Goodman, Jason C. v. Dept Prof'l Regulati ( 2005 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 05-1188
JASON GOODMAN, D.C.,
Plaintiff-Appellant,
v.
ILLINOIS DEPARTMENT OF FINANCIAL AND
PROFESSIONAL REGULATION, DAVID E. BLUTHARDT,
in his official capacity as the Acting Director of the
Department’s Division of Professional Regulation,
AND ALLAN G. BENNETT, M.D., TARIQ H. BUTT, M.D.,
GEORGIA D. LUBBEN, M.D., SANDRA F. OLSON, M.D.,
EDWARD P. ROSE, M.D., DOUGLAS P. WEBSTER, D.O.,
AND LINDA L. ZANGE, D.C., in their official
capacity as the duly appointed members of the
Medical Disciplinary Board of the Division of
Professional Regulation,
Defendants-Appellees.
____________
Appeal from the United States District Court
for the Central District of Illinois.
No. 04 C 3232—Jeanne E. Scott, Judge.
____________
ARGUED OCTOBER 26, 2005—DECIDED NOVEMBER 29, 2005
____________
Before FLAUM, Chief Judge, and EVANS, and WILLIAMS,
Circuit Judges.
FLAUM, Chief Judge. Jason Goodman is a chiropractor
who currently practices in St. Louis, Missouri. He is
2 No. 05-1188
licensed in Illinois, and states that he plans to open a clinic
in Springfield. He wishes to telemarket his services to
people in the Springfield area who have recently been in car
accidents, but is prevented from doing so by the Illinois
Medical Practice Act (“the Act”). The Act prohibits medical
professionals from soliciting professional patronage under
penalty of professional discipline. Goodman has filed a First
Amendment challenge to the law and has requested a
preliminary injunction against the Illinois Department of
Financial and Professional Regulation (“the Department”)
that would prohibit any professional discipline against him
for telemarketing.
The district court held an evidentiary hearing on the
preliminary injunction issue. At that hearing, the court
ruled that affidavits from another chiropractor and four
of Goodman’s patients in Missouri should be excluded
as hearsay. Although the Department presented no evi-
dence at the hearing, it argued that Goodman was unlikely
to prevail on the merits because, among other reasons,
the statute had already survived a constitutional chal-
lenge in the Illinois Supreme Court. At the close of evi-
dence, the district court denied the injunction request,
ruling that Goodman did not meet his burden of showing
that he was likely to prevail on the merits of his constitu-
tional claim. Goodman has filed an interlocutory appeal,
claiming that the district court erred by not granting the
injunction and by excluding the affidavits from the eviden-
tiary hearing. For the following reasons, we affirm the
district court’s denial of the preliminary injunction.
I. Background
Dr. Goodman is a chiropractor who is licensed in Illi-
nois and currently practices in St. Louis, Missouri. He
wishes to open an office in Springfield, Illinois. As a method
of building his practice, he would like to hire telemarketers
No. 05-1188 3
to call recent car accident victims and offer free consulta-
tions at his clinic. He intends to focus his calls on those
personal injury patients who have suffered minor injuries
or have sustained soft tissue injuries in a low-impact rear-
end collision. The telemarketers would find potential
customers’ names from public, legal sources, such as
newspapers and court records. Goodman contends that he
would not call any phone number that is listed on the
National Do Not Call Registry. Goodman has been
telemarketing sixty to seventy prospective patients per
week for approximately one year in St. Louis.
Under Illinois law, Goodman could be professionally
disciplined if he makes such telephone solicitations to
prospective patients in Springfield. Under the Act, the
Department could “revoke, suspend, place on probation-
ary status, or take any other disciplinary action as the
Department may deem proper” against any professional
who solicits patronage through any agent. 225 ILL. COMP.
STAT. §§ 60/26, 60/22(a)(24). Goodman claims that this
regulation violates his First Amendment rights by wrong-
fully suppressing protected commercial speech.
Goodman filed a complaint in district court, seeking
declaratory and injunctive relief. He also filed a motion
for preliminary injunction, requesting that the Depart-
ment be enjoined from enforcing the Act pending resolution
of his suit.
In support of his preliminary injunction, Goodman
testified to explain his proposed telemarketing plan. He
testified that he intended to hire salaried employees to
call individuals who were involved in car accidents. The
telemarketers would identify who they were and why
they were calling. They would offer the potential customer a
free screening with Dr. Goodman. Goodman acknowledged
that the telemarketers’ goal would be to schedule the
appointment, but insisted that the telemarketers would
4 No. 05-1188
follow a script which is truthful, non-deceptive, and con-
forms to Federal Trade Commission requirements. He
further claimed that all customers would be told that there
was no obligation to schedule an appointment. If a customer
was not interested in an appointment, the telemarketers
would be instructed to immediately end the call and not to
call that number again. If a customer agreed to an appoint-
ment, Dr. Goodman would make a follow-up call within an
hour of the appointment being set. He claimed that if the
potential customer seemed to be confused or as if “their
head [was] not right,” he would cancel the appointment. If,
after his initial consultation, he believed the patient could
benefit from chiropractic treatment, he would arrange for
another appointment with the patient. The next appoint-
ment would require payment.
Goodman claimed that he would take special care to
ensure that his telemarketers did not deviate from their
prepared script and did not impart false or misleading
information. He would personally train and monitor
employees and would have the telemarketers tape their
calls. Goodman also claimed that he would establish
strict rules, such as requiring telemarketers to identify
themselves and the clinic within the first minute of the call.
Telemarketers would also be instructed not to dis-
cuss specific health problems with potential patients, except
to suggest an appointment.
Goodman further testified that patients can benefit
from immediate treatment of accident injuries. Immediate
treatment, he claimed, can reduce “over-healing” and can
release endorphins, which act as natural painkillers and
alleviate suffering. Further, tissue that is not treated
immediately can repair improperly with less motion and
strength, which will lead over time to degeneration of joints
and discs. Prompt treatment prevents such consequences.
Goodman also offered his own affidavit, a written state-
ment by another chiropractor, and four identical written
No. 05-1188 5
statements from satisfied customers in Missouri. Goodman
did not offer any proposed scripts for his telemarketers, nor
tapes of sample calls from Missouri.
The Department objected to the affidavits from the
patients and the other chiropractor, claiming that they were
hearsay. The Department also claimed that the patient
statements were cumulative of Goodman’s testimony that
he received no complaints about his calls in Missouri. The
trial court agreed that the affidavits were hearsay, and
excluded them.
The Department presented no evidence of its own, but
argued in closing that Illinois’s ban on professional solicita-
tion materially and directly furthered significant govern-
ment interests in protecting the public against overreaching
and protecting the medical profession’s integrity and
professionalism. The Department also drew the court’s
attention to Desnick v. Dep’t of Prof’l Reg., 665 N.E.2d 1346
(Ill. 1996). In that case, the Illinois Supreme Court upheld
the Act’s telephone solicitation ban against a First Amend-
ment attack. The Department also argued that the statute
was not a complete restriction on the relevant speech,
because direct mailings, television, and newspaper advertis-
ing were allowed. Finally, the Department argued that
policing chiropractor telemarketing throughout the state of
Illinois would be impractical, as there are over fifty chiro-
practors in Springfield alone, and many telemarketers
make over twenty calls per day.
The district court denied Goodman’s motion for prelimi-
nary injunction. Although the court ruled that he had
standing to pursue the lawsuit because of his planned office
in Springfield, the court did not believe that Goodman had
carried his burden of establishing that his proposed speech
was protected. Moreover, the judge was not convinced that
susceptible individuals would not be harmed by the calls.
The court noted that it did not have the script that Good-
6 No. 05-1188
man wished to use, nor details of the “training” that the
telemarketers would receive. The court was also concerned
that Goodman had presented no evidence regarding how he
planned to determine which accident victims should not be
called because they were particularly vulnerable, such as
those who were on medication. Given that Goodman had not
shown that his proposed speech was not misleading or
unlawful, the court ruled that he had not shown a likeli-
hood of success on the merits. The court added that al-
though the preliminary injunction was not being granted,
discovery would proceed and that Goodman still could
eventually win injunctive relief.
Goodman now appeals both the denial of preliminary
injunction and the exclusion of the affidavits from the
evidentiary hearing.
II. Discussion
As the Supreme Court has observed, “[A] preliminary
injunction is an extraordinary and drastic remedy, one that
should not be granted unless the movant, by a clear show-
ing, carries the burden of persuasion. Mazurek v.
Armstrong, 520 U.S. 968, 972 (1997) (quoting 11A CHARLES
ALAN WRIGHT, ARTHUR R. MILLER, & MARY KAY KANE,
FEDERAL PRACTICE AND PROCEDURE § 2948, pp. 129-30 (2d
ed. 1995)). To justify this relief, movants must show that (1)
they have a reasonable likelihood of success on the merits;
(2) no adequate remedy at law exists; (3) they will suffer
irreparable harm which, absent injunctive relief, outweighs
the irreparable harm the respondent will suffer if the
injunction is granted; and (4) the injunction will not harm
the public interest. Joelner v. Vill. of Washington Park, 378
F.3d 613, 620 (7th Cir. 2004) (citing Erickson v. Trinity
Theatre, Inc., 13 F.3d 1601, 1607 (7th Cir. 1994)). A district
court’s denial of a preliminary injunction is reviewed for
abuse of discretion. Ashcroft v. Am. Civil Liberties Union,
No. 05-1188 7
542 U.S. 656, 664 (2004) (citing Walters v. Nat’l Ass’n of
Radiation Survivors, 473 U.S. 305, 336 (1985) (O’Connor, J.,
concurring)); Re/Max N. Cent., Inc. v. Cook, 272 F.3d 424,
429 (7th Cir. 2001).
As a preliminary matter, Goodman claims that the
district court improperly placed the burden on him to prove
that his speech was protected. Instead, he argues that the
Department bears the burden of proving that its regulation
is justified, i.e., that it effectively prevents real harm. He
cites three cases in support of this proposition, Edenfield v.
Fane, 507 U.S. 761, 770 (1993); Bailey v. Morales, 190 F.3d
320, 323 (5th Cir. 1999); and Pellegrino v. Satz, No. 98-
7356-CIV-FERGUSON, 1998 WL 1668786 (S.D. Fla. Dec.
22, 1998). The first two, Edenfield and Bailey, did not
concern a preliminary injunction, but instead were substan-
tive rulings on First Amendment claims. Pellegrino, though
addressing preliminary injunctions, is an unpublished
opinion. Moreover, its logic conflicts with Supreme Court
case law addressing the standard for granting preliminary
injunctions in First Amendment cases. Ashcroft v. American
Civil Liberties Union stated that plaintiffs must demon-
strate that they are likely to prevail on the merits if they
are to receive a preliminary injunction. 542 U.S. at 666
(citing Doran v. Salem Inn, Inc., 422 U.S. 922, 931 (1975));
see also Mazurek, 520 U.S. at 973.
This court has also followed this standard. See, e.g.,
Curtis v. Thompson, 840 F.2d 1291 (7th Cir. 1988) (affirm-
ing denial of preliminary injunction against enforcement of
ban on real estate sales solicitation because plaintiff
demonstrated no chance of success on the merits of his First
Amendment challenge); Re/Max, 272 F.3d at 429; Chi. Dist.
Council of Carpenters Pension Fund v. K & I Const., Inc.,
270 F.3d 1060, 1064 (7th Cir. 2001); Boucher v. Sch. Bd. of
Sch. Dist. of Greenfield, 134 F.3d 821, 823-24 (7th Cir.
1998). Therefore, for the purposes of a preliminary injunc-
8 No. 05-1188
tion, Goodman has the burden of showing that he is likely
to succeed on his First Amendment claim.
Goodman has not met that burden in this case. In order to
prevail in a First Amendment case, the plaintiff must first
show that protected speech is being restricted. The district
court found that Goodman had not shown that his speech
was protected commercial speech because he had not
submitted a copy of the script to the court, nor revealed any
of the substance of the telemarketers’ anticipated comments
to potential customers. He did not provide any evidence
regarding how he intended to ensure that particularly
vulnerable individuals would not receive calls. The only
evidence he offered to prove that the telemarketer calls
would not be misleading was his own testimony promising
that they would be truthful and non-coercive.
Goodman has argued that First Amendment plaintiffs
should not be required to provide an exact script of their
proposed speech in order to obtain a preliminary injunction.
While it may be true that a script is not necessary in each
instance, Goodman has failed to show why, in this instance,
rejecting the limited evidence he offered was an abuse of
discretion by the trial court.
The Supreme Court has recognized the danger of mislead-
ing statements when telemarketing professional services,
noting that because professionals render services rather
than sell standardized products, there is a “consequent
enhanced possibility for confusion and deception if they
were to undertake certain kinds of advertising.” Va. Bd. of
Pharmacy v. Va. Citizens Consumer Council, Inc., 425 U.S.
748, 773 n.25 (1976); see also Shapero v. Ky. Bar Ass’n, 486
U.S. 466, 475-76 (1988) (distinguishing direct mail from
personal solicitation, stating that the latter was “rife with
possibilities of overreaching, invasion of privacy, the
exercise of undue influence, and outright fraud” and
presented “unique difficulties” for regulation because it was
No. 05-1188 9
not open to public scrutiny (internal citations and quotation
marks omitted)). It was not an abuse of discretion for the
district court to discount Goodman’s self-serving statement
on such an important issue; courts need not assume that all
such speech is harmless.
Following the Supreme Court’s opinion in Central Hud-
son, the First Amendment analysis ends here, for commer-
cial speech is not automatically protected speech. “[T]here
can be no constitutional objection to the suppression of
commercial messages that do not accurately inform the
public about lawful activity.” Cent. Hudson Gas & Elec.
Corp. v. Pub. Serv. Comm’n of New York, 447 U.S. 557, 563
(1980). Therefore, analysis of a commercial speech claim
ends once it is determined that the speech is not protected.
Thompson v. W. States Med. Ctr., 535 U.S. 357, 367 (2002)
(“Under [the Central Hudson] test, we ask as a threshold
matter whether the commercial speech concerns unlawful
activity or is misleading. If so, then the speech is not
protected by the First Amendment.”). Since Goodman did
not bear his burden of showing that his telemarketing
speech was protected, the district court acted within its
discretion when denying his motion for a preliminary
injunction.
One issue remains unresolved: whether the district
court abused its discretion by excluding several affidavits
from the evidentiary hearing. The exclusion of evidence is
reviewed for abuse of discretion. The district court’s deci-
sion is to be overturned only if no reasonable person would
agree with the trial court’s ruling. Snipes v. Ill. Dep’t of
Corr., 291 F.3d 460, 463 (7th Cir. 2002). This court has
held, “[N]o error in either the admission or exclusion of
evidence is ground for . . . vacating, modifying, or otherwise
disturbing a judgment or order, unless refusal to take such
action appears to the court inconsistent with substantial
justice.” Speedy v. Rexnord Corp., 243 F.3d 397, 404 (7th
Cir. 2001) (quotation marks omitted) (citing FED. R. CIV. P.
10 No. 05-1188
61; Palmquist v. Selvik, 111 F.3d 1332, 1339 (7th Cir.
1997)). Even an erroneous evidentiary ruling can be deemed
harmless if the record indicates that the same judgment
would have been rendered regardless of the error. Id.
Goodman claims that during the evidentiary hearing, the
court erroneously excluded the affidavits of Dr. Richard Lee
Christie, as well as the affidavits of four satisfied customers
from his Missouri practice.
Dr. Christie’s affidavit stated that: (1) patients have more
control over telemarketing than direct mail or mass media
advertising because they can simply hang up the phone if
they are not interested; (2) the decreased cost of
telemarketing can be passed on to consumers of chiropractic
treatment, thus benefitting the public; and (3) tele-
marketing does not present any serious threat of exposing
a prospective patient to undue influence, because the
patient can sign up for the Do Not Call Registry, hang up,
not accept the appointment, or not attend the appointment
after it’s made.
The patients’ affidavits, all identical, stated that: (1) they
had been telephonically solicited to visit Dr. Goodman’s
practice in St. Louis; (2) during the telephone call, the
person representing Dr. Goodman’s clinic was very kind and
put no pressure on them to visit the clinic; (3) they did not
feel that they were under any pressure to accept the offer to
visit the clinic; (4) they were grateful to receive the phone
call and be given the opportunity to visit Goodman’s clinic;
and (5) the telephone call was beneficial to them because
they got answers to questions about their condition that
they could not have obtained elsewhere.
The district court excluded these affidavits as hearsay.
Goodman argues that hearsay affidavits are fully admissi-
ble at preliminary injunction hearings, citing Ty, Inc. v.
GMA Accessories, Inc., 132 F.3d 1167, 1171 (7th Cir. 1997).
In that case, the court ruled that live testimony would have
No. 05-1188 11
been cumulative to an affidavit that was already in evi-
dence, and therefore an evidentiary hearing was not
necessary. However, the court did note, “Affidavits are
ordinarily inadmissible at trials but they are fully admissi-
ble in summary proceedings, including preliminary-injunc-
tion proceedings.” Id. at 1171. Later, the court engages in
a hypothetical that involves a district court judge who
“labor[s] under the misapprehension that affidavits are
inadmissible in preliminary-injunction proceedings.” Id.
Therefore, although the case is not directly on-point, it does
support Goodman’s contention.
Even assuming that the evidence should have been
admitted, however, we conclude that excluding it was
harmless error. The district court based its ruling on its
inability to review the proposed script and thus to
know whether the speech was protected. Goodman had
already testified that the script was not false or misleading,
so the district court apparently wanted concrete information
on the contents of the script. These affidavits would have
done nothing to remedy the court’s reluctance to issue a
preliminary injunction based on the information before him.
Accordingly, we need not reach the issue of whether the
district court abused its discretion by not admitting the
affidavits, because any error was harmless.
III. Conclusion
For the foregoing reasons, we AFFIRM the district
court’s decision to deny the preliminary injunction.
12 No. 05-1188
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—11-29-05