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					                     IN THE MISSOURI COURT OF APPEALS
                             EASTERN DISTRICT


AMERICAN ASSOCIATION OF                             )
    ORTHODONTISTS,                                  )
                                                    )
                Plaintiff/Appellant,                )
                                                    )
          vs.                                       )     No. ED90777
                                                    )
YELLOW BOOK USA, INC.,                              )
                                                    )
                Defendant/Respondent.               )


                            Appeal from the Circuit Court
                                 St. Louis County

                           Honorable Melvyn W. Weisman
                                   Circuit Judge


                          REPLY BRIEF OF APPELLANT



                                       HUSCH BLACKWELL SANDERS, LLP
                                       Mark G. Arnold, #28369
                                       Dutro E. Campbell, #47942
                                       The Plaza in Clayton Office Tower
                                       190 Carondelet Plaza, Suite 600
                                       St. Louis, MO 63105
                                       Phone: 314.480.1500
                                       Fax: 314.480.1505

                                       Attorneys for Appellant
                                       American Association of Orthodontists




3001909
                                              Table Of Contents

                                                                                                                    Page


Table Of Contents ...........................................................................................          i

Table Of Cases And Other Authorities ...........................................................                      iii

Argument ........................................................................................................      1

I.        The Trial Court Erred In Dismissing AAO‟s Petition

          On The Ground That No Private Right Of Action Is

          Available To Enforce Dental Board Regulations,

          Because The Petition Stated A Cause Of Action, In

          That It Invoked The Common Law Of Unfair

          Competition ..........................................................................................       1

II.       AAO Did Not Need To Exhaust Any Administrative

          Remedy And A Multiplicity Of Proceedings Is Not An

          Adequate Remedy ................................................................................             5

III.      The Court Erred In Dismissing AAO‟s Petition On

          The Ground That §332.321.2(14)(f) Violated The First

          Amendment, Because The First Amendment Does Not

          Apply To The Subject Advertising In That The

          Absence Of The Required Disclaimer Makes The

          Advertising False And Misleading ......................................................                      7




3001909                                                      i
IV.       The Trial Court Erred In Dismissing AAO‟s Petition

          On The Ground Of Res Judicata, Because The Federal

          Judgment Does Not Bar This Action ...................................................                     15

          A.        A Dismissal For Want Of Standing Is Not A

                    Judgment On The Merits ..........................................................               15

          B.        Litigation Over The 2003 Yellow Book Does

                    Not Preclude A Subsequent Action Over The

                    2006 Or 2007 Yellow Book ......................................................                 17

IV.       The Trial Court Erred In Dismissing AAO‟s Petition

          On The Ground That Yellow Book Is Not A

          Competitor Of Orthodontists, Because The Publisher

          Of False Advertising Is Contributorily Liable At

          Common Law, In That It Directly And Substantially

          Assists The False Advertiser ................................................................             20

Conclusion ......................................................................................................   22

Certificate Of Compliance ..............................................................................            23

Certificate Of Service ......................................................................................       24




3001909                                                     ii
                             Table Of Cases And Other Authorities

Cases:

44 Liquormart, Inc. v. Rhode Island,

          517 U.S. 484 (1996) .................................................................      10

Abrahamson v. Gonzales,

          949 F.2d 1567 (11th Cir. 1992) ................................................            13

Alpharma, Inc. v. Pennfield Oil Co.,

          411 F.3d 934 (8th Cir. 2005) ....................................................        2-3,6

American Ass‟n of Orthodontists v. Yellow Book USA, Inc.,

          434 F.3d 1100 (8th Cir. 2006) ..................................................         11,21

Ardt v. Dep‟t of Professional Regulation,

          578 N.E.2d 128 (Ill. App. 1991),

          aff‟d, 607 N.E.2d 1226 (Ill. 1992) ...........................................             13

Bingham v. Hamilton,

          100 F. Supp. 2d 1233 (E.D. Cal. 2000) ...................................                  13

Bolger v. Youngs Drug Products Corp.,

          463 U.S. 60 (1983) ...................................................................      8

Borgner v. Cook,

          33 F. Supp. 2d 1327 (N.D. Fla. 1998) .....................................                 13

Boyle v. Vista Eyewear, Inc.,

          700 S.W.2d 859 (Mo. App. 1985) ...........................................                  4




3001909                                                 iii
Carter v. Money Tree Co.,

          532 F.2d 113 (8th Cir.),

          cert. denied, 426 U.S. 925 (1976) ............................................              17

Central Hudson Gas & Elec. Corp. v. Public Service Comm‟n,

          447 U.S. 557 (1980) .................................................................       8-9

Commissioner of Internal Revenue v. Sunnen,

          333 U.S. 591 (1948) .................................................................     18,19

Community Title Co. v. Roosevelt Federal S&L Ass‟n,

          796 S.W.2d 369 (Mo. banc 1990) ............................................                  4

Costello v. United States,

          365 U.S. 265 (1961) .................................................................     15,16

Cottrell, Ltd. v. Biotrol Int‟l, Inc.,

          191 F.3d 248 (10th Cir. 1999) ..................................................             2

Dial A Car, Inc. v. Transportation, Inc.,

          82 F.2d 484 (D.C. Cir. 1996) ...................................................             2

Elk Grove Unified S.D. v. Newdow,

          542 U.S. 1 (2004) .....................................................................     16

Federated Dep‟t Stores, Inc. v. Moitie,

          452 U.S. 394 (1981) .................................................................       16

Florida Bar v. Went For It, Inc.,

          515 U.S. 618 (1995) .................................................................        8




3001909                                                  iv
Hatch v. Boulder Town Council,

          471 F.3d 1142 (10th Cir. 2006) ................................................           19

Ho-Chunk Nation v. J.C. Penney Co.,

          1998 WL 774118 (N.D. Ill. 1998) ...........................................               16

Huch v. Charter Communications, Inc.,

          2008 WL 1721868 (Mo. App. E.D. Apr. 15, 2008) ................                            20

Ibanez v. Fla. Dep‟t of Bus. & Prof. Regulation,

          512 U.S. 136 (1994) .................................................................     14

In re R.M.J.,

          455 U.S. 191 (1982) .................................................................   10,12

IQ Products Co. v. Pennzoil Products Co.,

          305 F.3d 368 (5th Cir. 2002),

          cert. denied, 538 U.S. 944 (2003) ............................................             2

Joshi v. St. Luke‟s Episcopal-Presbyterian Hosp.,

          142 S.W.3d 862 (Mo. App. 2004),

          cert. denied, 544 U.S. 922 (2005) ............................................            7-8

Lane v. Peterson,

          899 F.2d 737 (8th Cir.),

          cert. denied, 498 U.S. 823 (1990) ............................................            17

Lawlor v. Nat‟l Screen Serv. Corp.,

          349 U.S. 322 (1955) .................................................................     19




3001909                                                 v
Mason v. Florida Bar,

          208 F.3d 952 (11th Cir. 2000) ..................................................                13

Mathews v. Lancaster Gen‟l Hosp.,

          883 F. Supp. 1016 (E.D. Pa. 1995),

          aff‟d, 87 F.3d 624 (3d Cir. 1996) .............................................                 16

McCarney v. Ford Motor Co.,

          657 F.2d 230 (8th Cir. 1981) ....................................................            15-16

Miami Herald Pub. Co. v. Tornillo,

          418 U.S. 241 (1974) .................................................................        10-11

Missouri Highway & Transp. Comm‟n v. Merritt,

          204 S.W.3d 278 (Mo. App. 2006) ...........................................                   20-21

Parker v. Commonwealth of Kentucky,

          818 F.2d 504 (6th Cir. 1987) ....................................................            13,14

Parmley v. Missouri Dental Board,

          719 S.W.2d 745 (Mo. banc 1986) ............................................              9-10,12-14

Peel v. Attorney Registration & Disciplinary Committee,

          496 U.S. 91 (1990) ...................................................................          13

Pessin v. State Tax Comm‟n,

          875 S.W.2d 143 (Mo. App. 1994) ...........................................                       5

Peugeot Motors v. Eastern Auto Dists., Inc.,

          892 F.2d 355 (4th Cir. 1989) ....................................................               19




3001909                                                 vi
Pittsburgh Press Co. v. Pittsburgh Comm‟n on Human Relations,

          413 U.S. 376 (1973) .................................................................    9,10,11,12

Posadas de Puerto Rico Assocs. v. Tourism Co.,

          478 U.S. 328 (1986) .................................................................            9

Property Exchange & Sales, Inc. v. King,

          822 S.W.2d 572 (Mo. App. 1992) ...........................................                       5

Sandoz Pharmaceuticals Corp. v. Richardson-Vicks, Inc.,

          902 F.2d 222 (3d Cir. 1990) .....................................................                2

State ex rel. Mo. Highway & Transp. Comm‟n v. Marcum,

          697 S.W.2d 580 (Mo. App. 1985) ...........................................                     6-7

Taucher v. Born,

          53 F. Supp. 2d 481 (D. D.C. 1999) ..........................................                    11

United States v. Edge Broadcasting Co.,

          509 U.S. 418 (1993) .................................................................         8,10

Zauderer v. Office of Disciplinary Counsel,

          471 U.S. 626 (1985) .................................................................            9



Statutes And Other Authorities:

Art. 1 § 14, Mo. Const. .......................................................................           20

§332.321, R. S. Mo. ............................................................................          1,4

§332.321.2(14), R. S. Mo. ..................................................................              1,7

§332.321.2(14)(f), R. S. Mo. ..............................................................        9,11,18,21


3001909                                                 vii
Restatement (Third) Unfair Competition, (1995) ...............................                                3

18 Wright & Miller, Federal Practice & Procedure, § 4409 (2002) ...                                        18-19

18 Wright & Miller, Federal Practice & Procedure, § 4409 (Supp.

          2008) ........................................................................................     18

18A Wright & Miller, Federal Practice & Procedure, § 4436 (2002) ...                                         17




3001909                                                     viii
                                          Argument

I.        The Trial Court Erred In Dismissing AAO’s Petition On The Ground That

          No Private Right Of Action Is Available To Enforce Dental Board

          Regulations, Because The Petition Stated A Cause Of Action, In That It

          Invoked The Common Law Of Unfair Competition.

          In Point I of its brief, AAO explained that the common law prohibits deceptive

advertising. The Missouri legislature has determined that advertising of orthodontic

services without the required disclaimer is false and deceptive. The competition which

Yellow Book fosters is unfair precisely because it is false and deceptive.

          Yellow Book never really responds to that simple argument. Its principal response

is to erect and then demolish a strawman: that § 332.321, R.S. Mo., does not include a

private right of action. Br. at 9-15. AAO has never argued otherwise. Its argument is

that § 332.321.2(14) contains a legislative decision that a general dentist‟s advertisement

without the required disclaimer is false and misleading. The common law of unfair

competition authorizes injunctive relief against false and misleading advertisements.

          Yellow Book string cites several federal cases for the proposition that the federal

Lanham Act does not permit “advertising regulations committed to agency enforcement”

to be “enforced through the backdoor of private false advertising.” Br. at 15-16. These

cases are readily distinguishable.

          In each case, the plaintiff alleged that the defendant had violated some federal

regulatory scheme and that the violation made the defendant‟s conduct false and

misleading. In each case, the courts found that the regulation in question was sufficiently


3001909                                        1
ambiguous that the courts should defer to the agency‟s expertise. Dial A Car, Inc. v.

Transportation, Inc., 82 F.3d 484, 489 n.3 (D.C. Cir. 1996) (“regulatory framework in

this case is, at the very least, ambiguous with regard to the legality of appellee‟s

activity”); Cottrell, Ltd. v. Biotrol Int‟l, Inc., 191 F.3d 1248, 1255 (10th Cir. 1999)

(“determination of the scope of EPA clearance, and whether Birex‟s advertisement

violates that clearance, would require EPA expertise”); Sandoz Pharmaceuticals Corp. v.

Richardson-Vicks, Inc., 902 F.2d 222, 231 (3d Cir. 1990) (no false advertising claims “in

cases requiring original interpretation of these Acts or their accompanying regulations”);

IQ Products Co. v. Pennzoil Products Co., 305 F.3d 368, 374 (5th Cir. 2002), cert. denied,

538 U.S. 944 (2003) (same).

          The instant case does not involve some ambiguous regulation that requires agency

expertise to interpret. It involves a plain, unambiguous legislative finding that general

dentists engage in “false, misleading or deceptive” conduct when they advertise a

specialty service without the statutory disclaimer. Not even Yellow Book has argued that

there is anything unclear or ambiguous about that statute.

          In those circumstances, federal courts do permit Lanham Act false advertising

claims. Dial A Car itself held that such a claim would lie if the regulation were “so clear

on its face that no good faith doubt concerning its interpretation would be possible.” 82

F.3d at 489 n.3. In Alpharma, Inc. v. Pennfield Oil Co., 411 F.3d 934 (8th Cir. 2005),

Alpharma alleged that Pennfield was advertising Pennfield‟s product for uses for which

the FDA had not approved. The District Court dismissed the claim but the Eighth Circuit

reversed.


3001909                                       2
          The Eighth Circuit acknowledged the cases on which Yellow Book relies, but held

that “they do not support Pennfield‟s arguments.” 411 F.3d at 939. Distinguishing

Sandoz, the Court held:

          The [Sandoz] court did not reject all Lanham Act suits involving drug labeling,

          and it actually considered the false advertising claim on the merits, refusing only

          to determine preemptively how a federal administrative agency will interpret and

          enforce its own regulations. Alpharma‟s claim does not require such a preemptive

          a determination, and Pennfield‟s attempt to place this case within the reasoning of

          Sandoz is mistaken.

Id. at 940 (citations and internal punctuation omitted).

          Yellow Book cannot dispute that the Restatement of Unfair Competition plainly

states that “accepted principles of public policy recognized by statute” can support an

unfair competition claim. Instead, it sarcastically suggests that the Supreme Court of

Missouri has not adopted the entire Restatement. Br. at 17-18.

          Missouri courts generally follow the various Restatements in making common law

decisions and Yellow Book has given no plausible reason why they would not follow

comment g to § 1. Once the legislature has unambiguously declared a particular kind of

conduct to be false and misleading, why should a party injured by such conduct not have

a right to sue for false advertising?

          There is nothing novel about using a statute to satisfy an element of a common law

claim.      A tortious interference plaintiff, for example, may have to prove that the

defendant used improper means to interfere with plaintiff‟s contract. The Supreme Court


3001909                                        3
has held that improper means include “misrepresentation of fact, threats, violence,

defamation, trespass, restraint of trade, or any other wrongful act recognized by statute

or the common law.”         Community Title Co. v. Roosevelt Federal S&L Ass‟n, 796

S.W.2d 369, 373 (Mo. banc 1990) (emphasis added). The Court did not limit that

holding to wrongful acts for which the statute provides a private right of action.

          Similarly, an employee terminated for refusing to violate a statute, or for reporting

the employer‟s intent to do so, has a right to sue for retaliatory discharge. Boyle v. Vista

Eyewear, Inc., 700 S.W.2d 859, 878 (Mo. App. 1985). On Vista‟s motion, the trial court

dismissed Boyle‟s retaliatory discharge claim because, inter alia, “Missouri courts were

without subject matter jurisdiction to try causes asserting violations of OSHA and FDA.”

700 S.W.2d at 862. Boyle‟s inability to assert a private right of action under those

statutes did not dissuade the court of appeals from reversing.

          Yellow Book claims that AAO‟s argument is “schizophrenic,” in that it both relies

on § 332.321 and disclaims reliance on the statute. Br. at 18-19. This assertion proves

only that Yellow Book does not understand (or, more likely, does not want to understand)

AAO‟s argument. To repeat, the source of AAO‟s claim is the common law of unfair

competition. The reason the competition is unfair is that the legislature has, by statute,

declared that this type of advertising is false, deceptive and misleading. Thus, AAO does

not need to have a private right of action under § 332.321 to pursue the relief it seeks.




3001909                                         4
II.       AAO Did Not Need To Exhaust Any Administrative Remedy And A

          Multiplicity Of Proceedings Is Not An Adequate Remedy.

          Yellow Book‟s second basis for affirming the trial court is that AAO failed to

exhaust its alleged administrative remedies by seeking relief from the Dental Board.

Once again, this argument completely misconceives the theory on which AAO is

proceeding. The common law of unfair competition does not have any administrative

procedures that are a precondition to litigation and the Dental Board does not have the

authority to grant the injunctive relief that AAO seeks.

          At the outset, Yellow Book cannot seek affirmance on this ground because it did

not present it to the trial court. L.F. 10-11. While numerous cases hold that appellate

courts may affirm on any ground fairly supported by the record:

          The full statement of that rule, however, is that the order must be affirmed, if the

          dismissal of an action can be sustained on any ground which is supported by the

          motion to dismiss regardless of whether the trial court relied on that ground.

Property Exchange & Sales, Inc. v. King, 822 S.W.2d 572, 574 (Mo. App. 1992)

(emphasis original).

          Yellow Book tries to dodge the issue by characterizing exhaustion of

administrative remedies as jurisdictional. Br. at 21. Its own authority recognizes that

exhaustion is jurisdictional only “if applicable.” Id. quoting Pessin v. State Tax Comm‟n,

875 S.W.2d 143, 146 (Mo. App. 1994). Yellow Book assumes that the exhaustion

doctrine applies but it never explains why.




3001909                                         5
          The Eighth Circuit rejected the identical argument in Alpharma. The District

Court dismissed the action because Alpharma failed to file an administrative complaint

with the FDA. The Eighth Circuit reversed:

          [T]he statute does not create administrative procedures for the resolution of false

          advertising claims brought by Alpharma. Moreover, the FDA does not have the

          authority to award the compensatory and punitive damages sought by Alpharma in

          the present lawsuit. The company‟s claim was therefore not cognizable by the

          agency, and it was not required to refrain from litigation until some administrative

          process had run its course.

411 F.3d at 938 (citations and internal punctuation omitted).

          The same is true here. The common law of unfair competition does not create any

administrative procedure with which AAO must comply before filing suit. And the

Dental Board does not have the authority to grant the injunctive relief against Yellow

Book that AAO seeks. As Yellow Book itself argues at length, Br. at 12-13, the statute

limits the Dental Board‟s authority to proceedings against dentists. It does not allow for

proceedings against those, like Yellow Book, who aid and abet dentists in violating the

statute.

          Yellow Book‟s suggestion that multiple complaints against offending dentists

before the Dental Board is an adequate remedy at law, Br. at 20, is wrong as a matter of

law. The necessity to bring a “multiplicity of corrective actions” in and of itself proves

that those actions are not an adequate remedy at law. State ex rel. Missouri Highway &

Transp. Comm‟n v. Marcum, 697 S.W.2d 580, 581 (Mo. App. 1985):


3001909                                        6
          The fact that an injured person has the right to bring successive actions in case of

          continuance of the wrong does not establish an adequate remedy at law and does

          not bar a court from granting an injunction to restrain the continuance of the

          injury.

Id. at 581-82.


III.      The Court Erred In Dismissing AAO’s Petition On The Ground That

          § 332.321.2(14)(f) Violated The First Amendment, Because The First

          Amendment Does Not Apply To The Subject Advertising In That The

          Absence Of The Required Disclaimer Makes The Advertising False And

          Misleading.

          Yellow Book‟s advertisements are commercial speech.            The legislature has

decided that it is false, deceptive and misleading for non-specialists to advertise dental

specialty services without disclosing that they do not have the requisite license to practice

that specialty. The First Amendment does not prevent states from regulating deceptive

commercial speech.

          Yellow Book‟s response is a frontal assault on the constitutionality of

§ 332.321.2(14). Yellow Book has waived this argument to the extent that it argues its

advertising is not commercial speech. Before the trial court, Yellow Book acknowledged

that the commercial speech doctrine applied to its advertising. S.L.F. 9. A party waives

a constitutional challenge if it does not present it “at the earliest opportunity.” Joshi v. St.




3001909                                        7
Luke‟s Episcopal-Presbyterian Hosp., 142 S.W.3d 862, 866 (Mo. App. 2004), cert.

denied, 544 U.S. 922 (2005).

          Yellow Book makes a half-hearted effort to argue that its advertising is not

commercial speech, just “editorial choice with respect to how it organizes its directory.”

Br. at 23. AAO does not challenge that editorial discretion; all it asks is that, if Yellow

Book does choose to put general dentists in the field of orthodontics, it include a

disclaimer that the legislature has decided is necessary to avoid misleading consumers.

          AAO‟s‟ initial brief explained why Yellow Book‟s advertising easily satisfies the

criteria for commercial speech set forth in Bolger v. Youngs Drug Products Corp., 463

U.S. 60, 66-67 (1983), and Yellow Book does not respond. Advertising of professional

services “is commercial speech,” “pure commercial advertising.” Florida Bar v. Went

For It, Inc., 515 U.S. 618, 623, 635 (1995).

          Yellow Book claims that there is a distinction between the advertiser (the general

dentist) and the medium in which the advertisement appears (Yellow Book). Br. at 23. It

cites no authority for that distinction and the Supreme Court of the United States clearly

does not agree with it.

          In United States v. Edge Broadcasting Co., 509 U.S. 418 (1993), a federal statute

prohibited the news media from accepting paid advertising for state lotteries if the

medium was located in a state that did not allow lotteries. The parties agreed that the

statute did not cover “the broadcast of non-commercial information about lotteries.” 509

U.S. at 424.      The Supreme Court evaluated the ban on paid advertising under the

commercial speech test set forth in Central Hudson Gas & Elec. Corp. v. Public Service


3001909                                        8
Comm‟n, 447 U.S. 557 (1980), and upheld the statute against a First Amendment

challenge. 509 U.S. at 436.

          In Pittsburgh Press Co. v. Pittsburgh Comm‟n on Human Relations, 413 U.S. 376

(1973), a city ordinance prohibited a newspaper from publishing advertisements for jobs

based on gender. Much like Yellow Book, the newspaper claimed that this ordinance

“restrict[ed] its editorial judgment” in violation of the First Amendment. 413 U.S. at 381.

The Supreme Court affirmed the validity of the ordinance because the advertisements

were “classic examples of commercial speech.” Id. at 385.

          Yellow Book does not dispute that the Supreme Court of Missouri sustained the

disclaimer requirement against a First Amendment challenge in Parmley v. Missouri

Dental Board, 719 S.W.2d 745, 752 (Mo. banc 1986). Instead, it asks this Court to

overrule Parmley. Br. at 23-27.1

          The basis for this remarkable request is that one of the 12 United States Supreme

Court cases on which Parmley relied, Posadas de Puerto Rico Assocs. v. Tourism Co.,

478 U.S. 328 (1986), has since been overruled. The part of Parmley sustaining the

disclaimer did not even cite Posadas:

          The disclaimer of § 332.321.2(14)(f) rather readily may be found constitutionally

          sufficient; appellant has only a minimal protected interest in “not providing . . .

          particular factual information.” Zauderer v. Office of Disciplinary Counsel, 105

          S. Ct. at 2282. The interests of the State, by requiring “factual and uncontroversial

          information” about the services involved, are advanced at no significant cost to the

1
          Yellow Book has waived this argument by failing to raise it in the trial court.

3001909                                         9
          disclaimer‟s first amendment rights. Id. More important is the value to consumers

          of the greater information conveyed:     Disclaimers are effective safeguards to

          dissipate “consumer confusion or deception.” In re R.M.J., 455 U.S. 191, 209,

          102 S. Ct. 929, 71 L.Ed.2d 64 (1982). The disclaimer prescription advances the

          State‟s interest in a circumscribed manner, yet causes appellant no outweighing

          harm; it is on that basis upheld.

719 S.W.2d at 752.

          44 Liquormart, Inc. v. Rhode Island, 517 U.S. 484 (1996), overruled the result in

Posadas. No longer may a legislature “suppress truthful, nonmisleading information”

about activities that are not illegal. 517 U.S. at 510. But nothing in Liquormart purports

to restrict disclaimers. To the contrary, the opinion specifically recognizes that states

“may require commercial messages” to include such “disclaimers, as are necessary to

prevents its being deceptive.” 517 U.S. at 498.

          Yellow Book also claims that Parmley is distinguishable because Parmley was a

dentist and Yellow Book is a third-party publisher. Br. at 27-28. Yellow Book cites no

authority for the proposition that this distinction matters and it does not explain why it

should. Edge Broadcasting and Pittsburgh Press make it clear that the distinction is

irrelevant.

          Yellow Book next launches a lengthy – and utterly irrelevant – discussion of the

invalidity of prior restraints against protected speech. Br. at 28-37. The explicit premise

of this argument and the cases on which Yellow Book relies is that the speech in question

is fully protected speech instead of commercial speech. E.g., Miami Herald Pub. Co. v.


3001909                                       10
Tornillo, 418 U.S. 241 (1974) (requiring a newspaper to provide equal space for a

politician to refute negative editorial); Taucher v. Born, 53 F. Supp. 2d 464, 481 (D. D.C.

1999) (“plaintiffs‟ publications constitute fully protected speech”).        As previously

explained, that premise is false.

          Yellow Book paints a parade of horribles if the Court prohibits it from publishing

advertisements that the legislature has deemed false and misleading. Br. at 32-34. Most

of these examples ignore the difference between fully protected speech and commercial

speech. And they grotesquely exaggerate the consequences of the injunction that AAO

actually sought. If the Court issued that injunction, Yellow Book would be entirely free

to classify general dentists wherever it pleased and to publish their advertisements of

orthodontic services. It would simply have to include the disclaimer that these dentists

did not have specialist‟s licenses.

          Yellow Book‟s complaint that any organization could sue it for “false

sponsorship,” Br. at 32-33, wildly mischaracterizes AAO‟s theory. Other organizations

could sue Yellow Book for such advertisements only if they could point to “a specific

state law prohibition against” such classifications, such as § 332.321.2(14)(f). American

Ass'n of Orthodontists v. Yellow Book USA, Inc., 434 F.3d 1100, 1103 (8th Cir. 2006).

          The true parade of horribles would occur if the Court accepted Yellow Book‟s

theory that it has a First Amendment right to publish whatever commercial advertising it

pleases, such as ads for prostitution or illegal drugs. Pittsburgh Press expressly rejected




3001909                                       11
the notion that the First Amendment protects such activity. 413 U.S. at 388. It provides

no further protection for the false and misleading advertising at issue here.2

          Yellow Book claims that the statute is too vague to pass First Amendment muster.

Br. at 38-39. As usual, the cases it cites deal with fully protected speech, not commercial

speech. And the injunction that AAO seeks will be quite precise: if Yellow Book wants

to publish advertising from general dentists about orthodontics, it must include the

statutory disclaimer.

          Yellow Book finally gets around to discussing the real issue, regulations on

commercial speech, in Point III-B-4 of its brief. Parmley has settled the question of

whether the statutory disclaimer violates the First Amendment; as previously explained,

that case remains good law; and this Court must follow it.

          On the merits, Yellow Book starts with the astonishing proposition that its

advertising is truthful and not misleading, because general dentists can legally perform

orthodontic services.     Br. at 40-41.    The legislature has specifically declared that

advertising specialty services without the required disclaimer is “false, misleading or

deceptive.” The one case that Yellow Book cites, In re R.M.J., 455 U.S. 91 (1982),

squarely holds that “[f]alse, misleading or deceptive advertising remains subject to

restraint,” 455 U.S. at 200, and that “disclaimers” are “preferabl[e]” to an outright ban.

Id. at 203.



2
       Yellow Book‟s argument that “publications cannot be restrained merely because
they contain an advertiser‟s content that may violate some specialized law,” Br. at 37, is
directly contrary to Pittsburgh Press.

3001909                                      12
          Yellow Book next string cites seven cases that allegedly stand for the proposition

that states may not “restrict truthful statements.” Br. at 42-43. Six of those seven cases

involved outright bans on particular kinds of advertising. Abrahamson v. Gonzales, 949

F.2d 1567, 1578 (11th Cir. 1992); Parker v. Commonwealth of Kentucky, 818 F.2d 504,

510 (6th Cir. 1987); Peel v. Attorney Registration & Disciplinary Committee, 496 U.S.

91, 110 (1990); Bingham v. Hamilton, 100 F. Supp. 2d 1233, 1241 (E.D. Cal. 2000);

Borgner v. Cook, 33 F. Supp. 2d 1327, 1331 (N.D. Fla. 1998); Ardt v. Dep‟t of

Professional Regulation, 578 N.E.2d 128, 132 (Ill. App. 1991), aff‟d, 607 N.E.2d 1226

(Ill. 1992).

          Abrahamson, Parker, Peel and Bingham each expressly held that a disclaimer

would resolve any potentially misleading aspect of the advertising. Borgner and Ardt

specifically cited Parker in condemning a “complete ban,” 33 F. Supp. 2d at 1331, or an

“absolute prohibition,” 578 N.E.2d at 132, on the advertising in question. Those cases

support AAO‟s argument.

          The seventh case, Mason v. Florida Bar, 208 F.3d 952 (11th Cir. 2000), is readily

distinguishable. Mason wanted to advertise his AV rating in Martindale-Hubbell as the

“highest rating” available. The Bar allowed him to publish the rating but prohibited the

factually accurate statement that it was the highest available. The Eleventh Circuit struck

down the Bar‟s rule because the Bar was unable to produce anything but speculation to

suggest that the proposed advertising was misleading. 208 F.3d at 958.

          Here, Parmley squarely held that the State‟s goal – to “protect the public from

those unqualified to practice in a specialty,” 719 S.W.2d at 752 – is legitimate. Parmley


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also squarely held that the disclaimer serves this goal, because “the public will be

apprised when a limited though unqualified practitioner who has no specialty license

purports to bear such qualifications.” Id.

          Yellow Book claims that it is pure speculation that the disclaimer would assist

consumers. Br. at 44. But its own authority agrees with Parmley that the state does have

a “substantial interest in enabling the public to distinguish between general practitioners

and specialists.” Parker, 818 F.2d at 510-11. Telling the public that a general dentist is

not a specialist clearly serves that purpose.

          Moreover, the Supreme Court of the United States has made it clear that courts

must consider the burden imposed on speech as well as the benefit from the regulation.

Ibanez v. Fla. Dep‟t of Bus. & Prof. Regulation, 512 U.S. 136, 146 (1994). The burden

on Yellow Book in complying with the statutorily required disclosure is minimal.

          Yellow Book‟s final salvo is that there are less restrictive ways of protecting the

public than requiring a simple disclosure, such as limiting general dentists from

practicing specialties. Br. at 45. One suspects that most general dentists would find that

rather more burdensome than disclosure. In any event, Parmley has flatly rejected the

argument: a dentist‟s interest in not supplying truthful information is “minimal.” 719

S.W.2d at 752.

          Yellow Book has devoted almost 25 pages of its brief to an issue which the

Supreme Court of Missouri has directly addressed and resolved in AAO‟s favor. If

Yellow Book thought that its other arguments had the slightest merit, it would not have

spent that much space whipping a thoroughly dead horse.


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IV.       The Trial Court Erred In Dismissing AAO’s Petition On The Ground Of Res

          Judicata, Because The Federal Judgment Does Not Bar This Action.

          A.    A Dismissal For Want Of Standing Is Not A Judgment On The Merits.

          Point III-A of AAO‟s initial brief established that a dismissal on standing grounds

is not on the merits and hence cannot support a claim of res judicata. Any discussion

about whether AAO stated a cause of action is irrelevant.

          Yellow Book‟s principal response is that the rules of res judicata operate

differently when the first case is dismissed on prudential standing grounds than when it is

dismissed on constitutional standing grounds. Br. at 48. This argument is simply wrong.

          The parties agree that federal law determines the preclusive effect of a federal

judgment:

          If the first suit was dismissed for defect of pleadings, or parties, or a

          misconception of the form of proceeding, or the want of jurisdiction, or was

          disposed of on any ground which did not go to the merits of the action, the

          judgment rendered will prove no bar to another suit.

Costello v. United States, 365 U.S. 265, 286 (1961) (emphasis added). Obviously, a

dismissal on prudential standing grounds is a ground that does not go to the merits.

          McCarney v. Ford Motor Co., 657 F.2d 230 (8th Cir. 1981), cited in AAO's

opening brief, involved a dismissal on prudential standing grounds. As noted in that

brief, the court dismissed the first lawsuit because the former shareholders were trying to

enforce statutory rights that belonged to the corporation. The “general prohibition on a



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litigant's raising another person's legal rights” is a prudential standing rule. Elk Grove

Unified S.D. v. Newdow, 542 U.S. 1, 12 (2004). Relying on Costello, the Eighth Circuit

held that the first lawsuit was not res judicata. 657 F.2d at 234. Accord, Ho-Chunk

Nation v. J.C. Penney Co., 1998 WL 774118 (N.D. Ill. 1998) at *4 (no res judicata when

plaintiff in first suit “did not have standing to sue on its own behalf”).

          The only authority Yellow Book cites in support of this putative distinction is

Federated Dep't Stores, Inc. v. Moitie, 452 U.S. 394 (1981). Moitie simply does not so

hold. It holds only that there is no general equitable exception to res judicata for parties

who lose a motion to dismiss and fail to appeal, even if their co-plaintiffs are successful

on appeal. 452 U.S. at 399. The words “standing” and “prudential” appear nowhere in

the opinion.

          The likely source of Yellow Book's confusion about Moitie is a technical doctrine

in antitrust law known as “antitrust standing” – i.e., “an injury of the type the antitrust

laws were intended to prevent.” Mathews v. Lancaster Gen'l Hosp., 883 F. Supp. 1016,

1045 (E.D. Pa. 1995), aff'd, 87 F.3d 624 (3d Cir. 1996). The doctrine has nothing to do

with standing in its jurisdictional sense. Id.

          The original dismissal in Moitie, therefore, had nothing to do with jurisdictional

issues. Rather, it was simply a holding that “the plaintiff had not stated a cause of action

which, all agree, is a judgment „on the merits‟ of the substantive claim.” McCarney, 657

F.2d at 232, citing the Supreme Court's opinion in Moitie.

          Yellow Book also claims that the Eighth Circuit's finding that the original

complaint did not state a cause of action is an “alternate holding” which supports a


3001909                                          16
finding of res judicata. Br. at 51. It may be an alternate holding for purposes of stare

decisis. As the cases AAO cited in its opening brief establish, it is not a basis for res

judicata:

          [A] dismissal that rests on both lack of jurisdiction and alternative rulings on the

          merits is dominated by the jurisdictional ruling and should not preclude a second

          action on a claim caught up with the jurisdictional ruling.

18A Wright & Miller, Federal Practice & Procedure, §4436 at 153 (2002).

          The only case that Yellow Book cites, Carter v. Money Tree Co., 532 F.2d 113,

115 (8th Cir.), cert. denied, 426 U.S. 925 (1976), discusses res judicata generally. It does

not discuss the present situation, in which the prior judgment combined a dismissal for

want of standing with a finding that the complaint failed to state a cause of action.


          B.     Litigation Over The 2003 Yellow Book Does Not Preclude A

                 Subsequent Action Over The 2006 Or 2007 Yellow Book.

          AAO‟s opening brief established that res judicata does not bar a second action

based on events that occurred after the first action was over. Every time Yellow Book

publishes a new version of its directory without the required disclaimer, it commits a new

act of unfair competition.

          Yellow Book argues at length that res judicata bars new legal theories seeking

relief from the same conduct. Br. at 52-57, citing Lane v. Peterson, 899 F.2d 737 (8th

Cir.), cert. denied, 498 U.S. 823 (1990). As Yellow Book itself states, res judicata

applied there because the different legal theories all arose from “the same corporate sale.”



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Br. at 55. Here, the legal theories may be similar, but they apply to different editions of

the directory.

          Yellow Book argues that AAO could have pleaded §332.321.2(14)(f) in the 2003

action, so res judicata bars its efforts to do so now. Br. at 57-58. Another strawman.

AAO does not seek to avoid res judicata based on a different legal theory, but on the

basis that the 2007 directory is not the same as the 2003 directory.

          Suppose Yellow Book published a libel of AAO in its 2003 directory, but the

petition is dismissed with prejudice because AAO did not plead special damages with the

requisite particularity. Yellow Book repeats the same libel in the 2007 edition, and this

time the petition does adequately plead special damages.          Is the first judgment res

judicata of the second libel?

          Yellow Book does not dispute that Commissioner of Internal Revenue v. Sunnen,

333 U.S. 591 (1948), squarely holds that each separate tax year is a different cause of

action. It claims that tax cases are “an exception to ordinary preclusion rules.” Br. at 58-

59, citing 18 Wright & Miller §4409 (Supp. 2008) at 40.

          The snippet that Yellow Book quotes refers only to “special limits on issue

preclusion.” Id. (emphasis added).        What that has to do with res judicata – claim

preclusion – Yellow Book does not say.             Wright & Miller's discussion of claim

preclusion states that:

          [S]ome common circumstances may support adoption of clear conventions that

          define discrete causes of action. A clear rule avoids the need for case-by-case

          decisions and more importantly gives clear notice to all parties that can be relied


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          upon in defining the stakes of a litigation. The best-known illustration is the rule

          that every tax year constitutes a separate cause of action.

18 Wright & Miller § 4409 (2002) at 248.3

          Yellow Book's penultimate salvo is that changes in a “few” facts do not warrant

avoiding res judicata and that the continuation of policies does not affect that result. Br.

at 59-60, citing Peugeot Motors v. Eastern Auto Dists., Inc., 892 F.2d 355 (4th Cir. 1989).

The basis for the holding was that the facts were “either fully litigated or in existence” at

the time of the first judgment. 892 F.2d at 359. The 2007 Yellow Book was not even

published at the time of the first judgment.

          Yellow Book's final argument is an alleged exception for conduct continuing into

the future. Br. at 60 citing Hatch v. Boulder Town Council, 471 F.3d 1142, 1151 (10th

Cir. 2006). Hatch mentions, but does not describe the scope of that exception. Hatch's

source for the exception, Wright & Miller, says that it applies to "all matters arising prior

to the close of trial or even judgment." §4409 at 221. Once again, the 2007 Yellow Book

was not even published when the first case went to judgment.

          Res judicata simply does not apply to transactions that had not yet occurred when

the first judgment was entered. The controlling decisions of the United States Supreme

Court in Sunnen and Lawlor v. Nat'l Screen Serv. Corp., 349 U.S. 322 (1955), so hold

and Yellow Book has nothing meaningful to say about them.



3
        Yellow Book‟s argument that AAO did not present this issue to the trial court, Br.
at 59, is frivolous. AAO made precisely the same argument, citing the same cases, in its
memorandum opposing the motion to dismiss. S.L.F. 36-38.

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V.        The Trial Court Erred In Dismissing AAO's Petition On The Ground That

          Yellow Book Is Not A Competitor Of Orthodontists, Because The Publisher

          Of False Advertising Is Contributorily Liable At Common Law, In That It

          Directly And Substantially Assists The False Advertiser.

          In its opening brief, AAO cited three Missouri cases and the Restatement to

establish that AAO is entitled to an injunction against an advertising medium that

publishes false and misleading advertising. Since that approach allows the courts to

resolve the issue in one lawsuit instead of many, it is the only sensible public policy.

          Yellow Book does not even try to respond to the legal analysis. It claims that

Missouri common law is generally the same as the Lanham Act, Br. at 61, but that is

clearly incorrect when it comes to suing advertising media. Yellow Book cites a few

cases allegedly immunizing media from even equitable relief, Br. at 61-62, but it cites no

Missouri authority.

          Instead, it offers the novel argument that “prudential standing considerations”

should trump a properly pleaded petition that states a cause of action under substantive

law. Br. at 63. Yellow Book cites no legal authority for this proposition and does not

explain the absence of any. That forfeits the point. Huch v. Charter Communications,

Inc., 2008 WL 1721868 (Mo. App. E.D. Apr. 15, 2008) at *3 (“appellant must cite legal

authority in support of its points relied on if precedent is appropriate and available, or, if

there is no authority, explain why citations are unavailable”).

          Yellow Book's argument is directly contrary to the open courts provision in Art. I

§14 of the Missouri Constitution. The open courts provision “permits the pursuit in


3001909                                       20
Missouri courts of causes of action recognized in substantive law.” Missouri Highway &

Transp. Comm'n v. Merritt, 204 S.W.3d 278, 285 (Mo. App. 2006). And it prohibits

“judicial or legislative acts,” like prudential standing considerations, that “impose

procedural bars to access to Missouri courts.” Id. (emphasis original).

          Yellow Book's prudential standing considerations are makeweights. For example,

it claims that the Court “will not get full and adequate information about the dispute.”

Br. at 62, citing Yellow Book, 434 F.3d at 1103. The Eighth Circuit thought that detailed

information about each dentist was necessary only because it was unaware of “a specific

state law prohibition against general dentists holding themselves out as orthodontists.”

Id. Section 332.321.2(14)(f) is, of course, just such a statewide prohibition. Yellow

Book identifies no other information that the Court will need to resolve the case.

          Yellow Book also claims that AAO wants to “shortcut litigation . . . with its

competitors.” Br. at 62. Yellow Book does not explain why this is a bad idea. One

lawsuit against the medium is far more efficient, not just for AAO but also the courts,

than multiple lawsuits against multiple dentists.

          Yellow Book argues that most advertising media “are likely to give in” to AAO's

lawsuit, “rather than to litigate matters peripheral to their business.” Br. at 63. Whatever

the theoretical merit of this argument, it has no place here. Yellow Book has fought this

case as vigorously as if its own corporate survival were at stake.

          Finally, Yellow Book suggests that AAO file complaints with the Dental Board.

Br. at 63. As previously explained, a multiplicity of lawsuits is far less efficient than the




3001909                                      21
single lawsuit that Missouri common law allows against a publisher who contributes to

unfair competition though false and deceptive advertising.


                                       Conclusion

          For these reasons, AAO respectfully submits that the Court should reverse the

judgment of dismissal and remand for trial.


                                          Respectfully Submitted,

                                          HUSCH BLACKWELL SANDERS, LLP

                                          By: ______________________________
                                                Mark G. Arnold, MBE #28369
                                                mark.arnold@huschblackwell.com
                                                Dutro E. Campbell, MBE #47942
                                                bruce.campbell@huschblackwell.com
                                                The Plaza in Clayton Office Tower
                                                190 Carondelet Plaza, Suite 600
                                                St. Louis, MO 63105
                                                Phone: 314.480.1500
                                                Fax: 314.480.1505

                                          Attorneys for Plaintiff/Appellant
                                          American Association of Orthodontists




3001909                                       22
                                 Certificate Of Compliance

          The undersigned counsel hereby certifies, under Rule 84.06(c), that this brief: (1)

contains the information required by Rule 55.03; (2) complies with the limitations

contained in Rule 84.06(b); (3) contains 5,583 words, exclusive of the sections exempted

by Rule 84.06(b)(2) pursuant to Local Rule 360(c), based upon the word count that is part

of Microsoft Office Word 2003.          The undersigned counsel further certifies that the

diskette has been scanned and is free of viruses.



                                                    _______________________________
                                                    Mark G. Arnold




3001909                                       23
                                   Certificate Of Service

          I certify that one copy of this brief and one copy on floppy disk, as required by

Missouri Supreme Court Rule 84.06(g), were served on each of the counsel identified

below by placement in the United States Mail, postage paid, this 23rd day of June, 2008:

Mark Sableman, Esq.
Harry W. Wellford, Esq.
Michael Nepple, Esq.
Thompson Coburn, LLP
One U.S. Bank Plaza
St. Louis, MO 63101

                                                  ______________________________
                                                  Mark G. Arnold




3001909                                   24

				
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