This аdministrative appeal raises several intriguing questions about the intricate matrix of relationships between an administrative agency and the Office of Administrative Hearings (OAH) to which the agency sometimes delegates some or all of its adjudicatory functions. Does the authority to delegate expand or contract when the adjudication is primarily 1) demeanor-based fact-finding, 2) other fact-finding that is not so dependent on demeanor assessment, or 3) the application of the law to essentially undisputed facts? Does the deference, if any, that the agency owes to the conclusions of the Administrative Law Judge (ALJ) expand or contract with the nature of the thing that the ALJ adjudicated? On judicial review, does the circuit court and then the appellate court look only to what the agency ultimately did or also to what the ALJ may have done? Need we be concerned about whether the ALJ used the right or wrong burden of persuasion? It is a fascinating matrix that deserves periodic reexamination.
On September 80, 2008, the appellant, the Maryland Board of Physicians (“the Board”), denied the Application for Reinstatement of Medical License submitted by the appellee, Dr. Robert M. Elliott. Dr. Elliott appealed that denial to the Circuit Court for Baltimore County, which, on June 29, 2005, reversed the decision of the Board. The Board has, in turn, appealed to us.
Personal Background
Dr. Elliott is a physician who practices dermatology and specializes in hair restoration. He was originally licensed to practice medicine in the State of Maryland on October 23, 1991, but his Maryland license registration expired on September 30, 1992. Dr. Elliott is currently a partner, with Robert True, M.D., in a medical practice known as the Elliott-True Medical Group, with offices in California, Illinois, Maryland, and New York. Dr. Elliott’s primary practice is in California and he is a resident of that state.
Procedural Background
In December of 1999, Dr. Elliott submitted an Application for Reinstatement of his Medical License to what was then designated as the Maryland Board of Physician Quality Assurance. Effective July 1, 2003 by Chapter 252 of the Maryland Laws of 2003, the Board’s name was changed to the Maryland Board of Physicians. On September 13, 2000, the Board issued a Notice of Initial Denial of Dr. Elliott’s Application.
Pursuant to Maryland Code, Health Occupations Article, § 14-205, the Board possesses the authority to deny a license for any actions which would, on the part of a licensee, constitute grounds for disciplinary action under § 14-404. Section 14-205 provides, in pertinent part:
(a)(1) In addition to the powers set forth elsewhere in this title, the Board may:
(iii) Subject to the Administrative Procedure Act, deny a license to an applicant or refuse to renew or reinstate an applicant’s license for any of the reasons that are grounds for action under § lk-kOlt of this title.
(Emphasis supplied).
The notice of denial was based on allegations that Dr. Elliott had committed acts that would, had he been a licensee, have violated § 14-404(a)(l), in that he fraudulently or deceptively attempted to obtain reinstatement of his medical license for himself; § 14-404(a)(3), in that he was guilty of unprofessional conduct in the practice of medicine; and § 14-404(a)(36), in that he willfully made misrepresentations when seeking or making application for reinstatement of his medical license.
The letter of “Initial Denial” also informed Dr. Elliott that he was entitled to a hearing before an Administrative Law Judge and to the opportunity, should the findings and recommendations of the ALJ be adverse to him, to “file exceptions and present argument to the Board.”
If you request a hearing in this matter, please be advised that you must prove by a preponderance of the evidence that you are entitled to be reinstated by the Board. You should note that an Administrative Law Judge will conduct the hearing in accordance with the Administrative Procedure Act, Md.Code Ann., State Gov’t § 10-201 et seq. The Administrative Law Judge will submit proposed findings of fact to the Board for the Board’s consideration. If the proposed findings are adverse to you, you mil be given an opportunity to file exceptions and present argument to the Board before the Board reaches a final decision.
(Emphasis supplied).
Dr. Elliott did, indeed, “request a hearing in this matter.” Accordingly, the case was assigned by the Office of Administrative Hearings to Administrative Law Judge Joan B. Gordon. In
Maryland Board of Physicians v. Bernstein,
At that point, the physician is entitled to a contested case hearing before an administrative law judge in the Office of Administrative Hearings, pursuant to the Administrative Procedure Act, section 10-201 et seq. of the State Government Article (“SG”). Following the hearing, the ALJ issues findings of fact, conclusions of law, аnd a proposed disposition.
Either party may file exceptions to the ALJ’s findings and proposed disposition.
The Board is not bound by the decision of the ALJ. After receiving the ALJ’s proposed decision, the Board must review the record and the ALJ’s proposal, and hold a hearing on any exceptions. It then issues a final decision stating its findings of facts, conclusions of law, and a disposition of the charge.
(Emphasis supplied).
After a procedural glitch that is not pertinent to what is now before us, ALJ Gordon conducted a two-day hearing beginning on November 19, 2002. On March 17, 2003, she issued a Proposed Decision. The ALJ’s proposed conclusions of law were that Dr. Elliott had violated the Maryland Medical Practice Act by acts that would qualify as violations of § 14-404(a)(1), (3), and (36). As a proposed disposition, the ALJ recommended that Dr. Elliott’s application for reinstatement of medical license be denied.
The Contentions
The Board, in turn, has appealed to us. It contends
1. that there was substantial evidence to support the decision of the Board; and
2. that the “clear and convincing” burden of persuasion did not apply in this case, but that even if it, arguendo, did apply, it was satisfied.
A False Light On the Shore
During the course of oral argument and our first preliminary consideration of the case, a troubling question arose, sua sponte, casting into at least momentary doubt the propriety of the Board’s having submitted the case to the OAH. There were distant echoes about “demeanor-based credibility findings,” but the connection, if any, of those faint resonances to what was before us was uncertain. Was it possible that, although the delegation of demeanor-based fact-finding to an ALJ might be appropriate, the delegation of authority to reach more technical findings and even tentative conclusions of law might not be appropriate? Although we were soon disabused of the doubt, it behooves us, at the threshold, to address that issue of what is a proper delegation of adjudicative authority by an administrative agency to an ALJ.
The Propriety of Submitting the Case To the Office of Administrative Hearings
Procedurally, this case is governed squarely by the Administrative Procedure Act, Maryland Code, State Government Article, §§ 10-201
et. seq.
As Judge James Eyler observed in
Bragunier Masonry Contractors v. Maryland Commissioner of Labor and Industry,
The model administrative procedure act was developed to encourage a more uniform procedural process for administrative agencies. Maryland adopted the 1961 version of the model with some changes. See SG §§ 10-201 et seq. The APA applies to all state administrative agencies not specif ically exempted and provides a standard framework of fair and appropriate procedures for agencies that are responsible for both administration and adjudication of their respective statutes.
(Emphasis supplied). See also
Kaufman v. Taxicab Bureau, Baltimore City Police Department,
The appellant, Maryland Board of Physicians, both under its present name and under its former name of Board of Physician Quality Assurance, clearly qualifies as an “Agency” within the definition of § 10-202(b). In terms of being covered by the Administrative Procedure Act, moreover, the Board of Physicians has never been “expressly excluded” or “specifically
The Board’s coverage by the APA thereby becomes the ineluctably valid conclusion of a classic categorical syllogism:
All agencies that are not specifically exempted are covered by the APA.
The Board of Physicians is an agency that is not specifically exempted.
Ergo, the Board of Physicians is covered by the APA.
A quick look at the case names leads us to the same conclusion inductively:
Young v. Board of Physician Quality Assurance,
Under the APA, the decision of the Board to grant or to deny the renewal of Dr. Elliott’s license to practice medicine in the State of Maryland was unquestionably a “contested case.” Section 10-202(d), defining “contested case,” provides in pertinent part:
(1) “Contested case” means a proceeding before an agency to determine:
(ii) the grant, denial, renewal, revocation, suspension, or amendment of a license that is required by statute or constitution to be determined only after an opportunity for an agency hearing.
(Emphasis supplied). See
Modular Closet Systems, Inc. v. Comptroller,
Section 10-205, in turn, grants to an Agency the discretionary authority to delegate to the Office of Administrative Hearings the аctual conducting of a hearing in such a contested case. Subsection (a) provides, in pertinent part:
(a) To whom delegated. — (1) A board, commission, or agency head authorized to conduct a contested case hearing shall:
(i) conduct the hearing; or
(ii) delegate the authority to conduct the contested case hearing to:
1. the Office [of Administrative Hearings].
(Emphasis supplied).
With respect to the OAH, to which adjudicating responsibility is delegated, in
Anderson v. Department of Public Safety,
One of the main objectives of the Legislature in establishing the OAH was to provide an impartial hearing officer in contested cases. A hearing officer employed by and under the control of the agency where the contested case or other disputed action arises, often results in the appearance of an inherent unfairness or bias against the aggrieved.
Under Maryland’s current system of State administrative procedures, set forth in The Administrative Procedure Act (“the APA”), Md.Code Ann., State Gov’t § 10-101 et seq. (1993 Yol. & Supp.1994), the head of a covered agency has the option, under § 10-205 of the APA, of either allowing the agency itself to conduct the hearing in a contested case, or delegating such authority to the Office of Administrative Hearings (“the OAH”), which designates an administrative law judge to perform that function. In the event that an agency elects to have the OAH play a role in the hearing process, administrative law judges are generally employed not to render a final decision as a result of the hearing, but rather to develop a record and to make a recommendation to the agency head, which may either be adopted, modified, or rejected at the agency’s discretion.
(Emphasis supplied).
When the agency “delegates the hearing responsibility to the ALJ,” moreover, the ALJ then “becomes an extension of [the agency].”
Bragunier,
Avoiding Confusion Between Degrees of Deference hand the Discretion to Delegate
But is there a limitation on the types of adjudicatory responsibility that may be delegated? Does what we shall call the Anderson-Shrieves Deference Rule possibly stretch this far? When an agency, pursuant to § 10 — 205(b), delegates to an ALJ the limited task of making only proposed findings of fact and/or proposed conclusions of law, the agency is ordinarily at liberty, in making its own independent final decision, to override the ALJ. A recent sunburst of caselaw, however, has imposed a narrow limitation on one aspect of an agency’s otherwise unfettered entitlement to override the conclusions of the ALJ. Because of the prominence of this recent flurry of activity, we were, during the course of oral argument, momentarily tempted to chase an illusory analogy down what would have been a rabbit hole.
The temptation was to confuse 1) that very limited area of demeanor-based fact-finding with respect to which the ALJ enjoys an unusually high degree of deference with 2) a limitation on the type of adjudicating that may be delegated to the ALJ in the first instance. A close look at the recent caselaw, fortunately, occasioned a quick correction of course. It may nonetheless be helpful to pin down the illusive chimera lest others be lured by it down the same false trail.
The Anderson-Shrieves Distinction
A new distinction in the caselaw first surfaced in
Anderson v. Department of Public Safety,
Because of the superior opportunity for the ALJ to observe witnesses and to make demeanor-based credibility assessments, however, the failure of the agency to defer to the ALJ in a case in which demeanor and credibility were significant factors could not be totally ignored. Such a disdain for the ALJ, unexplained, might have an erosive effect on the “substantial basis” the agency would need to rely on to support its decision on appellate review. There was a psychic tension between two conflicting principles, and the Court of Appeals looked for guidance to the federal Administrative Procedure Act and especially to the opinion of the Supreme Court in
Universal Camera Corp. v. National Labor Relations Board,
We intend only to recognize that evidence supporting a conclusion may be less substantial when an impartial, experienced examiner who has observed the witnesses and lived with the case has drawn conclusions different from the [agency’s] than when he has reached the same conclusion.
The Court of Appeals, in turn, recognized the unique value of first-hand observation of a witness’s demeanor.
All aspects of the witnesses demeanor — including the expression of his countenance, how he sits or stands, whether he is inordinately nervous, his coloration during critical examination, the modulation or pace of his speech and other non-verbal communication — may convince the observing [hearing officer] that the witness is testifying truthfully or falsely.
The Court of Appeals finally quoted with approval,
[T]he credibility findings of the person who sees and hears the witnesses — be he ALJ, juror or judge — is entitled to considerable deference. While the degree of deference due the ALJ’s final decision is related to the importance of credibility in a particular case, the ALJ’s decision to give or deny credit to a particular witness’ testimony should not be reversed absent an adequate explanation of the grounds for the reviewing body’s source of disagreement with the ALJ. In sum, the review authority has the power to reject credibility assessments only if it gives strong reasons for doing so.
(Emphasis supplied). The Court of Appeals reversed the agency.
A year later, Judge Motz picked up on the theme and further refined it in
Department of Health and Mental Hygiene v. Shrieves,
Only if that order [of the agenсy] is not based on substantial evidence can it be reversed by a court.... [T]he “ ‘substantial evidence’ standard is not modified in any way when the [agency] and its examiner disagree. ”
The court below erred in viewing its “job” as “determining] if the ALJ had a rational basis for making the decision she did” or if the ALJ’s decision was supported by substantial evidence.
The court’s “job” was not to assess
the “rationality” of or evidentiary basis for the ALJ’s recommendation; it was to assess the rationality or evidentiary basis of the agency’s ... final order. Drexel Bum-ham Lambert, Inc. v. Commodity Futures Trading Comm’n,
Limitation No. 1: The Substantial Evidence Test Trumps Everything Else
The Shrieves opinion made clear that there are two basic limitations on what might otherwise be read, overbroadly, into the Anderson opinion. Because the substantial evidence test remains the ultimate and absolutely controlling consideration on judicial review, it does not matter that the agency may have ignored the findings and the proposed decision of the ALJ, even without having had any rational basis for doing so, just so long as there still exists some other basis for the agency’s decision that would be enough, in and of itself, to satisfy the substantial evidence test.
[T]he question is not “whether the agency erred" in overruling the ALJ but whether there is substantial evidence for the agency’s decision. Accordingly, the “power of administrative law judges to render initial decisions does not mean that [an agency] is ‘relegated to the role of [a] reviewing court.’ ”
... It is the agency’s responsibility to make the final decision; in doing so, it certainly may “substitute” its judgment for that of the ALJ. Moreover, the agency’s substituted judgment must be affirmed by a court — if it is based on substantial evidence. The ALJ’s recommendation — and particularly its credibility findings — are part of that evidence, but if there is “evidence to support each of two conflicting views, ” e.g., the ALJ’s and the agency’s, the findings of the agency “must be allowed to stand despite the fact that [a court] might have reached the opposite conclusion on [its] own.”
100 McLApp. at 302,
Judge Motz encapsulated our holding in a nutshell.
To summarize, when an administrative agency overrules the recommendation of an ALJ, a reviewing court’s task is to determine if the agency’s final order is based on substantial evidence in the record. In making this judgment, the ALJ’s findings are, of course, part of the record and are to be considered along with the other portions of the record .... If after giving appropriate deference to the ALJ’s demeanor-based findingsthere is sufficient evidence in the record to support both the decision of the ALJ and that of the agency, the agency’s final order is to be affirmed — even if a court might have reached, the opposite conclusion. This approach preserves the rightful roles of the ALJ, the agency, and the reviewing court: it gives special deference to both the ALJ’s demeanor-based credibility determinations and to the agency’s authority in making other factual findings and properly limits the role of the reviewing court.
Limitation No. 2: Testimonial Inferences Versus Derivative Inferences
Even in those cases in which there is no independent evidence on which to base an agency decision that is contrary to the proposed decision of the ALJ, moreover, there is yet a further limitation on the possible reading of Anderson that the agency must justify its departure when it departs from the fact-findings of the ALJ. The Shrieves opinion pointed out that not all fact-finding by an ALJ is entitled to special deference by the delegating agency, but only those findings of fact which are demeanor-based credibility determinations.
Generally, the ALJ’s findings, however, “are not entitled to any special deference from the agency except insofar as [they] are based on witness credibility determinations.” The significance to be given to ALJ’s credibility determinations “depends largely on the importance of credibility in the particular case. ” If credibility is not important in the agency’s final decision, an ALJ’s credibility determinations are not very significant. If credibility is of “utmost importance, ” if it “played a dominant role,” if it was “pivotal” to an agency’s final order — as in Anderson — then an ALJ’s credibility determinations are entitled to substantial deference.
It was the
Shrieves
opinion, quoting
Penasquitos Village, Inc. v. N.L.R.B.,
All aspects of the witness’s demeanor — including the expression of his countenance, how he sits or stands, whether he is inordinately nervous, his coloration during critical еxamination, the modulation or pace of his speech and other nonverbal communication — may convince the observing trial judge that the witness is testifying truthfully or falsely. These same very important factors, however, are entirely unavailable to a reader of the transcript.
The Agency, on the other hand, owes no such deference to the derivative inferences of the ALJ, notwithstanding the fact that they fall within the generic category of fact-finding.
But it should be noted that the administrative law judge’s opportunity to observe the witnesses’ demeanor does not, by itself, require deference with regard to his or her derivative inferences. Observation makes weighty only the observer’s testimonial inferences.
Deference is accorded [an agency’s] factual conclusions for a different reason — [the agency is] presumed to have
Id.
quoting
Penasquitos Village, Inc.,
Derivative inferences, frequently derived from undisputed evidence, may readily be based on an agency’s professional expertise and familiarity with procedures uniquely within its ken. With respect to such derivative inferences, therefore, the agency owes no deference to the ALJ. Shrieves concluded that the limitations on the deference rule that it articulated were implicit, even if not explicit, in the Anderson opinion.
Although Anderson did not explicitly adopt the view that only an ALJ’s demeanor-based credibility determinations are entitled to special deference, it does appear to have implicitly adopted this position.
Id. (emphasis supplied).
The Anderson-Shrieves Deference Rule In Practice
In the twelve years since the
Shrieves
decision, the
Anderson-Shrieves
Deference Rule has been addressed by this Court on four occasions and by the Court of Appeals on one occasion. In
Gabaldoni v. Board, of Physician Quality Assurance,
In
State Commission on Human Relations v. Kaydon Ring & Seal, Inc.,
Judge Deborah Eyler wrote for this Court as we held that the agency had no basis for rejecting the contrary demeanor-based findings of the ALJ.
Both Skinner and Henry testified, and the ALJ found, that when Skinner fired Henry, he did so in anger and remarked that Henry could not “cut it,” i.e., could not perform.... [T]he Appeal Board adopted the ALJ’s finding that Henry’s performance, as measured by production and efficiency ratings, was deficient. It was the Appeal Board’s finding of disparate treatment, contrary to the ALJ’s finding, and on a contested issue, that was crucial to its ultimate finding that despite Skinner’s “can’t cut it” remark,he in fact fired Henry because Henry is black.
The evidence of disparate treatment in this case was conflicting and only could be resolved by a demeanor-based credibility assessment of certain witnesses.
Id.
at 703-04,
The resolution of the critical issue in the case depended on which of two contradictory bits of testimony was to be believed. As such, the issue should have been submitted to the ALJ, and the decision of the ALJ in that regard should have been extended due deference by the agency.
Depending upon which of these witnesses is believed, and what parts of their testimony are credited, a fact finder reasonably could conclude that Skinner treated Henry and Morgan differently by telling Henry or leading him to think he could not apply for other jobs at Kaydon while leading Morgan to think he could, and then not standing in his way — or reasonably could conclude that Skinner did not do so. Precisely what Skinner said or did, and did not say and do, in this regard is not something that can be determined without a credibility judgment about the witnesses that only can come from observation.
Id.
at 704,
The Kaydon opinion also added an efficacious tool to our analytic kit, as it coined a distinction between a “cold record” and a “live record.”
In assessing the rationality and evidentiary basis for the agency’s final decision, however, we may take into account as a factor that on a cold record the agency made a decision contrary to the one the ALJ made on a live record, i.e., upon first-hand observation of witnesses.
Id.
at 693,
An instructive contrast emerges from juxtaposing our decision in
Kaydon
with the opposite result in
State Board of Physicians v. Bernstein,
The critical issue was whether Dr. Bernstein, an anesthesiologist, was subject to disciplinary action by the State Board of Physicians for having breached the requisite standard of care. A contested case hearing was held over the course of three days by an ALJ. “The focus of the hearing was expert testimony about the appropriate standard of care.”
After thoroughly analyzing the entire
Anderson-Shrieves
body of caselaw,
id.
at 751-55,
Here, the ALJ stated several times in her proposed decision that the appellee’s expert witnesses were credible, and that they were more credible than the Board’s expert witnesses. The reasons she gave to support her credibility findings did not involve assessments of the witnesses based on their demeanor, however. Clearly, the ALJ found the appellee’s experts to be more experienced, more proficient, more knowledgeable, and more objective than the Board’s witnesses, and determined on those bases that their opinions were sound and correct, and were “persuasive” and “credible.” She said nothing to indicate that the outward appearances of the expert witnesses as they testified played a part in her credibility evaluations of their testimony. By her own account of her evaluation of the evidence, the ALJ did not place any importance upon the demeanor of the expert witnesses in deciding which of them was more credible in their testimony.
Id.
at 759-60,
The opinion pointed out that expert testimony generally is not as dependent on demeanor-based credibility assessments as is the testimony of fact witnesses.
[EJxpert witnesses usually are not testifying about first-level facts that are susceptible of a “true or false” determination by the fact-finder (for example, whether the appellee indeed was in the operating room during extubation, as opposed to whether prevailing standards required him to be there). Demeanor most often is a factor in deciding the credibility of a fact witness who is testifying about a fact that may be true or false, not of an expert who is offering his opinion based on assumed facts.
Id.
at 760,
Even witness bias on the part of an expert is not essentially a demeanor-based determination.
Bias can be shown on a cold record, however; a witness does not have to be observed for the fact-finder to determine that he has an interest in the outcome of the case that has led him, consciously or not, to shade his testimony. In this case, the appellee’s counsel effectively cross-examined Dr. Lyles about his activities in support of legislation that would have mandated that anesthesiologists personally perform certain tasks of patient care.... The ALJ was impressed by this evidence, and it is part of the reason she gave little weight to Dr. Lyles’s opinions. The Board had the prerogative to re-weigh evidence that was not demeanor-based, however, and it was not impressed 'with the bias evidence against Dr. Lyles, and weighed his opinions heavily. ... [T]he Board may make its own decisions about bias, interest, credentials of expert witnesses, the logic and persuasiveness of their testimony, and the weight to be given their opinions.
Accordingly, the Board did not owe deference to the credibility assessments made by the ALJ, and was not required to state strong reasons for rejecting those assessments.
Id.
at 761,
In concluding that the Board in that case was not inhibited from overriding the ALJ’s findings, the opinion did contribute another analytically efficacious insight as it distinguished be
tween 1) credibility assessments generally and 2)
In
Consumer Protection Division v. Morgan,
Judge Raker’s opinion,
This issue revolves around whether the Division’s determination of misrepresentations in comparable sales and neighborhood predominant values was a demeanor-based credibility assessment. A fact finder makes a demeanor-based credibility assessment when he or she bases a finding or decision on such factors as “ ‘the expression of [the witness or party’s] countenance, how he sits or stands, whether he is inordinately nervous, his coloration during critical examination, the modulation or pace of his speech and other non-verbal communication.’ ”
(Emphasis supplied).
The Court of Appeals further elaborated:
State courts similarly have held that an agency official may decide a case without hearing the witnesses testify.
An exception exists when the agency decision depends necessarily upon a demeanor-based, assessment. In such cases, it would be difficult for an agency designee to make findings without hearing the testimony. Thus, in Anderson, we held that evidence supporting the agency’s decision “ ‘may be less substantial when an impartial, experienced examiner who has observed the witnesses and lived with the casе has drawn conclusions different’ ” than the agency’s conclusions. We stated that an agency should give “appropriate deference” to the ALJ’s demeanor-based findings, because the ALJ is in the unique position to make such judgments.
At other times on other issues, by contrast, the required findings may properly be made simply by relying on a written record.
In some circumstances, the Division may make findings and issue an order in reliance on the written record, without the Division Chief personally observing the witnesses as they testify.
Case law addressing the federal Administrative Procedure Act supports the conclusion that an agency official may make findings and issue an order based on the written record alone.
Id.
at 197-98,
A conclusion based on this evidence necessarily would focus on appraisal standards, the accuracy of Morgan and Almony’s appraisals, and the information available to the appraisers at the time of the appraisal. As such, the determination would focus on the experts’ testimony, Hinton’s reports, Ramsay’s reports, Morgan’s testimony about his understanding of appraisal procedures, and, most importantly, Morgan and Almony’s actual appraisal reports.
An assessment of the appraisers’ demeanor is of minimal importance in this technical case. Ordinarily, demeanor has been held to be of little consequences in evaluating the credibility of experts who provide conflicting testimony.
Id.
at 202,
The Anderson-Shrieves Deference Rule Only Applies When the ALJ and the Agency Disagree
The Anderson-Shrieves Deference Rule is of limited utility. It is a small wrinkle on the substantial evidence test. It does not apply to an ALJ’s proposed decisions or conclusions of law. It does not apply to an ALJ’s proposed findings of fact that are based on derivative inferences. It does not apply even to the assessment of credibility, when the credibility assessment is not primarily demeanor-based but is based on, as is frequently the case with expert witnesses, technical knowledge or specialized practices that implicate the expertise of the reviewing agency. It does not apply even to demeanor-based credibility findings if the reviewing agency has other substantial evidence supporting its decision to disregard the proposed findings of the ALJ. In the limited circumstances in which it does apply, it still does not necessarily bind the agency. It simply imposes upon the agency the additional burden of articulating a sound reason for not accepting the demeanor-based fact-finding of the ALJ.
The overarching limitation is that the entire AndersonShrieves body of caselaw, by definition, only applies when the proposed findings of the ALJ and the desired findings of the agency are in disagreement with each other. Each of the seven cases that comprise this body of law was a case in which the ALJ proposed to go in one direction and the administrative agency went in a different direction. Only in the face of such disagreement do questions even arise as to whether the agency has a substantial basis to support its going off on its own.
Self-evidently, the Anderson-Shrieves Deference Rule could have no bearing on the case before us. In its Final Order of September 30, 2003, the Board, after reviewing the hearing conducted by the ALJ, expressly adopted the ALJ’s findings as its own.
The Board adopts all of the Administrative Law Judge’s Findings of Fact numbers 1-31 as set forth in the Administrative Law Judge’s March 17, 2003, Proposed Decision. The Board also ad,opts the Administrative Law Judge’s additional factual findings set forth in the Discussion section of the Proposed Decision. 2
(Emphasis supplied).
On every finding of fact, the ALJ and the Board were in full and total harmony.
The Anderson-Shrieves Deference Rule Does Not Inhibit The Agency’s Discretion to Delegate Adjudication
The chimera that we have been laboriously trying to pin down
With respect to the delegation of authority to “conduct a contested case hearing” from an administrative agency to the Office of Administrative Hearings, State Government Article, § 10-205 makes it clear that the grant of adjudicatory authority is plenary. Subsection 10-205(b) provides, in pertinent part:
(b) Scope of authority delegated. — An agency may delegate to the Office [of Administrative Hearings] the authority to issue:
(1) proposed or final findings of fact;
(2) proposed or final conclusions of law; [or]
(3) proposed or final findings of fact and conclusions of law.
(Emphasis supplied). See
Bragunier Masonry Contractors v. Maryland Commissioner of Labor and Industry,
Under SG § 10-205(a), a state agency may delegate all or some of its reviewing responsibility to an ALJ. The section is broad enough to allow the agency to determine the extent of the adjudicative responsibility given. See § 10-205(b). This allows the various agencies enough flexibility to carry out their diverse functions in a logical manner.
(Emphasis supplied).
What is conferred on the OAH, and ultimately on the ALJ, is not only the authority to engage in every conceivable variety of fact-finding, but even to make proposed conclusions of law. Subsection (d) goes on to provide, in pertinent part:
(d) Delegation final; exception. — (1) Except as provided in paragraph (2) of this subsection, an agency’s delegation and transmittal of all or part of a contested case to the Office is final.
(Emphasis supplied).
The exercise of discretion to delegate or not to delegate and of what to delegate will not constitute an abuse of discretion under the arbitrary or capricious standard by which courts review the actions of administrative agencies. As
Judge Raker explained for the Court of Appeals in
Spencer v. Maryland State Board of Pharmacy,
Applying the legal principles outlined above, we hold that (1)the determination by an agency to refer a case to the OAH is a matter committed to its discretion and that (2) the Board did not abuse that discretion under the arbitrary or capricious standard.
First, it is clear that the Board’s refusal to refer the case to the OAH was not a legal conclusion or a factual finding but rather a function of the Board’s discretion. The discretion is granted to the Board in § 10-205(b) which declares an “agency may delegate to the Office [of Administrative Hearings] the authority” (emphasis added) to hear the case. The word “may” connotes a permissive, discretionary function of the agency when it delegates a case to the OAH.
(Emphasis supplied).
The scope of what adjudicating authority may be delegated has never been confined. In
Anderson v. Department of Public Safety,
In not one of these cases was there the faintest suggestion that, once the administrative agency delegated the adjudication to the OAH, the ALJ was not authorized to adjudicate, in plenary fashion, everything that the agency itself would have been empowered to adjudicate. Nor was there any suggestion that the administrative agency had abused its discretion in the initial delegation of adjudicatory authority itself.
On this threshold issue, we hold that for the Board to have delegated to the OAH the task of conducting a hearing was a proper action pursuant to the Administrative Procedure Act. The ALJ might then issue back to the Board both proposed findings of fact and proposed conclusions of law.
How Far Do We Look Back?
There have been four stages of decision-making in this case: 1) the Proposed Decision of the ALJ; 2) the Final Order of the Board; 8) the Opinion and Order of the Circuit Court for Baltimore County; and 4) the present appeal to this Court. Perched as we are at Stage 4, on what should our review focus in looking back? In no uncertain terms, our appellate review is of what happened at Stage 2, the final action of the Board, and, except for coincidental glances, of nothing else.
On Administrative Review We Look Through the Circuit Court, Not At It
Although this appeal, of course, is literally from the decision of the Circuit Court for Baltimore County, it is actually the antecedent decision of the Board of Physicians that we shall review. In
Pollard’s Towing, Inc. v. Berman’s Body Frame & Mechanical, Inc.,
At the outset, let it be clear whose decision is being reviewed and by whom. The review on the ultimate meritsis now being conducted by this Court. We are not reviewing the procedural correctness of the earlier review by the circuit court. We are undertaking our own de novo review of the decision of the administrative agency. ...
The decision of the circuit court, therefore, is before us only in a proforma capacity, as the necessary procedural conduit by which the decision of the administrative agency gets to us for our review.
(Emphasis supplied).
As we explained in
People’s Counsel v. Country Ridge,
Although the judicial act being appealed to us is literally the June 13, 2001 ruling of the Baltimore County Circuit Court, our review will look not so much at the circuit court action as through it to the December 13, 2000 decision of the Baltimore County Board of Appeals.
(Emphasis in original).
In
Department of Health and Mental Hygiene v. Shrieves,
Moreover, it is well recognized in Maryland that, when reviewing administrative decisions, the role of an appellate court is precisely the same as that of the circuit court. See, e.g., Baltimore Lutheran High Sch. Ass’n, Inc. v. Employment Security Admin.,302 Md. 649 , 662,490 A.2d 701 (1985) (“A reviewing court, be it a circuit court or an appellate court, shall apply the substantial evidence test”).
(Emphasis supplied). See also
Tochterman v. Baltimore County,
We Review the Agency’s Decision, Not the ALJ’s Decision
At the other end of the time continuum, once our review has traveled back as far as the final decision of the Board, our time machine comes to a grinding halt. Except for its possibly peripheral influences on the final agency decision, the hearing before the ALJ does not concern us. An appellant who wants to obsess about all of the procedural missteps that allegedly were made by an ALJ may as profitably talk to the wall — unless, of course, those mistakes were then perpetuated in the final decision of the agency.
It was Judge Motz in the
Shrieves
opinion,
The court below erred in viewing its “job” as “deter-min[ing] if the ALJ had a rational basis for making the decision she did” or if the ALJ’s decision was supported by substantial evidence.The court’s “job” was not to assess the “rationality” of or evidentiary basis for the ALJ’s recommendation; it was to assess the rationality or evidentiary basis of the agency’s ... final order. Drexel Burnham Lambert, Inc. v. Commodity Futures Trading Comm’n, 850 F.2d 742 , 747 (D.C.Cir.1988) (when the agency and an “ALJ disagree on factual inferences to be drawn from the record ... the question to be decided is not whether the agency has ‘erred’ in ‘overruling’ the ALJ’s findings, but whether its own findings are reasonably supported on the entire record ”).
(Emphasis supplied).
The Board’s Ruling
The Boаrd’s first contention is that its decision to deny Dr. Elliott’s application for a reinstatement of his medical license was supported by substantial evidence and was, therefore, unassailable upon judicial review. We fully agree.
Under Health Occupations Article, § 14-205(a)(iii), the “Board may ... refuse to ... reinstate an applicant’s license for any of the reasons that are grounds for action under § 14-404.” The ALJ’s proposed conclusions of law were that Dr. Elliott was guilty of actions which would have constituted violations by a licensed physician of § 14-404(a)(l), (3), and (36). Those subsections, in pertinent part, treat as subject to discipline any licensee, who
(1) Fraudulently or deceptively ... attempts to obtain a license ...;
(3) Is guilty of ... unprofessional conduct in the practice of medicine; or
(36) Willfully makes a false representation when seeking or making application for licensure.
Dr. Elliott filed Exceptions to the ALJ’s Proposed Decision and a hearing before the Board was held. In its Final Order of September 30, 2003, the Board held that Dr. Elliott had committed actions that would, for a licensed physician, have been violations of § 14-404(a)(l). It made no findings with respect to § 14-404(a)(3) and (36). The Board “tend[ed] to agree” with the ALJ that subsections (a)(3) and (36) had been violated but concluded that it was unnecessary to reach those issues.
Although the Board tends to agree with the ALJ that Dr. Elliott’s conduct is also “unprofessional conduct in the practice of medicine” as that term is used in Section UJfOJp(a)(3), the Board need not reach this issue in order to decide this case and thus declines to do so. Likewise, though the Board agrees with the ALJ’s discussion of the “good moral character” issue under § 14-307(b), and although the ALJ’s comments indicate strongly that the ALJ meant to find a lack of good moral character, the ALJ made no conclusion of law on this issue, and the Board declines to add this issue at this point, in the circumstances of this case. Similarly, the Board declines to rule on whether the issue of whether false representations were made within the meaning of § Lk-b0h(<L(36). The Board notes that an affirmative conclusion on any or all of these issues would not change the sanction imposed in this particular case.
(Emphasis supplied).
The following predicate evidence is undisputed. In December of 1999, Dr. Elliott submitted to the Board his Application for Reinstatement of Medical Licensure. The Board’s reinstatement application form аsked the following questions:
Since your last registration:
B) Has a state licensing or disciplinary board, or a comparable body in the armed services taken an action against your license, including but not limited to limitations of practice, required education, admonishment, reprimand, suspension, or revocation for an act that would be grounds for disciplinary action under Health Occupations
C) Has an investigation or charge been brought against you by a licensing or disciplinary body or comparable body in the armed forces?
L) Have you been named as a defendant in a filing or settlement of a medical malpractice action within the past 5 years?
The application form further directed:
For each question answered YES, attach detailed explanation and documentation, including health claims, complaints, disciplinary actions, records and file numbers, current status and disposition.
Dr. Elliott answered “No” to all three questions. He did not attach any explanation or documentation with respect to any of those three questions. The issue now before us is whether there was substantial evidence to support the conclusion of the Board that one or more of those answers was deceptively false.
Substantial Evidence Test
In
Spencer v. Board of Pharmacy,
When an agency makes “conclusions of law” in a contested case, the court, on judicial review, decides the correctness of the agency’s conclusions and may substitute the court’s judgment for that of the agency’s. This established principle of administrative law is exemplified in § 10 — 222(h)(3)(i)— (iv), which permits judicial modification or reversal of agency action that (i) is unconstitutional; (ii) exceeds the agency’s jurisdiction; (iii) results from unlawful procedure; or (iv) is affected by “any other” error of law.
In contrast, when an agency is not interpreting law but instead makes a “finding of fact,” we have applied “substantial evidence” review. Substantial evidence review of agency factual findings is embodied in § 10-222(h)(3)(v). That provision grants a court authority to overrule an agency’s factual finding only when the finding is “unsupported by competent, material, and substantial evidence in light of the entire record as submitted.” According to this more deferential standard of review, judicial review of agency factual findings is limited to ascertaining whether a reasoning mind could have reached the same factual conclusions reached by the agency on the record before it.
Finally, there are circumstances when an agency acts neither as a finder of fact nor as an interpreter of law but rather in a “discretionary” capacity. Logically, the courts owe a higher level of deference to functions specifically committed to the agency’s discretion than they do to an agency’s legal conclusions or factual findings. Therefore, the discretionary functions of the agency must be reviewed under a standard more deferential than either the de novo review afforded an agency’s legal conclusions or the substantial evidence review afforded an agency’s factual find ings. In this regard, the standard set forth in § 10-222(h)(3)(vi), review of “arbitrary or capricious” agency actions, provides guidance for the courts as they seek to apply the correct standard of review to discretionary junctions of the agency.
(Emphasis supplied). See also
Maryland Transportation Authority v. King,
It is the substantial evidence test for administrative agency fact-finding that concerns us in this case. In
Board of Physician Quality Assurance v. Banks,
[A] reviewing court decides “whether a reasoning mind reasonably could have reached the factual conclusion the agency reached.” A reviewing court should defer to the agency’s fact-finding and drawing of inferences if they are supported by the record. A reviewing court must review the agency’s decision in the light most favorable to it; ... the agency’s decision is prima facie correct and presumed valid, and ... it is the agency’s province to resolve conflicting evidence and to draw inferences from that evidence.
(Emphasis supplied).
In
Bulluck v. Pelham Wood Apts.,
In applying the substantial evidence test, we have emphasized that a “court should [not] substitute its judgment for the expertise of those persons who constitute the administrative agency from which the appeal is taken.” We also must review the agency’s decision in the light most favorable to the agency, since “decisions of administrative agencies are prima facie correct” and “carry with them the presumption of validity.” [N]ot only is it the province of the agency to resolve conflicting evidence, but where inconsistent inferences from the same evidence can be drawn,, it is for the agency to draw the inferences.
(Emphasis supplied).
Consumer Protection Division v. Morgan,
We apply “substantial evidence” review to agency findings of fact, overruling factual findings only when they are “unsupported by competent, material, and substantial evidence in light of the entire record as submitted.” The standardfor substantial evidence review is “whether a reasoning mind reasonably could have reached the factual conclusion the agency reached.” We also apply the substantial evidence standard when reviewing mixed questions of law and fact, issues of whether the agency applied the law correctly to the facts.
(Emphasis supplied).
In
Board of Physicians v. Bernstein,
When a reviewing court applies the substantial evidence test, it decides “whether a reasoning mind reasonably could have reached the factual conclusion the agency reached.” “A reviewing court should defer to the agency’s fact-finding and drawing of inferences if they are supported by the record.” The agency’s decision must be reviewed in the light most favorable to it; because it is the agency’s province to resolve conflicting evidence and draw inferences from that evidence, its decision carries a presumption of correctness and validity. We give “considerable weight” to an agency’s “interpretations and applications of statutory or regulatory provisions” that are administered by the agency.
(Emphasis supplied).
The Evidence Before the Board Was Bountiful
In its Final Order of September 30, 2003, the Board pointed out that it had “consider[ed] the entire record in this case.” It expressly adopted all 31 of the ALJ’s findings of fact as set forth in the ALJ’s Proposed Decision of March 17, 2003. Turning to the “Discussion” section of the ALJ’s Proposed Decision, the Board also adopted the ALJ’s additional “evaluation of the evidence therein, including the ALJ’s credibility findings, as well as the ALJ’s further proposed factual findings.”
The evidence revealed that Dr. Elliott had had professional difficulties with respect to his practice of medicine in Illinois, Oregon, Massachusetts, and Maryland. It further revealed that he had been sued for medical malpractice on three occasions.
1. Illinois
The express findings of the Board with respect to Dr. Elliott’s difficulties in Illinois were as follows:
In July 1992, the Illinois Department of Professional Regulation (“IDPR”) initiated an investigation of Dr. Elliott and filed a complaint against him charging that Dr. Elliott employed and supervised persons who were not licensed to perform certain medical procedures in Illinois. On February 2, 1993, the IDPR filed an Amended Complaint against Dr. Elliott, and added additional charges against him. On August 16, 1993, Dr. Elliott entered into a Stipulation and Recommendation for Settlement with IDPR, in which he admitted allowing unlicensed individuals to function in the role of surgical assistants during the conduct of hair restoration surgeries. On November 12, 1993, the IDPR issued a follow-up Order dated November 12, 1993, which required that Dr. Elliott undertake 20 hours of continuing education dealing with topics of minor surgical procedures and the use of ancillary medical personnel. That Order further required Dr. Elliott to cease and desist from permitting persons other than duly licensed personnel to perform certain medical procedures under his supervision.
(Emphasis supplied).
On the basis of that Illinois Complaint, Amended Complaint, Stipulation and Recommendation
The Board went on to make a further finding as to Illinois and concluded that another inadequate answer had been furnished by Dr. Elliott.
Three years later, in June 1995, the IDPR filed another Complaint against Dr. Elliott alleging that he and a former partner engaged in illegal advertising by distributing brochures which included patient testimonials concerning hair transplants that violated the advertising provisions in the Illinois Medical Practice Act. The IDPR eventually dismissed the advertising Complaint against Dr. Elliott on statute of limitation grounds. Even though the second IDPR Complaint was dismissed, Dr. Elliott should have answered “Yes” to Question 8 c) and explаined the nature of the advertising Complaint and the outcome of the investigation on the Reinstatement Application he submitted to the Board.
(Emphasis supplied).
2. Oregon
The Board made the following findings with respect to Dr. Elliott’s practice in the State of Oregon.
On December 27, 1993, the Oregon Board of Medical Examiners (OBME) issued a Voluntary Limitation of Practice Order limiting Dr. Elliott’s medical practice in Oregon to hair restoration only. This voluntary limitation of practice order contained Dr. Elliott’s sworn statement acknowledging that the limitation would remain in effect until terminated by the OBME. This limitation on Dr. Elliott’s practice was the result of a recommendation made by the OBME after it reviewed the Illinois medical board’s disciplinary matter against Dr. Elliott and Dr. Elliott’s test scores on a Texas medical test.
(Emphasis supplied).
The Board concluded that “Dr. Elliott should have answered Yes’ to Question 8 B) and explained on his reinstatement application the nature of the limitation on his medical practice in Oregon.”
3. Massachusetts
The Board also made a finding with respect to Massachusetts.
In January 1996, the Massachusetts Board of Registration in Medicine (“MBRM”) notified Dr. Elliott that it had opened a complaint against him and a former partner and was investigating the propriety of certain advertising by Dr. Elliott’s medical practice in Massachusetts. In March 1996, the MBRM notified Dr. Elliott that it dismissed the complaint against Dr. Elliott and his medical group.
(Emphasis supplied).
Notwithstanding the dismissal, the Board concluded that “Dr. Elliott should have answered ‘Yes’ to Question 8 C) on his Reinstatement Application and should have also explained the nature of the complaint and the outcome of the investigation.”
4. Maryland
The Board also made a finding with respect to a complaint that had been filed
In June 1997, this Board, the Maryland State Board of Physician Quality Assurance, advised Dr. Elliott by letter that the Board had received a complaint that Dr. Elliott allowed an unlicensed individual to practice medicine in Maryland. That letter also advised Dr. Elliott that the Board had opened an investigation into the complaint. In July 1997, Dr. Elliott responded in writing to the Board about the complaint. After receiving Dr. Elliott’s response to the complaint, this Board closed the complaint and the case against Dr. Elliott.
(Emphasis supplied).
The Board concluded that even though the complaint was ultimately dismissed, “Dr. Elliott should have answered ‘Yes’ to Question 8 C) ... and should have also described the nature of the complaint and the outcome of the Board’s investigation of him on the reinstatement application.”
5. Three Medical Malpractice Suits
Dr. Elliott had been sued for medical malpractice on three occasions within the five-year period covered by Question 8 L). The suits were in New York, Illinois, and California. All three suits were settled in favor of the plaintiffs. On all three occasions, Dr. Elliott’s insurance carriers made payments on his behalf. The Board made the following finding.
Dr. Elliott submitted his reinstatement application to the Board on December 5, 1999. During the preceding five-year period from December 5, 1994, to December 5, 1999, Dr. Elliott was named as a defendant in three ongoing malpractice lawsuits. All three lawsuits resulted in settlements in favor of the plaintiff patients. Dr. Elliott’s malpractice insurance carriers paid the plaintiff patients in the three malpractice actions $12,500 on July 24, 1998; $37,500 on February 1, 1995; and $15,000 on December 9, 1994. Thus, all three malpractice lawsuits were settled during the five-year time period preceding December 5, 1999, the date Dr. Elliott filed a reinstatement application with the Board.
The Board concluded that “Dr. Elliott should have answered Tes’ to Question 8 L) and should have provided a detailed explanation and documentation ... about these three medical malpractice actions in which he was named as a defendant.”
An Act of Deliberate Deception
The documented records of complaints and investigations from the medical licensing boards in Illinois, Oregon, Massachusetts, and Maryland could not be disputed. Nor could the court records from New York, Illinois, and California about the malpractice suits that had been filed and settled.
The question before the Board was not what happened involving Dr. Elliott in Illinois, Oregon, Massachusetts, and Maryland, but his utter failure to make any mention of those happenings on his application for reinstatement. The never-ending lesson of Watergate is that it is seldom the original trespass that is fatal. It is the failure to come clean about the trespass. It is mind-boggling that an innocent applicant would remain bovinely silent about all of those confrontations and difficulties with medical licensing authorities over the years in state after state and then, coyly, blame his silence on the inartful phrasing of the questions.
The only rational explanation lies in another direction, as described by the ultimate conclusion of the Board.
The Board agrees with the AL J’s factual findings that Dr. Elliott knew he had been the subject of repeated complaints, investigations, board orders, and malpractice claims and that he deliberately intended to deceive the Board by his answers to the application questions. As the ALJ forcefully noted, Dr. Elliott’s answers were false, and they were intended to induce the Board to act to its detriment by reinstating his license without further investigation of his background, an action which would have been to the detriment of the Board and to the patients in this State. Dr. Elliott’s testimony in which he gave various excuses for his actions was not credible; his excuses are without merit.
(Emphasis supplied).
Dr. Elliott’s Testimonial Explanations
Dr. Elliott took the witness stand before the ALJ on November 19, 2002, and attempted to explain why he had answered as he did the questions previously discussed. As the ALJ summarized his testimony,
At the hearing, the Respondent presented a wide array of excuses and/or reasons for not correctly answering the three questions on the application. First, the Respondent argued that the Application for Reinstatement is worded in a variety of misleading ways, that he misunderstood the questions and did not believe that he needed to answer the three questions in the affirmative. Second, he argued that the matters in Illinois, Oregon, Massachusetts and Maryland were either not disciplinary in nature or did not involve him directly. Third, the Respondent argued that the records pertaining to the various states’ investigations of his medical practice and the records regarding the mal practice lawsuits against him were kept by other persons and that he did not have ready access to accurate information. Fourth, the Respondent insinuated at one point that he forgot about or never knew about the three malpractice lawsuits against him. Fifth, he argued, in essence, that he believed he was “named” as a defendant in the malpractice actions only at the moment the lawsuits were filed. Sixth, the Respondent argued that he should not have to report the Maryland complaint because the Board should be aware of its own investigations. Seventh, the Respondent argued that there has been no harm done by his application answers because the Board’s later investigation uncovered the truth.
(Emphasis supplied).
Dr. Elliott testified that he thought Question 8 C) referred only to an “investigation or charge” brought by a licensing or disciplinary body “in the armed forces.” The critical phrase was “by a licensing or disciplinary body or comparable body in the armed services.” In a vacuum, one might conceivably believe that the modifying phrase “in the armеd services” qualified not only the “comparable body” following the disjunctive “or” but actually qualified, and thereby austerely limited, all licensing or disciplinary bodies. Dr. Elliott was, in effect, making the sophistical claim that the renewal application dealt only with one’s licensing history in the armed services and with no licensing history since or elsewhere.
Question 8 C), however, was not in a vacuum. It was the third question in a tightly related package of twelve questions. In a slightly different word order, the first and second questions had already expressly established the distinction between “a state licensing or disciplinary board” and “a comparable body in the armed services.” No sane and literate
The ALJ’s finding in this regard, adopted by the Board, rejected as “specious” and “disingenuous” this particular explanation based on not understanding the question.
The Respondent testified that he found the questions in the Application for Reinstatement to be confusing and misleading. However, the Respondent is a sophisticated and well-educated professional and his claims that the application questions are misleading or confusing are disingenuous. The Application for Reinstatement is a preprinted form that is and has been used routinely by the Board for the re-licensure of thousands of physicians. No credible evidence was produced at the hearing to indicate that physicians have had difficulty understanding the application. Clearly, the object of the application, as with most applications, is to obtain as much information as possible about an applicant. The application provides space for an applicant to explain any answers. In addition, Board staff members are available to answer any questions about the meaning of the questions. The Respondent did not contact the Board for assistance prior to filing his application. The Respondent and his attorney argued that Question 8 C (Has an investigation or charge been brought against you by a licensing or disciplinary body or comparable body in the armed forces?) was a limited inquiry about investigations or charges by a regulatory board connection solely to the armed forces. This is a specious argument. The question means just what it says: “have you, the applicant, been the subject of an investigation or disciplinary charge by a licensing board, by a disciplinary board or by an armed forces body, that is comparable to a licensing or disciplinary board?” Even assuming, arguendo, that a reasonable physician could have found the question misleading, there is no reason why the Respondent could not have made an inquiry and asked the Board or its lawyers how the question ought to be read and interpreted. Moreover, the disingenuousness of the Respondent’s position became most apparent when, on cross-examination, the respondent admitted that no body of the armed forces licenses physicians. Therefore, the Respondent’s claims that he misinterpreted the questions and that that the questions are poorly written are entirely without merit
(Emphasis supplied).
Question 8 B) could not be so adroitly deflected, and Dr. Elliott took the very different tack that his troubles with the licensing boards in Illinois, Oregon, Massachusetts, and Maryland were of a nature other than “disciplinary.” The finding of the ALJ, adopted by the Board, rejected the very bona fides of that proffered explanation as “disingenuous.” “Disingenuous” means “lacking candor.” It means “deliberately playing dumb.” It is a classic modality of deception. The finding was:
The Respondent also claims that none of the investigations by Illinois, Oregon, Massachusetts or Maryland pertained to disciplinary matters. The Respondent also insinuated that because the Illinois complaints, the Massachusetts complaint, the Oregon complaint and Maryland complaint did not result in disciplinary action against him, he did not haveto report any of those matters to the Board. This argument ignores the thrust and unambiguous wording of Questions 8B and 8C. Question 8B required the Respondent to report action taken against him, which includes limitations of practice and required education.
Further, the issue is not whether each of the actions in Illinois, Oregon, Massachusetts and Maryland were disciplinary in nature, but whether any state board or body that regulates the practice of medicine took any action against him. The application questions are not limited to an inquiry into disciplinary matters, and also ask, for example, about possible remedial obligations, such as required education. The disingenuousness of the claim aside, a review of the evidence in this case reveals that it is also patently false.
Board Exhibits 3b and 3c are the Complaint and Amended Complaint filed by Illinois against the Respondent in 1993. Page 2 and page 4 of the Complaint (Board Exhibit 3b) state that the alleged acts or omissions charged against the respondent are “grounds for revocation or suspension of a Certificate of Registration.” Page 2 and page 3 of the Amended Complaint (Board Exhibit 3c) state that the alleged acts or omissions charged against the resрondent are “grounds for revocation or suspension of a Certificate of Registration.” The Respondent was indeed investigated by a disciplinary body and was required to undergo education; he should have answered “Yes” to Question 8B and 8C.
(Emphasis supplied).
If nothing else, Dr. Elliott’s excuses for his silence were wide-ranging and versatile. In part, he blamed his office staff and his attorney.
Question 8L is unambiguous, yet the Respondent failed to answer it accurately. The Respondent acknowledged that three malpractice actions had been filed against him and that he (and apparently his partner) filed answers to each malpractice claim. In an attempt to explain his failure to provide a truthful and accurate answer to Question 8L, the Respondent testified that he didn’t personally have any records of the malpractice actions; his office kept some of the information; and his attorney had most of the information about the malpractice actions. Such disingenuous testimony ignores the fact that the Respondent had an obligation to provide truthful, accurate answers on his application regardless of who maintained his records. Further, such claims ignore the fact that the correspondence from Illinois, Oregon, Maryland, and Massachusetts was sent to his personal attention, as were the initial filings of the three lawsuits.
(Emphasis supplied).
Dr. Elliott then shifted gears again and claimed that he had forgotten about the malpractice suits. It is difficult for us to imagine a physician who forgets being sued for malpractice. In any event, the AL J’s finding was:
A fourth claim, by the Respondent was that he forgot about or was unaware of the three malpractice lawsuits. I cannot accept as credible the Respondent’s insinuations and claims that he forgot or did not know the malpractice claims that were filed against him in the five brief years prior to his December 1999 application for reinstatement. His claims are especially lacking in credibility in light of the fact that his insurance carriers paid out thousands of dollars in each of the three cases. The fact that some or all of the records regardingthose cases may have been in someone else’s possession does not relieve the Respondent of his obligation to provide truthful answers to the questions posed in the Reinstatement Application.
(Emphasis supplied).
At another point in his testimony, however, Dr. Elliott remembered thе malpractice suits but argued that although they had been settled within the five year period of limitations before he answered Question 8 L), the actual filing of the suits, to wit, the literal time at which he was first named as a defendant, had been back beyond the limitations barrier. He was parsing the language with a scalpel. The ALJ, and ultimately the Board, rejected that claim as “preposterous.”
The fifth claim by the Respondent is that he was “named” in the three subject lawsuits only at the time the actions were filed in court — 1988, 1991 and 1992 respectively. This is a preposterous claim that ignores the fact that he continued to remain “named” as a defendant in those three lawsuits until they were settled — in July 24,1998; February 1,1995; and December 9,1994.
(Emphasis supplied).
Dr. Elliott offered the further excuse that he did not have to answer with respect to the Maryland claim against him because the Board itself should have known about it. That excuse was also rejected.
The sixth allegation by the Respondent is he should not have to report the Maryland complaint because the Board should be aware of its own investigations. This argument ignores the fact that the Respondent is obligated to provide truthful, accurate and detailed information about any investigation or complaint and that the burden of providing accurate information is on him, not the Board.
(Emphasis supplied).
Applying the Law to the Facts
The ALJ and the Board concluded that Dr. Elliott’s false and deceptive answering of the application for reinstatement constituted an act that would qualify for disciplinary action under Health Occupation Article, § 14-404(a)(l). The ALJ first found:
[A] physician may not make a willful false representation when seeking or making application for licensure or any other application related to the practice of medicine. The Respondent repeatedly and consistently failed to disclose information about complaints and investigations, conduct which I find was willful. His failure to provide any information about investigations by four jurisdictions, about three lawsuits and about the limitation on his practice in one state raises an aura of suspicion that leads me to believe his actions were willful.
Pursuant to Md.Code Ann., Health Occ. § 14-205(a)(l)(iii), the Board may deny a license to an applicant or refuse to renew or reinstate an applicant’s license for any of the reasons that are grounds for action under § U- JOJ of the Health Occupations article. The Board has charged the Respondent with violating § lk-UOkfaffl).
(Emphasis supplied).
Turning to § 14-404(a)(l) specifically, the ALJ further found:
Pursuant to § 14-404(a)(l), the Board may revoke a license if the licensee fraudulently or deceptively obtains or attempts to obtain a license. ...
The Respondent clearly intended to present false information and knew that the answers on his application were false. I conclude that the evidence, taken as a whole, provides compelling evidence of his intent to induce the Board, to its detriment, to reinstate the Respondent’s license. His behavior was also deceptive. Black’s defines deceit as “[t]he act of intentionally giving a false impression.” Black’s Law Dictionary 413 (7th ed.1999). That is certainly the case here. The Respondent intended to give the false impression that he had not been the subject of repeated complaints and investigations and malpractice claims.
The Board has proven by more than a preponderance of the evidence that the Respondent’s conduct violated § Hm(a)(l).
(Emphasis supplied).
Substantial Evidence Of the Intent to Deceive
Dr. Elliott has consistently maintained that the inaccuracy, or even falsity, of his answers on his application for reinstatement were not sufficient to sustain the Board’s decision. He maintains that the evidence must have shown that his answers were deliberately deceptive. We fully agree.
The ALJ found that his answers were deliberately false and deceptive. More significantly, the Board found that his answers were deliberately false and deceptive. The only question for us is whether there was substantial evidence to support such a finding by the Board. All of the evidence that we have fully recounted demonstrates conclusively that it was abundantly substantial within the contemplation of the substantial evidence test.
A Demeanor-Based Credibility Assessment
In addition to drawing the derivative inferences that the inherent improbability of Dr. Elliott’s explanations for his silence gave rise to, the ALJ herself expressly made reference to her demeanor-based observations and conclusions.
I note that the Respondent averted his eyes from my gaze as I administered the oath against perjury to him and that he avoided looking at me throughout much of his testimony despite the fact that I attempted to maintain eye contact with him. He was simply not a credible witness.
(Emphasis supplied).
Squeezing every drop of deference out of the AndersonShrieves Deference Rule that could ever be wished, the Board signed on to that demeanor-based credibility assessment with gusto.
The Board adopts the ALJ’s characterizations of Dr. Elliott’s testimony and arguments as “disingenuous,” “in credible,” “preposterous,” “especially lacking in credibility ” and “entirely without merit.”
(Emphasis supplied). Who are we to say otherwise?
Derivative Inferences of Deceit
There were many reasons for the ALJ to have concluded that Dr. Elliott was deliberately deceitful. In addition to her appraisal of his veracity based upon her observations of his demeanor, there were the derivative inferences that she could draw from the inherent implausibility of his explanations.
Respondent’s answers to Question 8B, 8C and 8L were not truthful. The Respondent’s facile excuses for failing to respond accurately to Question 8B, 8C and 8L would perhaps have been more credible if he had reported several of the various licensing board inquiries and, had merely overlooked one of them. However, the record in this case is clear thatthe Respondent failed to disclose four separate investigations, a limitation on his practice, required education, and three malpractice settlements.
The record shows that the Respondent corresponded with the various regulatory and disciplinary boards of Illinois, Oregon, Maryland and Massachusetts. He had actual knowledge of the complaints, investigations and results in each case. As the Board correctly notes, it is not for the Respondent to determine the relevance or importance of the information he was required to provide; it was simply his obligation to provide accurate and detailed information.
The Board correctly observed that a legal inference is permissible from the conduct of the parties. Fuller v. Horvath,42 Md.App. 671 , 685,402 A.2d 134 (1979). There was so much information that the Respondent neglected to provide the Board that I must conclude that his failure to give honest, truthful, or accurate answers to the application questions was not innocent and was not due to mere oversight, forgetfulness or an inability to properly interpret the questions. The Respondent simply had too many facile excuses for his various failures for me to give any credence to them. The Respondent was willfully deceptive, fraudulent, and misleading in his application answers and I must conclude that he intended to hide the true nature of his professional medical history. An application serves no purpose if a physician can be allowed to remain as willfully ignorant as the Respondent professed to be about his own personal history.
(Emphasis supplied).
The Board was fully in a proper position both to rely upon the inferences drawn by the ALJ and to draw its own derivative inferences in that regard. It did so.
The Board agrees with the ALJ’s factual findings that Dr. Elliott knew he had been the subject of repeated complaints, investigations, board orders, and malpractice claims and that he deliberately intended to deceive the Board by his answers to the application questions. As the ALJ forcefully noted, Dr. Elliott’s answers were false, and they were intended to induce the Board to act to its detriment by reinstating his license without further investigation of his background, an action which would have been to the detriment of the Board and to the patients in this State. Dr. Elliott’s testimony in which he gave various excuses for his actions was not credible; his excuses are without merit.
(Emphasis supplied).
It would be easy in this case to say that the Board had massive and overwhelming evidence to support its ultimate decision. All that is necessary for us to say, however, is that it had substantial evidence to do so. We so say.
Redundant Adverbs
Section 10-404(a)(l) provides that the Board may “suspend or revoke a license if the licensee fraudulently or deceptively obtains or attempts to obtain a license.” (Emphasis supplied). The pairing of adverbs strikes us as nothing more than redundant rhetoric. Assuming, arguendo, that there is some hypertechnical difference, the evidence overwhelmingly supported a finding of either or both.
After concluding that “an action for fraud or deceit ... is predicated upon a ... deliberate intent to deceive” and that “courts use the terms ‘fraud’ and ‘deceit’ interchangeably to describe intentional false conduct,” the ALJ ruled that Dr. Elliott “clearly intended to present false information and knew that the answers on his application were false.” As she went
His behavior was also deceptive. Black’s defines deceit as “[t]he act of intentionally giving a false impression.” Black’s Law Dictionary 413 (7th ed.1999). That is certainly the case here. The Respondent intended to give the false impression that he had not been the subject of repeated complaints and investigations and malpractice claims.
(Emphasis supplied).
By way perhaps of carrying coals to Newcastle, the Board did not hesitate to add the adverb “fraudulently.” It hastened to point out, however, that it did not make a bit of difference whether its conclusion was embellished by the first adverb or by the second or by both.
The statute in question, [¶] § li-W(a)(l), provides that the Board may sanction for either “fraudulently” or “deceptively” attempting to obtain a license. The ALJ stated in no uncertain terms that Dr. Elliott’s conduct met the necessary elements for being both fraudulent and deceptive, but did, not use the word “fraudulently” in the separate proposed Conclusions of Law Section. The Board adopts the ALJ’s conclusion that Dr. Elliott “deceptively” attempted to obtain a medical license. This aspect of Dr. Elliott’s offense alone justifies denial of his application. The Board has added the word “fraudulently” to its Conclusions of Law because it is justified by the evidence (and supported by the discussion of the ALJ). To the extent that this word was not used in the ALJ’s specific proposed Conclusions of Law, the Board modifies those proposed conclusions to include that term. Again, however, the Board emphasizes that its conclusion that the application was also “fraudulent” has had no effect on its denial of licensure in this case; in these particular circumstances, the fact that Dr. Elliott “deceptively” submitted his application would have itself resulted in the denial of the application.
(Emphasis supplied). We fully agree.
The Burden of Ultimate Persuasion
On what basis, then, could Dr. Elliott have persuaded the Circuit Court for Baltimore County to have reversed the decision of the Board of Physicians? Dr. Elliott convinced the court to reverse the Board because the ALJ had allegedly used the wrong burden of persuasion. The circuit court ruled:
Although a review of the record indicates that the Board produced a significant amount of evidence against Petitioner, the ALJ addressed her findings to the preponderance of the evidence standard. Without her express conclusion that the evidence was sufficient to overcome the clear and convincing evidence standard, neither the Board nor this Court can assume that the State prosecutor met this burden. The ALJ erred in adopting the preponderance of the evidence standard, and the Board erred in adopting this legal conclusion as well as determining that the evidence overcame the clear and convincing evidentiary hurdle.
Because this Court has determined that the higher clear and convincing evidence standard should have been applied at the merits hearing, it is unnecessary to address Petition er’s allegations of error regarding the Board’s evaluation of the evidence presented at said hearing.
(Emphasis supplied).
Dr. Elliott now has the burden of convincing us to reach that same conclusion.
The Burden of Persuasion Is a Question of Law
The issue of what burden of persuasion should have been employed by the Board is one of law. Accordingly, this Court owes no deference to the decision of the Board on this issue and will proceed to make its own
de novo
determination.
Coleman v. Anne Arundel County Police Department,
Petitioner’s sole issue before us, namely, whether an incorrect standard of proof was applied in the assessment of whether the Department proved the charges, presents a purely legal question. Accordingly, this Court reviews the matter de novo.
(Emphasis supplied).
Random Thoughts on the Burden of Persuasion
Preliminarily, we need to place this contention in realistic perspective. Undoubtedly, identifying the applicable burden of persuasion and then providing some guidance as to what that burden entails is a salutary and necessary thing to do when it comes to instructing jurors at the end of a judicial trial. It is а device by which veteran and professional decision makers attempt to convey to lay jurors, many of whom are being faced with such a decision for the first time in their lives, some rough sense of that degree of certainty they should feel before rendering a particular verdict. 3 It has been said that the three classical levels of persuasion — by a bare preponderance of the evidence, by clear and convincing evidence, and beyond a reasonable doubt — reflect, respectively, that the proposition before the jury is 1) probably true, 2) highly probably true, or 3) almost certainly true. Beyond that, there is really not much to be said.
When, by some dubious analogy, the law turned a lecture to the jurors on decision-making into a procedural requirement for all fact-finding and began applying it not only to laymen but to professional decision makers as well — be they judges sitting as a jury, administrative board members, or ALJ’s— the utility of the enterprise became a lot less certain. Veteran judges, sitting as a jury, will frequently deem it discreet, even if not necessarily commendable, to say nothing about the burden of persuasion, so as to enjoy the presumption of having done the right thing. When the burden is mentioned, it is sometimes simply by way of rationalizing a seemingly improbable result that could disappoint the expectations of the audience. Candor requires us to acknowledge that, when applied other than in the context of jury instructions, this body of law can be more of a procedural obstacle course than a genuine contribution to the judicial process. 4
Two characteristics about the burden of persuasion need to be kept in mind.
A second characteristic to be kept in the front of the mind is that the burden of persuasion, whatever it may be, does not apply to every constituent element that enters into the totality or to every evidentiary fragment that comes into a hearing. It only applies to the ultimate verdict based on the decision maker’s evaluation of the entire hearing and the totality of the evidence. The burden of persuasion is not a tollgate for admissibility. It deals only with the degree of mental certainty undergirding the final decision.
Our Concern is With the Board’s Persuasion, Not the ALJ’s
At the outset of her Proposed Decision, the ALJ reconfirmed that at an earlier stage of the case she had ruled that the pertinent burden of persuasion was that of a bare preponderance of the evidence.
At the hearing on the Board’s Motion for Summary Decision, the Respondent argued that the clear and convincing evidence standard applies in this matter. The Board raised the issue again after the hearing in its Post-Hearing Memorandum. 6 The issue of the standard of proof was previously addressed by me in my Proposed Decision and Ruling on Motion for Summary Decision. As this matter does not pertain to a standard of care issue, the preponderance of the evidence standard is the appropriate standard , 7
(Emphasis supplied).
Before even turning to what the appropriate burden of persuasion in this case
There is no necessary correlation between the degree of persuasion reached by the ALJ and that reached by the Board, еven when they agree. On the same record, the levels of persuasion of independent fact finders can float upward or downward independently of each other. The record that persuades one fact finder by a bare preponderance of the evidence may persuade another fact finder clearly and convincingly or yet another fact finder beyond a reasonable doubt. It might leave a fourth fact finder utterly unpersuaded. The ALJ’s burden of persuasion, moreover, applies to the ALJ’s ultimate proposed disposition of the entire case and not to each and every one of 31 findings of fact that may have entered into that proposed disposition. The Board is fully entitled to look at the record developed before the ALJ regardless of what burden of persuasion the ALJ may have been using.
We shall look at the Board’s level of persuasion in a moment, although Dr. Elliott does not directly challenge it. Unless what the ALJ did caused the decision of the Board to be fatally flawed, we really do not care what burden of persuasion the ALJ may have employed. If it really mattered, however, we would be hard put not to agree with the Board as it concluded, in its Final Order, with respect to the ALJ’s actual degree of certitude at the conclusion of the hearing before the ALJ.
Although the ALJ correctly ruled that the findings need only be made by a preponderance of the evidence, the ALJ opined that the case was “compelling” and that the case was proven by “more than a preponderance. ”
(Emphasis supplied). But see
Coleman v. Anne Arundel County Police
Department,
The only issue in genuine dispute before the ALJ was whether Dr. Elliott had been intentionally false and deceptive in providing the answers he did on his license reinstatement application. On top of page after page of findings as to his having been deliberately false and deceptive, the tip of the iceberg was the ALJ’s characterizations of his testimony as “disingenuous,” “incredible,” “preposterous,” “especially lacking in credibility” and “entirely without merit.” That would seem to communicate the unequivocal message not that she was merely a little bit convinced of his intentional deceit but that she was a whole lot convinced. Is not that the very degree of certainty that thе higher burden of persuasion is designed to guarantee? Even if the ALJ never said the magic words, do we honestly have any doubt? 5
As far as the critical decision of the Board itself was concerned, Dr. Elliott got more than he was entitled to with respect to the burden of persuasion. The Board had before it, of course, the proposed fact-findings and the proposed disposition of the ALJ. The Board made, however, its own independent evaluation of the entire record. It had a transcript of the testimony before the ALJ. It had critical documentation to review for itself — the reinstatement application form, Dr. Elliott’s answers on that form, and the records from the medical licensing authorities in Illinois, Oregon, Massachusetts, and Maryland. It had the court records detailing the three malpractice suits and their settlements.
The lion’s share of the ALJ’s fact-finding, moreover, consisted of derivative inferences which the Board was fully competent to draw for itself and did draw for itself. Even the credibility findings as to Dr. Elliott’s deceitfulness were not so much demeanor-based as they were based upon the inherent improbability of the excuses in face of the undeniable documentary reality. When the Board “adopts” the findings of fact of the ALJ, moreover, none of those individual findings of fact needs to have been found, by either the ALJ or the Board, according to any particular standard of persuasion. The burden of persuasion, whatever it may be, applies only to the degree of certitude felt about the final decision based on the totality of the facts, not to the finding of each constituent fact that enters into the totality. Circumstantial evidence is a classic example of this principle. Individual circumstances are frequently very tenuous or marginal in their persuasiveness, but the combination of many circumstances nonetheless yields a very convincing case.
Even while agreeing with the ALJ that the “clear and convincing” standard of persuasion did not apply, the Board observed that that higher standard had nonetheless gratuitously been satisfied:
Although not required to do so, the Administrative Prosecutor has proven the facts by clear and convincing evidence. (Emphasis supplied). Dr. Elliott could have wished for nothing more.
Even Health Occupations, § 14-404 Did Not Call For The “Clear and Convincing” Burden of Persuasion
Even if the Board had not been persuaded by the “clear and convincing” standard it would make no difference, however, because the “clear and convincing” standard was not required. Dr. Elliott argues to us, as he did successfully to the circuit court, that the “clear and convincing” burden of persuasion was mandated by Health Occupations Article, §§ 14-404 and 14-405. The Board’s denial of Dr. Elliott’s application for the renewal of his license was grounded in § 14 — 205(a)(l)(iii), which in pertinent part provides:
(a) Powers. — (1) In addition to the powers set forth elsewhere in this title, the Board may:
(iii) Subject to the Administrative Procedure Act, ... refuse to renew or reinstate an applicant’s license for any of the reasons that are grounds for action under § 14-404 of this title.
The standard of proof in a contested case shall be the preponderance of the evidence unless the standard of clear and convincing evidence is imposed on the agency by regulation, statute, or constitution.
(Emphasis supplied). See
Lussier v. Maryland Racing Commission,
Although all parties agree that a proceeding under Health Occupations Article, § 14-205 would ordinarily be controlled by the APA and would involve the “bare preponderance of the evidence” burden of persuasion, Dr. Elliott argues that because § 14-205 makes reference to § 14-404, § 14-404 “trumps” § 14-205 when it comes to determining the procedural requirements for litigating a contested case. The circuit court bought Dr. Elliott’s argument and ruled as follows:
In the instant matter, the Board invoked Health Occupations § lb-205 and § lb-b0b in its Notice of Initial Denial for Reinstatement of Application. Health Occupations § 14-205(a)(l)(iii) entitles the Board to deny a license to an applicant or refuse to renew or reinstate an applicant’s license for any of the reasons that are grounds for action under [¶] § 14-404. § lb~b05 provides that before the Board takes any action under § lb-bOb(a), it shall give the individual against whom the action is contemplated an opportunity for a hearing (HO § 14-405(a)), and any “factual findings shall be supported by clear and convincing evidence.” In order for the Board to proceed under § lb-205, it must make factual findings pursuant to § lb-bOb, and any findings — according to § 14-405(b) — must be supported by clear and convincing evidence.
(Emphasis supplied).
In a moment we shall examine the validity of Dr. Elliott’s claim that a reference by some other section to § 14-404 necessarily engages, even on a hearing with respect to that other section, the procedures that would attend a hearing on a complaint brought pursuant to § 14-404 directly. For the nonce, as we catalogue the flaws in Dr. Elliott’s argument, it is enough to note that, even if we were to assume, purely arguendo, that § 14-404 governed the procedural requirements in this case, the “clear and convincing” standard still would not have been mandated.
Title 14 of the Health Occupations Article deals with “Physicians” and Subtitle 4 thereof deals with “Disciplinary Actions.” Section 14-404 applies directly to actual present medical licensees and lists 41 separate actions that could subject a licensee to discipline at the hands of the Board. The procedures for conducting a hearing on a § 14-404 violation are, in turn, spelled out by § 14-405.
Section 14-405(b)(l) and (2) now provide:
(b) Application of Administrative Procedure Act. — (1) The hearing officer shall give notice and hold the hearing in accordance with the Administrative Procedure Act.
(2) Factual findings shall be supported by a preponderance of the evidence.
(Emphasis supplied).
That provision, however, is not dispositive of the issue before us because that subsection, enacted by Acts of 2004, Special Session, ch. 5, § 4, only became effective on January 11, 2005, at a time too late to have controlled the pertinent hearings
The hearing officer shall give notice and hold the hearing in accordance with the Administrative Procedure Act except that factual findings shall be supported by clear and convincing evidence.
(Emphasis supplied).
Between those two general provisions, covering all § 14-404 violations alike, there was an intermediate stage that engaged in fíne tuning with respect to particular violations. Ch. 252 of the Acts of 2003 reduced the burden of persuasion for all but one of § 14-404’s violations, but left the burden at the higher level for a violation of § 14-404(22), dealing with breaches of the standard of care. Section 14-404(b)(2) and (3) then provided:
(2) Except as provided in paragraph (3) of this subsection, factual findings shall be supported by a preponderance of the evidence.
(3) Factual findings shall be supported by clear and convincing evidence if the charge of the Board is based on § U-m(a)(22).
(Emphasis supplied).
The Board’s charges against Dr. Elliott had nothing to do with § 14-404(a)(22), so that exception to the downgrading of the burden of persuasion has no bearing on this case. What is pertinent to this phase of our analysis is the effective date of the downgrading of July 1, 2003.
The two decisions that we will consider straddle that date. The ALJ rendered her decision on March 17,2003, three and one-half months before the burden of persuasion was downgraded. On the other hand, the Board rendered its decision on September 30, 2003, three months after the downgrading had become effective.
As we have been stating consistently and repeatedly, the only action that we are reviewing is the decision of the Board on September 30, 2003. Even under § 14-405, assuming for the moment that it applied, the burden of persuasion applicable to the Board’s decision of September 30, 2003 had become, as of that date, that of a “bare preponderance of the evidence.”
As we have already discussed at length, the Board — through a review of the documents and a review of the record from which it could draw its own derivative inferences — had substantial evidence for its final decision even without adopting any findings by the ALJ. Even with respect to the adoption of the ALJ’s findings, however, nothing was remotely improper or irregular.
Even assuming, arguendo, that the ALJ’s findings of March 17, 2003, were inadequate when made, because they were made on a lower than required burden of persuasion, they had ripened into adequate findings by the time the Board relied on them on September 30, 2003. The critical date was when the Board relied on the ALJ’s findings and not when the ALJ’s findings were initially made.
If the ALJ had made the same findings relying on the “bare preponderance” standard on July 2, 2003, the day after the downgrading became effective, there clearly would have been no imрediment to their having been relied on by the Board on September 30, 2003. Precisely the same findings by precisely the same ALJ by precisely the same burden of persuasion
Sections 14-404 and § 14-405 Do Not Control the Burden of Persuasion
The final flaw in Dr. Elliott’s argument is its failure to recognize that the Board’s proceeding against him was not pursuant to § 14-404. It was pursuant to § 14-205, which calls for a standard APA contested case hearing using the standard “bare preponderance” burden of persuasion. Section 14-205 may refer to § 14-404, but it does not become § 14-404.
Judge Hollander’s opinion in
Oltman v. Maryland State Board of Physicians,
Whereas Dr. Elliott was directly charged pursuant to § 14-205, which made reference to § 14-404, Oltman was directly charged pursuant to § 15-314(3), which also made reference to § 14-404. Whereas in this case, Dr. Elliott is invoking a particular burden of persuasion as a procedural incident of §§ 14-404 and 14-405, Oltman invoked the entitlement to a Case Resolution Conference (“CRC”) as a procedural incident of§ 14-404.
Judge Hollander’s opinion made it clear that the complaint against Oltman was being pursued under § 15-314 and that the controlling procedures were, therefore, those provided by § 15-314. The fact that there was a reference to § 14-404 in no way implicated the procedures normally attendant on § 14-404.
Here, the proceedings were initiated under H.O. Title 15, not H.O. Title 14. The Board determined that, because appellant was charged under H.O. § 15-314(3), appellant was subjеct to the procedural mechanisms of H.O. Title 15, even though the provisions of H.O. § 14~404(b) were cross-referenced. In its “Reversal of Dismissal and Interim Order of Remand,” the Board stated: “Section 15-314 speaks of a ‘basis for disciplinary action’ set out in 14-404, but there is no indication that the procedures of 14-404 are meant to be applied to physician assistant discipline under 15-314.”
In that case, as in this, the Board of Physicians was dealing with a statute that it regularly interpreted and administered. What the Oltman opinion admonished about the deference that is due the Board in making such calls within its area of competence is equally apt as we look at similar calls by the Board in this case.
It is well settled that“an administrative agency’s interpretation and application of the statute which the agency administers should ordinarily be given considerable weight by reviewing courts.” [S]ee Solomon v. Bd. of Physician Quality Assurance, 132 Md.App. 447, 455, 752 A.2d 1217 (2000) (deciding to “accord the Board’s interpretation of the Maryland Medical Practice Act considerable weight and deference”). “The same principles apply to an agency’s interpretation of its own regulation.”
In light of these principles, we hold that the Board did not err in concluding that appellant was not entitled to a CRC; there is no statutory or regulatory provision requiring the Board to grant a CRC in a case arising under H.O. § 15-314(3).
The Civil Tort of Fraud Is One Thing; Administrative Allegations of Fraudulent Conduct Are Something Less
In a final effort to raise the bar of persuasion, Dr. Elliott waves the bloody shirt of “fraud.” His argument is that whenever allegations, even in the context of an administrative hearing, charge or even intimate that the conduct of the offender was fraudulent, the very nature of such a charge
ipso facto
raises the required level of persuasion. When extended to administrative proceedings, it is an argument grounded in the reasoning of
Everett v. Baltimore Gas and Electric Co.,
[WJhere a utility alleges that a customer engaged in conduct amounting to fraud or to a crime and such conduct constitutes the sole basis of the customer’s alleged responsibility for prior unpaid bills, the utility must prove its allegation by clear and convincing evidence to justify termination of service for non-payment.
Such an argument, albeit potent under
Everett,
cannot survive
Coleman v. Anne Arundel County Police Department,
various errors of law, including an alleged error that the Board had applied the preponderance of the evidence standard of proof, rather than the clear and convincing evidence standard required by the circumstances, in its assessment of whether the Department had proven the charges.
Petitioner’s first contention essentially is that Everett mandates otherwise, arguing that the burden of clear and convincing evidence, as opposed to the less rigorous standard of preponderance of the evidence, is required by the nature of the charges in the present case. Petitioner’s assertion primarily relies upon this Court’s holding in Everett, which Petitioner contends stands for the proposition thatproof by clear and convincing evidence is required in an administrative adjudicatory hearing whenever the charging allegation involves “fraud, dishonesty, or a serious criminal offense.” Petitioner argues that the allegations of his theft-related misconduct include all of these elements, which, in a civil judicial forum, requires proof by the clear and convincing standard. Noting that the fixed burden of persuasion ought to be the same in an administrative proceeding as it is in a civil judicial proceeding involving allegations of like nature, Petitioner argues that the allegations of his theft-related misconduct must be supported by the higher evidentiary standard of clear and convincing evidence.
After the Circuit Court for Anne Arundel County affirmed the decision of the Administrative Hearing Board, Coleman brought the issue to this Court. Judge Kenney undertook the Herculean labor of wrestling with the wide-ranging tentacles of
Everett.
Grasping tightly onto
Meyers v. Montgomery County Police Department,
We need not engage, as the Court of Special Appeals did in Meyers, in an elaborate effort to distinguish Everett from the facts of the case at hand. This is so because, unlike the intermediate appellate court, we have the authority, and shall exercise it in this instance, to overrule Everett.
Judge Harrell explained how the lay of the land in administrative law had changed dramatically since the time that Everett had been decided.
At the time Everett was decided, the contours of general state administrative law principles in Maryland were materially different than now. The Court then did not have the benefit of a broad public policy pronouncement by the State legislature that expressed a particular standard of proof requirement relative to contested administrative cases. Seeking a principled basis for its decision in the absence of such a policy, the Everett Court sought guidance, by analogy, from the common law, which traditionally required the intermediate standard of clear and convincing evidence to prove allegations of fraud in civil judicial proceedings. The Court drew on that analogy to decide Everett. The relevant legal terrain, however, has changed since Everett was decided.
The most prominent change, for purposes of the
Coleman
decision and for our purposes, was that by ch. 59, § 1, of the Acts of 1993, the General Assembly had promulgated what is now State Government Article, § 10-217, “establish[ing], for the first time, preponderance of the evidence as the generally applicable standard of proof to be used by covered state administrative agencies in contested case hearings.”
The Court of Appeals then surveyed the caselaw nationally and concluded that Everett was ripe for overruling.
Our conclusion is reinforced by comparison of the decisions of other states addressing similar questions. See, e.g., Romulus v. Anchorage Sch. Dist.,910 P.2d 610 , 618-19 (Alaska 1996) (upholdingtermination of teacher for sexually abusing students based on preponderance of the evidence standard which applies to disciplinary proceedings involving a government employee); Clark v. Bd. of Fire and Police Comm’rs, 245 Ill.App.3d 385 ,184 Ill.Dec. 509 ,613 N.E.2d 826 , 829-30 (1993) (applying preponderance of the evidence standard in police officer’s termination proceedings for obstruction of justice, bribery, conspiracy and official misconduct); Romeo v. Dep’t of Employment and Training,150 Vt. 591 ,556 A.2d 93 , 94 (1988) (stating that misconduct allegations of theft need only be proven by the civil standard of a preponderance of the evidence).
Everett v. Balt. Gas & Elec. Co.,307 Md. 286 ,513 A.2d 882 (1986), is inconsistent with the holding in the prеsent case and is overruled.
Conclusion
In this case, 1) there was substantial evidence to support the decision of the Board of Physicians and 2) the Board of Physicians applied the right “preponderance of the evidence” burden of persuasion in reaching its decision. The decision of the Board should be affirmed. Accordingly, the judgment of the Circuit Court for Baltimore County must be reversed.
JUDGMENT OF THE CIRCUIT COURT OF BALTIMORE COUNTY REVERSED AND CASE REMANDED FOR THE AFFIRMING OF THE DECISION OF THE BOARD OF PHYSICIANS; COSTS TO BE PAID BY APPELLEE.
Notes
. The "Discussion" section of the AU’s proposed decision (pp. 9-26) contains an evaluation of the evidence, further proposed factual findings and proposed conclusions of law. The Board adopts the AJJ’s evaluation of the evidence therein, including the AJJ’s credibility findings, as well as the AJJ’s further proposed factual findings.
.
MTA v. King,
a leading authority on judicial review of the decision of an administrative agency under the Administrative Procedure Act, points out,
The grounds set forth in § 10-222(h) for reversing or modifying an adjudicatory administrative decision do not include disproportionality or abuse of discretion. As long as an administrative sanction or decision does not exceed the agency's authority, is not unlawful, and is supported by competent, material and substantial evidence, there can be no judicial reversal or modification of the decision based on disproportionality or abuse of discretion unless, under the facts of a particular case, the disproportionality or abuse of discretion was so extreme and egregious that the reviewing court can properly deem the decision to be "arbitrary or capricious. ”
(Emphasis supplied). See also
Maryland Aviation Administration v. Noland,
Although every arbitrary or capricious act by an administrative agency may be, ipso facto, an abuse of discretion, every abuse of discretion is not, ipso facto, arbitrary or capricious within the contemplation of the APA and is not, in and of itself, good cause to reverse the agency’s decision.
. One of the findings of the ALJ was that "practicing medicine with an unlicensed person or aiding an unauthorized person in the practice of medicine constitutes grounds for discipline in Maryland under [Health Occupation Title], § 14-404(a)(18).”
. In his concurring opinion in
In Re Winship,
The function of a standard of proof, as that concept is embodied in the Due Process Clause ... is to "instruct the factfinder concerning the degree of confidence our society thinks he should have in the correctness of factual conclusions for a particular type of adjudication.”
. As Judge Harrell very insightfully noted in
Coleman v. Anne Arundel County Police Department,
Nor do we find that implementation of the heightened standard of proof sought by Petitioner would so significantly reduce the risk of error that it should be implemented regardless of any additional administrative or financial burdens it would entail. Candor requires that we acknowledge the difficulty a lay panel may encounter in perceiving the subtle distinctions and nuances between these two abstract standards when called upon to apply it. See also Wills v. State,329 Md. 370 , 374,620 A.2d 295 , 297 (1993) (noting that the terms "preponderance,” "clear and convincing,” and "reasonable doubt” are not “at least in their legal sense, street familiar")) Weisman v. Connors,76 Md.App. 488 , 503,547 A.2d 636 , 643 (1988) (noting the "amorphous” nature of the clear and convincing standard); Tippett v. Maryland,436 F.2d 1153 , 1158-59 (4th Cir.1971), cert. dismissed, sub nom. Murel v. Balt. City Criminal Court,407 U.S. 355 , 360,92 S.Ct. 2091 , 2094,32 L.Ed.2d 791 (1972) ("However meaningful the distinction [between the two standards] may be to ... judges, ... it is greatly to be doubted that a jury’s verdict would ever be influenced by the choice of one standard or the other.’’).
(Emphasis supplied).
. The Board also cited
Coleman v. Anne Arundel County Police Dept.,
. Although the clear and convincing evidence standard applies to standard of care issues, it is the lesser preponderance of the evidence standard that applies in an action arising under § 14-205(a). There is no statutory provision that imposes the clear and convincing evidentiary standard upon actions that arise from Health Occ. § 14 — 205(a)(l)(iii). In the absence of a statute specifying a particular standard of proof, the standard in an administrative proceeding shall be the preponderance of the evidence. Md.Code Ann. State Gov’t § 10-217 (1999 & Supp.2002).
. There is an unreal quality to this entire inquiry. It is as if someone were to read Winston Churchill's "We shall fight them on the beaches” speech of June 1940 and still, because he never expressly stated his standard of persuasion, be in doubt whether Churchill was only a little bit resolved to resist the Germans or was a whole lot resolved to do so. The difference between the first two standards of persuasion is only the difference between being persuaded a little bit and being persuaded a whole lot.
Are we so obsessed with getting the abracadabra down pat that we lose sight of the unmistakable reality of what really happened? Certainty sometimes proclaims itself. How do we know when that occurs? Because that's the appellate art. In this case, however, it is not necessary to decide that.