Professional Licensing Board Complaint & Investigation Defense


Defending licensees before their state licensing agency or licensing commission constitutes the original bedrock of the firm’s practice. Members of the Firm have been involved from the beginnings of administrative law as a recognized specialty practice area by the Texas Bar and have participated in the evolution of the Texas laws governing agency practice. Members of this Firm have been involved from the passage of the Administrative Practice and Texas Register Act in 1975 to the establishment of the State Office of Administrative Hearings in 1991 and the creation of conforming rules and regulations by the affected agencies.

Historically, Texas agencies were not under a common mandate to provide fair procedural process for deciding licensure and disciplinary matters. Each agency had its own process and they varied greatly in the practical opportunities for licensee to provide a defense.

With the passage of APTRA in 1975 (now the Administrative Practice Act, “APA”), most Texas agencies were required to provide notice of a complaint or violation, an opportunity for the licensee to respond, and some internal hearing process before refusing a license or imposing a punishment. Section 2001.054 (c)(2) of the APA (Title 10, Chapter 2001 of the Texas Government Code) requires that, prior to taking adverse action against a license, that the licensee be given an opportunity first to ”show compliance with all requirements of law for the retention on the license.”

 

INFORMAL SETTLEMENT CONFERENCES

Since the passage of Section 2001.054(c)(2) of the APA, this “show compliance” opportunity has been traditionally implemented with a face-to-face opportunity so that the licensee may attempt in-person to show the absence of a violation. Most agencies have adopted a face-to-face encounter which allows the licensee to ”show compliance” with the law and rules of the agency, as well as provide mitigating circumstances  and seek to resolve the matter by agreement, usually referred to as an “Agreed Order” or “Consent Order”. These proceedings are generally called “Informal Settlement Conferences”, commonly referred to as ISC’s, and are most often conducted in Austin where the agencies are based.

While there are some differences in the process at each agency, the purpose of the ISC is to allow the licensee to provide his or her defense or mitigation and receive a recommended settlement, perhaps saving both the State and the licensee the time and expense of a formal hearing. Some matters are also dismissed after further review and discussion by agency representatives. It is crucial that a licensee and legal counsel consider the filing of further written responses and consider the submission of additional documentation supporting dismissal of the matter or mitigating materials. In most cases these conference matters result in a preliminary recommendation for dismissal or disciplinary action with a later adoption of the recommendation by the full agency at a later agency meeting.

The ISC has been the single most useful and practical remedy for dealing with disciplinary complaints. It is also more cost effective to participate in such conferences if available as administrative hearings are very similar to a civil court trial, with formal discovery, motions and replies, and formal rules of evidence.

Unfortunately, in recent months some agencies have taken the position that, due to very heavy complaint dockets, they will only review written responses from the licensee and will propose resolution in writing only, without allowing the licensee to appear in person and discuss the matter with agency representatives. We believe that this is a significant loss to the fair and reasonable resolution of these cases.

 

TEMPORARY SUSPENSION ACTIONS

Most licensing agencies have the statutory power to temporarily suspend a license due to its perception of a threat to the health and safety of the public that would result from the continuing licensure and practice of a licensee. Each agency has its own procedure for implementing a temporary suspension. In most agencies, either a quorum of the agency representatives or a standing committee for such purposes may immediately suspend a practice license based upon their perception and finding that a danger exists.

In all cases, the licensee has an opportunity to appeal this finding to the State Office of Administrative Hearings, along with defending the allegations forming the basis of the complaint by the board. However, some agencies do provide a face-to-face hearing with representatives of the agency, usually after an abbreviated notice in advance. The Texas Medical Board, for example, can act with or without notice. If the TMB suspends after an abbreviated hearing without notice, the licensee has a right to a repeat hearing and advanced notice of that hearing. Sometimes an agency will instead provide a prompt ISC following the temporary suspension to see if the matter can be resolved quickly with less down time to the licensee. The Pharmacy Board, for example, often uses the suspension hearing to also consider and recommend an agreed final resolution which can save downtime to a suspended pharmacist or pharmacy technician.

In addition to the potential remedy of a prompt ISC, the licensee can seek an injunction in District Court, challenging the finding of an emergency threat to the public, though courts have held that the remedy is to seek an expedited hearing at the State Office of Administrative Hearings. In district court, the agency would be represented by the Texas Attorney General’s office in opposing that action.

 

THE STATE OFFICE OF ADMINISTRATIVE HEARINGS – “SOAH”

SOAH was created by statute and is an independent state agency. This agency, among other duties, has broad hearing and appeal responsibilities to conduct hearings regarding Formal Complaints from licensing agencies.

Although it is an agency in the Administrative or Executive branch of Texas government, SOAH is essentially the trial court for agency licensing and disciplinary matters. The employees function as a court, with the docketing of the complaint, discovery procedures, and public hearings conducted by an administrative law judge (“ALJ”). After hearing, the assigned ALJ crafts a written opinion and recommendation and provides that Proposal for Decision (PFD) to the agency. With certain requirements, an agency can modify the PFD and make different findings of fact and conclusions of law and impose disciplinary action, which is usually reserved to the agency to impose.

Changes to Texas law require that one agency, the Texas Medical Board, must adopt the findings of fact and conclusions of law in an ALJ opinion. However, the Board or licensee may still appeal the matter to district court, subject to certain standards (see below)  The Texas Medical Board has independent discretion in imposing corrective action, based on the findings of fact and conclusions of law in that case if there is a violation(s) found by the ALJ.

Recent reorganization of various agencies as advisory committees to umbrella agencies having multiple licensees under their jurisdiction may also affect the informal conference and later SOAH review process.

Once an agency has considered the PFD and entered an order, that order is appealable to a Texas district court. Venue for most agencies is set in Travis County, Texas. .

The standard for appeal from an agency licensure or disciplinary decision is referred to as “the substantial evidence rule.” Contrary to its plain meaning, this rule provides, in part, that the reviewing judge must affirm the agency’s decision if there is any evidence to support it. The evidence does not have to be “substantial” as the standard implies, merely “some” evidence or more than a “scintilla of evidence”. Credibility and factual determinations made by the ALJ are more difficult to challenge than conclusions of law made by the agency or ALJ, however interpretation of laws and rules may dictate the outcome of the case. Appeals can be very difficult if they are based on the merits of the decision, rather than procedural or legal error. In any matter proceeding to SOAH, it is important to understand these administrative law review standards and thus, present the best factual and legal defenses and arguments possible at the hearing stage.

 

CAUTION TO LICENSEES

When a licensee is notified by the agency that a complaint or investigation has been filed, the licensee should immediately seek experienced legal representation. The agency is represented and advised by its legal counsel throughout the process. At an ISC, you can expect the agency to have at least one lawyer and perhaps two or more present representing the agency. Often events occur prior to and during the ISC that may make adverse actions inevitable. Licensees often have voiced the concern that they might look guilty or they might appear to be hiding something if they appear with legal counsel. However, agency investigation and complaint procedures is a very sophisticated system and every agency is well accustomed to dealing with legal counsel representing the licensee. No holder of a state license should attempt to handle a license investigation without counsel.

Sharp & Cobos, L.L.P. is committed to maintaining our presence in this area of practice and to continue fighting for dismissals of baseless complaints, greater agency transparency, fairness in results, and fairness in procedure. We understand the time, effort, and personal sacrifice required to obtain professional licensure and we believe that our clients deserve our interest and efforts on their behalf.