Can a court be prohibited from staying an administrative board’s decision?

Administrative Board

Tate v. State, Bd. of Med. Exam’rs (Nev. Supreme Ct. – Sep. 10, 2015)

NRS 630.356(1) grants physicians the right to judicial review of Nevada State Board of Medical Examiners final decisions, while NRS 630.356(2) simultaneously prohibits district courts from entering a stay of the Board’s decision pending judicial review. The issue is whether this prohibition violates the Nevada Constitution’s separation of powers doctrine.

Tate is a surgeon licensed in Nevada. In February 2010, he was scheduled to perform a surgery at Valley Hospital at around 4 p.m. When he arrived to prepare for the surgery, members of the surgical team thought Dr. Tate smelled of alcohol. The hospital halted surgery preparations and asked Dr. Tate to submit to alcohol tests, which he did, admitting that he had consumed some alcohol during his lunch break. Dr. Tate’s blood alcohol level was .06 percent.

The Nevada State Board of Medical Examiners found that Dr. Tate had violated NAC 630.230(1)(c) by rendering services to a patient while under the influence of alcohol and in an impaired condition. The Board suspended Dr. Tate’s license for six months, issued a public reprimand, ordered him to complete an alcohol diversion program and pay $35,564.44 in investigation and prosecution costs and a $5,000 fine, and to complete continuing medical education on the subject of alcohol.

Dr. Tate petitioned for judicial review of the Board’s decision. He also requested a preliminary injunction to stay the sanctions and prevent the Board from filing a report with the National Practitioner Data Bank while judicial review was pending. Medical Boards are required by 45 C.F.R. §§ 60.5(d) and 60.8(a) to report sanctions to the National Practitioner Data Bank, which disseminates information of physician misconduct to health-care entities, including hospitals. In denying injunctive relief, the district court stated that, even though it thought the injunction was clearly warranted, NRS 630.356(2) precluded such action. Dr. Tate appealed the district court’s denial of his injunction request.

The primary issue in this appeal was whether NRS 630.356(2) violates the separation of powers doctrine articulated in Article 3, Section 1 of the Nevada Constitution. Dr. Tate argued that the statute conflicted with the judicial powers articulated in Article 6, Section 6 of the Nevada Constitution. The Board countered that courts have no inherent authority over administrative actions and that any authority given by statute is likewise subject to statutory limitations, that the Supreme Court of Nevada had already determined that prohibitions against stays are not unconstitutional, and that other jurisdictions have upheld similar stays.

In Nevada, the Administrative Procedure Act (APA), codified in NRS Chapter 233B, governs the judicial review of those final administrative agency decisions that qualify under the terms of the APA, thus conferring power to the district courts to determine whether an aggrieved party is entitled to the relief sought on review.

The Supreme Court of Nevada explained that in an administrative proceeding before the Board of Medical Examiners, a physician has the right to seek judicial review of a final order pursuant to NRS 630.356, which states in pertinent part as follows:

1. Any person aggrieved by a final order of the Board is entitled to judicial review of the Board’s order.

2. Every order that imposes a sanction against a licensee pursuant to subsection 4 or 5 of NRS 630.352 or any regulation of the Board is effective from the date the Secretary-Treasurer certifies the order until the date the order is modified or reversed by a final judgment of the court. The court shall not stay the order of the Board pending a final determination by the court.

The Court noted that although not previously examined by the Court, other courts have considered this issue.

For example, in Commission on Medical Discipline v. Stillman, 435 A.2d 747 (Md. 1981), a lower court reviewing an administrative agency’s revocation of a physician’s medical license granted a stay of the revocation pending judicial review, despite statutory language prohibiting stays. The Stillman court held that the prohibition against stays was constitutional because a stay is not an inherent judicial power, but merely a tool courts may use in administering justice. Because the physician retained the right to seek judicial review and the court retained its power to review the agency’s actions, the court further held that the statutory prohibition against stays did not inhibit the administration of justice.

In contrast, the Supreme Court of Kentucky took the opposite view in Smothers v. Lewis, 672 S.W.2d 62 (Ky. 1984). There, a licensing control board revoked a storeowner’s alcoholic beverage license, and the lower court found that the statutory scheme prevented it from issuing a stay pending judicial review. The Smothers court held that a statute prohibiting any stay of a board’s order pending judicial review violated the separation of powers doctrine because it was a legislative encroachment on the powers of the judiciary. The court reasoned that where the statute allowed the licensee to appeal a board’s decision, to simultaneously preclude the possibility of a stay would be to pay lip service to the statutory provisions that establish the right for a licensee to appeal while eradicating any practical reason for taking the appeal. The prohibition effectively puts a licensee in the position of winning the battle but losing the war because the sanctions could cause irreparable injury while review was ongoing. Succinctly put, the statute gives an appeal and then takes it away. The Smothers court noted that the contradiction and conflict here are obvious. The practical effect is to render the appeal a meaningless and merely ritualistic process.

The Court in Dr. Tate’s case explained that the Legislature’s enactment of NRS 630.356 provided physicians with the right to seek judicial review of Board decisions, thereby empowering the district courts with the ability to determine whether an aggrieved party is entitled to the relief sought on review, and if so, to shape that relief accordingly. Typically, once a court gains jurisdiction of a case, it has the power to preserve the status quo and maintain and protect the subject-matter of the suit as it existed at the time the appeal was taken. Likewise, the district court may issue an injunction to enjoin a party from taking action that would render the judgment ineffectual.

The Court believed that to bar a district court’s ability to grant injunctive relief while judicial review is pending effectively renders the appeal a meaningless and merely ritualistic process as the sanctions imposed will likely have been implemented or completed before the court could judicially review the case. Such sanctions may, among other things, irreparably penalize a physician through loss of patients, income, job opportunities, and/or damage the physician’s professional reputation and standing if the court were to later overrule the Board’s decision and the sanctions imposed.

The Court concluded that because NRS 630.356(2)’s prohibition against stays renders meaningless the legislative grant of authority to the district courts to judicially review Board decisions and encroaches on a district court’s inherent power to do all things reasonably necessary to administer justice, including issuing injunctions, NRS 630.356(2) violated the separation of powers doctrine.

The Court explained that Dr. Tate had been sanctioned with, among other things, fees and fines, a public reprimand, and suspension of his license for a six-month period. If the district court were prohibited from staying the sanctions imposed until it can determine whether the Board’s decision was in error, Dr. Tate may be irreparably penalized thus negating the purpose of his right to judicial review. Moreover, under federal law, these sanctions must be reported to the National Practitioner Data Bank within 30 days of their implementation, resulting in the Board’s decision and sanctions against Dr. Tate being recorded in a national database before the district court can review the Board’s decision. Thus, the Court believed that the statutory prohibition against stays would effectively eradicate any practical reason for taking the appeal.

Furthermore, the Court agreed with Dr. Tate that public interest militates in favor of injunctive relief when the district court deems it necessary. The Court explained that in Kassabian v. State Board of Medical Examiners, 68 Nev. 455, 235 P.2d 327 (1951), the Supreme Court of Nevada noted that the Legislature may have thought that the professions and callings to which this statute was applicable were such that the public health, safety, and welfare might be protected better if a stay were forbidden, echoing the public perception that there were many dangerous doctors from whom the public needed protection. However, the Court believed that a prohibition against stays could potentially endanger the public: for example, if a Board refused to suspend or revoke the license of a doctor who was questionably dangerous, a reviewing court would be unable to enjoin the doctor from practicing medicine pending judicial review. Allowing stays, on the other hand, present little danger to the public health, safety, or welfare as the impartial judge will weigh public interests, including potential danger to the public, in deciding whether to grant or deny a stay. Thus, the Court concluded that NRS 630.356(2)’s prohibition against stays was also against the public interest.

The Court explained that through the adoption of NRS 630.356(2), the Legislature gave physicians the right to contest and the district courts the power to review the Board’s final decisions. By simultaneously extinguishing the court’s ability to impose a stay where the progression of sanctions would impair or eliminate the purpose of seeking judicial review, the statute impermissibly acted as a legislative encroachment on the court’s power to do what is reasonably necessary to administer justice. This the Court concluded, was a violation of the separation of powers doctrine.

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