The People v. Super. Ct. (Cardillo)
218 Cal. App. 4th 492, 160 Cal. Rptr. 3d 264, 2013 WL 3942725 (2013)
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Rule of Law:
An unlicensed individual who owns and controls the business operations of a medical practice, including employing physicians, setting their hours, and collecting patient fees, is engaged in a 'system or mode of treating the sick or afflicted' and can be criminally prosecuted for the unauthorized practice of medicine under Business and Professions Code section 2052, even if they do not personally examine or treat patients.
Facts:
- Sean Cardillo and Andrew Cettei co-owned Kush Dr., LLC, a corporation that operated medical marijuana clinics at two locations in Venice, California.
- Cardillo was also the chief executive officer of a medical marijuana dispensary and a smoking lounge co-located with one of the clinics.
- Cettei hired licensed physicians to work at the clinics, set their hours, and paid them a percentage, typically one-third, of the daily profits collected from patients.
- Cardillo and Cettei, through Kush Dr., controlled the clinics' business operations, including leasing the premises, scheduling patients, and acting as the agent for collecting patient fees.
- A lease agreement for one clinic, signed by Cettei on behalf of Kush Dr., established that the company was the lessor and the physician was the lessee, with Kush Dr. controlling patient scheduling and fee collection.
- The clinic examination rooms were small and lacked standard medical equipment, containing only a blood pressure cuff and a stethoscope.
- Undercover agents feigning minor ailments like headaches and insomnia received minimal medical examinations from the hired physicians before being issued medical marijuana recommendations.
- When one undercover agent disputed a fee, Andrew Cettei, not the physician, resolved the dispute.
Procedural Posture:
- The Los Angeles County District Attorney filed a felony complaint against Sean Cardillo and Andrew Cettei in the Superior Court of Los Angeles County (trial court).
- Following a preliminary hearing, the magistrate granted the defendants' motion to dismiss the charge of practicing medicine without a license (§ 2052), concluding the statute only applies to individuals who actively treat patients.
- The District Attorney refiled the charge as count 14 in an information.
- The defendants then filed a motion under Penal Code section 995 to dismiss count 14.
- The Superior Court granted the defendants' motion, dismissing the charge and agreeing with the magistrate's legal interpretation.
- The District Attorney (Petitioner) sought a writ of mandate from the California Court of Appeal, Second Appellate District (intermediate appellate court), to compel the Superior Court to reinstate the charge.
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Issue:
Does an unlicensed individual who owns and operates a medical marijuana clinic, employs licensed physicians, sets their hours, and manages patient fees, engage in the unauthorized practice of medicine in violation of Business and Professions Code section 2052, even if the individual does not personally examine or treat patients?
Opinions:
Majority - Willhite, Acting P. J.
Yes. An unlicensed individual who controls the business operations of a medical clinic can be criminally charged with practicing medicine without a license. The court reasoned that Business and Professions Code section 2052 is broadly written to prohibit an unlicensed person from 'practic[ing]... any system or mode of treating the sick or afflicted.' By establishing and controlling clinics for the sole purpose of issuing medical marijuana recommendations—including employing physicians, setting their hours, soliciting patients, collecting fees, and paying the physicians a percentage—Cardillo and Cettei created and operated such a 'system.' The court relied on precedent from disciplinary cases like Painless Parker v. Board of Dental Exam., which established that controlling the 'business side' of a medical practice constitutes the practice of medicine itself. This is because it creates a divided loyalty where the licensed professional may prioritize the business interests of their unlicensed employer over the well-being of the patient. The fact that Cardillo and Cettei did not personally diagnose or treat patients is immaterial, as their control over the entire enterprise falls within the statute's prohibition.
Analysis:
This decision clarifies that criminal liability for the unlicensed practice of medicine under section 2052 extends beyond direct patient treatment to include the ownership and operational control of a medical practice by non-physicians. It affirms the 'corporate practice of medicine' doctrine in a criminal context, signaling that using a corporate structure to control medical services is not a shield from prosecution. The ruling reinforces the legal principle that medical decisions and practices must remain under the control of licensed professionals to prevent commercial interests from compromising patient care. This has significant implications for the business structuring of medical clinics, particularly in emerging fields, by underscoring the legal risks for unlicensed owners and managers.
