California Appellate Court Upholds Shortcut Form of Judicial Review for Physician Discipline Cases

By Michael Asimow⁽¹⁾

When the Medical Board of California asserts that a physician is guilty of gross negligence or misconduct, the law provides ample (perhaps excessive) procedural protection to the physician. An independent, central-panel ALJ conducts the hearing and writes a proposed decision. The Board must prove its case by clear and convincing evidence -- not just a preponderance. The decision must be supported by some non-hearsay evidence.

If the Medical Board's decision goes against the physician, a trial court reviews the decision and is required to make an independent judgment of the facts and application of the law to the facts. California, alone among the states, requires independent judgment review in cases involving vested, fundamental rights (such as professional licenses). The effect of independent judgment review is that the proposed decision of the ALJ and the final decision of the Medical Board count for nothing when the cases goes to court. A single superior court judge reweighs the evidence and independently applies the legal standard. Until recently, the physician also was entitled as of right to appellate review of the trial court's decision.

A 1989 study by the Center for Public Interest Law at the University of San Diego showed that a single case of physician discipline could drag out over eight years; during that time, the physician ordinarily continues to practice, thus perhaps seriously endangering patients. Moreover, exorbitant administrative resources had to be devoted to each case, thus limiting the number of disciplinary cases the Board could bring.

Adroit lobbying by the California Medical Association prevented radical legislative change to this system. In the end, the legislature achieved only modest reform. The independent judgment standard was untouched. However, appellate review of superior court decisions in physician discipline cases would be by extraordinary writ instead of appeal. Bus. & Prof. C. §2337. The practical consequence of this change is that a Court of Appeal can summarily dismiss a writ if the petition has no merit. Summary dismissal dispenses with further briefing and oral argument and brings the case to a quick ending. As a result, the license might be revoked a couple of years earlier than if full-fledged appellate procedure were provided.

In Landau v. Superior Court, 71 Cal.Rptr. 2d 54 (1998), the Court of Appeal upheld §2337. The key holding is that §2337 does not infringe the right to an appeal under the California constitution, because review by extraordinary writ is still a meaningful form of review. Nor does §2337 offend state or federal guaranties of due process or equal protection. Although a physician's license is a vested, fundamental right for purposes of insuring judicial independent judgment of the facts, the license is not a fundamental right for equal protection purposes. As a result, §2337 was subject only to rational basis review -- a test it easily passed. More than likely, the Landau case will be heard by the California Supreme Court. If the Supreme Court grants a hearing, this will automatically vacate the Court of Appeal decision. So stay tuned.

Mid-year Program Addresses Managed Care, Due Process, Judicial Independence

by Ann N. Young⁽²⁾

The Nashville mid-year meeting featured a panel discussion of several hot administrative law issues relating to managed care and public funding as well as ALJ decisional independence. The session began with a mock hearing before a state central panel ALJ. The dispute concerned a denial of care by a private managed care organization (MCO) that had contracted with the state to provide services to Medicaid recipients. The MCO refused to pay for a costly breast cancer treatment in the recipient's home town because it had no contract with the local hospital, even though there were medical reasons for doing the treatment there.

The government and the MCO argued that the MCO's decision on which providers to contract with was not subject to challenge by the recipient, relying on an unpublished agency interpretation of an agency rule. The parties assumed (based on some case law that is presently on appeal) that denials of service by private MCOs constitute state action for due process purposes.

There were no easy answers to the question of whether the MCO's decision could be overruled by an ALJ. In this new era of managed care, administrative decisionmakers and other interested parties will have to grapple with issues such as the extent to which MCOs may deny services, based on what kinds of reasons, and with what sorts of recourse for patients. As noted during the program, in a managed-care litigation context it is not just a question of "Who wins?" but also "What is the game?" "Who are the players?" "What are the rules?" and "What kind of playing field are we on?"

The prospect that an ALJ might overturn the MCO's decision and require the costly treatment to occur in a local hospital provided the context for the play's second scene: A high government official approached the Chief ALJ of the state's central panel to warn him about possible future budget problems, based on rumblings from the MCO community about the expense involved and the possible precedential effect of a ruling favorable to the recipient.

The panel discussion that followed centered around issues of:

• -ex parte communications generally;

• -permissible and impermissible interactions between chief judges, ALJs, agency personnel, and others, about pending and impending cases;

• -what if any disclosures should be made of various forms of interaction and consultation;

• -what if any deference ALJs should accord unwritten agency policies and interpretations;

• -how budgetary and other seemingly unrelated pressures may affect ALJ decision-making;

• -whether ALJs should or may be subjected to influences that would be impermissible with judicial branch judges; and

• -what "judicial independence" means for ALJs.

Panel and audience members engaged in sometimes lively discussion on various forms of "behind the scenes" interactions and influences that may deprive parties of notice and opportunity to respond to information relevant to their cases, and issues of judicial independence in an administrative law context.

The panel consisted of Chief Colorado ALJ Edwin L. Felter, Jr., Nashville Legal Aid Attorney Linda Narrow-McLemore, Tennessee Department of Health General Counsel Mary Jo Price, Nashville attorney Irwin Venick, Department of Transportation ALJ Ronnie Yoder, and UCLA Law Professor Michael Asimow. Tennessee ALJ Ann M. Young served as moderator.

The program was videotaped, and will be broadcast on the Lawyers Communication Network shortly. After its broadcast, videotapes will be available for sale. Copies of the written materials from the program can be obtained from the Section office for $15 (including shipping and handling).

Survey of State ALJ Practices

The state administrative law committee of the National Conference of Administrative Law Judges needs the assistance of practitioners, academicians, state ALJs, and judges familiar with state administrative law. The committee is gathering information concerning state or local administrative law proceedings. The committee is using a survey recently posted on the World Wide Web and covering areas including judicial immunity, appellate review, state central panels, publication of rules and decisions on the Internet and more, the survey follows one circulated in 1994. In the past, the results of this survey have had a significant impact on the long-range planning activities of the NCALJ. We are very interested in your input in this process. You can request a copy of the survey to be mailed to you by writing Ed Schoenbaum, 1108 South Grand W., Springfield, IL 62704; 217 524-7836, fax 7824, e-mail address edschoen@juno.com. As an alternative, there is a copy of the survey on the web site operated by the Ohio Administrative Law Reporter, Chris McNeil, located at: http://www.cbmcneil.com/webdoc4.htm. That site can also be reached from a prominent link on the ABA Administrative Law Section Home Page at Florida State Univeristy: http://www.law.fsu.edu/library/admin/. Once downloaded you can fill it out and return it to Ed or fax the completed survey to Chris McNeil at (614) 888-2687.

New York Environmental Department Initiates Mediation Program

The New York State Department of Environmental Conservation in 1996 initiated a mediation component to its administrative adjudication hearing program to revolve environmental disputes without the need for formal hearing. The program has met with many successes over the past two years. The primary advantage of the program is that it uses a skilled mediator or facilitator to assist regulatory staff negotiate with respondents in enforcement cases and with applicants for environmental permits. Often negotiations become bogged down for a variety of reasons that can often be bypassed through mediation or some other form of alternative dispute resolution. For more information, contact Daniel E. Louis, Chief Administrative Law Judge, Office of Hearings and Mediation Services, 50 Wolf Road, Albany, New York, 12233-1550.

Mediation Training Program for ALJs

From May 10-15, there will be a training program at the Maryland Office of Administrative Hearings, Hunt Valley, MD, sponsored by the National Association of Administrative Law Judges, the National Conference of Administrative Law Judges, the Maryland Association of Administrative Adjudicators, and the Section of Dispute Resolution of the American Bar Association. The Goal of this program is to equip administrative law judges to be effective mediators and become eligible for certification in those states that require a 40-hour educational program for certification. This program is designed to involve participants in exploring the stages of a mediation conference. The case study exercises will lead them through the fundamental process of mediation and be directly related to the wide variety of mediation used in the administrative law milieu. This program will feature lecture, demonstration, case study exercises, critiques by certified mediators, and additional practical exercises of the skills and abilities needed to become a competent and effective mediator. The process will allow each participant to conduct a complete mediation. For further information contact: Hon. Edward J. Schoenbaum, 1108 South Grand West, Springfield, Illinois 62704-3553; e-mail edschoen@juno.com or (217) 524-7836 or FAX (217) 524-7824. The registration fee is $600.00 for members of the NAALJ or the NCALJ, if paid before April 1, 1998. $675.00 after that date. $675.00 for non-members before April 1st. $775.00 after. Each registrant will receive a copy of Mediation: Principles & Practices and additional materials prepared for this program. A block of rooms has been set aside at the Embassy Suites (brisk walk or courtesy bus to The Maryland Office of Administrative Hearings). Rates $110.00 single or $120.00 double and include full breakfast and hospitality hour each evening.

Recent State Administrative Law Articles of Interest

Deshaies, Cheryl, Note, Vermont's misplaced application of the closely regulated industry exception to the warrant requirement under Article Eleven, 21 Vt. L. Rev. 1201 (1997).

Jackson, David S., Comment, Privacy and Ohio's Public Records Act, 26 Cap. U. L. Rev. 107 (1997).

Maher, Stephen T., How the glitch stole Christmas: the 1997 amendments to the Florida Administrative Procedure Act, 25 Fla. St. U. L. Rev. 235 (1998).

McGinley, Patrick C., Separation of powers, state constitutions & the attorney general: who represents the state?, 99 W. Va. L. Rev. 721 (1997).

Raepple, Carolyn, Florida's expedited permit review process: streamlining the development of Florida's economy, 25 Fla. St. U. L.Rev. 301(1998).

2. Ann M. Young has been an administrative law judge in Tennessee since 1984. She wishes to emphasize, as was done at the program, that nothing in the program was intended to reflect any resemblance to the practices of any state.