William J. Rea, M.D. v. State ( 2009 )

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-08-00491-CV
William J. Rea, M.D., Appellant
v.
The State of Texas; Texas Medical Board; Roberta Kalafut, D.O.,
in her Official Capacity as a Member of the Board; Donald Patrick, J.D., M.D.,
in his Official Capacity as the Director of the Board; et al., Appellees
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 250TH JUDICIAL DISTRICT
NO. D-1-GN-08-000997, HONORABLE SCOTT H. JENKINS, JUDGE PRESIDING
OPINION
The Texas Medical Board (the “Board”) determined that appellant William J. Rea,
M.D., who is licensed by the Board to practice medicine, committed violations of the
Medical Practice Act. The Board filed a complaint against Rea at the State Office of Administrative
Hearings (“SOAH”), seeking an adjudicative hearing for the purpose of taking disciplinary action
against Rea. In response, Rea filed this lawsuit, alleging various statutory and regulatory violations
made by the Board during its investigation of Rea, and seeking to enjoin the Board from continuing
to prosecute him and enjoin SOAH from adjudicating the matter. The district court granted the
Board’s plea to the jurisdiction and dismissed all of Rea’s claims on the basis that his claims are not
ripe and, therefore, the district court has no subject-matter jurisdiction over the claims. We affirm
the judgment of the district court.
Factual and Procedural Background
William J. Rea is a physician licensed to practice medicine in the State of Texas.
See Tex. Occ. Code Ann. § 155.001 (West 2004). The Texas Medical Board informed Rea in
October 2005 that it was investigating a complaint that Rea had violated certain statutes applicable
to the practice of medicine. See id. § 164.051(a)(6) (West 2004) (requiring physician to “practice
medicine in an acceptable professional manner consistent with public health and welfare”);
Tex. Health & Safety Code Ann. § 311.0025(a) (West 2001) (prohibiting physician from submitting
bill for treatment he knows was “improper, unreasonable, or medically or clinically unnecessary”).
The Board identified specific patients whose treatment by Rea was at issue, and Rea submitted to
the Board written materials applicable to Rea’s treatment of those patients. These materials were
reviewed by the Board-appointed expert physician panel. See Tex. Occ. Code Ann. §§ 154.056(e),
.0561 (West Supp. 2008). The Board informed Rea in September 2006 that the expert physician
panel had concluded that Rea violated the applicable standard of care, and that an Informal Show
Compliance and Settlement Conference (“ISC”) was initially scheduled for November 16, 2006. The
ISC took place on March 9, 2007, and in August 2007 the Board filed a complaint against Rea at the
State Office of Administrative Hearings, seeking an adjudicative hearing for the purpose of taking
disciplinary action against Rea. See Tex. Gov’t Code Ann. § 2001.058 (West 2008).
On March 26, 2008, Rea filed suit against the State, the Board, and multiple
individuals affiliated with the Board (collectively, the “Board Defendants”),1 as well as two
1
The Board-affiliated individuals—sued in their official capacities—are the Board’s director
Donald Patrick, J.D., M.D.; the Board’s director of enforcement Mari Robinson, J.D.; the Board’s
staff attorney Mark Martyn, Esq.; Board members Roberta Kalafut, D.O., Lawrence Anderson, M.D.,
2
administrative law judges with SOAH (the “SOAH Defendants”).2 Rea alleges multiple statutory
and regulatory violations by the Board Defendants, which he characterizes as violations of his right
to due process. According to Rea, the Board did not fulfill its obligation under occupations code
section 154.053 to “notify the physician of the nature of the complaint.” See Tex. Occ. Code Ann.
§ 154.053(a) (West Supp. 2008). Rea further alleges that the expert physician panel’s review
involved an improper conflict of interest, see id. § 154.056(e), failed to include a second
expert’s review, see id. § 154.0561(b), and included a physician who does not practice in a specialty
identical or similar to Rea’s specialty, see id. § 154.058(b) (West 2004). Rea alleges that the
expert report does not contain certain required information, see 22 Tex. Admin. Code § 182.8(c)
(2009), and was not completed in a timely manner, see id. §§ 179.6(a), 187.16(e) (2009). Rea also
alleges that the Board did not provide Rea an opportunity during the ISC to show his statutory
compliance, and that this was a statutory violation. See Tex. Occ. Code Ann. § 164.004(a)(2)
(West 2004); Tex. Gov’t Code Ann. § 2001.054(c) (West 2008).
In his petition, Rea seeks temporary and permanent injunctions—under the
authority of Texas Civil Practice and Remedies Code section 65.011 or 42 United States Code
Melinda McMichael, M.D., Timothy Webb, J.D., Michael Arambula, M.D., Julie Attebury,
Jose Benavides, M.D., Patricia Blackwell, Melinda Fredricks, Manuel Guajardo, M.D.,
Amanullah Khan, M.D., Margaret McNeese, M.D., Charles Oswalt, M.D., Larry Price, D.O.,
Annette Raggette, Paulette Southard, Timothy Turner, Irvin Zeitler, D.O., and Alan Shulkin, M.D.;
and Teralea Davis Jones, P.A., Felix Koo, M.D., and Abelino Reyna, sued as Texas Medical Board
members although the Board Defendants have alleged in their pleadings that they are instead
members of the Texas Physician Assistant Board.
2
The SOAH Defendants are Penelope Wilkov and Carol Birch, who Rea alleges are the
administrative law judges appointed by SOAH to conduct the hearing on the Board’s complaint
against Rea.
3
section 1983—barring the Board Defendants from prosecuting him and the SOAH Defendants from
conducting any administrative proceedings in connection with such prosecution. Rea also seeks a
declaratory judgment that (1) the Board’s actions are unconstitutional, in contravention of statutes
and regulations, and in excess of its lawful powers and authority, (2) appellees’ acts and omissions
violate Rea’s right to due process, (3) any future acts predicated on such due process violations
are null and void, and (4) the Board’s administrative regulation requiring that members of an
expert physician panel be certified by “the American Board of Oral and Maxillofacial Surgery or
an organization that is a member of the American Board of Medical Specialties or the Bureau
of Osteopathic Specialists,” see 22 Tex. Admin. Code § 182.5(a)(2)(B) (2009), is void and
unconstitutional.
The Board Defendants filed a plea to the jurisdiction. On July 28, 2008, the
district court granted the Board Defendants’ plea, based on the court’s determination that it lacks
subject-matter jurisdiction over Rea’s claims, and dismissed Rea’s claims without prejudice as to
all parties. Rea appeals.
Analysis
In his first point on appeal, Rea challenges the district court’s dismissal of his
claims against the Board Defendants in accordance with their plea to the jurisdiction. A plea to the
jurisdiction challenges the trial court’s authority to determine the subject matter of a specific cause
of action. See Bland Indep. Sch. Dist. v. Blue, 34 S.W.3d 547, 553-54 (Tex. 2000). Whether a
court has subject-matter jurisdiction and whether a plaintiff has alleged facts that affirmatively
demonstrate subject-matter jurisdiction are questions of law that we review de novo. Texas Dep’t
4
of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004). When a plea to the jurisdiction
challenges the plaintiff’s pleadings, as in this case, we determine if the plaintiff has alleged
facts that affirmatively demonstrate the court’s jurisdiction to hear the cause. Id. If the pleadings
affirmatively negate the existence of jurisdiction, the plea to the jurisdiction may be granted without
allowing the plaintiff an opportunity to amend his pleadings. Id. at 226-27.
Appellees assert that Rea’s claims are not ripe. Ripeness is a threshold issue
that implicates subject-matter jurisdiction. Patterson v. Planned Parenthood, 971 S.W.2d 439,
442 (Tex. 1998); Texas Dep’t of Ins. v. Reconveyance Servs., Inc., 240 S.W.3d 418, 435
(Tex. App.—Austin 2007, pet. filed). While the jurisdictional issue of standing focuses on who
may bring an action, ripeness focuses on when that action may be brought. Waco Indep. Sch. Dist.
v. Gibson, 22 S.W.3d 849, 851 (Tex. 2000); Reconveyance Servs., 240 S.W.3d at 435.
Ripeness concerns whether, at the time a lawsuit is brought, the facts have developed
sufficiently such that an injury has occurred or is likely to occur, rather than being contingent
or remote. Planned Parenthood, 971 S.W.2d at 442, Reconveyance Servs., 240 S.W.3d at 435. To
establish that a claim is ripe based on an injury that is likely to occur, the plaintiff must
demonstrate that the injury is imminent, direct, and immediate, and not merely remote, conjectural,
or hypothetical. Gibson, 22 S.W.3d at 852. By focusing on the concreteness of injury, the
ripeness doctrine allows a court to avoid premature adjudication as well as issuance of advisory
opinions. Id.
Generally, an administrative agency’s action must be final before it is judicially
reviewable. See Edwards Aquifer Auth. v. Bragg, 21 S.W.3d 375, 380 (Tex. App.—San Antonio
5
2000), aff’d, 71 S.W.3d 729 (Tex. 2002); City of El Paso v. Madero Dev., 803 S.W.2d 396,
399 (Tex. App.—El Paso 1991, writ denied). The finality requirement—in the context of
ripeness—concerns whether the initial decision-maker has arrived at a definitive position on the
issue that inflicts an actual, concrete injury. See Maguire Oil Co. v. City of Houston, 243 S.W.3d
714, 718 (Tex. App.—Houston [14th Dist.] 2007, pet. denied); Madero Dev., 803 S.W.2d at 399.
The administrative decision must be formalized, and its effects felt in a concrete way by the
challenging party. Madero Dev., 803 S.W.2d at 398-99. Rea identifies as final administrative
decisions ripe for adjudication by the district court both the Board’s “multiple violations” of statutes
and its “decision to continue with a license disciplinary proceeding.” However, these acts by the
Board are merely preliminary to the administrative hearing before SOAH. An action taken by an
agency is not a final one for purposes of judicial review merely because it is against the licensee’s
interest, or because it violates a statute or regulation. In determining whether an agency action is
final, we do not look at the action separately, but to the agency decision-making process as a whole.
See Star Houston, Inc. v. Texas Dep’t of Transp., 957 S.W.2d 102, 105 (Tex. App.—Austin 1997,
pet. denied) (final order is one with which agency expects compliance and that fixes some legal
relationship as consummation of administrative process); North Alamo Water Supply Corp. v. Texas
Dep’t of Health, 839 S.W.2d 448, 450-51 (Tex. App.—Austin 1992, writ denied) (final order is one
that does not require subsequent agency approval). Here, because the Board is merely seeking to
take disciplinary action against Rea, no final decision has been made at the agency level.
Moreover, the acts Rea alleges in this lawsuit as violating his constitutional and
statutory rights have not yet inflicted any concrete injury on Rea. At the time of the filing of suit,
6
no disciplinary action had been taken against Rea. Rather, the Board had sought an adjudicative
hearing before SOAH for the purpose of taking disciplinary action, subject to the results of the
hearing. This is made evident in the specific relief sought by Rea, which includes declaring as null
and void any “formal administrative proceeding seeking to revoke or otherwise discipline Plaintiff’s
medical license” and enjoining the Board Defendants from “prosecuting or causing to prosecute
the Plaintiff in connection with any of the allegations set forth in the administrative complaint.” A
determination that the result of the pending administrative proceeding and prosecution before
SOAH will be a concrete injury against Rea requires conjecture and speculation at this point. See
Texas State Bd. of Exam’rs in Optometry v. Carp, 343 S.W.2d 242, 245-46 (Tex. 1961) (injury from
public official’s alleged unlawful act is matter of conjecture until license revoked, upon which statute
gives right of appeal in district court). Therefore, Rea’s claims filed against appellees in this lawsuit
are not ripe.3
Rea asserts that the district court can intervene under the circumstances alleged
here because judicial intervention is proper when a state agency acts in excess of its powers
and jurisdiction. See Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 220
(Tex. 2002) (administrative agencies “may exercise only those powers the law, in clear and express
statutory language, confers upon them”). However, Rea does not allege the Board or SOAH lacks
3
The issue of ripeness applies specifically to Rea’s constitutional due process claims. See
Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 930 (Tex. 1998); Texas A&M Univ. v. Hole,
194 S.W.3d 591, 594 (Tex. App.—Waco 2006, pet. denied) (op. on reh’g). To the extent Rea has
a property right in his medical license, Rea has not suffered any deprivation applicable to his license
because the disciplinary proceeding has not yet run its course, and his license may or may not be
affected by the proceeding. See Monk v. Huston, 340 F.3d 279, 282-83 (5th Cir. 2003).
7
authority to make an initial determination regarding the revocation or suspension of a medical
license. See Tex. Occ. Code Ann. § 151.003(2) (West 2004) (Board is “primary means of licensing,
regulating, and disciplining physicians”), § 164.007(a) (West Supp. 2008) (formal hearing on Board
complaint to be conducted by administrative law judge employed by SOAH), § 164.009 (West 2004)
(judicial review available for “person whose license to practice medicine has been revoked
or who is subject to other disciplinary action by the board”). See generally Reconveyance Servs.,
240 S.W.3d at 432-33 (discussing concepts of exclusive jurisdiction and primary jurisdiction).4
Instead, Rea argues that the Board was stripped of such authority based on its failure to comply
fully with procedural requirements, in accordance with occupations code section 164.004(a) and
government code section 2001.054(c). Both such statutes require that, prior to any disciplinary
proceedings before SOAH, the Board must give notice of the “facts or conduct alleged to warrant
the intended [disciplinary] action.” Tex. Occ. Code Ann. § 164.004(a)(1); Tex. Gov’t Code Ann.
§ 2001.054(c)(1). In his pleadings, as stated above, Rea alleges a failure to give such notice.
However, neither occupations code section 164.004(a) nor government code
section 2001.054(c) provides that, upon insufficient notice, any administrative proceeding
must cease or the agency or SOAH loses its jurisdiction. Rather, these statutes provide that when
insufficient notice is provided, any disciplinary action taken is “not effective.” Tex. Occ. Code Ann.
4
Rea contends that neither the Board nor SOAH has exclusive or primary jurisdiction
over this dispute because neither the Board nor SOAH has the power to consider allegations of
constitutional violations or provide declaratory or injunctive relief to remedy such violations. Our
holding, however, is that neither the Board nor SOAH has implemented any final action that is ripe
for judicial review of Rea’s constitutional claims or his claims for declaratory or injunctive relief in
the first place.
8
§ 164.004(a); Tex. Gov’t Code Ann. § 2001.054(c). Rea cites no authority to support his contention
that if a certain action by an agency could be deemed ineffective, the agency loses its power to take
such action in the first instance as a part of the agency adjudicative process. In this case, in the event
that the SOAH proceeding results in disciplinary action to be taken against Rea, a claim by Rea that
his notice was insufficient and the Board’s disciplinary action was, therefore, not effective might
then become ripe for judicial review.
Rea also asserts the applicability of several exceptions to the general rule that subject-
matter jurisdiction not be exercised until all available administrative remedies have been exhausted.5
Rea fails to distinguish between the issues of ripeness and exhaustion of administrative remedies.
Whereas exhaustion refers to the administrative procedures available for review of an adverse
decision, ripeness in the administrative context concerns whether the applicable decision-maker
has arrived at a definitive position that inflicts a concrete injury. Maguire Oil Co., 243 S.W.3d
at 718-19. Regardless of whether the Board has made decisions adverse to Rea that would make
administrative remedies available, we do not need to consider the issue of exhaustion because our
focus is on the issue of ripeness and, as discussed above, no decision has been made that inflicts a
concrete injury on Rea and that is final at the agency level.
5
Specifically, Rea argues that administrative remedies are inadequate, exhaustion would
result in irreparable harm, exhaustion is not applicable to a case involving a section 1983 claim,
appellees are acting in excess of their powers and jurisdiction, use of administrative remedies would
be futile, his allegations involve pure questions of law, and constitutional violations are at issue.
Because our holding relies on the separate issue of ripeness, we do not consider the viability or
applicability of Rea’s argued exceptions to exhaustion of administrative remedies.
9
Even if the Board did violate Texas law and we were to agree with Rea that
the administrative proceeding before SOAH is thereby “tainted,” it is not the function of the
district court to speculate whether the outcome would be injurious to Rea. The district court’s
dismissal of Rea’s claims against the Board Defendants was not error.
In his second point on appeal, Rea challenges the district court’s dismissal of
his claims against the SOAH Defendants. Rea contends that because the SOAH Defendants
answered only with a general denial and did not file a plea to the jurisdiction, the district court’s
dismissal of the SOAH Defendants was made sua sponte. Rea cites case law holding that sua sponte
dismissal without a motion by the plaintiff or notice to the defendant is reversible error. See Ulloa
v. Davila, 860 S.W.2d 202, 204-05 (Tex. App.—San Antonio 1993, no writ); see also Zep Mfg. Co.
v. Anthony, 752 S.W.2d 687, 689 (Tex. App.—Houston [1st Dist.] 1988, no writ) (sua sponte
imposition of sanctions). However, Rea did have notice in this case. The Board Defendants’
ripeness arguments in their plea to the jurisdiction apply to all of Rea’s claims, not just those claims
asserted against the Board Defendants. Rea’s pleadings do not allege any wrongful act attributable
to the SOAH Defendants, and his attempt to enjoin the SOAH Defendants from proceeding with
the license revocation case is based solely on the Board Defendants’ allegedly wrongful acts. Our
holding that Rea’s claims are not ripe applies equally to the Board Defendants and the SOAH
Defendants. Given that Rea asserted no claims against the SOAH Defendants that were not also
asserted against the Board Defendants, had notice of the plea before the district court asserting that
Rea’s claims were not ripe, and had opportunity to argue against the plea before the district court
both in written briefing and at the hearing, we find no error in the district court’s dismissal of Rea’s
10
claims against the SOAH Defendants.6 See State v. Morales, 869 S.W.2d 941, 949 (Tex. 1994)
(“When a court lacks [subject-matter] jurisdiction, its only legitimate choice is to dismiss.”).
Conclusion
Rea’s claims in this lawsuit against both the Board Defendants and the SOAH
Defendants are not ripe for judicial review. Consequently, we affirm the judgment of the
district court dismissing the claims.
__________________________________________
G. Alan Waldrop, Justice
Before Justices Patterson, Pemberton and Waldrop
Affirmed
Filed: July 16, 2009
6
The SOAH Defendants assert that they made known to the district court their “neutrality”
on the Board Defendants’ plea to the jurisdiction, so that their position before the court would not
undermine their ability to remain “neutral when the merits of the case is before them.”
11