BODENHAUSEN v. MO. BD. OF REGIS. FOR HEALING

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Docket Number

No. 77573.

Attorney(S)

Jeremiah W. (Jay) Nixon, Atty. Gen., Don M. Downing, William J. Bryan, Asst. Attys. Gen., Jefferson City, for appellant. Lori J. Levine, Dana L. Frese, Jefferson City, Daniel P. Card, II, St. Louis, for respondent. Harvey M. Tettlebaum, Barbara L. Miltenberger, Jefferson City, for amicus curiae, Missouri Pharmacy Ass'n Missouri Dental Ass'n. Jeremiah W. (Jay) Nixon, Atty. Gen., James R. Layton, Asst. Atty. Gen., Jefferson City, for amicus curiae, Board of Pharmacy, et al.

Judges

DUANE BENTON, JUDGE.

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Smart Summary

Factual and Procedural Background

Gary Bodenhausen, a licensed physician, entered into a disciplinary agreement with the Missouri Board of Registration for the Healing Arts on June 13, 1990, stipulating violations of specified Missouri statutes. This agreement was made "in lieu of proceedings before the Administrative Hearing Commission" and imposed probation and restrictions on his ability to prescribe controlled substances. No complaint was filed with the Administrative Hearing Commission prior to this agreement.

In January 1992, the Attorney General requested further discipline of Dr. Bodenhausen for violations of the probation terms. Again, no complaint was filed with the Administrative Hearing Commission. The Board held a hearing and imposed additional discipline, including a 30-day license suspension and extended probation. Dr. Bodenhausen sought judicial review thirty days after the Board's disciplinary order.

The circuit court ruled that the Board lacked jurisdiction to impose additional discipline without an independent evidentiary finding of cause from the Administrative Hearing Commission and declared the original 1990 disciplinary agreement void ab initio. The Board appealed, and the Supreme Court of Missouri granted transfer.

Legal Issues Presented

Whether a licensing board may discipline a professional without involving the Administrative Hearing Commission.
Whether the disciplinary agreement entered into without a complaint filed with the Administrative Hearing Commission is valid and enforceable.
Whether the failure to timely seek judicial review of the original discipline affects its validity.

Arguments of the Parties

Board of Registration for the Healing Arts' Arguments

The Board contends it has authority to discipline Dr. Bodenhausen without filing a complaint with the Administrative Hearing Commission.
It relies on a statute permitting informal disposition of contested cases by stipulation or agreed settlement, arguing this authorizes disciplinary agreements that dispense with contested case proceedings.
The Board asserts that Dr. Bodenhausen waived his right to a hearing before an impartial administrative hearing commissioner in the 1990 agreement.

Respondent (Dr. Bodenhausen) Arguments

Dr. Bodenhausen challenged the additional discipline imposed in 1992 on the grounds that the Board lacked jurisdiction without findings from the Administrative Hearing Commission.
He argued that the 1990 disciplinary agreement was void because it did not comply with statutory requirements involving the Administrative Hearing Commission's involvement.
He contended that the Board could not impose discipline without a written decision from the Administrative Hearing Commission finding cause for discipline.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Board of Registration for the Healing Arts v. Spinden, 798 S.W.2d 472 (Mo.App. 1990)	Board's duty to investigate and file complaints with Administrative Hearing Commission.	Confirmed that the Board must file a complaint with the Administrative Hearing Commission to pursue violations.
State ex rel. Twenty-Second Judicial Circuit v. Jones, 823 S.W.2d 471 (Mo. banc 1992)	Administrative agencies possess only powers expressly conferred or necessarily implied by statute.	Supported the principle that the Board's powers are limited to those granted by statute.
Soars v. Soars-Lovelace, Inc., 142 S.W.2d 866 (Mo. 1940)	Scope of administrative agency powers.	Reinforced that agencies cannot exceed statutory authority.
State Board of Registration for the Healing Arts v. DeVore, 517 S.W.2d 480 (Mo.App. 1974)	Requirement of Administrative Hearing Commission findings before discipline.	Held that the Board may discipline a physician only after the Commission finds cause.
Missouri Real Estate Comm'n v. McCormick, 778 S.W.2d 303 (Mo.App. 1989)	Requirement of statutory procedures for disciplinary actions.	Supported the necessity of following statutory procedures before discipline.
State ex rel. Odom v. Missouri Board of Pharmacy, 777 S.W.2d 336 (Mo.App. 1989)	Statutory process for administrative discipline.	Reinforced requirement for Administrative Hearing Commission involvement.
Kennedy v. Missouri Real Estate Comm'n, 762 S.W.2d 454 (Mo.App. 1988)	Statutory compliance in administrative discipline.	Confirmed that disciplinary actions require compliance with statutory mandates.
Dunning v. Board of Pharmacy, 630 S.W.2d 155 (Mo.App. 1982)	Requirement of Administrative Hearing Commission findings prior to discipline.	Supported the statutory requirement for Commission findings before discipline.
Weber v. Firemen's Retirement System, 872 S.W.2d 477 (Mo. banc 1994)	Non-waivability of certain administrative hearing requirements; triggering judicial review.	Held that the Commission's written decision cannot be waived and that the disciplinary decision triggered the right to judicial review.
Byrd v. Board of Curators of Lincoln University of Missouri, 863 S.W.2d 873 (Mo. banc 1993)	Definition of a "contested case" and requirement to seek timely judicial review.	Confirmed that Dr. Bodenhausen's case was contested and required timely appeal.
Strozewski v. City of Springfield, 875 S.W.2d 905 (Mo. banc 1994)	Contested cases and administrative procedure requirements.	Supported the characterization of the discipline as a contested case requiring procedural safeguards.
Hackman v. Director of Revenue, 771 S.W.2d 77 (Mo. banc 1989)	Prospective application of judicial decisions.	Indicated no need to declare the decision prospective given the statutory scheme.

Court's Reasoning and Analysis

The Court analyzed the statutory framework governing professional discipline, emphasizing that administrative agencies like the Board have only those powers expressly granted or necessarily implied by statute. The Court underscored that the Board cannot impose discipline on a physician without a prior finding of cause by the Administrative Hearing Commission, which requires a formal complaint and a hearing resulting in findings of fact and conclusions of law.

The Board's reliance on a statute permitting informal dispositions and waivers of procedural requirements was rejected because the specific statutory scheme for physician discipline mandates Commission involvement and findings that cannot be waived. The Court found that the 1990 disciplinary agreement, entered without the Commission's findings, was voidable but binding if not timely challenged. Dr. Bodenhausen failed to seek judicial review within the 30-day statutory period following the original discipline, thereby affirming its validity.

Conversely, the additional discipline imposed in 1992 without Commission findings was invalid because the Board lacked jurisdiction to impose it absent the required administrative process. The Court concluded that the Board must follow the statutory procedure involving the Administrative Hearing Commission before imposing discipline.

Holding and Implications

The Court's final decision was to affirm in part, reverse in part, and remand. Specifically, the Court affirmed the circuit court's ruling invalidating the 1992 additional discipline imposed without proper administrative findings, but reversed the invalidation of the original 1990 discipline, holding that it remains binding since Dr. Bodenhausen failed to timely seek judicial review.

The direct effect of this decision is to require the Missouri Board of Registration for the Healing Arts to comply strictly with the statutory procedures involving the Administrative Hearing Commission before disciplining physicians. No new precedent beyond the statutory interpretation and application was established, and the Court declined to make the decision prospective only, given the clear statutory scheme governing physician discipline.

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GARY BODENHAUSEN, M.D., RESPONDENT, v. MISSOURI BOARD OF REGISTRATION FOR THE HEALING ARTS, APPELLANT.

DUANE BENTON, JUDGE.

May a licensing board discipline a professional without involving the Administrative Hearing Commission? The circuit court answered "no"; the court of appeals agreed; this Court granted transfer. Mo. Const. art. V, § 10. Affirmed in part, reversed in part, and remanded.

On June 13, 1990, Gary Bodenhausen — a licensed physician — signed an agreement with the Board of Registration for the Healing Arts, stipulating that he had violated §§ 334.100.2 (4)(h) and (13) RSMo Supp. 1989. No complaint was ever filed with the Administrative Hearing Commission. The disciplinary agreement recited that it was entered "in lieu of proceedings before the Administrative Hearing Commission."

As discipline, Dr. Bodenhausen agreed to three years of probation, beginning July 5, 1990. As a condition of probation, he could neither prescribe nor dispense controlled substances for one year. If Dr. Bodenhausen violated any probation condition, the agreement authorized further discipline solely by the Board after a hearing before the Board alone. Dr. Bodenhausen did not seek timely judicial review of this discipline.

In January 1992, the Attorney General asked the Board to discipline Dr. Bodenhausen for prescribing controlled substances during the first year of probation, and for not submitting truthful probation forms. Again, no complaint was filed with the Administrative Hearing Commission.

After a hearing, the Board found that Dr. Bodenhausen breached the 1990 agreement as charged. As additional discipline, the Board suspended his license for 30 days and imposed probation for two years, ending October 31, 1994. Dr. Bodenhausen has not served this additional discipline because the circuit court stayed it.

Thirty days after the Board issued its additional disciplinary order, Dr. Bodenhausen petitioned for judicial review. In its Judgment, the circuit court concluded that "the Board did not obtain an independent evidentiary finding of cause from the Administrative Hearing Commission to discipline petitioner's license . . .," and that the Board was "without jurisdiction to attempt to impose additional discipline." The circuit court also declared the 1990 agreement void ab initio and thus invalidated the original discipline.

II.

Among other duties, the Board receives information and investigates alleged violations of the Medical Practice Act. Board of Registration for the Healing Arts v. Spinden, 798 S.W.2d 472, 474 (Mo.App. 1990); see also §§ 334.100 334.128 RSMo Supp. 1989; § 334.240 RSMo 1986. To pursue a violation, the Board files a complaint with the Administrative Hearing Commission. Spinden, 798 S.W.2d at 474; § 334.100.2 RSMo Supp. 1989. The Commission then conducts a hearing and issues findings of fact and conclusions of law. § 334.100.3 RSMo. Supp. 1989; §§ 621.045.1 621.110. If the Commission finds cause for discipline, it may recommend "appropriate disciplinary action" to the Board. § 621.110. The licensee then appears before the Board, which determines the discipline. Id. The licensee may waive the Board hearing, in which case the Commission's recommendation is the disciplinary order. Id. The final decision of the Commission and Board is then subject to judicial review. §§ 621.145 536.100. Final disciplinary actions are available to the public. § 334.101 RSMo Supp. 1989.

Unless noted otherwise, all further statutory references are to RSMo 1986.

III.

The Board contends that it can discipline Dr. Bodenhausen without ever filing a complaint with the Administrative Hearing Commission.

The key principle is that administrative agencies — legislative creations — possess only those powers expressly conferred or necessarily implied by statute. State ex rel. Twenty-Second Judicial Circuit v. Jones, 823 S.W.2d 471, 476 (Mo. banc 1992); Soars v. Soars-Lovelace, Inc., 142 S.W.2d 866, 871 (Mo. 1940). The Board invokes a statute that authorizes "informal disposition of contested cases by stipulation, consent order, or . . . by agreed settlement where such settlement is permitted by law." § 536.060. That statute further recognizes "stipulations or agreements among the parties" and "waiver by the parties . . . of procedural requirements which would otherwise be necessary before final decision." §§ 536.060 (4) (3).

The Board argues that this statute permits disciplinary agreements that dispense with contested case proceedings. To the contrary, a specific type of contested case is a precondition to professional discipline: The Board may discipline a physicianonly if the Administrative Hearing Commission first finds cause for discipline. §§ 536.010 (2), 621.135, 621.045.1 5c 621.110; § 334.100.3 RSMo Supp. 1989; State Board of Registration for the Healing Arts v. DeVore, 517 S.W.2d 480, 485-86 (Mo.App. 1974). See also Missouri Real Estate Comm'n v. McCormick, 778 S.W.2d 303, 304 (Mo.App. 1989); State ex rel. Odom v. Missouri Board of Pharmacy, 777 S.W.2d 336, 338 (Mo.App. 1989); Kennedy v. Missouri Real Estate Comm'n, 762 S.W.2d 454, 456-57 (Mo.App. 1988); Dunning v. Board of Pharmacy, 630 S.W.2d 155, 159 (Mo.App. 1982).

The Commission may find cause for discipline only after the Board files a complaint with the Commission. §§ 621.045.1 621.110; § 334.100.3 RSMo Supp. 1989. Once the Commission issues its decision, the Board may impose discipline by choosing among its options to revoke or suspend a license, impose probation, restrict or limit a license, issue a warning or reprimand, deny an application, or require medical care or continuing education. § 334.100.3 RSMo Supp. 1989.

The Board asserts that in the 1990 disciplinary agreement Dr. Bodenhausen expressly waived "the right to a decision upon the record by a fair and impartial administrative hearing commissioner . . . ." However, the Commission's written decision — consisting of findings of fact and conclusions of law — cannot be waived in a physician discipline case. §§ 621.045.1, 621.110, 536.090 536.060 (3) § 334.100.3 RSMo Supp. 1989; cf. Weber v. Firemen's Retirement System, 872 S.W.2d 477, 480 (Mo. banc 1994).

Because the Commission never made findings of fact and conclusions of law, as mandated by §§ 621.045.1 621.110 and § 334.100.3 RSMo Supp. 1989, the Board could not impose additional discipline on Dr. Bodenhausen in 1992.

IV.

In addition to striking the 1992 discipline, the circuit court invalidated the 1990 discipline. True, the original discipline was subject to attack for the same reason as the additional discipline. However, Dr. Bodenhausen did not challenge the original discipline within the statutory time for appeal — 30 days after its imposition. §§ 621.145 536.110.1. By failing to seek timely judicial review, he is bound by the 1990 discipline.

Dr. Bodenhausen asked the circuit court to declare that the 1990 disciplinary agreement was void, beyond the jurisdiction of the Board, could never authorize any discipline, and could be challenged at any time. See § 536.100. Section 536.060 clearly authorizes settlement agreements between the parties to a contested case, whether pending or potential. However, it does not permit physician discipline without a written decision from the Administrative Hearing Commission finding cause for discipline. §§ 621.045.1 621.110; § 334.100.3 RSMo Supp. 1989. Because the 1990 disciplinary agreement violated this statutory requirement, it is voidable and does not permit discipline that is timely challenged.

The 1990 agreement imposed discipline and contained stipulations of fact and law — a sufficient decision to trigger judicial review. Weber, 872 S.W.2d at 480. Because Dr. Bodenhausen had a right to a hearing before discipline could be imposed, his case was "contested." § 536.010 (2); Byrd v. Board of Curators of Lincoln University of Missouri, 863 S.W.2d 873, 875 (Mo. banc 1993); Weber, 872 S.W.2d at 479 480 n. 3; Strozewski v. City of Springfield, 875 S.W.2d 905, 906 (Mo. banc 1994). Thus, he had to seek judicial review of the 1990 discipline within 30 days of its imposition. § 536.110.1; Byrd, 863 S.W.2d at 876. Although the Board did not follow the statutory procedure to impose the original discipline, the decision still could have been appealed, as the Board has jurisdiction of physician discipline. § 334.100 RSMo Supp. 1989; cf. Weber, 872 S.W.2d at 478-80.

This conclusion answers the request by both the Board and Dr. Bodenhausen for this Court to declare the present decision "prospective" only. Since a specific statutory scheme controls physician discipline, such a declaration is unnecessary. See Hackman v. Director of Revenue, 771 S.W.2d 77, 81 (Mo. banc 1989), cert. denied, 493 U.S. 1019 (1990). V.

The judgment of the circuit court is affirmed in part, reversed in part, and remanded for entry of a judgment consistent with this opinion.

Duane Benton, Judge

All concur.