Opinion ID: 1969808
Heading Depth: 2
Heading Rank: 2

Heading: The State of the Common Law

Text: While I view the inaction of the legislature as evidence that the corporate practice of medicine doctrine does not exist in Minnesota (and should not originate with the court), the majority likely would counter that the legislature's inaction is a form of acquiescence in, or at least a failure to abrogate, the doctrine that existed at common law. One question, thus, is whether the doctrine is truly part of Minnesota common law. The majority notes that many states have recognized the corporate practice of medicine doctrine, by judicial opinion or statute. But the national history of the doctrine is complex. Many states have also rejected the doctrine, and many states that gave recognition to the doctrine in the early 1900s have abandoned it now. See, e.g., D. Cameron Dobbins, Survey of State Laws Relating to the Corporate Practice of Medicine, 9 No. 5 The Health Law. 18 (1997). In fact, one commentator reports that the enforcement of the corporate practice doctrine has slackened over the last 20 years, it is commonly believed that the doctrine is dying a quiet death, and [a]ccording to one account, the doctrine is actively applied in only five states. Mark A. Hall & Justin G. Vaughn, The Corporate Practice of Medicine, in Health Care Corporate Law: Formation and Regulation § 3.2 (Mark A. Hall ed., 1993 and supp.1999). I conclude that it cannot be said that there ever was or now is a commonly accepted corporate practice of medicine doctrine in this country. In Minnesota, as discussed above, the doctrine has not been established or codified by statute. Further, Minnesota's statutes authorizing the formation of business corporations have not expressly excluded the learned professions as a lawful business purpose. In my view, the corporate practice of medicine doctrine also has not been recognized or enforced as part of our common law. The only decision that can be cited as possibly recognizing the doctrine as part of Minnesota's common law is the 1933 decision in Granger v. Adson, 190 Minn. 23, 250 N.W. 722 (1933). But, for several reasons, that decision does not fulfill the role claimed for it. First, and perhaps most important, the facts in Granger do not include any corporation. The person who employed the physician was an individual, not a corporation. Id. at 24, 250 N.W. at 722. Thus, any reference to the corporate practice of medicine in Granger is necessarily dicta. Second, the court determined that the individual was not licensed as a physician and was engaging in the unauthorized practice of medicine. Id. at 26, 250 N.W. at 723. This resolved the case before the court and all other discussion was gratuitous. Third, the Granger opinion does not specifically mention the corporate practice of medicine doctrine or the policies that underlie it. Granger's very brief reference to a corporation appears to be an aside, not a thoughtful or studied conclusion. Our entire discussion of a corporation is as follows: In Re Disbarment of Otterness, 181 Minn. 254, 232 N.W. 318, 73 A.L.R. 1319 [1930], we said that a corporation or layman could not indirectly practice law by hiring a licensed attorney to practice law for others for the benefit or profit of such hirer. We are just as firmly convinced that it is improper and contrary to statute and public policy for a corporation or layman to practice medicine in the same way. Granger, 190 Minn. at 26-27, 250 N.W. at 723. It is unclear from the opinion whether we even considered the corporate practice of medicine doctrine. The reference to Otterness, a 1930 case, was curious because that case involved attorney discipline, a matter clearly within the court's inherent regulatory power over the practice of law. See, e.g., In re Friedman, 183 Minn. 350, 353, 236 N.W. 703, 704 (1931) (referencing courts' inherent authority to admit, discipline, and disbar attorneys). At issue in Otterness was an attorney's employment agreement with a banking corporation to conduct the private practice of law as an employee of and for the benefit of the bank. In re Otterness, 181 Minn. 254, 256, 232 N.W. 318, 319 (1930). Although we acknowledged that an attorney may be hired as an employee of a corporation and provide legal services to that corporation, we held that the corporation could not employ an attorney to conduct law business generally for others because it amounted to the unlawful practice of law by the bank. Id. at 257, 232 N.W. at 319. But because this court had inherent regulatory power over the practice of law, we had full power to decide, without legislative authorization, whether corporate law practice was compatible with the ethical requirements we imposed on members of the bar. That decision has no application to the corporate practice of the other professions that are not regulated by this court. Further, Williams v. Mack, 202 Minn. 402, 278 N.W. 585 (1938), provides no support for the doctrine's existence in Minnesota. Because Williams interpreted the relevant statute to authorize the corporate practice of optometry, it made no holding under the common law. See id. at 407-09, 278 N.W. at 587. This court has not considered the corporate practice of medicine doctrine in the 70 years that followed Granger. Thus, I would conclude that the doctrine is not recognized in our common law.