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
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).