Pinpricks in Pleading: Lessons Learned About Suits Against State Agencies: North Carolina Acupuncture Licensing Board v. North Carolina Board of Physical Therapy Examiners, et. al.

If you've ever recovered from an athletic injury or pursued alternative medicinal therapies, you have likely visited a physical therapist, an acupuncturist, or possibly both.  Between these two distinct professions, there is arguably some overlap as to some of the treatments offered by each.  This overlap was the subject of a recent case in the North Carolina Business Court ("Business Court").  The plaintiff, the North Carolina Acupuncture Licensing Board ("Acupuncture Board"), filed a lawsuit against the North Carolina Board of Physical Therapy Examiners ("Physical Therapy Board") and individual physical therapists, seeking declaratory and injunctive relief.  Both the Acupuncture Board and the Physical Therapy Board are government agencies created by statute to govern their respective professions.  In the suit, the Acupuncture Board asked the Business Court to determine whether the fairly common practice of "dry needling" by physical therapists constitutes the unauthorized practice of acupuncture.  

Who Determines Unauthorized Practice?

Dry needling or "trigger point needling" is the practice of inserting needles into specific trigger points in the body to relieve muscle pain.  If this description sounds a lot like acupuncture to you, then you understand the basic gist of the Acupuncture Board's argument.  The Acupuncture Board argued that the practice of dry needling is no different than the basic practice of acupuncture, which involves inserting needles into "ashi points" on the human body.  The Acupuncture Board asked the Business Court to declare that dry needling was essentially acupuncture by a different name and that it could not be performed by physical therapists unless they also held an acupuncture license.

The dispute between the two Boards appears to have originated sometime around 2002, when the Physical Therapy Board initially took the position that dry needling was a form of acupuncture and was outside of the scope of physical therapy practice.  In 2010, the Physical Therapy Board revised its view, taking the position that dry needling is within the scope of physical therapy.  The Acupuncture Board requested a formal Opinion from the North Carolina Attorney General on the matter, and the Attorney General concluded that the Physical Therapy Board had the power to determine whether or not dry needling was within the scope of practice of physical therapists.  The Attorney General further opined that the Physical Therapy Board would need to adopt administrative rules to determine that dry needling was practiced by competent practitioners.  The Physical Therapy Board proposed such a rule, but the North Carolina Rules Review Commission objected to it, thereby preventing the proposed rule from becoming effective.  Undeterred, the Physical Therapy Board posted a revised position statement on its website that reflected its position that dry needling falls within the scope of physical therapy.  

The Acupuncture Board's response was to file a lawsuit in the Business Court.  While the precise techniques and methods used by acupuncturists and physical therapists in their respective practices would have made for interesting reading in a judicial opinion, the Business Court never had the opportunity to compare dry needling and acupuncture because it dismissed the Acupuncture Board's lawsuit based on principles of governmental immunity and administrative law.  The Business Court's dismissal serves as an important reminder of the many defenses available to governmental boards when they are named as a defendant in a lawsuit.  

The Business Court Weighs In

First, the Business Court accepted the Physical Therapy Board's defense of sovereign immunity, citing federal case law to hold that the doctrine of sovereign immunity applies in "government on government" litigation.  This appears to have been an issue of first impression in North Carolina.  The Acupuncture Board admitted that sovereign immunity generally applies to the Physical Therapy Board, but argued that sovereign immunity did not apply when the government is on both sides of the "v" in a case.  The Business Court, following precedent from the United States Court of Appeals for the District of Columbia D.C. Circuit, rejected the argument, and found that without an express waiver of sovereign immunity by the Physical Therapy Board, the defense applied, even in "government on government" cases.

The Business Court also agreed with the Physical Therapy Board that the Acupuncture Board failed to exhaust its administrative remedies.  Under the North Carolina Administrative Procedures Act (the "Act"), the Acupuncture Board was required to seek a declaratory ruling from the Physical Therapy Board pursuant to NC Gen. Stat. §150B-4 and/or was required to file a rulemaking petition pursuant to NC Gen. Stat. §150B-20.  The Act provides that a party may seek a declaratory ruling from a state agency:

On request of a person aggrieved, an agency shall issue a declaratory ruling 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 of a rule or order of the agency.  Upon request, an agency shall also issue a declaratory ruling 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).  When a plaintiff sues without first seeking a declaratory ruling pursuant to NC Gen. Stat. § 150B-4, the court may dismiss for failure to exhaust administrative remedies.  

The Acupuncture Board argued that it was not a "person aggrieved" under the Act and also that the requirements of  NC Gen. Stat. § 150B-4 did not apply because the Physical Therapy Board acted through informal rulemaking, not pursuant to the Physical Therapy Practice Act.  The Business Court rejected both arguments, holding that the Acupuncture Board did not exhaust the statutorily dictated administrative remedies before filing suit. 

In a similar vein, the Business Court granted a motion dismiss by the individual defendants sued by the Acupuncture Board.  In granting the motion, the Business Court relied upon the "Anti-Collateral Attack Rule," which prevents a suit against private parties if the suit side-steps the requirement to exhaust administrative remedies and an agency decision.  The Business Court found that the claims brought against the individual defendants were in essence a challenge to agency action, and since the Acupuncture Board failed to exhaust its administrative remedies and allow the appropriate agency (the Physical Therapy Board) to take action and develop a factual record, the claims against the individual defendants were also subject to dismissal.


Since the Business Court never got the opportunity to delve into the similarities and/or differences between dry needling and acupuncture, the decision may not be of much interest to injured runners or those who suffer from back pain.  However, to practitioners who represent state agencies and statutorily created boards, the case is a helpful reminder of the unique issues that present themselves when these boards litigate and the legal defenses that can put an early end to a lawsuit.

© 2018 Ward and Smith, P.A. For further information regarding the issues described above, please contact Caroline B. McLean.

This article is not intended to give, and should not be relied upon for, legal advice in any particular circumstance or fact situation. No action should be taken in reliance upon the information contained in this article without obtaining the advice of an attorney.

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