California License Law Blog : California License Lawyer & Attorney : Fredrick M. Ray Law Firm : Professional Licensing Revocation & Suspension : CA License Law Blog

A phenomenon we observe in our law firm every day is the Domino Effect of license discipline.  Simply put, discipline against one's license, a license denial, or a criminal conviction, can in turn result in discipline against out of state licenses, other agency licenses, and affect employment, memberships, clearances and registrations.  The clearest illustration of this effect is concerning a physician.

Let's say that a physician does his residency in the state of Florida, where he gets his license, then moves back to California, where he applies for a license.  However, after he got the Florida license, but before the California application, he was convicted of drug possession.  As a result of the conviction, California denies his license application.  That license denial becomes a public record.  Florida becomes aware of the license denial in California, leading Florida to discovery of the drug conviction, and then Florida takes away the physician's license as well.  The physician appeals the California license denial, but in the process, that appeal opens a case that results in a press release or email blast concerning the physician.  If the physician wins the appeal but obtains, for example, a probationary license, his license record will show, indefinitely, the cloud over his license by showing that the license was granted on probation and even may offer a link to the disciplinary documents.  A license denial followed by probation will then likely have to be disclosed whenever the physician applies for other state licenses, for acceptance to a health insurance plan, for membership in referral services, for hospital privileges, and the list goes on.

Predicting the Domino Effect of license discipline can be less like predicting the fall of dominoes and more like predicting chess moves.  It is very difficult to predict how some entities - such as other states' licensing boards or insurance companies - will react to negative licensing information.  The one overriding lesson of the Domino Effect is that a clean disciplinary record is a highly valuable possession.  One should, as a general rule, secure as many desired licenses, memberships or privileges before one is foreseeably tainted by a criminal conviction, license discipline or another reportable event.  In most cases, an indvidual enjoys due process rights with an existing license that may not be present when a license application has been turned down.

The worst part of the Domino Effect is the pernicioius manner in which negative public records available over the internet can damage one's career and reputation.  Most licensing agencies will make derogatory information available on a license record, in a website listing of disciplinary actions and even in an agency newsletter.  Thusfar licensing agencies see it as their duty to publicize one's license discipline on the websites and in their publications.  It remains to be seen if the law will curb these practices by requiring that old or irrelevant disciplinary cases be stricken from a licensing agency's website.

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California's insurance brokers are licensed and disciplined by the Insurance Commissioner through the Department of Insurance (DOI).  It has been my experience that the Department of Insurance takes a firm stance in disciplining its licensees.  In my view there are three reasons that account for this: 1) the Insurance Commissioner is an elected public official who has political concerns should his Department be perceived as being weak in disciplining licensees, 2) the legacy of  the Insurance Commissioner Chuck Quackenbush scandal in 2000, and 3) the subsequent enactment of Insurance Code section 12921 which makes the Insurance Commissioner solely responsible for the administrative settlements.  There are particular public protection issues relative to insurance brokers, because theft of premium monies and the failure to bind insurance, which leaves consumers unprotected and vulnerable, are constant problems.

The DOI also has some powerful tools in its tool chest, including Insurance Code section 1669, which allows for summary revocation of a license (that is, revocation without a hearing), as well as summary denial of a license application, where a licensee or license applicant has been convicted of a felony, has lost another occupational license, or has been convicted of a criminal violation of the Insurance Code.  The Insurance Code also permits the DOI to revoke a license when a licensee is "not of good business reputation" or it is simply "against the public interest" for them to have a license.   No profession, not even physicians, is subject to such vague and broad standards of discipline.

Despite these considerable legal hurdles, we have found that licensees and license applicants can be successfully represented before the DOI.  In the case of the Order of Summary Revocation, the DOI will consider a timely filed Petition for Reconsideration under Government Code section 11521.  In cases where a licensee or applicant is entitled to a hearing, the DOI tends to respect the outcome of administrative hearings, and is very receptive to a strong showing of character fitness or rehabilitation by its licensees or license applicants.  In most of the cases we have handled, those cases that were not dismissed resulted in license restriction.  License restriction by the DOI is less onerous that license probation typically used by other licensing agencies and usually requires little of the licensee or license applicant beyond compliance with all laws until the license restriction is lifted.  Restriction can later be lifted by a petition to the DOI, clearing the insurance broker's license of discipline.

The pitfalls of a license denial or license discipline case usually arise at the beginning of the case.  License applicants, seeking to avoid disclosure of past indiscretions, sometimes file false or incomplete applications that do not list prior convictions.  Current licensees either fail to notify the DOI of changes to their background information, fail to respond to a demand for information, or make statements that are later used against them.  It is absolutely critical that a license applicant or licensee handle all communications with DOI properly, employing honesty and sincere cooperation in most cases, but exercising one's right to remain silent in cases that can lead to criminal charges, and of course carefully choosing one's words in all communications.  The words of the Miranda warning are true here - everything you say can be used against you in a court of law.

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Earlier this month I had the privilege of participating for three days in the Betty Ford Center's Professionals in Residence program at this world famous drug and alcohol addiction treatment hospital in Rancho Mirage, California.  This program gave me insight into the Betty Ford Center's Professionals Program, where licensed professionals, typically physicians and attorneys, receive treatment tailored to their needs.  Betty Ford Center's longstanding treatment of professionals, particularly physicians, accords their facility a certain stature and credibility that can be critical in a license discipline case.  Of course, if one is struggling with addiciton, it is absolutely imperative to confidentially seek treatment before the addiction interferes with work and becomes a board discipline matter.

The Betty Ford Center has a twenty seven year track record of successfully treating individuals, both famous and not-so-famous, for the disease of addiction.  As the first licensed chemical dependency treatment hospital in California, Betty Ford has unparalleled facilities and trained medical staff for detoxification at entry and the management of medical issues throughout treatment.  The treatment program focuses upon treatment and recovery in a therapeutic environment, using individual and group counseling, addiction education through dynamic speakers, and fellowship with similarly situated individuals.   The Betty Ford Center also has educational and counseling programs for the families and children of patients, which helps the entire family heal from the ordeal of addiction and invests them in the patient's recovery.

BFC also offers the Clinical Diagnostic Evaluation, whereby a licensee or license applicant who is suspected of or suspects having an adiction problem can be evaluated for addiction.  According to Dr. Harry Hartounian of BFC, about 1/3 of CDE patients are found to be free of addicition, about 1/3 go on to treat at BFC, and finally 1/3 seek treatment elsewhere.  The CDE can be a useful tool to confirm or exclude the diagnosis of substance abuse, allowing the results to be used to demonstrate to a licensing agency the absence of an addiction issue, and facilitating access to confidential chemical dependency treatment with or without the use of insurance.

Accessing chemical dependency evaluation and treatment services is a highly personal decision that involves willingness of the individual involved or the intervention of loved ones around them.  Our firm works with Betty Ford Center and other  smaller treatment centers, such as Cornerstone of Southern California in Orange County to provide our clients with quality treatment referrals consistent with their personal and legal needs.  Our effective defense strategies include proactively resolving professional competency issues before they result in license discipline, loss of a license, or to ready a professional who has lost their license to seek relicensure.     

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About one year ago I wrote about a series of embarrassing newspaper articles about the California Board of Registered Nursing, that described how nurses incarcerated in prison retained their licenses due to the sheer ineptitude of the Board of Registered Nursing. The picture painted was nurses running amok while the Board was asleep at the wheel. Meanwhile, in my practice we were received numerous complaints from our nurse clients about how strict and even punitive the Board of Registered Nursing was acting. Which of these views was right? And what is this controversy all about?  In July 2009, we saw another round of revelations, leading to the sacking of three members of the Board of Registered Nursing and apparently the resignation of the longstanding executive officer of the RN Board.  What are the factors behind this focus on, of all the professions, registered nursing, and why was the Governor so quick to move in response to criticism?

The first and most important factor in our view, which is often not well understood by the public, is that the medical treatment you receive in hospitals is largely from nurses and their supervised LVNs and aides, not doctors. Doctors make their rounds, usually spending as little time in the hospital as possible, doctors perform surgeries, and doctors prescribe medicines and treatments. But for the hospitalized patient, almost all care comes from their registered nurse and those supervised by the RN. The registered nurse is the primary advocate for the patient, the individual charged with calling up the doctor and even demanding treatment if a patient is in neglected by their M.D. In fact, in the face of a recalcitrant doctor, the RN is responsible to even go above the head of the doctor to hospital officials if the situation warrants. Therefore, the registered nurse is the key link in the chain of care from hospital and doctor to patient.  Public concerns about the competency of registered nurses are well founded.

A second factor in this debate is the love/hate relationship that California (its people and the rest of its government) has with its regulatory boards.  In early 2005 there was an effort by the Governor to abolish 88 state boards, including the nursing board, citing waste and inefficiency.  The effort died after about one month.  Neverthless, nearly five years later state boards understandibly feel the need to zealously protect the public in carrying out their mission.  The image of board members as political cronies earning six figure salaries to jet around the state to attend a handful of meetings each year makes a popular punching bag for some politicians, the press and advocacy groups. 

To the extent the criticism of the Board of Registered Nursing focuses on lengthy delays in investigations and administrative cases, that criticism seems to have merit.  It is also true that many years ago the Board of Registered Nursing exercised lax oversight in the screening of the backgrounds of nursing license applicants.  In requiring livescans and asking simple background information questions at application and renewal the Board has brought itself in line with the common practices of other California licensing boards.

However, it is most unfortunate that the regulatory pendulum seems to be swinging to the other extreme.  The Board of Registered Nursing may be becoming quick to judge, quick to condemn, and unnecessarily punitive in its approach to the oversight of its licensees.  The purpose of independent licensing boards is that they can be relatively free of the political pressures from other segments of the government.  Unfortunately, actions such as the governor's undermine that independence and risk seriously damaging the nursing profession in terms of difficulty in attracting sufficient numbers of new nurses and the declining morale among existing nurses. 

The image of a "soft on discipline" nursing board is misleading and inaccurate.  I have found the Board of Registered Nursing to be firm in discipline and quite strict in probation oversight.  The Board has exhibited, in my view, a fairness towards its licensees, willing to give a second chance if the licensee is willing to earn it.  Regrettably, second chances may now become a lot harder to come by in Sacramento. 

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