Regan v. State Board of Chiropractic Examiners

ELDRIDGE, Judge. We issued a writ of certiorari in this administrative law case primarily to consider whether two members of the Maryland ⁴⁰⁰ Board of Chiropractic Examiners were required to have recused themselves from a chiropractor’s disciplinary hearing. I. Dr. Brian Regan has been licensed since 1987 by the Maryland Board of Chiropractic Examiners to practice chiropractic with the right to practice physical therapy. Dr. Regan began to work for the Yalich Clinic of Bel Air in 1987 and, in 1991, became the owner of the chiropractic portion of the clinic.

From 1989 through 1992, Dr. Regan supervised and hired workers at both the chiropractic clinic and the rehabilitation clinic. During this supervisory period, Dr. Regan practiced with, supervised, and aided several unlicenced individuals in the practice of chiropractic. These unlicenced persons consisted of recent chiropractic school graduates as well as persons with little or no training in chiropractic or physical therapy. The unlicenced workers engaged in the practice of chiropractic by performing consultations, taking patient histories, conducting examinations, deciding upon areas to be xrayed and taking x-rays, determining that physical therapy should be performed, applying physical therapy modalities, and filling out insurance report forms.

Dr. Regan had no documented, standardized training program for these persons. The tests performed by them were used by Dr. Regan to form a diagnosis which was used to determine a treatment plan for a patient. In the spring of 1993 the Board commenced an investigation into Dr. Regan’s practice of chiropractic. While under investigation, Dr. Regan allegedly asked the regional manager of the Yalich Clinic, Joan Gee, to seduce Dr. Howard Lewis and Dr. Brent Owens, both members of the Board at the time, and Dr. John Hughes, President of the Maryland Chiropractic Association, in order to jeopardize the Board’s proceedings.

Dr. Regan allegedly told Ms. Gee that, if she did not try to entice Dr. Lewis into having a sexual liaison with her, she would lose her job. Ms. Gee made an appointment at Dr. Lewis’s clinic and went to his clinic but did not try to seduce him. Ms. Gee also made appointments with both Dr. Owens and Dr. Hughes ⁴⁰¹ at their respective offices, but she did not keep these appointments. In addition, Dr. Regan allegedly asked his sister, Aileen Regan, who worked for him, to go to the office of Dr. Lewis to entice him into having a sexual liaison with her.

His sister declined this request. On July 7, 1994, the Board charged Dr. Regan with violations of the Maryland Chiropractic Act, Maryland Code (1981, 1994 RepLVol.), § 3-101 et seq. of the Health Occupations Article. In support of its charges, the Board alleged that Dr. Regan hired, supervised, and aided unlicenced persons in the practice of chiropractic by allowing unlicenced employees to conduct examinations and consultations, take x-rays, and -write reports. In addition to the unauthorized practice allegations, the Board averred that Dr. Regan made and submitted false reports when he billed for services not actually performed and instructed his employees to falsify reports submitted to third party payors in order to prolong treatment.

The Board further charged Dr. Regan with “soliciting employees for the sole purpose of obtaining information to use against the Board” through the alleged seduction scheme. Finally, the Board charged Dr. Regan with advertising in a misleading manner because he submitted newspaper advertisements in 1993 for free pain evaluations at the Yalich Clinic without listing his name or the name of any licensed chiropractor associated with the clinic. According to the Board’s charges Dr. Regan violated the following provisions of Code (1981, 1994 Repl.Vol.), § 3-313 of the Health Occupations Article: “Subject to the hearing provisions of § 3-315 of this subtitle, the Board may deny a license to any applicant, reprimand any licensee, place any licensee on probation, or suspend or revoke a license if the applicant or licensee: (7) Solicits or advertises in a false or misleading manner or in any other manner not approved by the Board; (8) Is unethical in the conduct of the practice of chiropractic; ⁴⁰² (12) Wilfully makes or files a false report or record in the practice of chiropractic; (18) Practices chiropractic with an unauthorized person or supervises or aids an unauthorized person in the practice of chiropractic; (19) Violates any rule or regulation adopted by the Board; (20) Behaves immorally in the practice of chiropractic; (21) Commits an act of unprofessional conduct in the practice of chiropractic.” The Board also charged Dr. Regan with violating § 3-407 of the Health Occupations Article and COMAR 10.43.03, both of which concern misleading advertising. Prior to the administrative hearing, Dr. Regan moved to disqualify the entire Board.

At the time, the Board of Chiropractic Examiners consisted of six members, and at least four members were required for a quorum. A quorum must be present in order to hear a matter. See §§ 3-202(a) and 3-204(a) of the Health Occupations Article. Of the six members, one consumer member, David Carey, Esq., recused himself because his law firm had previously handled a criminal matter involving Dr. Regan’s office manager, who was to testify at the proceedings.

Dr. Regan argued that Dr. Lewis should recuse himself because of the Board’s allegations that Dr. Regan orchestrated a seduction plot against him. 1 Dr. Regan also sought the recusal of Dr. Audie Klinger because Dr. Klinger purportedly telephoned Dr. Regan to inform him that one of Dr. Regan’s 1993 newspaper advertisements did not comply with the Board’s regulations. Dr. Regan immediately changed the advertisement in order to comply. Dr. Regan asserted in his motion that Dr. Klinger led him to believe that, if the advertisement was changed immediately, Dr. Regan would not be subject to disciplinary action because of the matter. Dr. Regan moved to recuse Dr. Florence Blanck ⁴⁰³ because Dr. Regan intended to call her as a witness to testify as to the Board’s proposed regulations governing chiropractic assistants.

Dr. Regan further sought the recusal of Dr. Paul Goszkowski and Dr. Lewis on the grounds that these doctors operated offices in the same geographic area as Dr. Regan’s office and would, therefore, “benefit economically by an adverse decision to Dr. Regan.” Dr. Regan moved for the recusal of the entire Board because “the impartiality of the entire Board will be contaminated if it recuses” the aforementioned members. Dr. Regan argued that the Board “should delegate its authority to conduct the evidentiary hearing” to the Maryland Office of Administrative Hearings, an independent agency. The Board denied Dr. Regan’s motion and declined to delegate its authority to the Office of Administrative Hearings. In response to Dr. Regan’s arguments concerning Dr. Lewis, the Board held that “Dr. Lewis, like all other Board members, has pledged to carry out his responsibilities as a public official; part of those responsibilities, as a Board member, is to participate in hearings; in so doing, all of the members have pledged to listen to all of the evidence presented and render a fair and impartial decision.” Additionally, the Board concluded that Dr. Regan’s argument as to Dr. Lewis’s and Dr. Goszkowski’s financial interests was “speculative and baseless.” The Board stated that Dr. Klinger would not testify at the hearing and that, if Dr. Klinger did in fact telephone Dr. Regan concerning the advertisement, “that [stipulation] can be arrived at or same can be contained in the Findings of Fact that will form part of the Board’s Order following the hearing.” The Board held that Dr. Blanck also would not testify at the hearing and did not need to recuse herself.

Finally, in declining to refer the case to the Office of Administrative Hearings, the Board reasoned that the final decision will ultimately be the Board’s regardless of which agency conducts the hearing, and that the Board is in a better position, because of its expertise, to determine what constitutes the practice of chiropractic. ⁴⁰⁴ On November 2, 1994, Dr. Regan filed in the Circuit Court for Harford County a petition for interlocutory review of the Board’s decision and a motion to stay the proceedings. On November 10, 1994, the circuit court denied the requested relief. Also, on November 10, 1994, the Board voted to dismiss all of the advertising charges, in part, because Dr. Regan “withdrew the advertisement immediately” after “receiving a telephone call from the Board’s President, Dr. Audie Klinger, that said advertisement violated the Act [§§ 3-313(19) and 3-407] and COMAR 10.43.03.” The Board conducted an evidentiary hearing which commenced on November 14, 1994, and continued over the course of seven days. The matter was heard by a quorum of the Board consisting of the following members: Dr. Klinger, Dr. Lewis, Dr. Blanck, consumer member Ivy Logan Harris, and Dr. Goszkowski.

The Board, in a 92-page opinion containing detailed findings of fact and conclusions of law, determined that Dr. Regan violated the following provisions of the Health Occupations Article: § 3-313(8) (unethical conduct in the practice of chiropractic); § 3-313(12) (filing a false report or record in the practice of chiropractic); § 3-313(18) (practicing chiropractic with an unauthorized person or supervising or aiding an unauthorized person in the practice of chiropractic); and § 3-313(21) (unprofessional conduct in the practice of chiropractic). The Board ordered that Dr. Regan’s license be suspended for two years and that he be placed on probation for three years subject to specified conditions. The Board’s factual findings, based on the testimony of witnesses, were as follows. The Board found that Dr. Regan “practiced with, supervised and aided several unlicenced individuals in the practice of chiropractic.” In addition, the Board found that the testimony established that Dr. Regan delegated the following duties to unlicenced individuals: consultation with patients, taking patient history, conducting examinations, conducting tests, taking x-rays, performing physical therapy modalities, and writing reports for third party payors.

The Board stated that the tests performed by the unlicenced persons were used by Dr. Regan “to form a diagnosis which ⁴⁰⁵ was used to make a treatment plan for his patients. Tests performed by unlicenced individuals posed a risk to patients that diagnoses and treatment plans would be inaccurate or erroneous, because same required professional skills, extensive training and clinical judgment.” The Board found that Dr. Regan “failed to document a systematic training program for the unlicenced individuals that he supervised.” The Board held that “it is not consistent with sound chiropractic practice for a licensee to permit unlicenced staff to perform the entire consultation, determine areas that need to be x-rayed and position patients for same, conduct a full examination involving range of motion, orthopedic, sensory evaluations and neurological assessments, and to determine what types of physical therapy are needed based on those examinations.” The Board also found that Dr. Regan “submitted false statements in the practice of chiropractic” when he billed a patient’s insurer for physical therapy which the patient’s chart did not indicate that she received on the dates billed. Furthermore, the Board said that Dr. Regan “disguised non-covered services, such as manipulation, as a covered service in order to bill” the insurer. The Board found that Dr. Regan established the billing policy for the office, was responsible for it, and instructed the employees to falsify records.

The Board’s charges with respect to Dr. Regan’s alleged attempt to have his employees seduce Board members were dismissed at the conclusion of the State’s case pursuant to Dr. Regan’s motion. The Board did not hear any evidence or make any findings regarding the alleged seduction scheme. Subsequently the parties agreed, by filing a consent order, to stay the suspension of Dr. Regan’s license pending judicial review. Dr. Regan has continued to practice chiropractic while he awaits the review of the Board’s action, and, according to the Board, he has complied with the Board’s conditions of probation.

Dr. Regan filed in the Circuit Court for Baltimore City an action for judicial review of the Board’s order. In February 1997 the circuit court affirmed the Board’s decision, holding ⁴⁰⁶ that the decision “does not constitute a denial of [Dr. Regan’s] rights to due process, does not constitute reversible error of law, is not arbitrary and capricious, and is supported by competent, material and substantial evidence in light of the entire record as submitted.” On Dr. Regan’s appeal to the Court of Special Appeals, the appellate court upheld the Board’s decision “insofar as it relates to violations of the Maryland Chiropractic Act” but ordered that the administrative decision be vacated with respect to sanctions because “Dr. Regan has already served what is in effect a probationary period almost equal to that ordered by the Board.” Regan v. Board of Chiropractic, 120 Md.App. 494, 523-524 , 707 A.2d 891, 905 (1998). The appellate court ordered that the case be remanded to the Board for it to “consider whether the sanctions previously imposed remain appropriate or should be modified.” 120 Md.App. at 524 , 707 A.2d at 905 . Before the Court of Special Appeals, Dr. Regan challenged the participation in the Board’s proceedings of only two Board members: Dr. Klinger because of his personál involvement with the advertising charges, and Dr. Lewis because of the alleged seduction scheme.

The Court of Special Appeals upheld the denial of the recusal motion as to both Dr. Klinger and Dr. Lewis, stating that recusal would have made a quorum of the Board impossible, thereby depriving the Board “of its right to hear the matter involving Dr. Regan.” 120 Md. App. at 513 , 707 A.2d at 900 . Additionally, the appellate court held that Dr. Regan failed to demonstrate any prejudice or actual bias on the part of the Board members. Instead, the court stated that Dr. Regan was merely arguing “generalities and appearances.” Ibid. The Court of Special Appeals rejected Dr. Regan’s arguments that he was not given adequate notice of new facts developed at the hearing and contained in the Board’s findings but not set forth in the Board’s charging document.

The appellate court concluded that “(1) the Board gave Dr. Regan adequate and reasonable notice of the nature of the allega ⁴⁰⁷ tions, and (2) that the notice provided to Dr. Regan enabled him to prepare an adequate defense.” 120 Md.App. at 519-520 , 707 A.2d at 908 . Dr. Regan filed in this Court a petition for a writ of certiorari which we granted. 2 Regan v. State Board, 350 Md. 488 , 713 A.2d 981 (1998). In his certiorari petition, Dr. Regan presented the following questions for our review: “1. Whether the Court of Special Appeals erroneously held that Dr. Regan was required to demonstrate actual bias to succeed on a recusal motion based upon appearance of impropriety where the hearing panel included one member who was named in the charging document as the target of a blackmail-type scheme allegedly orchestrated by Dr. Regan and had personal knowledge of disputed evidentiary facts concerning that charge and another who had personal knowledge of facts relating to an advertising charge? “2.

Whether the Court of Special Appeals committed reversible error when it improperly upheld the Board’s denial of Dr. Regan’s recusal motion by reasoning that the right of the Board to assert jurisdiction was paramount to the right of the accused to an impartial tribunal? “3. Whether the Court of Special Appeals erroneously decided that the Board provided Dr. Regan with legally adequate prior notice of the charges against him even though it prosecuted him based on allegations not set forth in the charging document?” II We shall treat the first and second questions together, as they are both concerned with whether the Board was not ⁴⁰⁸ impartial because of the failure of Drs. Klinger and Lewis to have recused themselves. Dr. Regan argues that the Court of Special Appeals “improperly imposed upon Dr. Regan the burden of demonstrating actual bias.” (Petitioner’s brief at 15).

Dr. Regan contends that actual bias is not necessary to recuse an administrative fact finder; instead, a “fact finder may just as well be recused based on his appearance of impropriety in a particular case.” (Ibid., emphasis omitted). Dr. Regan asserts that Drs. Klinger and Lewis should have recused themselves because their participation gave the appearance of impropriety. He contends that the dismissal of the advertising charge and the charge concerning the seduction plot did not cure this appearance of impropriety.

Dr. Regan maintains that Dr. Lewis’s participation is particularly improper because “there can be no reasonable dispute that someone who is allegedly the target of a blackmail plot may not sit in judgment of the individual accused of masterminding that plot without giving rise to an appearance of impropriety.” (Id. at 19). We have often stated that “[procedural due process, guaranteed to persons in this State by Article 24 of the Maryland Declaration of Rights, requires that administrative agencies performing adjudicatory or quasi-judicial functions observe the basic principles of fairness as to parties appearing before them.” Maryland State Police v. Zeigler, 330 Md. 540, 559 , 625 A.2d 914, 923 (1993). See, e.g., Schultz v. Pritts, 291 Md. 1, 7 , 432 A.2d 1319, 1323 (1981); Ottenheimer Pub. v. Employ. Sec. Adm., 275 Md. 514, 520 , 340 A.2d 701, 704 (1975); Rogers v. Radio Shack, 271 Md. 126, 129 , 314 A.2d 113, 115 (1974); Dal Maso v. Bd. of Co. Comm’rs, 238 Md. 333, 337 , 209 A.2d 62 , 64-65 (1965).

The doctrine that every person is entitled to a fair and impartial hearing “applies to an administrative agency exercising judicial or quasi-judicial functions,” and “is specifically applicable” to issues of disqualification, although “disqualification will not be permitted to destroy the only tribunal with ⁴⁰⁹ power in the premises.” Board of Medical Examiners v. Steward, 203 Md. 574, 582 , 102 A.2d 248, 251-252 (1954). See Department of Human Resources v. Bo Peep, 317 Md. 573, 607-608 , 565 A.2d 1015, 1032 (1989), cert. denied, 494 U.S. 1067 , 110 S.Ct. 1784 , 108 L.Ed.2d 786 (1990) (“actual bias” standard determines whether a hearing officer should recuse himself). See also, e.g., Schweiker v. McClure, 456 U.S. 188, 195 , 102 S.Ct. 1665, 1670 , 72 L.Ed.2d 1, 8 (1982) (“due process demands impartiality on the part of those who function in judicial or quasi-judicial capacities”); Gibson v. Berryhill, 411 U.S. 564, 579 , 93 S.Ct. 1689, 1698 , 36 L.Ed.2d 488, 500 (1973) (most of the law concerning disqualification based on interest applies equally to administrative adjudicators); Morrissey v. Brewer, 408 U.S. 471, 485 , 92 S.Ct. 2593, 2602 , 33 L.Ed.2d 484, 497 (1972) (preliminary determination that reasonable grounds exist for revocation of parole should be made by someone not directly involved in the case); Peters v. Kiff, 407 U.S. 493, 501 , 92 S.Ct. 2163, 2168 , 33 L.Ed.2d 83, 93 (1972) (“Due process requires a competent and impartial tribunal in administrative hearings”); Hummel v. Heckler, 736 F.2d 91, 93 (3rd Cir.1984). Dr. Regan conceded at oral argument before this Court that there was no showing of actual bias in the present case.

As previously mentioned, however, he argues that Dr. Klinger and Dr. Lewis should have recused themselves because of “the appearance of impropriety” (petitioner’s brief at 15). Canon 3(C)(1) of the Maryland Code of Judicial Conduct, which is not applicable to members of the Maryland Board of Chiropractic Examiners, states that a “judge should not participate in a proceeding in which the judge’s impartiality might reasonably be questioned.” With regard to the Maryland regulations applicable to administrative law judges employed by the Office of Administrative Hearings, COMAR 28.02.01.08(A)(1) requires a judge to “[cjonduct a full, fair, and impartial hearing,” and COMAR 28.02.01.08(C)(1)(a) states that an administrative law judge “shall withdraw from participation in any proceeding in which personal bias or other reasons render the judge unable to provide an impartial ⁴¹⁰ hearing and decision, or when an appearance of impropriety may reasonably be inferred from the facts.” (Emphasis added). This Court has held, under the rules governing admission to the bar, that a member of a character committee should not participate in reviewing an application for admission to the bar where there is “the appearance of possible prejudicial influence.” In re Application of Charles M., 313 Md. 168, 178 , 545 A.2d 7, 11 (1988). See Marshall v. Jerrico, Inc., 446 U.S. 238, 243 , 100 S.Ct. 1610, 1613 , 64 L.Ed.2d 182, 189 (1980), quoting Offutt v. United States, 348 U.S. 11, 14 , 75 S.Ct. 11, 13 , 99 L.Ed. 11, 16 (1954) (the principle that “ ‘justice must satisfy the appearance of justice’ ” has been applied in a variety of settings including administrative agencies); Gulf & Western Industries, Inc. v. United States, 230 Ct.Cl. 1 ,