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A vote flips, but the law stays the same

We’ve been following the saga of Hamlet H.M.A., LLC v. Hernandez throughout 2019. Last Friday, the Supreme Court finally issued its opinion in the case. Yesterday, Pat blogged on confusion caused by the tie vote in Hamlet. In this post, we read between the lines to consider what was going on behind the scenes in Hamlet.

Hamlet involves the “learned-profession exemption” in section 75-1.1. Section 75-1.1 broadly prohibits unfair and deceptive practices in or affecting commerce. But the statute excludes from its prohibition “professional services rendered by a member of a learned profession.” The Court of Appeals had historically interpreted that exemption broadly, but the panel majority in Hamlet introduced a narrower reading.

Before 2019, the Supreme Court had never weighed in on the scope of the exemption. The appeal-of-right in Hamlet was set to answer that question definitively, at least in the healthcare context. The parties had briefed it. The amici had lined up. Even the Solicitor General made an appearance, asking the Court to construe the exemption narrowly.

But while healthcare practitioners had their eyes set on Hamlet, the Supreme Court surprised court-watchers in June 2019 with its first opinion on the learned-profession exemption in a different case—Sykes v. Health Network Solutions. In Sykes, Justice Davis did not participate because he was new to the bench, and the rest of the Court split 4-2 on the breadth of the learned-profession exemption.

Justice Hudson, writing for the Sykes majority, gave the exemption a broad reading, consistent with prior opinions from the Court of Appeals. Meanwhile, Justice Earls would have reined in the Court of Appeals and given the exemption a decidedly narrower reading. The Chief Justice joined Justice Earls’ dissent. The majority and dissent both discussed the Court of Appeals’ Hamlet decision without expressing approval or disapproval.

Then, last Friday, the Court finally issued its decision in Hamlet. Below, a majority of the Court of Appeals had given the learned-profession exemption a surprisingly narrow interpretation. And that panel included then-Judge Davis, who dissented and would have continued giving the exemption a broad interpretation.

After Sykes, the best bet was that Hamlet would get reversed 4-2, following the reasoning of Sykes. But that didn’t happen. Instead, the Court divided 3-3, with Justice Davis recusing, leaving the Court of Appeals’ opinion without precedential value.

Of course, even though Justice Davis recused, one might assume that Justice Davis would have followed his own dissent in Hamlet, meaning that there would be four votes right now on the Supreme Court for a broad interpretation of the learned-profession exemption.

But this also means that one justice switched his or her vote from Sykes to Hamlet. In Sykes, there were just two votes for a narrow reading of the exemption. Yet the tallying in Hamlet shows that there are now three votes for narrowing the exemption.

It’s hard to say what caused the change in vote. Perhaps it was the persuasiveness of the amici. Or maybe the justice just viewed the two cases as distinguishable. We’ll have to keep watching the learned-profession cases for further clues.

Either way, a broad learned-profession exemption remains the law, at least for now. If another vote flips, expect to hear about it here. Meanwhile, let us know what you think was going on in Hamlet. Baseless speculation welcome!

–Troy

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