Ho v. Department of Commerce , 2020 UT App 37 ( 2020 )

2020 UT App 37THE UTAH COURT OF APPEALS
JESSICA HO,
Petitioner,
v.
DEPARTMENT OF COMMERCE, DIVISION OF
OCCUPATIONAL AND PROFESSIONAL LICENSING,
Respondent.
Opinion
No. 20190087-CA
Filed March 12, 2020
Original Proceeding in this Court
W. Andrew McCullough, Attorney for Petitioner
Sean D. Reyes, Stanford E. Purser, and Laurie L.
Noda, Attorneys for Respondent
JUDGE DAVID N. MORTENSEN authored this Opinion, in which
JUDGES GREGORY K. ORME and MICHELE M. CHRISTIANSEN
FORSTER concurred.
MORTENSEN, Judge:
¶1 Although Jessica Ho previously had a license to engage in
massage therapy, she had no such license the day an investigator
(Investigator) from the Division of Occupational and
Professional Licensing (DOPL) entered the establishment where
Ho worked. As found by DOPL, Ho confirmed that Investigator
wanted a massage, stated prices based on the differing massage
durations, indicated that she personally would be conducting
the massage, and commenced massaging Investigator’s arm. Ho
was cited for these acts. Ho challenged the citation, but she did
not prevail. She then sought agency review from the Department
of Commerce (Department), which upheld her citation and fine.
Ho now seeks judicial review, arguing that her constitutional
Ho v. Dep’t of Commerce
rights to freedom of speech and due process were violated. We
decline to disturb the Department’s order.
BACKGROUND 1
The Investigation and Citation
¶2 After receiving reports from the Salt Lake County Health
Department that individuals at a massage establishment were
likely providing massages without a license, Investigator went to
inspect the business. When he walked into the massage business,
Investigator was greeted by Ho. She asked Investigator, “Are
you here for a massage?” Investigator said, “Yes.” Ho then
directed him to another room and followed him there.
¶3 Once the two were inside the massage treatment room,
Ho closed the door, dimmed the lights, and said she would give
Investigator a thirty-minute massage for $50 or an hour-long
massage for $90. Investigator then asked Ho, “Are you going to
be giving me the massage?” Ho confirmed that she would be. As
they talked, Ho took Investigator’s right arm and started to rub
it up and down with her thumb and fingers on both hands. As
Ho continued to rub Investigator’s arm, Investigator inquired,
“Do you have a license?” Looking startled, Ho immediately
stopped rubbing Investigator’s arm, stepped back, and
exclaimed, “Who are you?” Investigator disclosed that he
worked for DOPL and asked to see Ho’s massage license. Ho
immediately responded, “I did not offer you a massage.”
¶4 Investigator then asked Ho for her driver license, which
she gave him. Investigator called other DOPL personnel at the
1. “We state the facts and all legitimate inferences drawn
therefrom in the light most favorable to the agency’s findings.”
ABCO Enters. v. Utah State Tax Comm’n, 2009 UT 36, ¶ 2 n.1, 211
P.3d 382 (cleaned up).
20190087-CA 2 2020 UT App 37Ho v. Dep’t of Commerce
DOPL office to determine whether Ho was a licensed massage
therapist. Ho did not have a current massage license; it had been
previously revoked.
¶5 Several weeks later, DOPL mailed Ho a citation for
“practicing or engaging in, representing oneself to be practicing
or engaging in or attempting to practice” massage therapy
without a license under Utah Code section 58-1-501(1)(a). 2 Ho
denied any wrongdoing and requested a hearing to challenge
the citation.
The Administrative Adjudication
¶6 A formal hearing was held before the Utah Board of
Massage Therapy (Board) and an administrative law judge
(ALJ). During opening statements, DOPL’s attorney explained
that the owner of the massage business acknowledged that he
was aware that Ho had been charged with prostitution, and that
her license had been revoked through a prior hearing due to that
charge. Ho objected. The Board was then excused from the
hearing room. Outside the presence of the Board, Ho explained
that the prostitution charge had been expunged, 3 and she
requested an outright dismissal of the citation. Counsel for
DOPL responded that she was unaware of the expungement,
and that the prostitution charge was relevant, as it was the
reason for the revocation of Ho’s license. The ALJ ruled that the
hearing would proceed, but that no further reference to
prostitution should occur. Ho stipulated that her license had
2. In all instances that we refer to the Utah Code, we are
referring to the 2016 version, which was in effect at the relevant
times.
3. We generally endeavor not to refer to an individual’s
expunged criminal record. But because Ho raises the expunged
charge as an issue and because it is at the heart of her due
process argument, we address it to the extent necessary.
20190087-CA 3 2020 UT App 37Ho v. Dep’t of Commerce
been revoked. The ALJ then invited the Board to re-enter the
hearing room and admonished the Board not to consider the
prostitution charge:
I’m asking you to completely disregard anything
about the subject of prostitution. There is no
evidence before you about that subject, none
whatsoever. . . . [The parties] have agreed that [Ho]
was once licensed as a massage therapist, and that
she is no longer licensed. . . . [E]very one of the
members of the [B]oard here was on the [B]oard
when that hearing took place. We’re not going to
rely upon the reasons why or whatever.
¶7 The parties proceeded to present their cases. Having
considered the evidence, the Board found in relevant part
that “[a]n offer and advertisement of massage therapy services
was made by” Ho, “who orally confirmed with [Investigator]
that she was the individual who was going to provide the
massage.” The Board also found that Ho “previously had a
license to provide massage therapy, but such license had been
revoked by action of the Board in a prior administrative
proceeding.” Based on its findings of fact, the Board concluded
that Ho committed an unlawful act in two ways: (1) she
provided, offered, or advertised to Investigator a paid service
using the term massage under Utah Code section 58-47b-
102(6)(l), and (2) she “practiced massage therapy by the
systematic manual manipulation of the soft tissue of the body (in
this case, the arm of [Investigator]), as provided” in section 58-
47b-102(6)(b)(vii). The Board finally concluded that Ho violated
section 58-1-501(1)(a)(i)–(ii), which prohibits engaging in those
actions without a license.
¶8 The Board ultimately recommended that the director of
DOPL assess Ho a fine of $1,500. Several days later, the director
reviewed and adopted the Board’s recommend findings and
conclusions in their entirety and imposed the fine.
20190087-CA 4 2020 UT App 37Ho v. Dep’t of Commerce
¶9 The next month, Ho requested an agency review of the
director’s order from the Department. In her request, Ho made
several legal arguments; however, she did not challenge any of
the Board’s factual findings. The Department adopted and
recited the factual findings verbatim.
¶10 The Department then addressed Ho’s legal arguments,
rejected them all, and upheld the fine. First, the Department
concluded that two of Ho’s procedural arguments were
unpreserved: (1) that the ALJ unlawfully delegated his assigned
functions to the Board, which should not have made conclusions
of fact and law, and (2) that the Board had a prejudicial conflict
of interest as “an institutionalized agent of [DOPL].” Then, the
Department rejected Ho’s argument that the reference to her
previous prostitution charge required dismissal, concluding that
Ho failed to show prejudice. Finally, the Department agreed
with the Board’s conclusions that Ho’s actions provided two
independent grounds proving that she engaged in unlawful
conduct: she “took . . . Investigator to a massage room, offered to
personally provide him a massage, and told him the rates for
different sessions,” and she “provided systematic manual
manipulation of soft tissue, here . . . Investigator’s arm.”
¶11 Ho seeks judicial review.
ISSUES AND STANDARDS OF REVIEW
¶12 There are two issues for us to address. First, we review
whether Utah Code section 58-47b-102(6)(l) facially violates Ho’s
right to freedom of speech under the First Amendment to the
United States Constitution. 4 “The interpretation and
4. Ho challenges the Department’s conclusion that her actions
met the definition of engaging in the practice of massage therapy
for a fee under Utah Code section 58-47b-102(6)(b)(vii)—“the
systematic manual or mechanical manipulation of the soft tissue
(continued…)
20190087-CA 5 2020 UT App 37Ho v. Dep’t of Commerce
constitutionality of a statute are questions of law that we review
for correctness.” Waite v. Utah Labor Comm’n, 2017 UT 86, ¶ 5, 416
P.3d 635.
¶13 Second, we address whether the Board violated Ho’s right
to due process—specifically, a fair hearing. As we explain, Ho
failed to preserve two of her arguments on this issue. However,
because she preserved her final argument—that the reference to
her previous prostitution charge unfairly prejudiced the Board
against her—we review it. “Constitutional issues, including
questions regarding due process, are questions of law that we
review for correctness.” Salt Lake City Corp. v. Jordan River
Restoration Network, 2012 UT 84, ¶ 47, 299 P.3d 990 (cleaned up).
“The ultimate question when faced with an allegation of a biased
decision maker is whether the appearance of unfairness is so
plain that we are left with the abiding impression that a
reasonable person would find the hearing unfair.” Nelson v. City
of Orem, 2013 UT 53, ¶ 36, 309 P.3d 237 (cleaned up).
ANALYSIS
I. Freedom of Speech
¶14 Ho does not challenge the Department’s conclusion that
her actions met the definition of unlawfully practicing massage
by “providing, offering, or advertising a paid service using the
term massage” without a license under Utah Code section 58-
47b-102(6)(l). Her challenge instead rests on her contention that
(…continued)
of the body for” one of the included purposes. However, we
need not and do not address her contention regarding this
statutory provision because we conclude that section 58-47b-
102(6)(l)—“providing, offering, or advertising a paid service
using the term massage”—is constitutional and provides an
independent ground to support Ho’s fine.
20190087-CA 6 2020 UT App 37Ho v. Dep’t of Commerce
section 58-47b-102(6)(l) facially violates her right to freedom of
speech under the First Amendment to the United States
Constitution. “When addressing a challenge to the
constitutionality of a statute, we presume the statute to be
constitutional, resolving any reasonable doubts in favor of
constitutionality.” South Salt Lake City v. Maese, 2019 UT 58, ¶ 8,
450 P.3d 1092 (cleaned up); see also Vega v. Jordan Valley Med.
Center, LP, 2019 UT 35, ¶ 12, 449 P.3d 31 (“We presume that
legislative enactments are constitutional and where possible will
construe them as complying with our state and federal
constitutions.”). “Moreover, in a facial challenge to a statute, . . .
we will only overturn the will of the legislature when the statute
is so constitutionally flawed that no set of circumstances exists
under which the statute would be valid.” Vega, 2019 UT 35, ¶ 12
(cleaned up). Because we conclude that section 58-47b-102(6)(l) is
constitutional as applied to Ho, her facial challenge fails. Id.;
State v. Lafferty, 2001 UT 19, ¶ 78, 20 P.3d 342 (explaining that the
statute was valid as applied to the defendant, and therefore “his
facial challenge must fail a fortiori”).
¶15 Not all speech is treated equally in the eyes of the law.
Some speech, such as that regarding “‘politics, nationalism,
religion, or other matters of opinion,’” is often held in high
repute and receives significant protection. Janus v. American
Fed’n of State, County, & Mun. Emps., Council 31, 138 S. Ct. 2448,
2463 (2018) (quoting West Va. Board of Educ. v. Barnette, 319 U.S.
624, 642 (1943)). Some forms of speech, such as commercial
speech, receive an intermediate level of protection. Central
Hudson Gas & Elec. Corp. v. Public Service Comm’n of N.Y., 447 U.S.
557, 566 (1980). Other categories of speech receive minimal
protection. See, e.g., Hazelwood School Dist. v. Kuhlmeier, 484 U.S.
260, 273 (1988) (applying the rational basis test to educators’
editorial control over “school-sponsored expressive activities”).
And finally some forms of speech receive no protection
whatsoever. E.g., Gertz v. Robert Welch, Inc., 418 U.S. 323, 340
(1974) (defamation); Brandenburg v. Ohio, 395 U.S. 444, 447–48
(1969) (incitement); Schenck v. United States, 249 U.S. 47, 52 (1919)
(explaining that the “most stringent protection of free speech
20190087-CA 7 2020 UT App 37Ho v. Dep’t of Commerce
would not protect a man in falsely shouting fire in a theatre and
causing a panic”). Thus, one of the crucial first steps in assessing
a restriction on speech is determining the category in which the
type of speech fits.
¶16 The speech at issue in this case is commercial speech.
There is a “commonsense distinction between speech proposing
a commercial transaction, which occurs in an area traditionally
subject to government regulation, and other varieties of speech.”
Central Hudson, 447 U.S. at 562 (cleaned up). Speech is
commercial when it “propose[s] a commercial transaction” or
relates solely to the parties’ economic interests. Board of Trs. of
State Univ. of N.Y. v. Fox, 492 U.S. 469, 473–74 (1989) (cleaned
up); see also Central Hudson, 447 U.S. at 561 (explaining that
commercial speech is “expression related solely to economic
interests of the speaker and its audience”). Ho clearly proposed a
commercial transaction when she recited the varying prices of
the massages and confirmed that she would be providing the
massage to Investigator, especially considering that this all
occurred in a commercial massage establishment. Moreover,
with our emphasis, section 58-47b-102(6)(l) restricts “providing,
offering, or advertising a paid service using the term massage.”
¶17 Having determined that the speech at issue is commercial,
the four-part test developed in Central Hudson applies to
determine whether the restriction on commercial speech violates
the First Amendment. 447 U.S. at 566. Those parts consist of (1)
whether the expression concerns lawful activity and is not
misleading, (2) “whether the asserted governmental interest is
substantial,” (3) “whether the regulation directly advances the
governmental interest asserted,” and (4) whether the regulation
is more extensive than necessary. Id.¶18 Here, Ho’s claim that section 58-47b-102(6)(l) is
unconstitutional fails at the initial step of this analysis because
her speech was misleading. When Ho explicitly stated that she
would provide the massage to Investigator for one of the two
prices, she inaccurately implied that she was licensed and could
20190087-CA 8 2020 UT App 37Ho v. Dep’t of Commerce
lawfully do so. This is precisely what the statute was designed to
prevent—scenarios in which Utah consumers are misled into
believing that unlicensed individuals are qualified to practice
massage therapy. Thus, we have no trouble rejecting Ho’s claim
that her constitutional right to freedom of speech was violated.
Id. at 563 (“The government may ban forms of communication
more likely to deceive the public than to inform it . . . .”); see also
In re R.M.J., 455 U.S. 191, 203 (1982) (“Misleading advertising
may be prohibited entirely.”); Virginia State Board of Pharmacy v.
Virginia Citizens Consumer Council, Inc., 425 U.S. 748, 771 (1976)
(“Untruthful speech, commercial or otherwise, has never been
protected for its own sake.”); Accountant’s Society of Va. v.
Bowman, 860 F.2d 602, 606 (4th Cir. 1988) (“The ban on the use of
‘public accountant’ or ‘PA’ by unlicensed accountants, in [the
statute], is a constitutionally permissible regulation of
misleading commercial speech . . . .”).
¶19 Nevertheless, Ho argues that the statute
unconstitutionally prohibits the mere use of the word massage in
any context. But this greatly misconstrues the statute by
overlooking the “paid service” part of the statutory definition.
Hence, no mere mention of the word massage is proscribed.
Instead, only “providing, offering, or advertising a paid service using
the term massage” is prohibited, as the statute says. Utah Code
Ann. § 58-47b-102(6)(l) (LexisNexis 2016) (emphasis added).
What’s more, section 58-47b-304(1)(l) exempts “an individual
performing gratuitous massage” from the licensure requirement.
So, not even offering a free massage without a license—let alone
mentioning the word massage—is prohibited. In short, Ho’s
argument is unpersuasive because it mischaracterizes the scope
of the statute. We find no constitutional infirmity therein. 5
5. Beyond this misreading of the statute, Ho passingly argues
that the provision in its correct construction is overbroad.
However, “the overbreadth doctrine does not apply to
commercial speech.” Village of Hoffman Estates v. Flipside, Hoffman
(continued…)
20190087-CA 9 2020 UT App 37Ho v. Dep’t of Commerce
¶20 Accordingly, we conclude that section 58-47b-102(6)(l)
does not violate Ho’s right to freedom of speech, and we decline
to disturb the Department’s order on this basis.
II. Due Process
¶21 Ho advances three arguments related to a lack of
procedural fairness at her hearing. She first asserts that she was
denied her right to due process when the Board decided
questions of both fact and law. She then posits that she did not
receive a neutral fact-finder because the Board “is an
institutionalized agent” of DOPL and the “conflict of interest is
obvious” and “inherently unfair.” Ho finally argues that she
was unfairly prejudiced by the reference DOPL’s attorney
made in her opening statement that Ho had been charged
with prostitution. Below, we initially explain why Ho’s first
and second arguments are unpreserved. Then, we explain why
Ho was not prejudiced by the reference to her prostitution
charge.
A. Preservation
¶22 “[T]he preservation rule applies to appeals from
administrative agencies” in two different situations: “when
mandated by statute” or “when not mandated by statute, . . .
[but] the issue raised on appeal could have been resolved in the
administrative setting.” ABCO Enters. v. Utah State Tax Comm’n,
2009 UT 36, ¶¶ 10–11, 211 P.3d 382; see also Badger v. Brooklyn
Canal Co., 966 P.2d 844, 847 (Utah 1998) (“[A] party seeking
review of agency action must raise an issue before that agency to
preserve the issue for further review.”); Kunej v. Labor Comm’n,
(…continued)
Estates, Inc., 455 U.S. 489, 497 (1982); accord Board of Trs. of State
Univ. of N.Y. v. Fox, 492 U.S. 469, 481 (1989); National Council for
Improved Health v. Shalala, 122 F.3d 878, 882 n.6 (10th Cir. 1997).
Therefore, Ho’s argument is legally misplaced.
20190087-CA 10 2020 UT App 37Ho v. Dep’t of Commerce
2013 UT App 172, ¶ 23, 306 P.3d 855 (“We have consistently held
that issues not raised in proceedings before administrative
agencies are not subject to judicial review except in exceptional
circumstances.” (cleaned up)). Requiring parties to preserve
issues promotes efficiency and fairness to both the adjudicative
tribunal and the parties. See Tschaggeny v. Milbank Ins. Co., 2007
UT 37, ¶ 20, 163 P.3d 615.
¶23 Here, the parties do not point us to any applicable
statutory command to preserve issues; nevertheless, Ho’s
arguments fall under the second administrative preservation
category—i.e., the issues could have been resolved below.
See Nielsen v. Labor Comm’n, 2020 UT App 2, ¶ 9 n.1. At the time
of the hearing, both the Division of Occupational and
Professional Licensing Act and the Administrative Procedures
Act allowed the Board, the ALJ, and the director of DOPL to
preside over the hearing in the manner in which they did in this
case. 6 Utah Code Ann. § 58-1-109(1)–(4) (establishing the
presiding officers and their duties in occupational and
professional licensing administrative proceedings); id. § 58-1-
202(1)(f) (dictating that the duties of boards include “acting as
presiding officer in conducting hearings associated with
adjudicative proceedings and in issuing recommended orders
when so designated by the director”); id. § 63G-4-103(1)(h)(i)
(“‘Presiding officer’ means an agency head, or an individual or
body of individuals designated by the agency head, by the
agency’s rules, or by statute to conduct an adjudicative
proceeding.”).
¶24 Moreover, those Acts provided the means for a different
presiding officer to be appointed, such as the ALJ. Id. § 58-1-
109(1)–(3) (establishing the regular presiding officer “[u]nless
otherwise specified by statute or rule . . . [or] the director”); id.
§ 63G-4-103(1)(h)(ii) (“If fairness to the parties is not
compromised, an agency may substitute one presiding officer for
6. The relevant statutes remain the same.
20190087-CA 11 2020 UT App 37Ho v. Dep’t of Commerce
another during any proceeding.”). Ho could have but did not
object to these roles under existing law at her hearing. Thus, Ho
failed to preserve her first two procedural arguments for judicial
review, and we therefore decline to disturb the Department’s
order on these bases.
B. Prejudice
¶25 On judicial review of administrative proceedings, a
petitioner bears the burden of demonstrating that she was
substantially prejudiced. Id. § 63G-4-403(4); see also Covey v.
Covey, 2003 UT App 380, ¶ 21, 80 P.3d 553 (explaining that the
party seeking review “has the burden of demonstrating an error
was prejudicial” (cleaned up)). “An error will be harmless if it is
sufficiently inconsequential that there is no reasonable likelihood
that the error affected the outcome of the proceedings.”
Macfarlane v. Career Service Review Office, 2019 UT App 133, ¶ 42,
450 P.3d 87 (cleaned up).
¶26 Here, Ho has failed to satisfy her burden of
demonstrating substantial prejudice. There is no evidence
anywhere in the record that the Board considered the
prostitution charge in issuing its recommended order. In fact, in
DOPL’s presentation of its case, the word prostitution was
uttered only once in a single reference to Ho’s charge for
prostitution during the opening statement. The topic was never
mentioned again by DOPL.
¶27 And after Ho objected to the prostitution reference—
outside the presence of the Board—the ALJ then
directly instructed the Board “to completely disregard” and
not rely upon the prostitution charge at all, noting that
Ho stipulated that her license had been revoked. See State
v. Padilla, 2018 UT App 108, ¶ 26, 427 P.3d 542(“Curative instructions are ordinarily presumed on appeal to be
effective.” (cleaned up)). This presumptively effective instruction
appears to have been dutifully followed as well because the
Board’s recommended order did not make any reference to the
20190087-CA 12 2020 UT App 37Ho v. Dep’t of Commerce
charge. 7 Finally, all the members of the Board were members of
the Board during the proceeding involving the prostitution
charge, so the reference would not have been news to the Board
members and thus was not reasonably likely to have changed
how the Board assessed the hearing. 8
¶28 Accordingly, because Ho has not persuaded us that she
has been substantially prejudiced, and there is not an
“appearance of unfairness . . . so plain that we are left with the
abiding impression that a reasonable person would find the
hearing unfair,” Nelson v. City of Orem, 2013 UT 53, ¶ 36, 309 P.3d
237 (cleaned up), we decline to disturb the Department’s order
on this basis.
CONCLUSION
¶29 We conclude that Utah Code section 58-47b-102(6)(l) is
not unconstitutional as Ho claims. We also conclude that Ho
failed to preserve two of her due process arguments and failed
to prove prejudice on her final due process argument.
Accordingly, we decline to disturb the Department’s order.
7. Ho takes issue with the language the Board used in its final
order: “[Ho] previously had a license to provide massage
therapy, but such license had been revoked by action of the
Board in a prior administrative proceeding.” However, as is
evident from the Board’s finding, it did not even mention the
prostitution charge. This in no way demonstrates Ho’s claimed
prejudice.
8. Again, although Ho knew and could have objected to the fact
that these were the same Board members from her previous
proceeding, she failed to do so and has not preserved the issue.
See supra ¶¶ 22–24.
20190087-CA 13 2020 UT App 37