its statutory rights to challenge

the Rules Review Commission’s objection to the proposed rule. Instead, the Physical

Therapy Board posted on its website a revised position statement on January 16,

2015 (the “Revised Position Statement”), the day after the Rules Review Commission

voted to object to the proposed rule. The Revised Position Statement expresses the

Physical Therapy Board’s view that the Attorney General’s Advisory Letter still

stands. The Revised Position Statement states the Physical Therapy Board’s

conclusion that “physical therapists can continue to perform dry needling so long as

they possess the requisite education and training required by N.C.G.S. § 90-270.24(4),

but there are no regulations to set the specific requirements for engaging in dry

needling.” (R. at 239.)

8. The Acupuncture Board filed suit to enjoin the Physical Therapy Board from

instructing physical therapists that they could practice dry needling, and the Court

in NC Acupuncture I dismissed the complaint on April 26, 2016. On May 2, 2016, the

Acupuncture Board requested a declaratory ruling from the Physical Therapy Board

pursuant to N.C. Gen. Stat. § 150B-4. (R. at 1.) The Acupuncture Board requested a

ruling “that the [Physical Therapy] Board publicly declare that ‘dry needling’ is not

within the scope of the Physical Therapy Act and withdraw the position statement of

January 16, 2015 . . . because it is in conflict with the determination of the Rules

Review Commission.” (R. at 1.)

B. The Declaratory Ruling and the Petition for Judicial Review

9. The Physical Therapy Board issued the Declaratory Ruling on June 27,

2016. The Declaratory Ruling summarizes the conclusions of the Physical Therapy

Board that:

 the scope of physical therapy under North Carolina law includes dry

needling;

 the scope of health professions is dynamic, not static;

 dry needling is distinct from acupuncture;

 the Acupuncture Board’s request fails to recognize that health

professions are allowed to have overlapping scopes of practice;

 there is no conflict between this ruling and the Rules Review

Commission’s January 15, 2015 objection to the Board’s proposed

rule on additional training requirements for dry needling;

 North Carolina public policy favors patient choice in health care; and

 the Acupuncture Board’s desired ruling would violate the anti-

monopoly provision in the North Carolina Constitution.

(Notice of Designation Ex. E., hereinafter “Declaratory Ruling,” 3.)

10. The Acupuncture Board exercised its right under North Carolina’s

Administrative Procedure Act, N.C. Gen. Stat. § 150B-1 et seq., to seek judicial review

of the Declaratory Ruling by filing the Petition on July 27, 2016. Pursuant to N.C.

Gen. Stat. § 150B-46, the Petition catalogues the Acupuncture Board’s exceptions to

the Declaratory Ruling and states its requested relief. The Acupuncture Board’s

Petition sets forth sixteen exceptions to the Declaratory Ruling, which the

Acupuncture Board’s opening brief in support of the Petition distills into two

arguments: (i) that the Physical Therapy Board is bound by the decision of the Rules

Review Commission in issuing its Declaratory Ruling and Revised Position

Statement; and (ii) that the Physical Therapy Board wrongly concluded that dry

needling falls within the statutory scope of physical therapy. The Acupuncture Board

seeks a final judgment that reverses the Declaratory Ruling and holds that dry

needling is acupuncture and not within the scope of physical therapy. (Pet. Judical

Review, Prayer for Relief.) The Court held a hearing on the Petition, and the matter

is now ripe for decision.

II.

STANDARD OF REVIEW

11. In reviewing a final agency decision, the Court acts in the capacity of an

appellate court, and the standard of review depends on the issue presented. Mann

Media, Inc. v. Randolph Cty. Planning Bd., 356 N.C. 1, 12, 565 S.E.2d 9, 17 (2002).

N.C. Gen. Stat. § 150B-51(b) specifically addresses a trial court’s authority in this

context and provides as follows:

The court reviewing a final [agency] decision may affirm the decision or

remand the case for further proceedings. It may also reverse or modify

the decision if the substantial rights of the petitioners may have been

prejudiced because the findings, inferences, conclusion or decisions are:

(1) In violation of constitutional provisions;

(2) In excess of the statutory authority or jurisdiction of the agency or

administrative law judge

(3) Made upon unlawful procedure;

(4) Affected by other error of law;

(5) Unsupported by substantial evidence admissible under G.S. 150B-

29(a), 150B-30, or 150B-31 in view of the entire record as submitted; or

(6) Arbitrary, capricious, or an abuse of discretion.

N.C. Gen. Stat. § 150B-51(b).

12. The first four grounds for reversing an agency’s decision listed in section

150B-51(b)(1)–(4) are characterized as law-based inquiries and receive de novo

review; the final two grounds listed in section 150B-51(b)(5)–(6) are characterized as

fact-based inquiries and reviewed under the “whole record” test. N.C. Dep’t of Env’t

& Nat. Res. v. Carroll, 358 N.C. 649, 659, 599 S.E.2d 888, 894–95 (2004); N.C. Gen.

Stat. § 150B-51(c).

13. When conducting a de novo review of an agency action under the

Administrative Procedure Act, the Court reviews the matter anew and substitutes its

own judgment for the judgment of the agency. Carroll at 660, 599 S.E.2d at 895.

“The judicial review provisions of the [Administrative Procedure Act],” however,

“should not be construed to substantially undermine the General Assembly’s

judgment that administrative agencies, not courts, should perform the primary fact-

finding function in contested cases.” Id. at 662, 599 S.E.2d at 896 (reversing where

the trial court made independent findings of fact while conducting de novo review of

the agency’s legal conclusions). Therefore, “where the findings of fact of an

administrative agency are supported by substantial competent evidence in view of

the entire record, they are binding on the reviewing court, and that court lacks

authority to make alternative findings at variance with the agency’s.” Id. at 663, 599

S.E.2d at 897.

III.

ANALYSIS

14. Prior to engaging the Acupuncture Board’s arguments, the Court first

considers it helpful to discuss the nature of the Declaratory Ruling. A declaratory

ruling can be sought “as to the validity of a rule or as to the applicability to a given

state of facts of a statute administered by the agency or a rule or order of the

agency[,]” or “to resolve a conflict or inconsistency within the agency regarding an

interpretation of the law or a rule adopted by the agency.” N.C. Gen. Stat. § 150B-

4(a). “A declaratory ruling is binding on the agency and the person requesting it

unless it is altered or set aside by the court.” Id. The Declaratory Ruling issued by

the Physical Therapy Board therefore is binding only on the Physical Therapy Board

and the Acupuncture Board. See also Diggs v. N.C. Dep’t of Health and Human

Servs., 157 N.C. App. 344, 349, 578 S.E.2d 666, 669 (2003) (holding that a declaratory

ruling was void where petitioner did not have standing to seek a declaratory ruling).

15. Thus, the Declaratory Ruling is of limited applicability, and it lacks the

same universal force as a promulgated regulation. Compare In re A Declaratory

Ruling by the N.C. Comm’r of Ins. Regarding 11 N.C.A.C. 12.0319, 134 N.C. App. 22,

30, 517 S.E.2d 134, 140 (1999) (citing Taylor v. Superior Motor Co., 227 N.C. 365, 367,

42 S.E.2d 460, 461 (1947)) (“Where an agency has the authority to act, its rules and

regulations have the binding effect of statutes and may accordingly alter the common

law.”), with Texas v. United States, 866 F.2d 1546, 1555 (5th Cir. 1989) (“Rendered in

a specific factual context and resolving only the question presented by [the] petitions,

[the declaratory ruling] belongs to the genre of adjudicatory rulings.”) (citation and

internal punctuation omitted).1 See also Opinion of Attorney General to Rep. Cherie

Berry, 1995 N.C. AG LEXIS 75, at *3 (Dec. 11, 1995) (“The JOBS Manual is a

statement of agency policy and has not been adopted as a rule. Thus, it does not have

the force of law.”)

A. Procedural Arguments

16. The Acupuncture Board advances several arguments contending that the

Declaratory Ruling and the underlying Revised Position Statement are the result of

unlawful procedure. These are law-based inquiries and receive de novo review. See

N.C. Gen. Stat. § 150B-51(b)(3).

1 There are many significant differences in the treatment of declaratory rulings under North

Carolina’s Administrative Procedure Act and declaratory orders under the federal

Administrative Procedure Act. The Court nevertheless considers this comparison useful here

because the purpose of declaratory orders under the federal Act—“to terminate a controversy

or remove uncertainty,” 5 U.S.C. § 554(e)—is substantially similar to the purpose of

declaratory rulings under North Carolina’s law—“to resolve a conflict or inconsistency within

the agency regarding an interpretation of the law,” N.C. Gen. Stat. § 150B-4(a).

1. The Effect of the Rules Review Commission’s Objection

17. The chief argument advanced by the Acupuncture Board is that the

Declaratory Ruling must be reversed because the Rules Review Commission’s

objection to the proposed rule precludes the Physical Therapy Board from

subsequently taking the position in the Revised Position Statement and the

Declaratory Ruling that dry needling is within the scope of physical therapy. (Pl.’s

Br. Supp. Pet. Judicial Review 6.) The Court disagrees.

18. From the Acupuncture Board’s point of view, the Rules Review

Commission’s objection to the proposed rule constituted a final determination binding

against all persons and entities and for all purposes that dry needling is not within

the scope of physical therapy under North Carolina law. From the Physical Therapy

Board’s point of view, however, the Rules Review Commission’s objection merely

blocked its proposed training requirements for physical therapists to perform dry

needling but did not restrict the Board’s ability to issue an interpretive statement

regarding the Board’s view that dry needling falls within the scope of physical

therapy. These divergent views turn on the parties’ competing interpretations of the

authority given to the Rules Review Commission by the North Carolina

Administrative Procedure Act.

19. “In matters of statutory construction, our primary task is to ensure that the

purpose of the legislature, the legislative intent, is accomplished. Legislative purpose

is first ascertained from the plain words of the statute.” Elec. Supply Co. v. Swain

Elec. Co., 328 N.C. 651, 656, 403 S.E.2d 291, 294 (1991) (internal citations omitted).

Analyzing the plain language and structure of the Administrative Procedure Act, the

Court concludes that the Rules Review Commission’s objection does not have a

preclusive effect outside of the rulemaking process.

20. The purpose of the Rules Review Commission, as set forth in its enabling

statute, is to “review[] administrative rules in accordance with [the Administrative

Procedure Act].” N.C. Gen. Stat. § 143B-30.2. The Administrative Procedure Act

gives the Rules Review Commission limited authority to review rules; the

Commission can approve or object to only the specific rules submitted to it. N.C. Gen.

Stat. § 150B-21.10. Approval of a rule by the Rules Review Commission is a necessary

step in formal rulemaking, and an agency cannot adopt a permanent rule without

approval by the Rules Review Commission. N.C. Gen. Stat. § 150B-21.8. The Rules

Review Commission can object to a rule for one of four reasons: (i) the rule is not

within the agency’s delegated authority; (ii) the rule is unclear and ambiguous; (iii)

the rule is not reasonably necessary to implement or interpret state or federal law; or

(iv) the agency failed to follow the strictures of the rulemaking process. See N.C. Gen.

Stat. §§ 150B-21.9(a), -21.10.

21. When the Rules Review Commission objects to an agency’s proposed rule,

the agency effectively has three options: (i) the agency can revise and resubmit the

rule in light of the Rules Review Commission’s objection; (ii) the agency can request

that the Rules Review Commission return the rule to the agency because the agency

has decided not to revise the rule, N.C. Gen. Stat. § 150B-21.12; or (iii) if the agency

seeks return of the rule and decides not to address the objection, the agency may then

elect to file a declaratory judgment action to seek judicial review of the Rules Review

Commission’s objection, N.C. Gen. Stat. § 150B-21.8(d). Here, the parties do not

dispute that the Physical Therapy Board exercised the second option; it sought return

of the rule and elected not to seek judicial review of the Rules Review Commission’s

objection.

22. The statutory provisions outlined above clearly identify the Rules Review

Commission’s role as a gatekeeper in the rulemaking process. Indeed, all of the

statutory provisions describing the role of the Rules Review Commission fall within

Article 2A—entitled Rules—of the Administrative Procedure Act. See Elec. Supply

Co., 328 N.C. at 656, 403 S.E.2d at 294 (“Moreover, we are guided by the structure of

the statute[.]”).

23. No part of the statutory framework, however, indicates that the legislature

intended the Rules Review Commission’s objection to a specific rule to restrict an

agency’s ability to act on a particular subject matter when the agency is lawfully

acting outside of formal rulemaking procedures.2 Indeed, the plain language of the

statute clearly suggests that an objection by the Rules Review Commission is only

relevant to rulemaking and the specific rules under consideration because the

Commission can object on relatively minor grounds that a proposed rule is unclear or

accompanied by procedural error and because the statutory framework contemplates

2 See infra ¶¶ 28–37 for a discussion of the Court’s conclusion that the Revised Position

Statement and Declaratory Ruling do not violate the requirements for formal rulemaking

contained in section 150B-2(8a).

that a party may propose successive rules as circumstances and an agency’s policy

preferences change and evolve.

24. Given the nature of the Rules Review Commission’s limited authority to

review and object to proposed rules, the Court concludes that it would unreasonably

expand the scope of the relevant statutory language to conclude, as the Acupuncture

Board urges, that an objection by the Rules Review Commission has vast preclusive

effect on the rule-proposing agency outside formal rulemaking. Burgess v. Your

House of Raleigh, Inc., 326 N.C. 205, 216, 388 S.E.2d 134, 141 (1990) (“A statute is

presumed not to have been intended to produce absurd consequences, but rather to

have the most reasonable operation that its language permits.”) This is particularly

true in light of the Acupuncture Board’s failure to identify any case law supporting

its view that the Rules Review Commission’s objection precludes the Physical

Therapy Board from stating its belief and its determination in the Declaratory Ruling

that dry needling falls within the scope of physical therapy.

25. Thus, applying basic rules of statutory construction, and in the absence of

controlling case law to the contrary, the Court concludes that the Rules Review

Commission’s objection does not constitute a final determination that dry needling is

outside the scope of physical therapy under North Carolina law.

2. Exhaustion of Remedies

26. The Acupuncture Board argues further that even if the objection by the

Rules Review Commission has no preclusive effect on the Physical Therapy Board’s

ability to reach the conclusions in the Declaratory Ruling, the Physical Therapy

Board is procedurally prohibited from doing so because it failed to pursue its right to

seek judicial review of the Rules Review Commission’s objection. (Pl.’s Br. Supp. Pet.

Judicial Review 10.) This argument relies on the doctrine of exhaustion of

administrative remedies, which holds that “[s]o long as the statutory procedures

provide effective judicial review of an agency action, courts will require a party to

exhaust those remedies.” Flowers v. Blackbeard Sailing Club, Ltd., 115 N.C. App.

349, 352, 444 S.E.2d 636, 638 (1994). Reliance on this doctrine in this context is

misplaced, however.

27. As this Court stated when applying the doctrine in NC Acupuncture I, a

party’s failure to exhaust administrative remedies reveals a lack of subject matter

jurisdiction, and the plaintiff bears the burden of proving that jurisdiction exists.

N.C. Acupuncture I, 2016 NCBC LEXIS 33, at *9; see also Frazier v. N.C. Cent. Univ.,

779 S.E.2d 515, 518 (N.C. Ct. App. 2015). The doctrine clearly applies to limit a

plaintiff who seeks judicial relief from an agency action prior to exhausting its

administrative remedies. Presnell v. Pell, 298 N.C. 715, 721, 260 S.E.2d 611, 615

(1979) (“[W]here the legislature has provided by statute an effective administrative

remedy, that remedy is exclusive and its relief must be exhausted before recourse

may be had to the courts.”) (emphasis added). The Court cannot apply the failure to

exhaust administrative remedies doctrine to the Physical Therapy Board here,

however, because the Physical Therapy Board is not seeking any relief from the Court

in this action and thus is not seeking to invoke this Court’s subject matter

jurisdiction. See, e.g., Neuse River Found. v. Smithfield Foods, Inc., 155 N.C. App.

110, 113, 574 S.E.2d 48, 51 (2002) (citing Lujan v. Defs. of Wildlife, 504 U.S. 555, 561

(1992)) (“As the party invoking jurisdiction, plaintiffs have the burden of proving the

elements of standing.”).

3. Requirement to Pursue Rulemaking

28. As an additional argument, the Acupuncture Board contends that the

Declaratory Ruling erred in reaching an opinion contrary to the Rules Review

Commission’s objection because the Physical Therapy Board can only act on the issue

of dry needling through formal rulemaking. (Pl.’s Br. Supp. Pet. Judicial Review 10;

Pet. Judicial Review 13.) The North Carolina Administrative Procedure Act requires

that agencies pursue formal rulemaking when they “seek to implement or enforce

against any person a policy, guideline, or other interpretive statement that meets the

definition of a rule contained in [section] 150B-2(8a).” N.C. Gen. Stat. § 150B-18. The

definition of a rule is “any agency regulation, standard, or statement of general

applicability that implements or interprets an enactment of the General Assembly or

Congress or a regulation adopted by a federal agency or that describes the procedure

or practice requirements of an agency.” N.C. Gen. Stat. § 150B-2(8a).

29. As an initial matter, the Court notes that the Administrative Procedure Act

includes an exemption for “[s]tatements of agency policy made in the context of

another proceeding, including . . . [d]eclaratory rulings under [section] 150B-4.” N.C.

Gen. Stat. § 150B-2(8a)(e)(1). Therefore, the Declaratory Ruling itself, which the

Acupuncture Board requested, cannot be an improper attempt to circumvent

rulemaking requirements.

30. Nevertheless, because the Declaratory Ruling includes a conclusion that the

Revised Position Statement is correct, the Court will address the question of whether

the Physical Therapy Board’s issuance of the Revised Position Statement is an

improper attempt to avoid the rulemaking requirements of the Administrative

Procedure Act. The Physical Therapy Board argues that it had the authority to issue

the Revised Position Statement because it falls within a specific exemption from the

rulemaking requirements for “[n]onbinding interpretive statements within the

delegated authority of an agency that merely define, interpret, or explain the

meaning of a statute or rule.” N.C. Gen. Stat. § 150B-2(8a)(c).

31. In a broad example of this exception, the Court of Appeals has held that the

North Carolina Department of Labor’s Operations Manual setting forth standards for

compliance with the state’s OSHA statute is a “nonbinding interpretive statement”

exempt from the more stringent standards of rulemaking. Comm’r of Labor v.

Weekley Homes, L.P., 169 N.C. App. 17, 30, 609 S.E.2d 407, 416 (2005). The court

concluded in Weekley Homes that the Operations Manual was a nonbinding

interpretive statement because the agency had a statutory mandate to protect the

health and safety of all employees in the state, and the Operations Manual was

“merely an interpretive guideline as to who can be cited [for OSHA violations] and

does not require additional evidence or a more stringent standard of proof.” Id. at 30,

609 S.E.2d at 417.

32. Rules, in contrast, “fill the interstices of statutes. They go beyond mere

interpretation of statutory language or application of such language and within

statutory limits set down additional substantive requirements.” Comm’r of Ins. v.

N.C. Rate Bureau, 300 N.C. 381, 411, 269 S.E.2d 547, 568 (1980), overruled on other

grounds by In re Redmond, 797 S.E.2d 275, 280 (N.C. 2017); see also Mt. States Health

Alliance v. Burwell, 128 F. Supp. 3d 195, 205 (D.D.C. 2015) (“Legislative rules are

those that grant rights, impose obligations, or produce other significant effects on

private interests. In contrast, interpretive rules clarify a statutory or regulatory

term, remind parties of existing statutory or regulatory duties, or merely track

preexisting requirements and explain something the statute or regulation already

required.”) (internal citations and punctuation omitted).

33. For example, the Court of Appeals has held that an agency policy requiring

certain Medicaid applicants to present written evidence in support of their

applications fell within the definition of a “rule” because the policy created “a binding

standard which interprets the eligibility provisions of the . . . law and, in addition,

describes the procedure and evidentiary requirements utilized by respondent agency

in determining such eligibility.” Dillingham v. N.C. Dep’t of Human Res., 132 N.C.

App. 704, 710, 513 S.E.2d 823, 827 (1999) (citing Comr. of Ins. V. Rate Bureau, 300

N.C. 381, 411, 269 S.E.2d 547, 568 (1980)).

34. Here, the Revised Position Statement limits itself to stating the Physical

Therapy Board’s interpretation of its own enabling statutes and existing regulations.

The Revised Position Statement does not set forth standards or policies for the

practice of dry needling by physical therapists. Instead, it restates the Physical

Therapy Board’s view that dry needling falls within the statutory definition of

physical therapy, it affirms that there are no specific regulations in place, and it

advises that physical therapists who desire to perform dry needling must comply with

21 NCAC 48C.0101(a), which is the agency’s most basic regulation on what practices

are permitted for physical therapists. (R. at 239.)

35. The Revised Position Statement is nonspecific and does not purport to be a

“statement of general applicability . . . that describes the procedure and practice

requirements of an agency.” Its apparent purpose is merely to “define, interpret, or

explain” the meaning of the statutes and rules administered by the Physical Therapy

Board. As such, the Court concludes that the Revised Position Statement falls within

the exception for “nonbinding interpretive statements.” See also Okale v. N.C. Dep’t.

of Health & Human Servs., 153 N.C. App. 475, 478–79, 570 S.E.2d 741, 743 (2002)

(holding that the North Carolina Family and Children’s Medicaid Manual is a

“nonbinding statement from the agency which defines, interprets, and explains the

statutes and rules for Medicaid”).

36. Indeed, agencies in other states have followed similar informal rulemaking

procedures in deciding whether dry needling falls within the scope of physical

therapy. See Iowa Ass’n of Oriental Med. and Acupuncture v. Iowa Bd. of Physical

and Occupational Therapy, No. CVCV 051242, slip op. at 4–5 (Iowa Dist. Ct. Polk

Cnty. Oct. 8, 2016) (Ruling on Petition for Judicial Review affirming agency’s

declaratory order determining that dry needling fell within the scope of the statutory

definition of physical therapy); Ky. Op. Att’y Gen., No. OAG 13-010, 2013 Ky. AG

LEXIS 145 (Sept. 3, 2013) (Attorney General Opinion upholding agency’s declaratory

ruling that dry needling fell within the scope of the statutory definition of physical

therapy).

37. Accordingly, for the foregoing reasons, the Court rejects the Acupuncture

Board’s contention that the Physical Therapy Board issued the Revised Position

Statement in violation of rulemaking requirements.

B. The Physical Therapy Statute

38. The Acupuncture Board next challenges the Physical Therapy Board’s

conclusion that dry needling satisfies the statutory definition of physical therapy.

The Acupuncture Board challenges the Physical Therapy Board’s legal conclusions as

made in excess of the Physical Therapy Board’s statutory authority, (Pl.’s Br. Supp.

Pet. Judicial Review 11), so the Court reviews this argument de novo. See N.C. Gen.

Stat. § 150B-51(b)(2). The Acupuncture Board does not argue that the Physical

Therapy Board’s factual findings were not supported by substantial competent

evidence. The Physical Therapy Board’s factual findings are therefore not at issue

and are binding on this Court in its de novo review. Carroll, 358 N.C. at 663, 599

S.E.2d at 897.

39. As noted above, the Court’s de novo review of the Declaratory Ruling’s legal

conclusions means that the Court “considers the matter anew and freely substitutes

its own judgment for the agency’s.” Carroll, 358 N.C. at 660, 599 S.E.2d at 895. The

Physical Therapy Board nevertheless contends that the Court should defer to the

Board’s interpretation of the Physical Therapy Practice Act, N.C. Gen. Stat. §§ 90-

270.24 et al., (Def.’s Resp. Opp. Pet. 17), relying on the rule that courts “give great

weight to an agency’s interpretation of a statute it is charged with administering.”

High Rock Lake Partners, LLC v. N.C. Dep’t of Transp., 366 N.C. 315, 319, 735 S.E.2d

300, 303 (2012).

40. The Court of Appeals has addressed this precise issue where, as here, a court

is employing de novo review of a statute that “instructs a state agency to promulgate

regulations to administer it”3 and determined that, in such situations, “an additional

layer of review is required.” Total Renal Care of N.C., LLC v. N.C. Dep’t of Health

and Human Servs., 776 S.E.2d 322, 326 (N.C. App. 2015). In particular, the Court of

Appeals has directed that:

If the statutory language is unambiguous and the statutory intent clear,

this Court must give effect to that unambiguous language regardless of

the agency’s interpretation. AH N.C. Owner LLC v. N.C. Dep’t of Health

& Human Servs., __ N.C. App. __, 771 S.E.2d 537, 549 (2015). But if the

statute is silent or ambiguous on an issue, this Court must defer to the

agency’s interpretation “as long as the agency’s interpretation is

reasonable and based on a permissible construction of the statute.” Id.

at __, 771 S.E.2d at 543.

Id. This approach is supported by longstanding precedent from the Supreme Court

of North Carolina. In re Appeal of N.C. Sav. & Loan League, 302 N.C. 458, 465–66,

276 S.E.2d 404, 410 (1981) (holding that, even when employing de novo review, courts

should accord some deference to the interpretation of a statute by an agency created

to administer that statute).

41. Under North Carolina law, physical therapy means:

the evaluation or treatment of any person by the use of physical,

chemical, or other properties of heat, light, water, electricity, sound,

3 The Physical Therapy Practice Act empowers the Physical Therapy Board to adopt

regulations to administer the Act, N.C. Gen. Stat. § 90-270.26(8) and instructs that the

Physical Therapy Board’s powers “are to be liberally construed,” N.C. Gen. Stat. § 90-270.26.

massage, or therapeutic exercise, or other rehabilitative procedures,

with or without assistive devices, for the purposes of preventing,

correcting, or alleviating a physical or mental disability. . . . Evaluation

and treatment of patients may involve physical measures, methods, or

procedures as are found commensurate with physical therapy education

and training and generally or specifically authorized by regulations of

the Board. Physical therapy education and training shall include study

of the skeletal manifestations of systemic disease. Physical therapy does

not include the application of roentgen rays or radioactive materials,

surgery, manipulation of the spine unless prescribed by a physician

licensed to practice medicine in North Carolina, or medical diagnosis of

disease.

N.C. Gen. Stat. § 90-270.24(4). The statutory definition of physical therapy is silent

regarding dry needling. Thus, the Court must defer to the Physical Therapy Board’s

interpretation of its own statute, so long as the Board’s interpretation is reasonable

and based on a permissible construction of the statute. Total Renal Care, 776 S.E.2d

at 326.

42. The Declaratory Ruling holds that dry needling falls within the statutory

definition of physical therapy because it is “a treatment that uses physical or

rehabilitative procedures, with assistive devices, for the purpose of correcting or

alleviating myofascial pain, a physical disability.” (Declaratory Ruling 20–21.) The

Acupuncture Board contends that this conclusion is fundamentally flawed and should

be reversed.

1. “Rehabilitative Procedures”

43. The Acupuncture Board argues that basic rules of statutory construction

require reading “other rehabilitative procedures” in section 90-270.24(4) to describe

only non-invasive acts because only non-invasive acts immediately precede that

phrase in the statute. Stated differently, the Acupuncture Board argues that the

Court should follow the rule that “the meaning of a doubtful word may be ascertained

by reference to the meaning of words with which it is associated,” Gardner v. City of

Reidsville, 269 N.C. 581, 591, 153 S.E.2d 139, 148 (1967) (citation omitted), and that,

under that rule, dry needling, which involves the insertion of solid filament needles

through the skin, necessarily falls outside the statutory definition of physical

therapy.

44. The Court disagrees, however, for several reasons. First, it appears from

the uncontested factual findings in the Declaratory Ruling that physical therapists

have long been permitted to insert needles into the body for the purpose of performing

electromyography studies, which assess electrical activity in muscles. (Declaratory

Ruling 22.) The Attorney General’s Advisory Letter also relied on this fact as

evidence that “insertion of needles by physical therapists does not appear to be

prohibited in all circumstances.” (R. at 267.) The Court concludes that this fact

demonstrates that the Physical Therapy Board has reasonably concluded that the

phrase “other rehabilitative procedures” can include the insertion of needles. AH

N.C. Owner LLC v. N.C. Dep’t of Health and Human Servs., 240 N.C. App. 92, 111,

771 S.E.2d 537, 548 (2015) (holding that an agency’s consistent interpretation of a

statute is particularly worthy of deference).

45. The Court further concludes that under basic rules of statutory construction

alone, the phrase “other rehabilitative procedures” can include dry needling. In

particular, the structure of the statute does not suggest that “other rehabilitative

procedures” categorically exclude all invasive procedures. While the Acupuncture

Board is correct that the phrases preceding “other rehabilitative procedures” do not

expressly embrace invasive procedures, later language in the statutory definition

explicitly exempts “surgery”—undeniably an invasive procedure—from the scope of

physical therapy. Reading “other rehabilitative procedures” to exclude any and all

invasive procedures from the scope of physical therapy would thus render the express

exclusion for “surgery” meaningless, and the law presumes that statutes do not

contain redundancies. Domestic Elec. Serv., Inc. v. City of Rocky Mt., 285 N.C. 135,

143, 203 S.E.2d 838, 843 (1974) (“The presumption is that no part of a statute is mere

surplusage, but each provision adds something which would not otherwise be

included in its terms.”).

46. For each of these reasons, therefore, the Court concludes that the phrase

“other rehabilitative procedures” under the Physical Therapy Practice Act can include

dry needling.

2. “Assistive Devices”

47. The Acupuncture Board additionally challenges the Declaratory Ruling’s

conclusion that the solid filament needles used in dry needling are “assistive devices”

as that term is used in the statute. The Declaratory Ruling determined that the

needles used for dry needling fall comfortably within the range of assistive devices

used by physical therapists, which include “ultrasound equipment, crutches,

wheelchairs, and the tools involved in instrument-assisted soft-tissue mobilization.”

(Declaratory Ruling 22.) The Declaratory Ruling also relied upon similar conclusions

from other states’ attorneys general around the United States. Ky. Op. Att’y Gen.,

2013 Ky. AG LEXIS 145, at *14 (finding that the term “assistive devices” in

Kentucky’s physical therapy statute could include needles); 95 Op. Att’y Gen. Md.

138, 2010 Md. AG LEXIS 9, at *17–18 (Aug. 17, 2010) (concluding that Maryland’s

Physical Therapy Board could interpret the term “mechanical device” to include

needles for dry needling); Miss. Op. Att’y Gen., No. 2012-00428, 2012 Miss. AG LEXIS

253, at *9 (Sept. 10, 2012) (adopting the Maryland Attorney General Opinion’s

conclusions regarding the term “mechanical devices”).

48. The Acupuncture Board argues that categorizing needles as “assistive

devices” improperly expands the meaning of that term beyond wheelchairs, crutches,

and other “typical” assistive devices used by physical therapists. (Pl.’s Br. Supp. Pet.

Judicial Review 14.) The Physical Therapy Practice Act does not define the term

“assistive devices,” and, as previously discussed, physical therapists in North

Carolina already have the ability to use needles to perform electromyography studies,

(Declaratory Ruling 22; R. at 267). The Court thus concludes that the Declaratory

Ruling does not unduly enlarge the scope of the phrase “assistive devices” as used in

the Physical Therapy Practice Act.

49. The Acupuncture Board further argues that the needles used in dry needling

cannot be considered an “assistive device” because they are a medical device

regulated by the FDA and available only for use by authorized practitioners of

acupuncture.4 (Pl.’s Br. Supp. Pet. Judicial Review 14; Petition Judicial Review

4 The Physical Therapy Board has not challenged, in briefing or at the hearing, the

Acupuncture Board’s contention that dry needling and acupuncture employ the same solid

filament needles.

¶¶ 16–20.) In particular, the Acupuncture Board contends that the needles used in

dry needling “must carry a specific FDA warning as required under 21 CFR §

880.109(b)(1), stating ‘Caution: Federal law restricts this device to sale by or on the

order of a [qualified practitioner of acupuncture licensed by the law of the State in

which he practices to use or order the use of the device.]’” (Petition ¶ 19) (brackets

and emphasis in original).

50. The Petition takes glaring liberties with the cited regulation, however. The

full text of the regulation requires medical devices, such as the solid filament needles

at issue here, to include a label bearing:

The symbol statement “RX only” or “℞ only” or the statement “Caution:

Federal law restricts this device to sale by or on the order of a ____”, the

blank to be filled with the word “physician”, “dentist”, “veterinarian”, or

with the descriptive designation of any other practitioner licensed by the

law of the State in which the practitioner practices to use or order the

use of the device[.]

21 C.F.R. § 801.109(b)(1). As such, the cited regulation does not support the

Acupuncture Board’s argument that the needles used in dry needling are “medical

devices” only for use by acupuncturists. Indeed, under a plain reading of the

regulation, acupuncture needles could be sold legally with a label stating “RX only”

by any practitioner licensed to use or order the use of such needles. The Acupuncture

Board’s position assumes that acupuncturists are the only practitioners so licensed,

but the cited regulation does not go so far.

51. Finally, the Acupuncture Board challenged the identification of solid

filament needles as “assistive devices” because of the Declaratory Ruling’s conclusion

that dry needling is a “rehabilitative procedure with an assistive device.” However,

as a matter of statutory construction, the Court concludes that whether or not solid

filament needles are “assistive devices” is not determinative of whether dry needling

falls within the scope of physical therapy.

52. The statute defines the scope of physical therapy as including “other

rehabilitative procedures, with or without assistive devices, . . . ” N.C. Gen. Stat. § 90-

270.24(4) (emphasis added). The phrase “with or without” regularly appears in North

Carolina’s General Statutes. See, e.g., N.C. Gen. Stat. § 168A-3 (defining a “qualified

person with a disability” as “a person with a disability who can satisfactorily perform

the duties of the job in question, with or without reasonable accommodation”); N.C.

Gen. Stat. § 55A-15-01(b)(3) (describing permitted practices for foreign corporations,

including “[m]aintaining bank accounts or borrowing money in this State, with or

without security”); N.C. Gen. Stat. § 55-8-08(a) (stating that “shareholders may

remove one or more directors with or without cause unless the articles of

incorporation provide that directors may be removed only for cause”); N.C. Gen. Stat.

§ 15A-501 (describing the duties of a law-enforcement officer “[u]pon the arrest of a

person, with or without a warrant”). These repeated and varying occurrences show

that the phrase “with or without” as used here clearly and unambiguously identifies

two equally available alternatives. Burgess, 326 N.C. at 209, 388 S.E.2d at 136

(holding that where statutory language is clear and unambiguous, the Court must

apply the plain meaning of the statute).

53. Indeed, while the Declaratory Ruling concluded that solid filament needles

are an “assistive device,” the phrase “with or without” indicates that a procedure does

not need to employ an assistive device to fall within the scope of the statute, so long

as a procedure qualifies as an “other rehabilitative procedure.” Here, the Court has

already concluded that dry needling can fall within the statutory definition of

physical therapy as an “other rehabilitative procedure,” and so whether or not solid

filament needles are an “assistive device” is not determinative of the issue.

54. Therefore, based on the foregoing, the Court finds the Acupuncture Board’s

arguments without merit and concludes that (i) the Physical Therapy Board has

reasonably interpreted the term “assistive devices” in the Physical Therapy Practice

Act to include solid filament needles used for dry needling, and (ii) the scope of

physical therapy can include dry needling regardless of whether solid filament

needles qualify as assistive devices under the statute.

3. “Commensurate with Physical Therapy Education and Training”

55. The Declaratory Ruling contained a conclusion that health care professions

have dynamic scopes of practice. (Declaratory Ruling 28.) The statutory definition

of physical therapy contemplates that the scope of practice will evolve to include

“physical measures, methods, or procedures as are found commensurate with

physical therapy education and training and generally or specifically authorized by

regulations of the Board.” N.C. Gen. Stat. § 90-270.24(4). Pursuant to this statutory

authority, the Physical Therapy Board has adopted a regulation stating that

“[p]hysical therapy is presumed to include any acts, tests, procedures, modalities,

treatments, or interventions that are routinely taught in educational programs or in

continuing education programs for physical therapists and are routinely performed

in practice settings.” 21 N.C.A.C. 48C .0101(a). Therefore, the Physical Therapy

Practice Act and the regulations enforcing the act embrace the view that the scope of

physical therapy can evolve, and the Physical Therapy Board relied on this aspect of

the statutory definition of physical therapy to conclude that dry needling fell within

its scope of practice.

56. The Acupuncture Board did not challenge this aspect of the Declaratory

Ruling. The Court nevertheless considers it worthwhile to evaluate the Physical

Therapy Board’s factual findings and conclusions of law construing this part of its

statute since the Court is determining whether the Physical Therapy Board’s

interpretation of its own statute merits deference.

57. The Physical Therapy Board set forth specific findings of fact in the

Declaratory Ruling supporting its conclusion that dry needling is regularly taught

and practiced by physical therapists. The Physical Therapy Board concluded that

dry needling is regularly taught and practiced because: (i) at least eighty-six percent

of the knowledge requirements needed to be competent in dry needling are taught in

entry-level physical therapy education; (ii) post-graduate and continuing education

courses are available and provide specific training in dry needling; (iii) as recently as

2014, physical therapists in North Carolina were performing an estimated 500,000

dry needling treatments per year; and (iv) experience in dry needling will accompany

physical therapists who relocate to North Carolina from one of the thirty-two states

that allows the performance of dry needling by physical therapists. (Declaratory

Ruling 25–27.) The Court concludes that these binding facts support a conclusion

that dry needling may be a procedure as is “found commensurate with physical

therapy education and training” as set forth in section 90-270.24(4).

58. For each of these reasons, therefore, the Court concludes that the Physical

Therapy Board has reasonably construed its statute to conclude that dry needling

falls within the statutory definition of physical therapy. The Court thus decides that

the conclusions in the Declaratory Ruling should not be set aside.

C. Unargued issues

59. Throughout this case, the Acupuncture Board’s briefs and oral arguments

have coalesced around two arguments—that the Declaratory Ruling is the result of

unlawful procedure and that the Physical Therapy Board erred in its interpretation

of the Physical Therapy Practice Act—which the Court has addressed above. The

Petition lists several other exceptions to the Declaratory Ruling. These include

exceptions to the Physical Therapy Board’s policy-based conclusions that North

Carolina public policy favors patient choice in health care, and an exception to the

Physical Therapy Board’s conclusion that the Acupuncture Board’s desired ruling

would violate the anti-monopoly provision of the North Carolina Constitution.

60. These exceptions received little to no attention in the Acupuncture’s Board’s

briefs or oral arguments. For instance, across its two briefs, the Acupuncture Board

devoted but a single sentence in the last page of its reply brief arguing that a ruling

in its favor would not violate the anti-monopoly provision of the North Carolina

Constitution. (Pl.’s Reply Br. Supp. Pet. Judicial Review 12.) The Court concludes

that these issues have not been sufficiently presented for review and therefore does

not consider these unargued exceptions. See Foster v. Crandell, 181 N.C. App. 152,

173, 638 S.E.2d 526, 540 (2007) (“It is not the responsibility of this Court to construct

arguments for a party.”); Larsen v. Black Diamond French Truffles, Inc., 241 N.C.

App. 74, 79, 772 S.E.2d 93, 96 (2015) (holding, under the Rules of Appellate

Procedure, that a party has abandoned issues not raised in its principal brief).

IV.

CONCLUSION

61. For the reasons stated above, the Court AFFIRMS the Physical Therapy

Board’s Declaratory Ruling.5

SO ORDERED, this the 2nd day of August, 2017.

/s/ Louis A. Bledsoe, III

Louis A. Bledsoe, III

Special Superior Court Judge

for Complex Business Cases

5

Despite its ruling, the Court is sensitive to the Acupuncture Board’s view that the legal

status of dry needling by physical therapists is currently in an unusual status—i.e., that the

Physical Therapy Board currently believes that it has the authority to determine that

physical therapists may practice dry needling, although the Board lacks the statutory

authority to establish training standards for physical therapists to perform dry needling

based on the Rules Review Commission’s objection. (Pl.’s Pet. Judicial Review 9.) It appears

to the Court that this seeming inconsistency could potentially be resolved through the

Physical Therapy Board’s further pursuit of formal rulemaking or, alternatively, through

legislative action. Indeed, over the last decade, a handful of state legislatures have amended

their statutes to address explicitly whether dry needling is within the scope of physical

therapy. See Ariz. Rev. Stat. § 32-2001(4) (defining dry needling as within the scope of

physical therapy); Del. Code Ann. tit. 24, § 2602(10)(a)(2) (same); Ga. Code Ann. § 43-33-

3(7)(D) (same); Kan. Stat. Ann. § 65-2901(a) (same); Tenn. Code Ann. § 63-13-103(16)(B)

(same); Utah Code Ann. § 58-24b-505 (same).