Lost Owners: North Carolina’s Limitation of Veterinary Practice Property Rights

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North Carolina’s Constitution, originally adopted in 1776 before the United States Constitution, provides that, “[n]o person shall be taken, imprisoned, or disseized of his freehold, liberties, or privileges, or outlawed, or exiled, or in any manner deprived of his life, liberty, or property, but by the law of the land.”  The Fourteenth Amendment echoes a similar promise that no one will be deprived of “life, liberty, or property without due process of law.”  The late, former president, William Howard Taft once declared that, “[n]ext to the right of liberty, the right of property is the most important individual right guaranteed by the Constitution and the one which, united with that of personal liberty, has contributed more to the growth of civilization than any other institution established by the human race.”  Despite the value of property rights, North Carolina is currently restricting this right of its citizens and, as a result, allowing national corporations to take ownership in their place.

Under North Carolina law, a licensed veterinarian may own his or her veterinary practice as a sole proprietorship, but they may not devise or distribute the ownership of their business to their family or friends unless the person they wish to devise their business to is also a licensed veterinarian.  Consequently, when a North Carolina local veterinary practice owner is ready to retire, their options are either to shut the business down, find a local buyer with the money to purchase the practice, or, more likely, sell to a large national veterinarian corporation.

North Carolina’s Laws and Regulations for Veterinary Practices

North Carolina State University’s College of Veterinary Medicine has remained among the top four veterinary schools in the nation since 2019.  Despite North Carolina being a top location to study veterinary medicine, the ownership of such veterinary practices within the state raises some concerns.

The North Carolina Veterinary Medical Board (NCVMB) controls and regulates veterinary practice and facility ownership in the state.  One of the NCVMB’s special functions is to deny or grant the required permits to legally operate a veterinarian hospital.  It is only the NCVMB that has the power to “[a]dopt, amend, or repeal all rules necessary for its government and all regulations necessary to carry into effect the provisions of [the North Carolina Veterinary Practice Act].”

The North Carolina Veterinary Practice Act, which came into effect in 1976, states that a veterinary clinic “may be conducted as a sole proprietorship, by a partnership, or by a duly registered professional corporation.  [Additionally,  w]henever the practice of veterinary medicine is carried on by a partnership, all partners must be licensed.”  Thus, for example, if a graduate of NC State’s College of Veterinary Medicine goes out, applies for a permit from the NCVMB,  and starts a successful local practice in the state as a sole proprietorship, by the time he or she is ready for retirement, they will not be able to pass their business onto their children or family unless such a family member has likewise decided to pursue veterinary studies.  The business that provides for the family cannot continue providing for that family after the veterinary member passes, since any person not licensed to practice veterinary medicine will be an unlawful owner.  This restriction of business is incompatible with the ideals of property rights, especially when the medical standards and practices can remain up to professional standards when owned by non-veterinarians.

The North Carolina Supreme Court has held that “[e]very person owning property has the right to make any lawful use of it he sees fit, and restrictions sought to be imposed on that right must be carefully examined[.]”  The Court has further claimed that “[t]he free use of property is favored in our State, and when there are doubts about the use to which property may be put, those doubts should be resolved in favor of such free use.”  North Carolina, however, has continued to restrict the alienation of veterinary businesses.

Corporations are Increasing Ownership of Veterinary Practices in North Carolina

Without any change, local owners of veterinary practices entering retirement must either close down, find another veterinarian to buy their practice, or in many cases, submit to selling their local practice to a large national corporation.

Big corporations are increasingly setting their sights on the veterinary industry for two main reasons.  First, “[b]uying a cash business like a companion animal practice is considered a safe and lucrative investment for private entities looking to gain profit and diversify their portfolio.”  Second, “[m]ergers and acquisitions are easier to run, taking into account high market fragmentation (there are numerous small hospitals) and a growing number of practice owners thinking about sale and retirement.”

 Mars Inc., famously known for its candy, Twix, M&Ms, Snickers, and Starbursts, acquired VCA in 2017.  Since then, VCA now “owns more than 1,000 animal clinics in North America.”  Interestingly enough, Mars Inc. also owns Banfield Pet Hospital, the clinics often seen in PetSmart stores.  As of February 2024, 57 Banfield Hospitals can be found in North Carolina alone.  Other national corporations are also buying and gaining veterinary practices in North Carolina as well, including Mission Veterinary Partners (MVP), Veterinary Centers of America (VCA), Southern Veterinary Partners (SVP),  Encore Vet Group, (EVG),  VetCor, and  Community Veterinary Practice (CVP).  These last two corporations now own forty-nine animal clinics throughout North Carolina alone.

Although the process varies, corporations may partner with a licensed veterinarian and name that licensed veterinarian on the application and register form as the owner, even if the veterinarian is not necessarily practicing at that specific location.  A licensed veterinarian partnered with national corporations may have their name on several veterinary practices.

Additionally, the business for animal care is likely to only increase.  According to a recent survey done by the American Pet Products Association, the total pet industry expenditures are up 19%, from $103.6 billion in 2020 to $123.6 billion today.  Additionally, within the same survey, it was found that presently, from 2021-2022, nearly 70% of US households own a pet, which is roughly about 90.5 million families. Without any change, North Carolina’s animal care is veering towards, if not already arrived at, a majority of care from national corporations rather than local owners.

How Other States Are Handling Property Rights and Veterinary Practices

This type of property restriction, however, is not the case in all states.  Currently, fifteen states allow ownership of veterinary clinics by unlicensed persons, so long as certain standards are met, including the oversight of the practice by a licensed veterinarian.  Among these fifteen states are California, Virginia, Florida, Oregon, New Hampshire, and Vermont.  These states provide ways for local veterinary practices to remain locally owned rather than having to sell the business to a large corporation.  For example, current Florida law states that,

Any person who is not a veterinarian licensed under this chapter but who desires to own and operate a veterinary medical establishment or limited service clinic shall apply to the board for a premises permit.  If the board certifies that the applicant complies with the applicable laws and rules of the board, the department shall issue a premises permit.  No permit shall be issued unless a licensed veterinarian is designated to undertake the professional supervision of the veterinary medical practice and the minimum standards set by rule of the board for premises where veterinary medicine is practiced.  Upon application, the department shall submit the permittee’s name for a statewide criminal records correspondence check through the Department of Law Enforcement.  The permittee shall notify the board within 10 days after any designation of a new licensed veterinarian responsible for such duties.

 What About Medical Standards?

One of the main concerns and arguments against more inclusive ownership laws for veterinary practices is that medical standards and procedures may be compromised in the process.  This can be prevented by implementing safety mechanisms ensuring all medical performance will remain as is.  Florida, a state that allows non-veterinarian owners, expresses “that the practice of veterinary medicine is potentially dangerous to the public health and safety if conducted by incompetent and unlicensed practitioners[,]” but “[t]he legislative purpose in enacting this [veterinary practice] chapter is to ensure. . . safe practice.”

The purpose of North Carolina’s own Veterinary Practice Act is similar, claiming that it is “to promote the public health, safety, and welfare” of veterinary medicine.  Yet, currently, even with similar purposes, North Carolina has continued to suppress ownership.

By following the examples of other states’ guidelines, North Carolina would not have to fear any decline in the quality of animal care and services.  In North Carolina’s neighboring state of Virginia, anyone may own a veterinary practice so long as there is a veterinarian-in-charge who has been registered with the Virginia Board of Veterinary Medicine.  The legislation of Virginia has set forth detailed provisions to maintain the professionalism and safety required, stating that, “[t]he veterinarian-in-charge of a veterinary establishment is responsible for:

1. Regularly being on site as necessary to provide routine oversight to the veterinary establishment for patient safety and compliance with law and regulation.
2. Maintaining the facility within the standards set forth by this chapter.
3. Performing the biennial controlled substance inventory and ensuring compliance at the facility with any federal or state law relating to controlled substances as defined in § 54.1-3404 of the Code of Virginia.  The performance of the biennial inventory may be delegated to another licensee, provided the veterinarian-in-charge signs the inventory and remains responsible for its content and accuracy.
4. Notifying the board in writing of the closure of the registered facility 10 days prior to closure.
5. Notifying the board immediately if no longer acting as the veterinarian-in-charge.
6. Ensuring the establishment maintains a current and valid registration issued by the board.

Similarly, but with some varying provisions that North Carolina could adopt as well, is Oregon’s stance on maintaining safety standards.  In Oregon, a licensed veterinarian overseer is referred to as a “managing veterinarian” rather than Virginia’s “veterinarian-in-charge.”  Oregon’s statute provides that the managing veterinarian should:

1. Provide the Board with documented authority from the facility owner to maintain the facility within the standards set forth by this chapter.
2. Ensure facilities maintain and post a valid facility registration issued by the Board.
3. Ensure timely provision of medical record copies from the facility when requested.

North Carolina may adopt similar or verbatim statutes which would allow more ownership opportunities within the field, while also maintaining rigorous medical standards and practices.

Conclusion

The NCVMB should amend the regulations and rules regarding ownership of veterinary practices and allow permits to non-licensed owners as long as the safety standards are satisfied.  By following leading states that have set provisions to ensure quality control over medical practice, North Carolina can continue providing excellent care to all furry clients while promoting freedom of property rights for their owners.