In California, a criminal defendant can be initially "charged" with a felony although no probable cause determination has been made.  This raises an issue concerning the precise meaning question F(2) on Form MU4, required for registry with the Nationwide Mortgage Licensing System (NMLS), which asks, “Are there pending charges against you for any felony?”

The NMLS Policy Guidebook, published by the NMLS Resource Center, provides a definition of “charged” as “being accused of a crime in a formal complaint, information, or indictment (or equivalent formal charge).”  A formal criminal “charge” differs from a simple accusation or an arrest, in that the state must prove that there is sufficient cause to believe the defendant committed a particular crime.  This is accomplished in different ways in different states—some states use a grand jury to evaluate cases and return “indictments,” some states file an “information” after a preliminary hearing, and other states use formal complaints certified by judges.

This raises a legal question under California criminal law, because in California, a felony can be “charged” by three separate means: a complaint, an information, or an indictment.  The precise moment at which a defendant in California is “charged” with a criminal case can be found at California Penal Code (“CPC”) §949, which provides that “[t]he first pleading on the part of the people in the superior court in a felony case is the indictment, information, or the complaint in any case certified to the superior court under Section 859a.”

If an information or an indictment is returned against a defendant, he or she is unquestionably “charged” for the purposes of the MU4 and the event must be disclosed to NMLS.  However, before an information is issued against a defendant, the state files a “complaint” against the defendant alleging that he or she has committed a certain felony. 

CPC §859 explains this process in detail, beginning: “[w]hen the defendant is charged with the commission of a felony by a written complaint subscribed under oath and on file in a court […]”.  On its face, this language suggests that a defendant in California is “charged” as soon as a written complaint is subscribed under oath, filed with the appropriate court.  However, CPC §949 indicates that the people have not filed their first pleading—in other words, have not formally charged the defendant with a crime—until the “complaint is certified to the superior court under Section 859a.”

CPC §859a adds a procedural requirement to the language of §859.  If a defendant is presented with a criminal charge under §859 and wants to plead guilty, the complaint must first be certified by the judge before the defendant can be committed to the appropriate law enforcement officer to serve his or her sentence.  Only when the complaint is certified in this manner does it become a “pleading on the part of the people” as discussed in CPC §949.

It is my opinion that, in California, when a formal complaint is filed by the people against a defendant, it is not a criminal charge as contemplated by Form MU4 unless the defendant pleads guilty prior to the filing of an information.  CPC §949 specifically lists what constitutes the “first pleading on the part of the people,” and a complaint that has not been certified under §849a is not mentioned.  Instead, the complaint must first be certified before it can be considered a legal pleading.  Further, unless the complaint is certified in this matter, a California court cannot accept a guilty plea to any of the alleged crimes.  If a defendant does not plead guilty to an alleged crime, the state must proceed to a preliminary hearing and obtain an “information” against him or her before the state can proceed.  At this point, the state has filed its first pleading under CPC §949 and the defendant is formally charged.

If a defendant cannot legally plead guilty to an allegation, it is my opinion that there are not yet formal charges pending against him within the context of question F(2) on Form MU4.  Please note that this opinion is written with reference to California law and general principles of U.S. law and does not address the particular laws of other states.  Specific facts may yield a different result.

 

 

 

As I have written about before, the C.U.R.E.S. database was created and is maintained by the California Department of Justice to track the prescriptions of Californians.  The purpose of this database is ostensibly to detect patient prescription drug abuse and over-prescribing by physicians.  However, C.U.R.E.S. is a huge medical information database that is unprotected from unchecked government intrusion and abuse.  Over the past several years, C.U.R.E.S. has been employed as an investigative tool by the Medical Board of California and others to glimpse into the medical histories and medication use of individuals via their prescription records.

A case currently pending on appeal, Lewis v. Superior Court, raises troubling issues.  In that case, at administrative hearing, a Medical Board investigator testified that the Board routinely accesses C.U.R.E.S. records for all patients of a physician subject to an investigation, even patients who are not part of the investigation.  For attorneys who handle health care defense matters, this disclosure is not surprising.  However, the public may be shocked to learn that without providing any waiver of confidentiality, these records are easily and routinely accessed.  The California Medical Association has filed a brief with the Court of Appeal that clearly addresses these concerns. 

Health care board investigators can access C.U.R.E.S. to check on the personal prescriptions of licensees, license applicants or indeed anyone, without a subpoena, warrant or HIPAA confidentiality release.  These practices and the potential for abuse raise troubling questions not unlike those surrounding the NSA revelations from former contractor Edward Snowden.  Therefore, we counsel any client who is under investigation or subject to discipline to expect that investigators will pry into their personal prescription records, possibly finding highly personal or embarrassing information.

We hope that Dr. Lewis and his legal team will persuade the Court of Appeals to place important checks on the limitless power of Board investigators to pry into patient medication records.  In the meantime, health care licensees, license applicants and patients should be aware that prescription records are not private or protected as they should be in California.

When a California licensing agency seeks to discipline a license by filing and serving an accusation, in the accusation there is usually a request for cost recovery.  Cost recovery is mandatory reimbursement paid to the agency for all of its investigative costs and attorneys fees.  In other words, if you receive an accusation against your license, your license agency usually can, and if it can it will, ask for you to pay it back all of the costs incurred in prosecuting you.

There is one primary statute and one case that govern license discipline cost recovery in California.  Under Business and Professions Code section 125.3, an administrative law judge may award an agency the reasonable costs of its investigation and enforcement.  This issue is unique in that a license board, bureau, department or agency can never increase the amount of cost recovery beyond what the administrative law judge has ordered.  The agency only has the power to reduce or eliminate the amount.  This is limitation on the agency’s power is rare, because in all other respects the agency, which has the final say, can always increase a penalty.

The one case on point is Zuckerman v. Board of Chiropractic Examiners [(2002) 29 Cal.4th 32.]  In Zuckerman, the California Supreme Court found that a licensing agency "must exercise its discretion to reduce or eliminate cost awards in a manner that … does not deter [licensees] with potentially meritorious claims or defenses from exercising their right to a hearing."  The Court went on to find that a licensing agency "must not assess the full costs of investigation and prosecution when to do so will unfairly penalize a [licensee] who has committed some misconduct, but who has used the hearing process to obtain dismissal of other charges or a reduction in the severity of the discipline imposed. The [agency] must consider the [licensee’s] ‘subjective good faith belief in the merits of his or her position’ and whether the [licensee] has raised a ‘colorable challenge" to the proposed discipline." Also, a licensing agency may not force a licensee to pay costs for an unreasonably large or unnecessarily extensive investigation.

A licensing agency may not get cost recovery for the hearing itself, only the investigation and enforcement costs up to the start of the hearing.  Also, as a general rule, cost recovery is not available for license denial cases.  Finally, the licensee’s ability to pay can be a significant factor in determining whether a judge orders cost recovery, in what amount, and whether she or he sets forth any payment arrangements.

Many licensees do not realize that cost recovery can range from a few thousand dollars in a simple case to $25,000 or more in a complex case.  A licensing attorney well versed in this issue can save a licensee thousands of dollars on this issue alone.  Also, in the case of settlement, the cost recovery amount can be sometimes negotiated.  I have seen costs typically reduced 20 to 50 percent through negotiation; I have negotiated as much as a 90 percent reduction (although that is not a typical result at all).

In my opinion, Administrative Law Judges in California tend to disfavor monetary penalties against licensees.  For all intents and purposes, a cost recovery order is a monetary penalty.  Therefore, judges are very receptive to arguments for the reduction of the cost recovery amount.

 

 

The first contact that a California licensee may receive from a licensing board investigator is either a letter asking the licensee to sign a waiver form for the release of records, or receipt of a copy of an investigative subpoena to a third party seeking certain personal records.  The request for a release or waiver usually comes at the beginning of an investigation, and may be accompanied by a rather innocuous letter or a friendly telephone call or visit.  (Please note that this article is discussing requests for a licensee’s own records held by third parties such as a doctor or employer.  Records of patients or clients are a different issue altogether, and their release may be mandated by law upon threat of discipline.) 

Our standard advice to clients is to never sign an authorization or consent to release your personal employment, medical or other records.  There are several reasons for this advice.  First, and foremost, your privacy is at stake.  These records are highly personal and sensitive.  They may contain information about how much money you have made, your performance at work, illnesses you have suffered, or complaints of harassment you have made.  Second, although you may feel that your personal records do not in any way negatively reflect upon you, you might be surprised.  A licensing board may be looking for any evidence of drug or alcohol abuse, impairment, poor judgment, practice errors, mental health issues, or competency issues.  The scope of the inquiry is very broad.  Third, your licensing agency does not work for you, but for the public to protect them from any danger you may represent.  Therefore, simply put, your licensing agency is looking for guilt, not innocence, not to clear up an issue, but to build a case for discipline.

There can be, however, occasionally a scenario where it is beneficial to sign an authorization to release your own records.  For example, if you already know the complete contents of the records sought, and they will help to tell "your side of the story" without any detriment to you, you may want to encourage or even facilitate the records release.

Investigative subpoenas are another matter.  If an investigator cannot get records by securing a signed release or simply by asking, then the licensing agency can issue a subpoena for the records.  The standard proper response is to retain an experienced licensing attorney to file objections, which must be done very quickly.  The objections are served on the agency and the custodian of the records sought.  Most employers, medical providers or others will respect the objections and not turn over the records.  It is then up to the agency to go to court to seek a court order to enforce the subpoena.  Usually before the agency goes to court, they will contact the attorney for the licensee to try to negotiate release of the records.  Through negotiation, the scope of the records release can be limited to exclude sensitive information that is irrelevant to the investigation.

Agencies under the California Department of Consumer Affairs (DCA), including the Medical Board of California, Dental Board of California, the Bureau of Real Estate and the Board of Registered Nursing have their own investigators.  Smaller boards often use investigators from the Division of Investigation of the Department of Consumer Affairs to conduct their investigations.  The Board of Registered Nursing uses both DCA investigators and its own investigative staff.  In an investigation, an investigator may be paired with an attorney in what is referred to as a vertical assignment or vertical prosecution.  An investigator may also work closely with a Board expert.

Responding to licensing agency requests for records and investigative subpoenas can be very tricky.  It is best to let a licensing lawyer deal with the complicated strategic and legal questions involved.

In California, practically speaking, there is no such thing as a permanently revoked license.  I can think of a couple of rare examples of licenses that cannot be reinstated, for example, if a physician is spending life in prison, or an attorney has been convicted of a felony that cannot be reduced.  However, for the vast majority of individuals whose licenses have been revoked, petitioning to reinstate a revoked license is a matter of waiting one to three years then following an application process.  There are a number of important considerations when seeking to reinstate a license.

The first is eligibility.  As a general rule, an individual can only petition to reinstate their license if they are not on probation or parole and a requisite amount of time has passed.  Some Boards, such as the Medical Board of California, require that the petitioner obtain sworn statements supporting their petition from two licensed colleagues.  These threshold requirements must first be met.

Next is consideration of the time involved and complexity of the process.  Some Boards, such as the California Board of Registered Nursing, will allow a petitioner to appear in front of the Board in just a matter of months to seek reinstatement of a license.  Other Boards, such as the Medical Board of California, delegate these cases to the Office of Administrative Hearings (OAH) in a process that can easily take from a year to 18 months.  The Medical Board and Dental Board, to name two, also commonly conduct investigations as part of the processing and consideration of reinstatement petitions.  These investigations usually occur even before the case is referred to the Attorney General and then placed on calendar at OAH.

The most important consideration, however, is whether the person asking to reinstate the license has the ingredients for a winning petition.  Very simply put, these ingredients are adequate rehabilitation both through personal improvement and the passage of adequate time without further incident; evidence of professional knowledge and competency; and a demeanor, or attitude, that favors a second chance.

Here are some answers to questions that we are repeatedly asked about concerning petitions for reinstatement of revoked licenses.  First, a licensee does not have to requalify for the license all over again to get it reinstated.  Second, even individuals with serious wrongdoing in their past can get their license back with the right presentation.  Third, any cost recovery ordered at the time the license was revoked must be paid back, although not necessarily before the license is reinstated.  And fourth, oftentimes licenses are reinstated only on probation (as opposed to a full and clear license), and with the prior record of discipline prominently featured on the license record, so restarting a professional career with a reinstated license can be a challenge.  It is a good idea to develop a plan in consultation with a licensing lawyer to use these opportunities and to overcome these challenges.  Legal fees, payment of cost recovery, the costs of probation and the cost of rebuilding a practice can present significant financial hurdles.

The most common issue that comes up when potential clients ask about license reinstatement is whether at hearing a petitioner can challenge the underlying, or prior, discipline that led to license revocation.  The short answer is “no.”  Even if the license was revoked as a default judgment (without even having a court hearing), even if the petitioner was sitting in jail or rehab when the license was revoked, even if the petitioner felt he or she had no choice but to a accept a license revocation due to a lack of money or the occurrence of personal hardships, that discipline from long ago cannot be directly attacked or impeached.  It must be overcome with evidence of personal improvement and readiness to resume licensed work without raising overriding concerns about public protection.  If lingering issues from the prior discipline are to be discussed at all in the current reinstatement proceedings, that is a highly delicate matter that must be strategically calculated by an experienced lawyer.

Another important aspect of the process to understand is that license reinstatement can be a cumulative process with failures along the way.  Although ideally the license should be reinstated on a single attempt, more than one attempt may be necessary, building towards success on each attempt.  Often the key factor for success is that sufficient time has elapsed since the license was revoked in order to demonstrate the longevity and permanence of positive lifestyle, behavior or personal judgment changes.  However, many petitioners are impatient to get their license back and therefore want to push quickly for reinstatement, even if it would be prudent to wait a number of additional years.

The assistance of a licensing lawyer is critical for a successful petition for reconsideration.  An experienced California license lawyer has the objectivity and experience to determine what evidence will be crucial to get a license issued.  The message of the petition must be carefully crafted to explain the petitioner’s personal growth and redemption and assure a skeptical licensing Board that the petitioner will neither harm to public nor end up back in the license discipline system.

Click here to see how Ray & Bishop can help.

We have had great success in securing full non-probationary licenses, with just a citation placed on the record at license issuance, for licensed vocational nurse applicants with prior criminal records.  The key to this success has been demonstrating our clients’ rehabilitation to show the Board that a probationary license or license denial was not necessary to protect the public.  It should be noted that a typical outcome for a licensed vocational nurse license applicant with a criminal record is a probationary license at best and a license denial at worst.

In one case, an LVN license applicant with a battery conviction was issued a clear license with a citation.  In a second case, an LVN license applicant who had suffered a court-martial for drug offenses was granted a clear license with a citation.  In a third case, an LVN license applicant had a petty theft conviction, and in aggravation, failed to disclose her conviction on her license application, but yet was granted a full, non-probationary license with a citation.   All three cases were settled prior to hearing, saving the clients the stress, embarrassment and cost of hearing.

In all of these cases, presenting compelling evidence of rehabilitation and demonstrating a lack of public protection concerns was the key to getting these LVN license applicants full licenses without probation.

Effective January 1, 2014, under Title 16 California Code of Regulations section 37.5, all certified public accountants who have not previously submitted fingerprints to the California Board of Accountancy (CBA) must do so as a condition of their license renewal.  At least since 2011, the CBA has required fingerprints with applications.  However, thousands of CPAs will be subject to the new requirement.

The CBA requirement will be met by in-state licensees by submitting to the Livescan process.  Livescan uses a platen glass fingerprint scan that is sent to the California Department of Justice and Federal Bureau of Investigation to obtain the licensee’s criminal records.  If a criminal conviction is revealed, it could be grounds for license discipline.  Furthermore, CPAs have had a mandated disclosure requirement for certain convictions under Business and Professions Code section 5063 – basically, all felonies, all convictions related to the qualifications of a CPA license, and any conviction involving theft or fraud.  Failure to previously disclose a reportable conviction can be another basis for license discipline.

Based upon my experience, if you have a conviction unknown to the CBA and are considering “coming clean” with the CBA, some research and professional analysis is needed.  Some licensees with certain types of criminal convictions can expect the CBA to have a response to certain misconduct committed by a licensee and any subsequent failure to self-report.  Steps can be taken, however, to anticipate possible disciplinary action to minimize the harshness of such action or perhaps to avoid discipline completely.  This includes building a case of mitigation and rehabilitation evidence.  Mitigation evidence is particularly important, but with the passage of time, can be hard to come by.  The decision whether to make a late 5063 disclosure to the Board before inevitable discovery from fingerprinting requires a case-by-case analysis, particularly since not all convictions mandate disclosure, and not all records are accurate.

I would strongly advise anyone who has concerns about their criminal background to request their own background check now from the Department of Justice (and FBI if federal or other state convictions are thought to exist).  Obtaining accurate information about what appears in one’s criminal record is a great starting place to help a professional license lawyer decide what damage control measures may be appropriate.  The next logical step would be to contact our firm to decide upon a strategy.

Click here to learn more about how Ray & Bishop defends certified public accountants and CPA license applicants.

 

A Notice of Defense is the document a licensee and some license applicants submit to preserve their right to a hearing after receiving an accusation or denial.  If a Notice of Defense is not timely filed, a licensing agency can take the licensee or license applicant’s default.  A default usually means that the harshest sanction sought is imposed – revocation or license denial.

A Notice of Defense must be filed with the agency or attorney for the agency within 15 days of service.  This means that if the agency mails out the Notice of Defense on the 1st of the month, the completed  Notice of Defense must come back to the agency counsel (or agency, as specified) by the 16th.  Due to mailing times, therefore, the period of response is less than 15 days.  Some licensees or license applicants mistakenly believe that the 15 days start to run upon receipt of the Notice of Defense, but this is incorrect and could lead to default.

Notice of Defense filed in response to a Medical Board of California accusation
California Medical Board Notice of Defense
Notice of Defense filed in response to a Department of Real Estate accusation against a real estate salesperson
California Department of Real Estate Notice of Defense

The statute that creates and sets forth the functions of the Notice of Defense is Government Code section 11506.  This statute provides that a Notice of Defense constitutes a request for hearing and a general denial of all the allegations in the accusation.  The Notice of Defense is typically a form supplied by the licensing agency with the accusation, and in the case of a license denial, with the statement of issues (when a request for hearing has not been previously made).

In a Notice of Defense, the respondent can object to the form of the accusation or object that the accusation is uncertain or ambiguous.  These objections are rarely applicable, particularly if the agency is represented by experienced administrative law counsel.

Finally, the Notice of Defense need only contain the respondent’s mailing address and be signed by the respondent.  Nevertheless, it is not unusual for the Notice of Defense to have blanks and check boxes for various other information.  One common feature is a box to check if a respondent objects to recording the hearing (and instead demands a court reporter); alternatively, the check box may give permission for recording instead of court reporting.  We always demand a court reporter (decline electronic recording), because a court reporter provides a record superior to an audio recording which can be faint, jumbled, or has participants talking over one another at hearing.

Occasionally an attorney representing a respondent licensee or license applicant will draft an elaborate Notice of Defense to file.  We have rarely if ever found this necessary.  The pre-prepared Notice of Defense form is sufficient for 99% of all cases.  Also, in the rare case where the accusation is poorly drafted, early objections in the Notice of Defense give the agency a chance to correct mistakes that might inure to the respondent’s benefit at hearing.  Therefore, making objections in the Notice of Defense may be a poor strategic decision.

Click here to learn more about how Ray and Bishop can help you with your Notice of Defense.

A firm client who had a felony conviction for possession of narcotics for sale and nine undisclosed misdemeanor convictions was granted a restricted real estate salesperson’s license in a negotiated settlement.  A restricted license enables a salesperson to perform all the functions of any real estate salesperson, with the condition that a new law violation could lead to license revocation.  The restriction will come off the license after two years.

Working with the client, we developed a mitigation and rehabilitation case that met most of the Bureau’s factors for finding an applicant rehabilitated and therefore qualified for a license.  Despite the fact that the client had been in prison, we persuaded the Bureau to see beyond the criminal history to see the fine individual that the applicant had become.  We also explained the undisclosed convictions to the satisfaction of the Commissioner.

Even a serious felony conviction which has resulted in prison time is not a bar to licensure by the Bureau of Real Estate if the Commissioner can be persuaded that issuing the license is consistent with the BRE’s protection of the public. 

The enactment of The Health Care Quality Improvement Act of 1986 by the federal government led to the creation of the National Practitioner Data Bank, or NPDB, for the reporting of adverse actions, including license discipline, which can be accessed by government and private health care organizations.  The inclusion of inaccurate information in the NPDB can severely damage the career of a health care provider.  However, remedies are available to rectify NPDB reporting errors.

The first step, when misinformation has appeared in a data bank entry, is to obtain a report.  Every health care practitioner, such as a physician or nurse, can quickly and cheaply get a copy of their own data bank report at the NPDB website, http://www.npdb-hipdb.hrsa.gov.  The information should be compared against the any original adverse action, such as a Board order, for accuracy.

If the data bank entry is incorrect, the person who is the subject of the entry must contact the reporting agency to ask that the entry be modified or retracted.  If a reporting agency becomes aware of an error, by law it must correct the data bank entry.  If the report should not have been made at all, the reporting organization may void, or delete, the entry.

In addition to seeking a correction from the entity that made the entry into the data bank, the subject of the report may submit a subject statement to be included with the data bank entry.  Although sometimes this is the only avenue available to do damage control, the subject statement may do little to address confusion, misinterpretation or unfairness resulting from the data bank report.  Also, it should be apparent that a caustic response may do more harm than good when the objective is to reassure the organizations that rely upon the data bank information.  The subject statement may be up to 2,000 characters long.

The final step in the dispute process is to ask the Health and Human Services Secretary to review the report for accuracy.  If the Secretary of HHS deems the report to be inaccurate, the Secretary may order the entry to be corrected or voided.  It is important to note that the Secretary will not examine the merits of the underlying action to determine if it was warranted or just.

The absolute best way to avoid an entry on the NPDB is to avoid the adverse action itself.  Furthermore, careful consideration of the reporting rules for the NPDB can be used to sometimes reach a resolution that does not have be reported by law.