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

In California, the Office of Administrative Hearings (OAH) hears all professional license discipline or denial cases, except for liquor license and attorney discipline hearings.  The same administrative court hears cases for such varied occupations as physicians, architects, dentists, insurance brokers and engineers.  A panel of about 75 administrative law judges (ALJs), working our of four OAH offices in Sacramento, Oakland, Los Angeles and San Diego, hears thousands of cases each year.  Administrative licensing agencies such as the Medical Board of California, the Dental Board of California and the Department of Insurance delegate the job of hearing disciplinary hearings to these judges, while retaining final decision-making authority.   

When a licensing agency issues an accusation (the start of a formal disciplinary case) or a statement of issues (a formal license denial case), and the licensee has requested a hearing, the case is typically filed with OAH for adjudication.  Once OAH receives the filing, it assumes jurisdiction over the case which continues until the case is settled, the accusation is withdrawn, or a panel judge issues a proposed decision.   The presiding judge of a particular OAH office, or an ALJ acting temporarily on her or his behalf, addresses any logistics issues that arise.  Before the hearing date itself (the trial to decide the case), a hearing judge is assigned.  However, the assigned judge can be changed even shortly before the start of the hearing.

A hearing can be held at one of the courtrooms available at one of OAH's offices, or sometimes in a remote location (typically a borrowed conference room in a state or federal building) for the convenience of the parties or witnesses.  Occasionally, a party or witness, complying with applicable rules and with the agreement of the parties, appears by telephone.  I have seen an OAH hearing held in a state mental hospital, a federal office building, and even at a prison.  As long as a quiet room with adequate seating and tables is available and a court reporter can get to the location, it can be used for an OAH hearing.

OAH is different than any other court in that OAH is a state agency that other state agencies hire to hear their cases.  ALJs produce "proposed decisions" that can be adopted, changed or rejected then decided differently by licensing agencies.  Although a very high percentage of proposed decisions are adopted as written, occasionally a decision is rewritten or even decided differently by the agency.  Therefore, for ALJs to do their job, they must be "in tune" with the agencies for whom they decide cases.  Licensing agencies issue disciplinary guidelines to guide ALJs to decide cases consistently on common fact patterns, however, in reality most disciplinary guidelines are not specific enough to provide clear guidance.  It is definitely an art for a judge to intuit the wishes of a distant licensing board or agency head to reach a decision consistent with the agency's own thinking.

Having seen hundreds of ALJ decisions adopted or rejected by agencies, patterns tend to form.  For agencies particularly that have a high volume of cases or an elected agency head, a higher percentage of decisions seem to be adopted.  If many decisions are rejected, the burden of deciding those cases upon the administrative agency would be great.  Agencies with relatively few disciplinary cases can review them with greater care and more easily reject or modify those decisions.  Also, in the case of some agencies, the agency may prefer to leave the burden of the decision upon the ALJ, who is not subject to political pressure or public scrutiny, rather than to alter the decision to have a greater hand in the decision.  

For self-represented litigants (individuals without an attorney), and inexperienced attorneys as well, a common mistake is to think that OAH proceedings are just informal meetings.  Indeed, these are trials that require pre-planning and organization, legal research, questioning of witnesses, objections to evidence, and arguments.  The primary "law firm" that prosecutes cases at OAH, the California Department of Justice, has hundreds of well trained Deputy Attorneys General.

OAH decisions are often published on the internet by the particular licensing agency for whom cases have been heard.  I strongly advise unrepresented litigants to search out those decisions to review them before deciding to proceed without an attorney.  It is not uncommon that administrative decisions are 10, 15, 20 pages or more, discussing a range of factual and legal issues.  Reviewing these decisions, the complexity of these administrative proceedings becomes apparent.

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In 2010, all 50 states were required to implement the SAFE Act, with a compliance deadline of December 31, 2010.  With the passing of this deadline, individuals acting as Mortgage Loan Originators who are either California Department of Real Estate (DRE) licensed real estate brokers or salespeople, or are employed by a lender licensed by the California Department of Corporations, must complete a 20 hour approved course for the initial application, 8 hours of continuing education for renewal, pass the SAFE MLO test, and undergo a background check.  Applicants begin by completing the extensive Nationwide Mortgage Licensing System, or NMLS, application.  For anyone coming from a broker-dealer background, this application will look familiar, as it is the equivalent of FINRA's form U-4 or U4.   For individuals who are applying to be mortgage loan originators, it is called the MU4 or MU-4.

For those who have passed the coursework and test, challenges may arise in background checks.  In addition to a criminal record background check, the SAFE Act requires that all applicants permit their credit to be checked as well.  Regulators will be looking for bankruptcies, unsatisfied liens, judgments, and other evidence of prior financial mismanagement.  Currently, these cases are reaching the legal departments of the DRE and DOC, and may result in the first litigated administrative MLO endorsement cases.

The SAFE Act contains certain prohibitions for issuance of the endorsement.  If an applicant has been ever convicted of a felony involving fraud, dishonest, breach of trust, or money laundering, they cannot get an MLO endorsement.  Also, the SAFE Act bars issuance of an MLO endorsement if someone has been convicted of any felony within the prior seven years.  Apparently, individuals who have criminal records, but are not barred from issuance of the MLO endorsement by these rules, will be evaluated on a case-by-case basis, just as they are for any state occupational licenses. 

Also, the SAFE Act requires applicants to submit to credit checks to determine if an applicant has demonstrated "financial responsibility, character, and general fitness such as to command the confidence of the community and to warrant a determination that applicants will operate honestly, fairly, and effectively".  So how bad must your credit be to run afoul of the SAFE Act?  No one will exactly know until these cases are litigated.  It seems likely that if someone's credit is bad enough, the licensing agency will want to see an explanation of the misfortune that occurred.  Clearly, the person whose credit was trashed due to medical bills will do better than a compulsive gambler.  Also, credit can be cleaned up.  NMLS websites actively encourage applicants to check their credit first and clean up their credit reports before applying.  

Review of credit reports by state agencies to make licensing decisions is a new, and uncomfortable area.  The poor credit criteria draws a correlation between financial mismanagement and dishonesty that is a difficult analogy.  My suspicion is that absent unsatisfied judgments or liens that cast an applicant in an appalling light, this criteria alone, without some prior criminal misconduct, will be a difficult standard to apply to deny the endorsement.

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Widespread use of the internet by regulatory agencies to post disciplinary actions, causing damage to licensees' reputations and dramatically impacting careers, is a deeply unfortunate reality.  Prior to widespread use of the internet, "practical obscurity" kept disciplinary information largely out of the reach of the public, because records were only available by telephonic or written request.  "Practical obscurity" has given way to "ambient findability," the ability for anyone with internet access to readily access information.  State agencies now post both pending, unproven accusations and disciplinary decisions, indefinitely, and with impunity, in their role to protect the public.

The rise of "ambient findability" has prompted a new service known as "reputation enhancement" or "reputation defense."  Simply put, if one cannot remove derogatory information from the internet, but anyone can freely post information, negative or positive, then posting as much neutral or positive information can overwhelm and obscure a negative entry.   Although there are services that will flood the internet with positive information to bury negative information, it is also possible to do it by oneself.  Indeed, it is imperative that every person regularly check, and take charge of, their internet reputation.

Facebook, My Space, Twitter, online professional directories, and other sites enable one to make numerous free web pages, producing substantial content for search engines.  Although time consuming, it is possible to create a significant positive web presence.  To the extent that a licensee's name is unique, and therefore easily searched, the greater the "ambient findability."  Such licensees should be very vigilant with their internet reputation.  Individuals with more ordinary names can be much more difficult to search.

Unfortunately, information on a licensing agency's website itself remains accessible for one who does a basic search and click.  In the future, licensees may bring lawsuits to prevent the dissemination of unproven allegations or inaccurate disciplinary information.  California's Information Practices Act and other laws could provide relief, particularly when disciplinary information becomes outdated and irrelevant.

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Years of experience have taught me that there is a rule of diminishing returns in licensing law.  In general, the earlier in the development of a problem that I intervene, the more effective I can be in limiting damage to a license or license application.  Two examples of this principle transpired in the last 24 hours at the office, when two different criminal defense attorneys called me for advice on how to be resolve criminal cases for their professional clients to minimize license discipline.  A simple 15 minute conversation today can yield a greater benefit than 150 hours of work on an appeal years in the future.

This particular issue cuts to the heart of licensing law.  Clients contact our firm seeking solutions to their licensing problems.  Typically, the further along their case is, the more difficult the task of containing the damage to their license and reputation can be.  For this reason, a client who has been previously denied a license (after going through the entire process from application to decision after hearing) may hire us even before their very first communication with the licensing agency, to insure that every step is taken to maximize success.

The first critical point in a licensing matter is that first communication with the licensing agency - either a mandated disclosure or response to an agency inquiry.  If that opportunity to say and do the right things is missed, the next critical point is at receipt of an accusation or application denial.  At that point, there still is typically ample time to take rehabilitative actions and identify mitigating evidence that can change the result of an administrative hearing.  As the administrative hearing approaches, though, for many licensees or license applicants, opportunities begin to be lost, then this process accelerates.

Once the administrative hearing is concluded, the die begins to be cast.  Unfortunately, it is often only after the licensee or applicant walks out of their hearing, or worse yet receives an adverse result in the mail, that the hardest lessons of diminishing returns are revealed.

Licensing agencies and courts are generally quite deferential to the hearing decision of an administrative law judge.  Once an administrative law judge has decided the case, and the agency has adopted that decision,the remaining legal options generally are ask for reconsideration, petition the Superior Court for a writ, or wait reinstatement after rehabilitation.  However, in administrative law, as in all law and litigation, second chances can be hard to come by.  As a general principle, the integrity of our state license discipline apparatus depends upon agencies typically making decisions that conclude cases and withstand challenges.  This begs the question of what, if anything, can be done in the latter stages of administrative litigation.

As a general rule, post-decision case reversals depend upon either new, "game changing" evidence, or an identified legal mistake made by the agency or judge.  Most potential appeals that come into the office would be argued as "abuse of discretion," which can be described as patent unfairness in the imposition of and degree of discipline.  Unfortunately, true abuse of discretion occurs very rarely.  Courts are loathe to second-guess agencies and administrative judges. 

The lesson for licensees and license applicants is that pro-active, positive action at the earliest possible stage of the licensing matter can make a big difference in the outcome of an administrative hearing.  It is crucial that the licensee or license applicant communicates information and demonstrates a demeanor that is honest, remorseful for past mistakes, and humbly and energetically seeks to right the wrongs of the past.  To be certain, some serious license discipline or application denial cases must be litigated to conclusion or through appeal.   Negative assumptions can cause an attorney to miss issues for reversal, and thus should be avoided.  However, clients must recognize early on the depth of their dilemma, and after receiving an adverse decision, must then think carefully about the risk benefit analysis involved in pursuing a license appeal.

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An area most often misunderstood in the regulation of the professions is the separation of powers.  To put it simply, the difference between the people or person who seeks to discipline a licensee, and the people or person who decides whether or not to discipline the licensee.  We usually refer to these "people" collectively as "the Board" or "the Department."  Sometimes we call some of them "the Attorney General."  These non-specific labels are misleading and mask the true nature of the system.

In the criminal justice system, when we violate the law we are arrested by a police officer or investigated by a detective.  The police officer or detective puts together the evidence and walks it into the District Attorney's office.  The D.A. decides whether to file the case, and if he does, he takes it to the court to file the case and (sometimes) to a judge to get a warrant.  The judge later acts as referee of the case (between the accused and the prosecutor).  If the case is not resolved by agreement of the prosecutor and defendant, then a jury decides guilt or innocence, and the judge imposes a sentence.  Therefore, the independent district attorney, elected judge and selected jury all act as checks upon the power of the police, to ensure the fair and lawful handling of cases.  

In licensing law, the licensing agency typically is comprised of two distinct "entities."  On the one hand, there is the administrative staff, which includes enforcement staff, that acts like the police. The administrative staff may have its own lawyers, who work for enforcement staff, or may contract with the Attorney General's office for legal representation.  In California, boards and bureaus typically hire the Attorney General's office, while Departments (such as real estate or insurance) have their own in-house lawyers.  Lawyers who represent licensing agencies typically have less independence than a criminal prosecutor.  The criminal prosecutor can freely reject cases, but the licensing agency attorney is not usually free to make that decision, but instead must persuade their client (like in the private sector) that a case lacks merit. 

The second entity that makes up the licensing agency is the decision-maker, which is a board or an agency head.  The decision-maker should have no foreknowledge of a disciplinary matter until it is brought to them for a decision, just as an impartial jury should have no foreknowledge of a criminal matter.  Due to the volume of cases and complexity of legal issues, the decision-maker may have their own in-house adviser attorneys to help analyze cases or, in the case of a sole decision maker, lieutenants (also usually high ranking lawyers) who can aid in making decisions.  In most cases, decision-makers are too busy to hear cases themselves, so they delegate the job of hearing cases to administrative law judges, who make proposed decisions.  The administrative law judges must prepare detailed proposed decisions to give the decision-makers sufficient information to comfortably adopt most decisions.

Therefore, the licensing agency has a sort of dual personality.  For example, the Medical Board has within it administrative staff including enforcement staff.  The enforcement apparatus of the Medical Board of California has considerable resources.  With a large staff in Sacramento and twelve district offices, enforcement staff includes analysts and investigators in the field who identify and build cases against physicians.  This enforcement work is done with no direct supervision by or knowledge of the Medical Board itself, a 15 member group that meets about 4-6 times per year to make decisions, including decisions on disciplinary matters.  Board enforcement staff hires and pays the Department of Justice to provide it with Deputy Attorney Generals to represent it in legal matters.  Only once a case has been litigated until a proposed decision is reached does that case then come before the Medical Board to make a final decision.  The formal structure used by the Medical Board is based upon a separation of powers: enforcement staff is a type of executive (with an executive director above all administrative staff) and the decision-making Board is a form of judiciary, like a judge or jury.

This structure often leads licensees and their attorneys to conclude that administrative courts are "kangaroo courts."  After all, the "complainant" who brings a case, which may be the executive director of an agency or the head of enforcement, is typically the trusted and well-liked employee of the agency head or board that ultimately decides a case.  Although an administrative law judge is impartial, his or her proposed decision can be voided by the agency head or board and replaced with a decision more to the agency head's or board's liking.  Although there is some truth in these observations, the reality is more complex.

Due to the high volume of cases, administrative agency heads or boards must, as a practical matter, agree with the decisions of administrative law judges almost all of the time, because the reweighing of evidence required to render a new and different decision taxes the limited resources of the decision-maker.  Also, the Superior Court and Appellate Court are an important check on licensing agencies to ensure they act in a reasonable, deliberate and lawful fashion.  But perhaps most importantly, licensing agencies must carefully balance public protection with the interests of the licensees the agencies regulate.  Although public protection is the stated mission of licensing agencies, an overzealous regulator can cripple the industry it regulates or create unintended results, such as driving significant numbers of individuals to work without licenses.

What I have learned in handling hundreds of licensing matters is that the administrative arena has many traps for unwitting attorneys.  Lawyers accustomed to the impartiality and significant due process protections of Superior Court often fail to understand who the decision makers are and how decisions are made in license discipline litigation.  Administrative law requires a "Goldilocks" approach.  If the lawyer is too aggressive or enjoys early success based upon exploiting legal technicalities or hiding the ball, the administrative process has a way of catching up to and extinguishing such successes through the ultimate power of the agency head or board.  If a lawyer is too passive, concluding that the whole system is rigged and there is no way to win, important opportunities to influence the decision-makers will be lost and the lawyer's fatalism will breed failure.  Attorneys must be thoughtful, prepared, persuasive and proactive, but also honest, forthright and determined, to achieve the best results in license cases   

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New clients sometimes call the firm to ask " what are my rights?" in a license discipline or license denial case.  The answer to this question goes to the heart of the complexities of representing clients in professional licensing cases. 

When I see that a client is struggling with the concept of their constitutional protections, I usually ask them to envision a continuum (like a time line), with criminal cases at one end and at the other end licensing cases, and in the middle civil cases for money damages.  The criminal end symbolizes the greatest constitutional protections, the licensing or administrative end represents the fewest protections.  I then talk about three major case types in exemplifying the rights involved in each.

Starting with the greatest protections, a criminal defendant enjoys the strongest rights because their liberty is at stake.  A criminal defendant has the absolute right of presumed innocence, and can only be found guilty beyond a reasonable doubt by a unanimous vote of twelve unbiased peers.  The criminal defendant can remain silent throughout the trial.  The defendant is guaranteed an effective defense, which for someone indigent can mean a free lawyer and even a free investigator.  These are some of the rights involved.

In a civil case, typically a defendant must be found liable by a preponderance of the evidence (basically, more than 50 percent).  A defendant is entitled to a jury of his peers, but a unanimous decision is not required.  Numerous procedures, including discovery (exchanging information through asking for documents and answers to questions,  and taking depositions) and summary judgment motions (to get a case that lacks merit dismissed) are available to the defendant.

In a licensing case, there is no jury.  The neutral judge who hears the case only makes a proposed decision, which then goes to the licensing agency for adoption, non-adoption or modification.  In other words, the licensing agency board or agency head (without a board) makes the final decision.  The licensee has no right to remain silent, meaning they must testify at their trial.  There is nothing to prevent an agency from bringing even a meritless case against the licensee and to press the matter to hearing.  And, in most cases, a licensee can be made to pay reimbursement to the licensing agency for its attorneys fees and investigation costs.

The rights, or lack of rights, of a licensee in a disciplinary hearing, is often shocking to hear the first time.  However, there are reasons why licensees have fewer rights.  First, a professional license is a privilege, not a right.  Second, the protection of the public against incompetent, impaired or dishonest licensees is paramount for a licensing agency.  And third, a licensee issued by a licensing agency is neither a fundamental freedom nor the personal property of the licensee.  It is a grant of permission predicated upon education, experience, exams, payment of fees, and meeting qualifications.

The striking difference in rights between criminal, civil and licensing matters may lead one to ask, can a license discipline case be fought and won? The answer is yes.  Despite the relatively few rights that a licensee has, a skilled attorney can contain the damage from a license discipline action and even win cases.  The key is understanding that the administrative discipline process is a system which is somewhat predictable.  A licensing attorney must usually work with, and sometimes within the system, to avoid loss of license or severe discipline.  Finally, the client must be willing to take steps, sometimes extraordinary steps, to reassure their licensing agency that they are safe and competent to work in their profession.

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One of our most frequent issues at the firm is clients calling who have become the subject of a California licensing board investigation.  Investigations are handled primarily two ways, either by an enforcement analyst or technician inside a licensing agency's offices, or in the field by outside investigators who work for either the board itself (such as the Medical and Dental Boards) or the Department of Consumer Affairs (all other boards). 

If an investigation can be completed from the desk of a board employee in Sacramento, the questioning of a licensee usually consists of a letter asking for a written response.  Such investigations can broadly be placed into two categories: requests for documents and information concerning a criminal conviction or discipline against another license held by the licensee, or, minor investigations which might be closed with the receipt of a satisfactory written response.  A licensee should have all such written communications reviewed by an attorney.  A response concerning a consumer complaint should be consistent with the complete case file.  A reply to a board concerning a criminal conviction or other license discipline must be consistent with the available records concerning the incident and penalty.  Inconsistent statements may be interpreted as dishonesty.  Also, be cautious, there is always the possibility that a rather benign inquiry from a licensing agency may be a prelude to an in-depth investigation.

A much more complicated question is the extent to which a licensee should cooperate with an investigator in the field (such as a Medical Board Investigator or a Department of Consumer Affairs Investigator) who is investigating allegations of wrongdoing against that licensee.  We generally follow these principles when clients face investigation: First, do not sign a release for your personal records, particularly medical records, except upon the advice of an attorney.  Preservation of confidentiality is paramount.  Would you freely seek medical or psychiatric treatment if you knew that a stranger, possibly seeking to damage your livelihood, would one day pour through your personal records? The decision to sign a release must be very carefully made. Second, never submit to drug testing at an interview.  The taking of one's body fluids is a similar invasion of privacy, and body fluids can be tested in a variety of ways.  Third, all communications with an investigator must be through a lawyer or with a lawyer present.  Only the presence of a lawyer at an interview can ensure that  the interview is accurately reported on later, the investigator will not act improperly, and can ensure that the licensee can decline to answer questions or to leave when he or she wants without pressure or intimidation.  Fourth, we counsel against signed statements - investigators sometimes prepare statements for a quick signature by the licensee, which may contain in them very harmful admissions. 

Having cautioned clients about the many possible traps in a board field investigation, we still counsel that the client should be cooperative,  Examining the difference between a police investigation and a licensing agency investigation is instructive to explain why. The difference between an investigation by a board investigator concerning possible board discipline and a police investigator in a criminal investigation is that a state licensing agency has much broader powers to punish, using a much lower standard of proof, than the police investigator can through the D.A. and the courts.  Therefore, while a citizen who exercises his rights against self incrimination may shield himself from prosecution successfully, a licensee will rarely if ever deter a licensing agency from seeking and imposing discipline through non-cooperation if the licensing agency believes its licensee is incompetent, impaired or has committed serious misconduct.  Licensing agency investigations arise from concerns for public safety.  Therefore, the licensee should look at the investigation as an opportunity to reassure the licensing agency that the licensee is competent and safe to practice.  Finally, above all, be honest.  Betraying the trust of the licensing agency can be seen as worse than the conduct that triggered the investigation in the first place.

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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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By far the number one question we get in our law offices is about the disclosure of criminal convictions on license applications and license renewal forms.  Some  people see themselves facing the choice of whether to be honest and disclose, almost certainly triggering a license problem, as opposed to lying to possibly get away with it but risking an even more severe license penalty if they are caught lying.  For other individuals, it is not whether to answer yes or no, but rather how they should explain what happened. 

Going to the first issue, when we are asked whether one should disclose a conviction, the answer is almost always yes.  A relatively minor criminal conviction can be aggravated by non-disclosure.  In other words, some minor criminal convictions won't  trigger license discipline, but lying about the conviction probably will trigger license discipline. 

Expunged convictions must always be revealed.  An expungement in California does nothing to conceal, remove or clear the conviction for licensing purposes.  By the same token, out of state convictions that have been expunged or dismissed after an individual has been convicted should usually be revealed out of an abundance of caution.  The exceptions to this rule are where someone has been found factually innocent or a judge has given them a "true" dismissal ("in the interests of justice").  When in doubt, however, disclosure is the best policy. 

Once a conviction is revealed, almost all licensing agencies will ask for certified court documents and a written explanation.  Certified court documents can be obtained from California courts without difficulty.  Police reports are another matter - they are usually not even obtainable, and if they can be obtained, police agencies, in my experience, have no way to certify them.  California licensing agencies know this and therefore usually will settle for certified court documents.

Finally, there is the explanation.  I advise clients to make their conviction explanations concise, honest and remorseful.  It is a good idea to have the explanation reviewed by an attorney before submitting it.  The explanation should be concise because longer statements might contradict official accounts or devolve into making excuses and blaming others - all very harmful things in an explanation.  The statement must be honest, but since accounts of the incident may differ - the police report may differ from your account , for example- it is better to stick to a short factual summary and forego details.  Finally, remorse must show insight.  Everyone who has a criminal conviction regrets that they got caught.  Showing an understanding of how the bad conduct affects those around us and our society, and can place others in danger, shows true rehabilitation.   

For example, someone who was convicted for DUI might make this statement: "I am sorry that I drove drunk, I spent the night in jail and lost my job when I didn't show up the next day.  I really regret it."  This statement shows more that someone is sorry for themselves than truly remorseful.  The lesson learned is, next time, don't get caught!  This is not  helpful.

A better statement is: "I made a terrible mistake driving drunk.  I endangered the other drivers on the road with my carelessness.  Others might have been hurt, even killed."  Many people who have been convicted, even defendants pleading for mercy at their sentencings with the advice of skilled lawyers, fail to show true remorse.  You have just a short statement from which a licensing agency may decide whether to discipline you or not.  Your statement might even be used in a hearing.  It is therefore crucial to reflect upon your mistake and show true insight in your explanation.

It can take courage to make an honest and thoughtful disclosure on a license application or renewal.  However, licensing agencies demand, and expect, honesty.  The character of a licensee or applicant is evaluated (or re-revaluated) based upon what little information the agency has about them.  Lying to the agency is never worth the terrible black mark it makes.

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Unfortunately, a large percentage of individuals facing license discipline fail to hire an experienced license law attorney.  The result is often that the disciplinary hearing is lost.  While the loss of an administrative hearing is tragic, it is not the end of the case.  The Administrative Procedure Act and California law give the licensee some options after a lost hearing.

The first option is reconsideration.  The Administrative Procedure Act permits a licensee or license applicant to ask the administrative agency to reconsider its decision before the decision becomes final.  The petition for reconsideration can be an opportunity, if the agency allows it, to produce additional evidence that was not available at the administrative hearing.  Reconsideration also gives the agency another opportunity to decide the case where the agency feels the outcome was too harsh.

Once an administrative decision has become final, the next step is an appeal to Superior Court, called a writ of administrative mandamus.  The writ process allows a Superior Court judge to review the case record and determine if the agency abused its discretion.  A Superior Court judge can also stay, or stop, the imposition of  a penalty (such as license revocation) while the writ is pending.  The judge can remand a case back to the agency for proceedings in line with the judge's decision.  Sometimes the licensing agency will settle a case once the writ is granted, to save time and money, rather than send the case through the administrative discipline proceess again.  The deadline to file a writ of administrative mandamus is generally 30 days after the effective date of the decision.

If a writ was not filed or was not successful, the final option is a petition for reinstatement of a lost license.  Some health care licensing agencies require a three year wait before applying for reinstatement, although most agencies permit a petition for reinstatement to be filed after one year.  Some agencies decide these petitions by a short hearing in front of the Board, but some submit the cases to a full-blown hearing before an administrative law judge.  The agency hearing the petition for reinstatement focuses upon the licensee's rehabilitation, education and personal enrichment activities after the loss of a license.  The petition for reinstatement is not an opportunity to again fight the lost battle over a license.

All in all, licensees get the best legal value from hiring an attorney as soon as possible after a problem starts.  When a lawyer takes a case at the appellate level, significant irreversible damage may have already been done.  Nevertheless, a valuable license can be saved even after a loss at hearing by a skilled aggressive attorney.

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The toughest part of a license application is often not the test you had to pass, or the extensive experience information you have to list, but instead is the answer to one simple question: Have you been convicted of a crime?  Actually, this is not really the question the board, bureau, department or agency is asking.  The real question is: Are you a person we can trust with this license?  I will explain.

First, a detour to Costco.  Yes, that warehouse membership store you belong to.  Everyone has seen Costco store security, or, I should say, what they think is store security.  A barely interested employee standing at the exit glances at your cart and puts a highlighter mark (and sometimes a happy face for the kids) on your receipt.  Considering how laughable this security seems, thousands of people brazenly attempt to steal from Costco each year.  At that point, they find out (the hard way) that Costco has a very sophisticated and agressive loss prevention team, which has nothing to do with the folks at the door with the green highlighters.  

Back to licensing agencies.  When an applicant is asked, "Have you been convicted of a crime?," if we assume that this question is the sole source of information for the agency, this is like assuming that Costco's loss prevention is the bored guy at the door.  The truth is, the agency will run California Department of Justice and FBI background checks to scour the applicant's background for arrests, indictments, and convictions, even from 20 years ago, even in other states, even for a DUI the applicant got when she was 18.  So then, back to my "real question" point - why does the agency even ask?

This a major part of the "real reason" can be explained in two ways.  One way of looking at it is the agency is giving the applicant a chance to "come clean" with the agency.  Another way of looking at it (and, in my view, the key) is this is a test of the applicant's honesty.  If the individual with a criminal record answers "no," then even if they swindled their boss 15 years ago, it is not ancient history, because the applicant is still a dishonest person, according to fresh evidence - their license application - sporting a lie told in 2009.  Of course, there is a chance that the licensee will inadvertently lead the agency to a deeply hidden or obscure conviction by disclosure - but guess what? - if the agency can't prove the conviction (usually true if they can't find it) they probably can't use it against the applicant.

Finally, there is the issue of dismissed convictions.  Many people are running around thinking they have a "dismissal" or an "expungement" or that the judge himself ran their record through the shredder.  At least in California, this is rarely the case.  If an applicant hides what they believe is a "dismissed" conviction and it turns out they are wrong, again, they may be seen as lying.  All in all, it is best to only put "no" if a license law attorney with extensive criminal defense experience (like me) reviews the criminal case records and the application side-by-side and declares the disposition of the criminal case a non-disclosable event.  Otherwise, get ready to meet loss prevention - getting past the guy at the door really didn't mean anything after all.

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At the firm we get calls from all types of licensees from jurisdictions around the country.  Many individuals, having had no problems in other states, are surprised when California denies their license application or comes after their license.  This has led us to often observe that California may be the strictest state for license discipline.   But is California really the strictest?  Mostly, it depends upon what type of license you have.

California's Medical Board is famously strict.  The background questions on the Med Board's application are extensive.  The background check is thorough.  Any blemish on an applicant's record, it seems, is cause for further investigation and often denial.  The Medical Board looks for mental illness, substance abuse, chemical dependency, deviancy, anger problems, lack of skill, dishonesty, etc., etc.  It is not surprising that almost 1,000 applications out of 5,000 are denied.

In contrast, California's nursing boards (registered nursing and vocational nursing) seem to be more lenient.  In part, this could be due to California's famous nursing shortage and mandated nurse-patient ratios.  However, this could be changing.  California's nursing boards have come into criticism for not checking into the backgrounds of nurse license applicants, leading to, among other stories, a nurse who is validly licensed while in prison.   

Another notable "strictest" is the California Department of Insurance.  If I only had a dime for every call where someone had "no trouble at all" with the 30 other states that had licenses from, only to encounter problems with California.  But who can blame the Department of Insurance?  After the Chuck Quackenbush scandal, where our Commissioner went easy on disciplining insurance companies that supported him politically, the Department of Insurance still wants to avoid any appearance of impropriety at all costs. 

One area where California seems to be the leader is in splashing license discipline all over the internet.  These efforts range from the Medical Board's e-mail notifications to posting disciplinary documents on the internet by most boards and departments.  It is also little-known that most California licensing agencies have the option of pressing ahead with license discipline even when an applicant wishes to withdraw an application or a licensee want to surrender a license.  Once a board has learned of an applicant's or licensee's problem, they close off the exits.  Not allowing for a quiet resolution by withdrawal or surrender, they insist on making a public record of license discipline.  In this post-practical obscurity age, California leads the way in publicizing its licensees shortcomings for the good of the public.  We'll talk about practical obscurity in another blog.

So is California the strictest?  I think so.  As long as our golden shores beckon to professionals all over this country and the world, we can afford to be strict.  Not only is our native population overflowing - our great weather, huge market for services, and diversity make California irresistable.  So long as this is true, California licensing agencies will probe for faults, expose and punish.  It is sad that I must, from time to time, tell a client - "go east - they're more forgiving over there."   

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Many professionals may think that the agency that licenses them is on their side. They are so wrong. The primary goal of a California license agency is public protection. Whether the Medical Board, Department of Insurance or the Chiropractic Board, these agencies impose more regulations and seek to strictly enforce discipline against their licensees.

The equalizers in this process, who counterbalance the awesome power of the Boards, Bureas and Departments, are the administrative law judges, the Superior Court, and most importantly, the attorneys who appear before them. The rules are relatively simple. Each licensee is constitutionally entitled to due process, meaning simply notice and an opportunity to be heard. The agency cannot punish, but instead only protect the public. The agency must follow its own rules and treat everyone fairly. Violations of these rules will lead to successful appeals before the Superior Court and higher courts.

In a recent case, we succeeded in getting an order of license revocation overturned. The licensee had gone to a hearing without an attorney (regrettable, and unfortunately common these days). The hearing had, of course, gone badly, and his license was revoked. Luckily for the licenseholder, the Department of Insurance violated the rules of due process, and, even more fortunately, he came to me while we could do something about it. After eight months of fighting in court with the Department, the decision was overturned and the license was restored.

Most law is based upon relatively simple rules which anyone can grasp. The lawyer's job - and what all lawyers must demonstrate to pass the bar - is applying the law to the facts of a specific case to make effective legal arguments. The more experience the lawyer has in a specific area of law, the more insightful the lawyer becomes at applying facts to the law.

It is fortunate that even with the awesome power the licensing agencies have over their licensees, with encouragement from an attorney many judges and courts will stand up to the agencies.

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For California's three million-plus licensed professionals, the name of the game is to stay off their licensing agency's radar screen. If you run into a problem, you want to make it go away, or at worst, suffer as little damage as possible. Here are some tips:

1) Get Out of a Problem Workplace: Many license problems arise from reporting by employers to licensing agencies, and can come from spiteful employers and arise from employee conflicts. If you have a bad feeling, get out before you are the subject of a complaint.

2) Solve Your Personal Problems Before They Become License Problems: Alcohol and drug abuse, followed by physical and mental issues, can trigger serious safety concerns for a licensing agency. Seek prompt treatment so that your personal issue doesn't become a public safety concern that causes the loss of your license.

3) Take Great Care of Your Customers (or Patients, or Clients): When you are wrongly accused of course defend yourself, but if you have made a mistake, fix it, if the customer deserves a refund, make it, if an apology is due, give it. Hurt feelings, refusal to make an account adjustment or rudeness can trigger a license discipline nightmare.

4) Be Honest with Your Licensing Agency: If you are caught in a lie and shatter the trust placed in you by your licensing agency, the lie will almost always overshadow the behavior you wanted to cover up. Most licensing agencies are poorly staffed and rely upon the honesty of licensees when they make an inquiry or do an inspection. Betraying this trust can cost you your license.

5) Keep Your Address Information Up to Date: If your licensing agency has a problem and can't reach you, they may assume your guilt or never get your side of the story. You could be disciplined or lose your license and not even know it! A license hanging on a wall means nothing if, unbeknownst to you, the license has expired or has been revoked.

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