CALIFORNIA DENTAL ASSOCIATION v. BLOCK (1978)

OPINION

This appeal involves an internecine dispute between the American Dental Association (ADA) and one of its constituent societies, the California Dental Association (CDA).

We are asked by ADA to review the judgment granting CDA's petition for a writ of mandate which requires the ADA to vacate its decision involving a California dentist, Charles Block (Block), the real party in interest, and to reschedule a hearing on Dr. Block's appeal.

We reject appellant's contentions that the trial court lacked both personal and subject matter jurisdiction and that CDA's petition failed to state a cause of action. We affirm the judgment.

1. The Facts

It is helpful to separate the factual circumstances surrounding this litigation into two separate categories. The first involves the relationship between the parties and their respective duties in connection with disciplinary activities. The second pertains to the specific disciplinary matter involving Block.

(a) The parties and their relationship to one another.

ADA is a non-profit corporation organized under the laws of the State of Illinois, with its principal headquarters in Chicago, Illinois. Its purpose is to “. . . encourage the improvement of the health of the public, to promote the art and science of dentistry and to represent the interests of the members of the dental profession and the public which it serves.” (ADA Const.) Its by-laws provide for the issuance of a charter to constituent societies denoting a name and territorial jurisdiction. One of the societies so chartered was CDA. Membership in a component society is also authorized by the by-laws when the dentist is in good standing of his respective constituent society and of the ADA. The powers and duties of the constituent and component societies as to membership, finances and discipline are subject to the by-laws of the ADA.

The professional conduct of a member of ADA is governed by its Principles of Ethics and by the codes of ethics of the constituent and component societies within whose jurisdiction the dentist may practice. Discipline may consist of censure, suspension or expulsion from membership. Prior to imposition of any disciplinary penalty, the member affected is entitled to written notice of the charge, a written decision including a statement of the facts which substantiate any or all of the charges, the verdict rendered, the penalty imposed, and notice of his right to appeal. Appellate review established by the ADA is by its Council on Judicial Procedures, Constitution and By-laws (hereafter Judicial Council) which has the responsibility of examining the record of the hearing of the accused member, the written affidavit on appeal, and the briefs. Any appeal, for which provision is made by a constituent society, must be taken in accordance with and satisfy the by-laws of ADA.

The reviewing agency is required to determine whether the evidence before the society which preferred the charges against the accused member supports that decision or warrants the penalty imposed. Its decision must be in writing and must clearly state the conclusion of the appeal agency and its reasons for that conclusion. It can (1) dismiss the appeal for technical reasons, (2) affirm or reverse the decision, (3) refer the case back to the society for new proceedings if the rights of the member were not afforded him, or (4) uphold the decision and reduce the penalty.

(b) The disciplinary proceedings pertaining to Block.

On May 7, 1975, the CDA Judicial Council cited Block for twelve separate alleged violations of the CDA Code of Ethics and ADA Principles of Ethics. A hearing was conducted before a trial panel which rendered its written decision on July 24, 1975, in which Block was found guilty of eight of the charges and the penalty of expulsion from the CDA and the Tri-County Dental Society was imposed. Block appealed the decision to the ADA council which reversed seven of the eight charges and reduced the penalty of expulsion to one of suspension for a period of two years. The opinion of the ADA council made no reference to the CDA Code of Ethics nor to any of its advisory opinions. CDA and Block each filed separate petitions in the Superior Court of Riverside County for a writ of mandate, each seeking to vacate that portion of the ADA decision adverse to their positions.¹ This appeal by ADA is from the judgment granting CDA's petition.

2. Jurisdiction

(a) Personal jurisdiction over ADA.

ADA urges that a California court does not have personal jurisdiction over it in reference to what is essentially a dispute between a California dentist involving his conduct in California in violation of the ethical standards prescribed for California dentists by a California non-profit corporation.

Code of Civil Procedure section 410.10 provides that: “A court of this state may exercise jurisdiction on any basis not inconsistent with the Constitution of this state or of the United States.” It may exercise personal jurisdiction over a non-resident individual so long as he has such minimal contacts with the state that “. . . the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ (Citation omitted.)” (International Shoe Co. v. Washington (1945) 326 U.S. 310, 316-317, 66 S.Ct. 154, 158, 90 L.Ed. 95, 102.) The inquiry as to whether the “ minimal contacts” exist require an analysis of the “quality and nature of the . . . activity” in relation to the particular cause of action. (See Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1240, 2 L.Ed.2d 1283; McGee v. International Life Ins. Co., 355 U.S. 220, 222-223, 78 S.Ct. 199, 200-201, 2 L.Ed.2d 223, 225-226.)

The present litigation involves the question as to whether ADA followed its own rules relating to the appellate process. ADA's involvement in this matter was caused by its insistence that its by-laws be superimposed on those of CDA as to the manner and place of appeal.

ADA's contacts with California include the requirement that CDA grant membership to ADA members who reside in California, that it collect membership dues from ADA members in California and remit those dues to the ADA office in Chicago, Illinois. The sum collected by ADA in California in the fiscal year 1974-1975 alone exceeded $1,000,000. ADA also distributes to CDA members in California, a monthly journal known as the Journal of the American Dental Association, which contains paid advertising and generates substantial revenues. In addition, it accredits dental auxiliaries in California and endorses insurance programs promoted in California. Clearly the extent of ADA's activities in this state and the significant benefits it obtains from that activity warrant the extension of personal jurisdiction. (See Buckeye Boiler Co. v. Superior Court (1969) 71 Cal.2d 893, 80 Cal.Rptr. 113, 458 P.2d 57; cf. Sibley v. Superior Court (1976) 16 Cal.3d 442, 128 Cal.Rptr. 34, 546 P.2d 322.) Even if we were to only consider the effect of the out of state act which in theory can lower the ethical standards of those practicing dentistry in California with a resultant impact on patient care, extension of jurisdiction is proper. (See Martinez v. Perlite Institute, Inc. (1975) 46 Cal.App.3d 393, 402-403, 120 Cal.Rptr. 120; Quattrone v. Superior Court (1975) 44 Cal.App.3d 296, 303, 118 Cal.Rptr. 548.) California not only has an interest in assuring access to its courts by California residents, but also an interest in avoiding multiplicity of litigation. It is certainly sensible and not unreasonable to have the courts of this state hear and determine all matters that may involve the parties. (See Fisher Governor Co. v. Superior Court (1959) 53 Cal.2d 222, 225, 1 Cal.Rptr. 1, 347 P.2d 1.)

(b) Subject matter jurisdiction.

ADA questions whether the trial court had jurisdiction to hear the subject matter of CDA's petition. It argues that courts should not intercede in the internal affairs of a private, voluntary association. Although judicial involvement in the exclusion of membership in private associations is of fairly recent origin, California has since 1888 authorized judicial review of association expulsions. (See Pinsker v. Pacific Coast Society of Orthodontists (1974) 12 Cal.3d 541, 550, fn. 8, 116 Cal.Rptr. 245, 526 P.2d 253.)² The substantive rule requiring expulsion can neither be capricious nor contrary to public policy and the person expelled is entitled to procedural fairness. (See Pinsker II, pp. 552-553, 116 Cal.Rptr. 245, 526 P.2d 253.)

In the first Pinsker case, Pinsker v. Pacific Coast Soc. of Orthodontists (1969) 1 Cal.3d 160, 81 Cal.Rptr. 623, 460 P.2d 495,³ our Supreme Court sanctioned judicial intervention in the affairs of a private association to assure an applicant for membership that his application would be considered in a manner comporting with the fundamentals of due process. (Pinsker I at p. 166, 81 Cal.Rptr. 623, 460 P.2d 495.) Although we do not have specific findings in the case at bench as to the relationship between membership in the CDA and the economic benefit derived therefrom, we cannot ignore the significance of membership in an organization which at the time of trial consisted of approximately 12,250 practicing dentists in California. It is only proper that the issues relating to a member's status within any such professional organization be deemed justiciable to permit a judicial consideration and determination. (See Smith v. Kern County Medical Assn. (1942) 19 Cal.2d 263, 265, 120 P.2d 874; Bernstein v. Alameda, etc., Med. Assn. (1956) 139 Cal.App.2d 241, 253, 293 P.2d 862.)

The judicial inquiry into the propriety of the expulsion or exclusion from membership is properly commenced through a petition for writ of mandate. Anton v. San Antonio Community Hosp. (1977) 19 Cal.3d 802, 140 Cal.Rptr. 442, 567 P.2d 1162, has put to rest whether Code of Civil Procedure section 1094.5 may be used only to review administrative decisions of governmental agencies. It now extends to “. . . all cases in which the subject decision is the product of a proceeding in which a hearing and related procedural protections are required by law.”⁴ (See Anton v. San Antonio Community Hosp., supra, at p. 817, 140 Cal.Rptr. at p. 450, 567 P.2d at p. 1170.) CDA is charged with the responsibility of maintaining the ethical standards of its members. In attempting to assure compliance with its rules, it instituted the proceedings against Block and was a party in his appeal. As a direct result of a decision which was adverse to it in seven of the eight charges, it was the aggrieved party (see Grant v. Board of Medical Examiners (1965) 232 Cal.App.2d 820, 827, 43 Cal.Rptr. 270) and consequently has status as one “beneficially interested” to commence proceedings against ADA. To conclude otherwise would be tantamount to placing CDA in a position where it could not govern its membership.

3. CDA's Cause of Action

CDA's petition alleges that the decision of the ADA Judicial Council was invalid because of the failure of ADA to consider the CDA Code of Ethics as well as its wrongful exclusion of Dr. Daniel F. Gordon, one of the council members, from participation in the Block appeal. We do not reach the second ground asserted by CDA because we conclude that the first is sufficient to warrant the issuance of the writ.

In notifying the parties of its decision, the Judicial Council stated that it had “. . . reviewed each of the surviving charges and specifications, the Section of the American Dental Association Principles of Ethics related to each of the charges, and the evidence adduced at trial to substantiate the charges.” No mention was made that it had considered the California Code of Ethics, a more encompassing code than that of ADA. Included within the California code are “. . . Principles of Ethics of the American Dental Association (ADA) and advisory opinions pertaining thereto, plus . . . rewordings made by the California Dental Association (CDA) . . . .” (See Editor's note, Code of Ethics, CDA.) ADA argues that (1) the respective codes are essentially the same and reference to the California code would have been redundant; (2) there is insufficient evidence to conclude that the Judicial Council did not consider the California code; and (3) CDA is precluded by ADA's by-laws from enacting any ethical standard that is in conflict with ADA's Principles of Ethics.

(a) Identify of the codes.

The basic ethical standards promulgated by ADA and enacted by CDA are virtually identical. However, CDA's code, as set out in its editor's prefatory comment, does include advisory opinions plus additions and rewordings made by it. The enlarged standards do vary from those of ADA. For example, section 17 of both the ADA and DCA codes permits a dentist to enter into an agreement with individuals and organizations to provide dental health care provided the agreement does not permit or compel practices which are in violation of the Code of Ethics. Each code sets out eight ADA advisory opinions. However, the California code also includes seven additional advisory opinions. At least one of the additional advisory opinions, 17g, is relevant to the present case.

The determination by the trial court that the CDA code included all advisory opinions and that the codes were not identical was proper.

(b) Sufficiency of the evidence.

The evidence presented by ADA in support of its position that its council members considered the CDA code consisted of four identical affidavits submitted by each of the persons who participated in the decision. Each affidavit to a great extent is merely an apologia for the ruling by the council. Two charges against Dr. Block are explained away as activity protected by the First Amendment. On another charge it was concluded that a violation of an advisory opinion, section 17g, cannot be a violation of section 17. We need not decide in this case which, if any, of the advisory opinions of CDA are valid as applied to a dentist member. The inference can properly be drawn from the evidence that the Judicial Council failed to consider the CDA advisory opinions at the time of its deliberations on the appeal.

The responsibility of ADA is to determine whether the evidence supports the decision made by CDA. If it cannot determine the factual basis for CDA's decision on any charge, it is incumbent on it to request findings from CDA rather than to reweigh the evidence. As to one charge the affidavit from each council member asserts that “. . . we had no choice but to subjectively analyze the record. While this placed us in the unfortunate position of not knowing what evidence was relied upon and the reasoning for the decision of the Trial Panel, it most certainly did not constitute a retrial.”

CDA and ADA each has a significant role in the process of imposing discipline on a dentist member. Basic fairness to the members requires that if there are problems relating to the performance by either the CDA or ADA pertaining to a specific function delegated to it, those problems as between them should be promptly resolved.

(c) ADA's by-laws preclude CDA's conflicting ethical standards.

The ADA by-laws provide that a constituent society may adopt a constitution and by-laws which shall not be in conflict with, or limit, the constitution and by-laws of ADA. Because a violation of the CDA code herein is also not a violation of the ADA Principles of Ethics, ADA contends that CDA has enacted conflicting standards.

We construe the language of the ADA by-laws to mean that a constituent society may not have lower ethical standards than the national society. We see nothing inconsistent with the charter of ADA and the purpose of CDA for the latter to have professional standards which may be higher than the former.

Conclusion

One theme which persists throughout all of ADA's contentions is that regardless of the steps taken by it to reach its decision, it has complete discretion in any event to reduce the penalty imposed by any constituent society. In performing that function it attempts to assure uniformity of the discipline imposed by constituent societies throughout the country. However, before ADA can reach the point where it can properly exercise its discretion relating to the extent of discipline, it must follow the appellate process which it established.

“ ‘(D)iscretion contemplated by law is not a capricious or arbitrary one, but an impartial discretion, guided and controlled in its exercise by fixed legal principles.’ (Citation.)” (Webb v. Webb (1970) 12 Cal.App.3d 259, 262, 90 Cal.Rptr. 565, 567.)

Judgment affirmed.

FOOTNOTES

FOOTNOTE.  

1.  Block's petition trailed the petition in the instant matter and was dismissed without prejudice at the same time the trial court rendered its decision in this case.

2.  Hereafter Pinsker II.

3.  Hereafter Pinsker I.

4.  We do not decide herein because of the absence of a factual basis whether upon further judicial review of any administrative determination in this case, the court is required to exercise its independent judgment pursuant to the principles established in Bixby v. Pierno (1971) 4 Cal.3d 130, 93 Cal.Rptr. 234, 481 P.2d 242 and Strumsky v. San Diego County Employees Retirement Assn. (1974) 11 Cal.3d 28, 112 Cal.Rptr. 805, 520 P.2d 29.

WIENER,* Associate Justice. FN* Assigned by the Chairperson of the Judicial Council.

KAUFMAN, Acting P. J., and MORRIS, J., concur.