Tri-Cities Holdings, LLC v. Tennessee Health Services and Development Agency ( 2016 )

IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
September 18, 2015 Session
TRI-CITIES HOLDINGS, LLC v. TENNESSEE HEALTH SERVICES AND
DEVELOPMENT AGENCY
Appeal from the Chancery Court for Davidson County
No. 1465011 Carol L. McCoy, Chancellor
________________________________
No. M2015-00058-COA-R3-CV – Filed February 22, 2016
_________________________________
An attorney from Georgia, who had been admitted to practice pro hac vice in a
contested case hearing before the Tennessee Health Services and Development Agency,
had his privilege to practice revoked by the Administrative Judge based upon
representations he made as to the status of related federal litigation. On review by the
Chancery Court, the revocation was affirmed. Discerning no error, we affirm the
judgment of the Chancellor.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Affirmed
RICHARD H. DINKINS, J., delivered the opinion of the court, in which FRANK G.
CLEMENT, JR., P.J., M.S., and W. NEAL MCBRAYER, J. joined.
Jim Higgins, Nashville, Tennessee, for the appellant, Tri-Cities Holdings, LLC.
Herbert H. Slatery, III, Attorney General and Reporter; and Sara E. Sedgewick, Senior
Counsel, Nashville, Tennessee, for the appellee, Tennessee Health Services and
Development Agency.
OPINION
I. FACTUAL AND PROCEDURAL HISTORY
This appeal arises out of the revocation of an attorney’s permission to appear pro
hac vice by an Administrative Judge for conduct in the course of a contested case
proceeding. The parties are the Tennessee Health Services and Development Agency
(“HSDA”) and Tri-Cities Holdings, LLC (“Tri-Cities”), an entity that wished to open an
opiate addiction treatment center in Johnson City and applied for a certificate of need
(“CON”) from the HSDA pursuant to Tenn. Code Ann. § 68-11-1607. After the
application was denied in June 2013, Tri-Cities initiated a contested case pursuant to
Tenn. Code Ann. § 68-11-1610. As provided in Tenn. Code Ann. § 4-5-301, the
contested case procedures allowed for the appointment of an Administrative Judge (“AJ”)
to oversee the process at the request of the agency; pursuant to the statute an AJ was
appointed.
On July 8, 2013, Tri-Cities’ counsel, Mr. James Dunlap, who is licensed in the
State of Georgia, filed suit in the U.S. District Court for the Eastern District of Tennessee
on behalf of Tri-Cities and eight potential patients of the proposed opiate treatment
program (“OTP”). The suit named HSDA, the City of Johnson City, the Johnson City
Board of Commissioners, and the Johnson City Board of Zoning Appeals as defendants
and alleged that the city’s zoning restrictions and HSDA’s “statutory procedures”
violated the Rehabilitation Act, 29 U.S.C. § 701 et seq, and the Americans with
Disabilities Act, 42 U.S.C. § 12101, et seq.1
On July 25, Mr. Dunlap sent a letter to the Administrative Procedures Division of
the Secretary of State, containing the following request:
1
The suit filed July 8, 2013, will be referred to in this opinion as Tri-Cities II. Mr. Dunlap had previously
filed a nearly identical lawsuit, hereinafter referred to as Tri-Cities I, on behalf of the same plaintiffs
against the same defendants, with the exception of the HSDA. Tri-Cities I was filed after the City of
Johnson City had denied Tri-Cities’ application for rezoning to permit it to open the proposed opiate
addiction treatment center, also known as a methadone clinic.
In Tri-Cities I, the federal court issued an order requiring Tri-Cities to show cause as to why its
“motion [for a preliminary injunction] was not premature inasmuch as the plaintiff, Tri-Cities Holdings,
LLC, has no Certificate of Need from the Tennessee Health Services and Development Agency or license
from the Tennessee Department of Health.” Tri-Cities Holdings LLC v. City of Johnson City, Tenn., No.
2:13-CV-108, 2013 WL 2635337, at *3 (E.D. Tenn. June 12, 2013). The federal court highlighted the
unresolved nature of the still-pending CON application, noted that “the State of Tennessee requirements,
as to CON and licensing, which have not been met and may never be met for reasons totally unrelated to
Johnson City’s zoning ordinance,” and dismissed the case without prejudice on the ground that it was not
ripe; the court held:
Although the factual record is sufficient to allow the Court to decide plaintiffs’ facial
challenges to the zoning ordinance, because it is largely a legal issue, it is virtually
impossible at this time for the Court to determine any likelihood that the harm alleged by
plaintiffs will ever come to pass, and there is minimal hardship on the parties if judicial
review is denied as premature until it is determined whether Tri-Cities Holdings can meet
the State of Tennessee’s CON and licensing requirements.
Id. at *5.
2
On behalf of my clients, I would ask your office directly to provide my
clients with a reasonable modification of any and all applicable state and
local rules and regulations as required under the Americans with
Disabilities Act (“ADA”) and the Rehabilitation Act of 1973
(“Rehabilitation Act”) from your office, and to the administrative hearing
officer assigned to this case, and any other applicable agency of the State of
Tennessee, to allow TCH to locate its Opiate Treatment Program at 4
Wesley Court, or elsewhere, in Johnson City, Tennessee.
On July 28, Mr. Dunlap sent a substantially similar letter to the AJ who had been
assigned to the case and asked that the administrative appeal “be stayed while the federal
case [Tri-Cities II] is pending.” HSDA’s counsel responded by letter, dated July 29,
stating that the HSDA did not consent to the stay. Mr. Dunlap responded by letter to the
AJ that same day, again asking for a stay and for “a reasonable modification under the
ADA and the Rehabilitation Act to allow TCH to locate its OTP clinic in Johnson City”;
with this letter, Mr. Dunlap included the four-page table of contents of the 75-page Tri-
Cities II complaint.2 On July 30, Mr. Dunlap filed a Motion for Admission Pro Hac
Vice, which the AJ granted on August 2.
The AJ held pre-hearing conferences in July, September, and November of 2013;
on November 18, the AJ entered a scheduling order stating that “the status of the related
federal litigation has not changed; therefore, the hearing in this matter will continue to be
held in abeyance.” On January 8, 2014, the AJ emailed counsel for both parties seeking
an update on developments in the pending federal litigation. In reply, Mr. Dunlap
represented that no new developments had occurred. HSDA’s counsel also replied,
disputing Mr. Dunlap’s representation and indicating that he would file a document
explaining the developments. On March 7, HSDA’s counsel filed a Motion to Set for
Hearing, which included as an exhibit the federal magistrate’s December 10, 2013, order
granting defendants’ motion to stay discovery in Tri-Cities II in which the magistrate
expressed concern about the stay in the administrative appeal.3
2
As explained further infra, in the July 28 letter, which was sent by electronic and regular mail, Mr.
Dunlap referenced the federal complaint and stated that “[t]he administrative appeal claims are included
as pendant claims in Counts 13 and 14 in the federal complaint.” The record does not show that the
complaint was included as an attachment to the electronic mail or an enclosure in the letter sent by regular
mail. In the letter sent July 29, also by electronic and regular mail, Mr. Dunlap included the first four
pages of the 75-page complaint; the four pages consisted of an introductory paragraph to the complaint
and a three-page table of contents.
3
In pertinent part, the Magistrate held:
Plaintiffs’ blatant forum-shopping to avoid this court’s ruling in Tri-Cities I admittedly
has been taken into account in the court’s decision. But more important is the fact that it
is reasonable to conclude that the district judge will not change his opinion that plaintiffs
3
In response to HSDA’s motion, on March 13, on behalf of Tri-Cities, Mr. Dunlap
filed a pleading styled “Objection to Motion to Set Hearing and Demand for Reasonable
Modification under the ADA.” In this Objection, Mr. Dunlap asserted, inter alia, the
following:
. . .[I]f this tribunal does “take HSDA’s bait” and takes any action to decide
this appeal before a federal court or DOJ has spoken on this case, including
scheduling a hearing, Petitioner respectfully indicates that it will have no
choice but to join Your Honor, in an official capacity, and this tribunal, as
defendants in the pending federal court action.
Finally, Petitioner respectfully submits that, under the ADA, Your Honor
and this tribunal are required to offer Petitioner a reasonable modification
to allow the CON to be issued. Petition[er] respectfully submits that Your
Honor’s and this tribunal’s continuing failure to do this creates a cause of
action that Petitioner may bring against Your Honor, and the tribunal itself,
and may well move DOJ to include Your Honor and this tribunal as
respondents in an ADA enforcement action.
Thus, this tribunal should decline to be HSDA’s and Johnson City’s
“fixer,” despite their desperate attempts to create a non-existent “escape
hatch” for their blatant violations of federal law and the penalties likely
soon to be imposed against them for these violations.
***
Misery loves company and HSDA would surely love this tribunal to try to
extricate HSDA from the legal swamp it has created for itself. However,
this tribunal is unable to do this and, at a minimum, would just succeed in
bringing further liability upon itself and become a named defendant in the
must attempt to procure a certificate of need, and a license from the Tennessee Health
Services Agency, before this Court can entertain their suit.
Plaintiffs’ application for a certificate of need has been denied, and an appeal of that
denial is now pending before a state administrative law judge. During argument, the
court was quite surprised to learn that an administrative law judge has delayed
considering the appeal of that denial based upon plaintiffs’ counsel’s representation to her
that he intended to ask this court to stay, i.e., enjoin, any action by her. That would seem
to be contrary to plaintiffs’ professed need for a quick resolution to this litigation.
Order Granting Defendant’s Mot. to Stay Discovery, Tri-Cities Holdings v. Tennessee Health Services
and Development, et al, Case No. 2:13-CV-305, Dec. 10, 2013.
4
federal action. Petitioner respectfully suggests this would be an unwise and
costly step for the tribunal and certainly violate principles of judicial
economy at the very minimum.
(Emphasis in original.) Mr. Dunlap also claimed in the Objection to Motion to Set that
“this administrative appeal process amounts to a scheme or artifice to violate the ADA.”
The next day, the AJ issued an order revoking Mr. Dunlap’s permission to appear
pro hac vice. In that order, the AJ made numerous findings of fact and quoted Tenn. Sup.
Ct. R. 19 in its entirety, as well as excerpts of Tenn. Sup. Ct. R. 8, RPC 3.3 (“Candor
Toward the Tribunal”), 3.5 (“Impartiality and Decorum of the Tribunal”), and 8.4
(“Misconduct”) and Tenn. Code Ann. § 39-14-112, “Extortion.” The AJ then stated the
following Conclusions of Law:
1. From the outset, Mr. Dunlap requested a stay of this
administrative proceeding on behalf of Tri-Cities until after the related
federal court action was resolved. He never disclosed to this tribunal that
the federal litigation had previously been dismissed for lack of ripeness or
that it was now, itself, subject to a stay in deference to the administrative
proceedings.
2. Notwithstanding the recent indication from the federal court that
the CON appeal should be resolved before the federal issues are addressed,
Mr. Dunlap still insists that the stay of these proceedings should remain in
place, and has threatened to join the Administrative Judge and this tribunal
in the federal court action should the stay of the administrative proceedings
be lifted and the CON appeal be set for hearing.
3. In addition, Mr. Dunlap is now demanding that this tribunal grant
the requested modifications of HSDA rules and the disputed CON even
though the HSDA’s obligation to provide this relief is yet to be determined,
either by this tribunal or in the federal courts. Mr. Dunlap’s demand
includes an unveiled threat that the Administrative Judge and the tribunal
will face an ADA enforcement action by the Department of Justice should
the Administrative Judge fail to provide the requested relief.
4. Mr. Dunlap has misrepresented to this tribunal the status of the
federal litigation and has used this misrepresentation to attempt to coerce a
decision by this tribunal in favor of his client without the benefit of the
administrative hearing, which he demands must remain stayed.
5
5. Mr. Dunlap’s coercion and misrepresentations are a flagrant
attempt to improperly influence a judge in violation of Rules 3.3, 3.5, and
8.4 of the Tennessee Rules of Professional Conduct, as well as Tenn. Code
Ann. § 39-14-112.
6. Mr. Dunlap has expressed contempt for this tribunal and these
administrative proceedings, thus, there is no apparent purpose for his
continued participation.
7. Mr. Dunlap’s actions have unnecessarily impeded a resolution of
the CON appeal and have breached the conditions on which he was granted
pro hac vice admission to practice law in Tennessee. In accordance with
Rule 19(c), Mr. Dunlap’s permission to appear in this matter pro hac vice is
appropriately and necessarily revoked.
On March 24, Tri-Cities, through its local counsel, filed a motion to reconsider the
revocation of Mr. Dunlap’s permission to appear pro hac vice, denying “each and every
allegation of misconduct, violation of Rules of Professional Conduct, or violation of law,
by Mr. Dunlap contained in the Court’s March 14, 2014 Order”; asking the AJ to
“rescind and otherwise withdraw” its Order; and asserted “that Mr. Dunlap is a competent
and careful attorney, appropriately cognizant of his duties both to his clients and this
Court, and that Mr. Dunlap should be allowed to represent TCH in this administrative
proceeding.”
The AJ entered an order on April 2, in which she noted that “a few points of
clarification are needed.” The AJ stated that the permission granted Mr. Dunlap had been
“revoked on account of Petitioner’s Objection to Motion to Set Hearing and Demand for
Reasonable Modification Under the Americans with Disabilities Act . . . in which Mr.
Dunlap makes an unveiled threat to initiate litigation against this tribunal should it
decline to make a ruling in his favor.”4 The AJ also noted that Mr. Dunlap had not
provided “rather pertinent information regarding the status of the federal proceedings . . .
when requesting that the stay remain in place.” Finally, the AJ ruled as follows:
The Motion [for Reconsideration] provides no authority to support the
contention that a tribunal, such as the APD [Administrative Procedures
4
Tri-Cities initiated a third federal suit (“Tri-Cities III,” Case No. 3:14-cv-01197) on May 21, 2014,
naming the AJ as a defendant and alleging that the AJ, “through her rulings in this proceeding, has
retaliated against the Petitioner and has intentionally violated the Americans with Disabilities Act, for
which the Petitioner is seeking monetary and injunctive relief.” After Tri-Cities III was filed, Tri-Cities
moved for the AJ to recuse herself, a motion which Tri-Cities had unsuccessfully made when it filed the
motion for reconsideration; the AJ entered an order of recusal on July 2.
6
Division], must grant the relief requested without a hearing on the merits or
be in automatic violation of the ADA. The suspension of due process
cannot be considered a reasonable modification of APD rules as the Motion
contends. Thus, advancing this position under the threat of legal action far
exceeds simply pointing out to the tribunal its obligations under the law and
potential penalties for noncompliance.
On May 1, Mr. Dunlap and local counsel for Tri-Cities filed an “Appeal of Order
Revoking Permission to Appear Pro Hac Vice” in Davidson County Chancery Court,
seeking review of the AJ’s decision pursuant to Tenn. Code Ann. § 4-5-322.5 The court
heard argument on June 26 and entered a Memorandum and Order on December 10,
2014, affirming the action of the AJ.
Tri-Cities appeals, articulating the following issues for our review:
1. Whether the AJ violated Tennessee Supreme Court Rule 19 when she revoked Mr.
Dunlap’s pro hac vice petition without any notice whatsoever and despite the fact
that Mr. Dunlap’s conduct was completely appropriate at all times.
2. Whether the AJ’s sua sponte allegation and finding that Mr. Dunlap intentionally
or fraudulently concealed the existence and outcome of the first federal action,
Tri-Cities LLC et al. v. Johnson City et al, Case No. 13-cv-108 (E.D. Tenn. 2013)
(“Tri-Cities I”), is baseless in light of the fact that Tri-Cities I had been disclosed
by Mr. Dunlap and was is [sic] immaterial to the CON hearing process.
3. Whether the AJ’s sua sponte allegation and finding that Mr. Dunlap concealed that
the federal court action “was now, itself, subject to a stay in deference to the
administrative proceeding” is baseless in light of the fact that this was clearly not
the case.
4. Whether Mr. Dunlap committed misconduct when he indicated his good faith
opinion to the AJ that there were no “new developments” in the case on January 8,
2014 and he reasonably relied on HSDA counsel’s assurances that he would
advise shortly on “new developments” that the HSDA counsel perceived at the
time.
5. Whether Mr. Dunlap’s respectful communication to the AJ that she faced potential
ADA liability was completely appropriate given the fact that the AJ was subject to
the ADA and had an obligation under federal law to provide TCH with a
reasonable modification of its rules allowing the issuance of a CON.
6. Whether the Chancery Court’s affirmance of the AJ’s revocation order was clearly
erroneous, and without basis in fact or law.
5
Though Tri-Cities styled the filing as an “appeal,” Tenn. Code Ann. § 4-5-322(a)(1) states that judicial
review of agency actions is initiated by filing a petition for review.
7
II. STANDARD OF REVIEW
Judicial review of decisions of agency actions is governed by the narrow standard
contained in Tenn. Code Ann. § 4-5-322(h) rather than the broad standard of review used
in other civil appeals. Wayne County v. Tennessee Solid Waste Disposal Control Bd.,
756 S.W.2d 274, 279-80 (Tenn. Ct. App. 1988). A court may modify or reverse the
decision of the agency if the petitioner’s rights have been prejudiced because the
administrative findings, inferences, conclusions or decisions are:
1) In violation of constitutional or statutory provisions;
2) In excess of the statutory authority of the agency;
3) Made upon unlawful procedure;
4) Arbitrary or capricious or characterized by abuse of discretion or clearly
unwarranted exercise of discretion; or
5) (A) Unsupported by evidence which is both substantial and material in
the light of the entire record.
(B) In determining the substantiality of evidence, the court shall take
into account whatever in the record fairly detracts from its weight, but the
court shall not substitute its judgment for that of the agency as to the weight
of the evidence on questions of fact.
Tenn. Code Ann. § 4-5-322(h). When this Court reviews the decision of the trial court,
we are to determine whether the trial court properly applied the standard of review found
at Tenn. Code Ann. § 4-5-322(h). See Jones v. Bureau of TennCare, 94 S.W.3d 495, 501
(Tenn. Ct. App. 2002) (quoting Papachristou v. Univ. of Tennessee, 29 S.W.3d 487, 490
(Tenn. Ct. App. 2000)).
III. ANALYSIS
At the outset, we address consideration of the order of revocation pursuant to
Tenn. Code Ann. § 4-5-322. That statute reads in pertinent part:
A person who is aggrieved by a final decision in a contested case is entitled
to judicial review under this chapter, which shall be the only available
method of judicial review. A preliminary, procedural or intermediate
agency action or ruling is immediately reviewable if review of the final
agency decision would not provide an adequate remedy.
Tenn. Code Ann. § 4-5-322(a)(1). Tenn. Sup. Ct. R. 19 governs the admission of
attorneys licensed in other states into the practice of law in Tennessee. Pursuant to
section (h) of that Rule, an agency’s revocation of admission pro hac vice pursuant to
paragraph (c) “may be appealed by filing a petition for judicial review pursuant to Tenn.
8
Code Ann. § 4-5-322.” Tenn. Sup. Ct. R. 19(h).6 The order of revocation of Mr.
Dunlap’s pro hac vice status was not a “final decision” on the appeal of the denial of Tri-
Cities’ application for a CON; rather, it was an intermediate agency action or ruling in the
course of the case, as contemplated by the statute. Reading the rule and the statute
together, Mr. Dunlap was entitled to immediate judicial review of the revocation order.7
In reviewing an agency’s decision pursuant to Tenn. Code Ann. § 4-5-322, the
trial court must engage in a three-step analysis. First, the court must determine whether
the agency “identified the appropriate legal principles applicable to the case.” McEwen v.
Tennessee Dept. of Safety, 173 S.W.3d 815, 820 (Tenn. Ct. App. 2005). Second, the
court must examine the factual findings made by the agency to determine whether the
findings are supported by substantial and material evidence. Id. Finally, the court “must
examine how the agency applied the law to the facts.” Id. The final step of this analysis
involves mixed questions of law and fact; therefore, the court is to give deference to the
agency. Miller v. Civil Serv. Comm’n., 271 S.W.3d 659, 665 (Tenn. Ct. App. 2008)
(citing Armstrong v. Metro Nashville Hosp. Auth., No. M2004-01361-COA-R3-CV, 2006
WL 1547863, at *2 (Tenn. Ct. App. June 6, 2006), no perm. app. filed.
A. Identification of the Appropriate Legal Principles
The practice of law in Tennessee is a privilege and comes with “the duty . . . to act
at all times, both professionally and personally, in conformity with the standards imposed
upon members of the bar as conditions for the privilege to practice law.” Tenn. Sup. Ct.
R. 9, § 1. As we have noted, Rule 19 of the Rules of the Tennessee Supreme Court
governs the admission of attorneys licensed out of state. That rule reads, in pertinent
part:
A lawyer not licensed to practice law in Tennessee, licensed in another
United States jurisdiction, and who resides outside Tennessee shall be
permitted to appear pro hac vice, file pleadings, motions, briefs, and other
papers and to fully participate in a particular proceeding before a trial or
appellate court of Tennessee, or in a contested case proceeding before a
6
While we recognize the differences between an administrative judge and an agency, we do not
distinguish between the two for purposes of our analysis and presume that the Supreme Court intended
for the word “agency” in Rule 19 to include the administrative judge utilized by an agency in contested
cases, as permitted in Tenn. Code Ann. § 4-5-301.
7
There is a difference under Rule 19(h) as to the nature of appellate review based on whether the
attorney’s pro hac vice status is revoked by a trial or appellate court or by an agency. If by a trial or
appellate court, whether to permit review is governed by Tenn. R. App. P. 10; under that Rule, the
decision to grant the appeal is discretionary with the appellate court and does not require permission from
the trial court. When an agency (or AJ) revokes the status and the party files a petition for review, review
is conducted pursuant to Tenn. Code Ann. § 4-5-322.
9
state department, commission, board, or agency (hereinafter “agency”), if
the lawyer complies with the following conditions:
(a) A lawyer not licensed to practice law in Tennessee and who resides
outside Tennessee is eligible for admission pro hac vice in a particular
proceeding pending before a court or agency of the State of Tennessee:
(1) if the lawyer is licensed, in good standing, and admitted to
practice before the court of last resort in another state or territory of
the United States or the District of Columbia in which the lawyer
maintains a residence or an office for the practice of law;
(2) if the lawyer is in good standing in all other jurisdictions in
which the lawyer is licensed to practice law; and
(3) if the lawyer has been retained by a client to appear in the
proceeding pending before that court or agency.
***
(c) A lawyer admitted pro hac vice under this Rule may not continue to so
appear unless all requirements of the Rule continue to be met. Admission
granted under this Rule may be revoked by the court or agency granting
such admission upon appropriate notice to the lawyer and upon an
affirmative finding by the court or agency that the lawyer has ceased to
satisfy the requirements of this Rule. In any proceeding in which a court or
agency revokes an admission pro hac vice, the court or agency shall set
forth findings of fact and conclusions of law that constitute the grounds for
its action; in addition, the court or agency shall send a copy of the order
revoking the admission pro hac vice to the Board of Professional
Responsibility of the Supreme Court of Tennessee.
Tenn. Sup. Ct. R. 19. The AJ also cited the following provisions of the Rules of
Professional Conduct at Tenn. Sup. Ct. R. 8:
Rule 3.3. Candor Toward the Tribunal
(a) A lawyer shall not knowingly:
(1) make a false statement of fact or law to a tribunal; . . .
Tenn. Sup. Ct. R. 8, RPC 3.3.
Rule 3.5. Impartiality and Decorum of the Tribunal
A lawyer shall not:
(a) seek to influence a judge, juror, prospective juror, or other official by
means prohibited by law; . . .
10
Tenn. Sup. Ct. R. 8, RPC 3.5.
Rule 8.4. Misconduct
It is professional misconduct for a lawyer to:
(a) violate or attempt to violate the Rules of Professional Conduct,
knowingly assist or induce another to do so, or do so through the acts of
another;
(b) commit a criminal act that reflects adversely on the lawyer’s honesty,
trustworthiness, or fitness as a lawyer in other respects;
(c) engage in conduct involving dishonesty, fraud, deceit, or
misrepresentation;
(d) engage in conduct that is prejudicial to the administration of justice;
(e) state or imply an ability to influence a tribunal or a governmental
agency or official on grounds unrelated to the merits of, or the procedures
governing, the matter under consideration;
(f) knowingly assist a judge or judicial officer in conduct that is a violation
of applicable rules of judicial conduct or other law; or
(g) knowingly fail to comply with a final court order entered in a
proceeding in which the lawyer is a party, unless the lawyer is unable to
comply with the order or is seeking in good faith to determine the validity,
scope, meaning, or application of the law upon which the order is based.
Tenn. Sup. Ct. R. 8, RPC 8.4.
The AJ revoked Mr. Dunlap’s pro hac vice status under the authority granted at
Tenn. Sup. Ct. R. 19(c), upon a finding that he no longer met the requirements of the
Rules of Professional Conduct. In so doing, the AJ identified Tenn. R. Sup. Ct. 19 and
Tenn. Sup. Ct. R. 8, RPC 3.3, 3.5, and 8.4 to be the applicable legal standards and
principles. In like manner, the Chancellor utilized Tenn. Sup. Ct. R. 9, § 33 in
performing her review.8 These were the appropriate procedures and principles to apply.
8
That procedure, set forth in Tenn. Sup. Ct. R. 9, § 33, “Appeal,” reads in pertinent part:
b) The review shall be on the transcript of the evidence before the hearing panel and its
findings and judgment. If allegations of irregularities in the procedure before the hearing
panel are made, the trial court is authorized to take such additional proof as may be
necessary to resolve such allegations. The trial court may, in its discretion, permit
discovery on appeals limited only to allegations of irregularities in the proceeding. The
court may affirm the decision of the hearing panel or remand the case for further
proceedings. The court may reverse or modify the decision if the rights of the party filing
the Petition for Review have been prejudiced because the hearing panel’s findings,
inferences, conclusions or decisions are: (1) in violation of constitutional or statutory
11
B. Substantial and Material Evidence to Support the Factual Findings
Tri-Cities’ contentions on appeal call for us to overturn the factual findings of the
AJ; that, however, is not the nature of our review. Instead, we examine the AJ’s factual
findings to determine whether they are supported by substantial and material evidence.
“Substantial and material evidence is the amount of relevant evidence that a reasonable
person would require to reach a rational conclusion.” Miller v. Civil Serv. Comm’n of
Metro. Gov’t of Nashville & Davidson Cty., 271 S.W.3d 659, 665 (Tenn. Ct. App. 2008)
(citing Clay County Manor, Inc. v. Dep’t of Health & Env’t, 849 S.W.2d 755, 759 (Tenn.
1993); Southern Ry. Co. v. State Bd. of Equalization, 682 S.W.2d 196, 199 (Tenn. 1984);
Bobbitt v. Shell, 115 S.W.3d 506, 510 (Tenn. Ct. App. 2003)). “Findings of fact made by
the agency are not reviewed de novo; our review is limited to the record of the case.”
Freedom Broad. of TN, Inc. v. Tennessee Dep’t of Revenue, 83 S.W.3d 776, 781 (Tenn.
Ct. App. 2002) (citing Tenn. Code Ann. § 4-5-322(g)).
The AJ made numerous findings of fact before revoking Mr. Dunlap’s pro hac
vice status, including that “Mr. Dunlap . . . request[ed] that the administrative appeal of
the CON denial be stayed pending the resolution of a related federal court action”; that
Mr. Dunlap represented in a January 8 email to the AJ and HSDA’s counsel that there
were no new developments in Tri-Cities II; that the magistrate judge’s order in Tri-Cities
II, which included a history of the case as well as of Tri-Cities I, stated that “it is the law
of this case that [Tri-Cities] must procure, or at least attempt to procure, certain
administrative remedies” and that the magistrate judge “expressed surprise that the CON
appeal had been delayed at the request of Tri-Cities after having professed a need for an
expeditious resolution.” The AJ also found that Mr. Dunlap, in the Objection to the
Motion to Set, objected to setting the contested case for hearing and demanded a
modification of the HSDA rules so that Tri-Cities could be granted a CON “without the
formality of a hearing”; that he made certain statements (reproduced in part in Section I,
supra); and that he provided no information about the current status of the federal
litigation.
The record before us contains evidence in the form of letters and pleadings
authored by Mr. Dunlap as well as orders entered in the federal lawsuits, set forth in some
detail in section I, supra, which is substantial and material, and which supports the
factual findings of the AJ in the initial order.
provisions; (2) in excess of the hearing panel’s jurisdiction; (3) made upon unlawful
procedure; (4) arbitrary or capricious or characterized by abuse of discretion or clearly
unwarranted exercise of discretion; or (5) unsupported by evidence which is both
substantial and material in the light of the entire record. In determining the substantiality
of evidence, the court shall take into account whatever in the record fairly detracts from
its weight, but the court shall not substitute its judgment for that of the hearing panel as to
the weight of the evidence on questions of fact.
12
In the motion for reconsideration, Tri-Cities took issue with the AJ’s
determination that Mr. Dunlap’s conduct, as demonstrated in the pleadings and letters he
filed on behalf of Tri-Cities, violated the standards set in the Rules of Professional
Conduct. The specific factual finding which Tri-Cities argued was not supported by the
record was the finding that Mr. Dunlap had not supplied the AJ with relevant part of the
Tri-Cities II complaint.9 The motion referenced page 32 of the Tri-Cities II complaint to
show that Mr. Dunlap had not failed to disclose the nature and outcome of Tri-Cities I.
However, the administrative record only contains the first four pages of the Tri-Cities II
complaint; page 32, which is the “relevant part of the federal complaint” as stated by the
AJ, is not included in the record. Further, nothing in the first four pages of the complaint
(three pages of which consists of the table of contents) gives any indication of the
existence or history of Tri-Cities I.
In the order denying the motion for reconsideration, the AJ stated that “a few
points of clarification are needed” and explained that “Mr Dunlap’s permission to appear
Pro Hac Vice was actually revoked on account of the Petitioner’s Objection to Motion to
Set Hearing and Demand for Reasonable Modification under the [ADA] . . in which Mr.
Dunlap makes an unveiled threat to initiate litigation against this tribunal should it
decline to make a ruling in his favor.” The AJ also made additional findings that Mr.
Dunlap failed to file “the relevant part of the federal complaint” in Tri-Cities II, the
9
In the memorandum in support of the motion, Tri-Cities argued:
[T]he allegation that Mr. Dunlap failed to disclose Tri-Cities I is patently
incorrect. On July 29, 2013, Mr. Dunlap sent a copy of the Tri-Cities II Complaint to
Judge Summers along with his letter (“I’m attaching a copy of the federal complaint”).
This was done to assist Judge Summers in understanding the issues in the federal action.
The Complaint clearly and unambiguously identifies Tri-Cities I and its dismissal without
prejudice on ripeness grounds:
Tri-Cities Holdings et al. v. Johnson City et al., Case No. 13-cv-108 (E.D.
Tenn. 2013)(case dismissed without prejudice on ripeness grounds).
See Tri-Cities I, Doc. 1, p. 32, n. 67 (emphasis added). Furthermore, the Complaint in
Tri-Cities II clearly and unambiguously references evidence and testimony from Tri-
Cities I multiple times.
There was no concealment by Mr. Dunlap. It is undisputed that he gave this
Court a copy of the Tri-Cities II Complaint which clearly and unambiguously references,
including the court, caption, and a specific and fairly crafted parenthetical reference that
Tri-Cities I was “dismissed without prejudice on ripeness grounds.” Id. Thus, Mr. Dunlap
has disclosed the nature and outcome of Tri Cities I. . .
(Emphasis in original.)
13
relevance of which “is the indication from the federal court of its preference for
completion of the administrative proceedings prior to commencement of the federal
litigation”; failed to provide “rather pertinent information regarding the status of the
federal proceedings . . . when requesting that the stay remain in place”; and failed to
“provide[] [any] authority to support the contention that a tribunal . . . must grant the
relief requested without a hearing on the merits or be in automatic violation of the ADA”
and “advance[ed] this position under the threat of legal action.”
The pleadings and letters are substantial and material evidence supporting the AJ’s
findings.
C. Application of the Law to the Facts
In determining whether an agency has properly applied the law to the facts, we
have explained that:
The courts may neither reweigh the evidence nor substitute their judgment
for the [agency]’s, even if the evidence could support a conclusion different
from the one reached by the [agency]. Rather, the courts must determine
whether a reasonable person could appropriately have reached the same
conclusion reached by the [agency], consistent with a proper application of
the controlling legal principles.
Miller v. Civil Serv. Comm’n of Metro. Gov’t of Nashville & Davidson Cty., 271 S.W.3d
659, 665 (Tenn. Ct. App. 2008) (internal citations omitted) (citing Tenn. Code Ann. § 4-
5-322(h)(5)(B); City of Memphis v. Civil Serv. Comm’n, 216 S.W.3d at 316; McClellan v.
Bd. of Regents, 921 S.W.2d 684, 693 (Tenn. 1996); Eatherly Constr. Co. v. Tenn. Dep’t
of Labor & Workforce Dev., 232 S.W.3d 731, 735 (Tenn. Ct. App. 2006); McEwen v.
Tennessee Dep’t of Safety, 173 S.W.3d 815, 820 (Tenn. Ct. App. 2005)).
On the basis of the factual findings discussed above, the AJ concluded that Mr.
Dunlap breached the conditions on which he was granted pro hac vice admission and did
not conduct himself in conformity with professional standards because: he made an
“unveiled threat that the Administrative Judge and the tribunal will face an ADA
enforcement action by the Department of Justice should the Administrative Judge fail to
provide the requested relief”; he misrepresented to the tribunal the status of the federal
litigation and used the misrepresentation to attempt to coerce a decision in favor of his
client without the benefit of a hearing; his coercion and misrepresentation [we]re “a
flagrant attempt to improperly influence a judge in violation of Rules 3.3., 3.5, and 8.4 of
the Tennessee Rules of Professional Conduct, as well as Tenn. Code Ann. § 39-14-112”;
14
and he expressed contempt for the tribunal and impeded a resolution of the CON
appeal.10
We agree that Mr. Dunlap’s conduct did not comply with Tenn. Sup. Ct. R. 8,
RPC 3.3, 3.5, and 8.4, rendering revocation of his pro hac vice status appropriate. See
Tenn. Sup. Ct. R. 19(c).
D. Notice
We next address Tri-Cities’ contention that the AJ “violated Tennessee Supreme
Court Rule 19 when she revoked Mr. Dunlap’s pro hac vice petition without any notice
whatsoever.” Rule 19 provides in pertinent part:
Admission granted under this Rule may be revoked by the court or agency
granting such admission upon appropriate notice to the lawyer and upon an
affirmative finding by the court or agency that the lawyer has ceased to
satisfy the requirements of this Rule.
Tenn. Sup. Ct. R. 19(c).
The order revoking Mr. Dunlap’s privileges identified the specific conduct which
violated the Rules of Professional Conduct and led to the revocation of his pro hac vice
privileges. Ten days after the order was issued, Tri-Cities filed a motion to reconsider, in
which ten arguments were raised, including the assertion that Mr. Dunlap did not have
adequate notice of the revocation of his privileges and an opportunity to respond. In this
motion, Tri-Cities addressed each of the specific instances of Mr. Dunlap’s conduct that
were found to have violated the Rules of Professional Conduct. Upon consideration of
the entire record, the lack of specific notice to Mr. Dunlap prior to the entry of the order
was not an abrogation of Rule 19. Under the unique circumstances of this case, the
notice of the factual basis and grounds for the revocation of his privileges which he
received in the order was appropriate inasmuch as Mr. Dunlap was fully advised of the
basis of the revocation and had the opportunity to—and did—include any concern
relative to notice in his motion for reconsideration, which was fully considered by the AJ.
10
The AJ, in attempting to move the contested case toward resolution, was performing her duties under
Tenn. Code Ann. §4-5-301. As an officer of the court, Mr. Dunlap was permitted to zealously advocate
for his client by informing the tribunal of how he believed the ADA and Rehabilitation Act should be
applied; threatening to sue the AJ and the Administrative Procedures Division in order to get the result he
desired, however, was wholly inappropriate. Moreover, clothing inappropriate language with the word
“respectfully” does not negate the impropriety of the words.
15
IV. CONCLUSION
Upon our review of the entire record, the AJ identified the correct legal principles,
the evidence supports the AJ’s factual findings, and the AJ properly applied the law to the
facts; in like fashion, the trial court properly applied the standard of review at Tenn. Code
Ann. § 4-5-322. Accordingly, we affirm the decision revoking Mr. Dunlap’s pro hac vice
privileges and remand the case to the trial court with instructions to remand the case to
the agency for further proceedings in accordance with this opinion.
________________________________
RICHARD H. DINKINS, JUDGE
16