Chase v. State

• Decision Date: 14 August 2008
• Docket Number: No. 07-217.,07-217.
• Citation: 966 A.2d 139,2008 VT 107
• Parties: David S. CHASE, M.D. v. STATE of Vermont, Agency of Human Services, Department of Health, Board of Medical Practice, John Howland, et al.
• Court: Vermont Supreme Court

966 A.2d 139

2008 VT 107

David S. CHASE, M.D. v. STATE of Vermont, Agency of Human Services, Department of Health, Board of Medical Practice, John Howland, et al.

No. 07-217.

Supreme Court of Vermont.

August 14, 2008.

Eric S. Miller and Ian P. Carleton of Sheehey Furlong & Behm P.C., Burlington, for Plaintiff-Appellant.

William H. Sorrell, Attorney General, and Bridget C. Asay, Assistant Attorney General, Montpelier, for Defendants-Appellees.

Present: REIBER, C.J., JOHNSON, SKOGLUND and BURGESS, JJ., and MARTIN, Supr. J. (Ret.), Specially Assigned

REIBER, C.J.

¶ 1. This appeal arises out of a Medical Practice Board disciplinary proceeding against Dr. Chase for alleged unprofessional conduct. Prior to final adjudication by the Board, Dr. Chase filed a six-count complaint in the superior court, claiming that his due process rights had been violated during the Board's preliminary proceedings. Dr. Chase sought a declaratory judgment and a permanent injunction requiring dismissal of the Board's charges. The Washington Superior Court dismissed all six counts, finding that they were within the primary jurisdiction of the Board, see Travelers Indem. Co. v. Wallis, 2003 VT 103, ¶¶ 14-18, 176 Vt. 167, 845 A.2d 316 (discussing doctrine of primary jurisdiction), and reviewable only by this Court. See 26 V.S.A. § 1367 ("A party aggrieved by a final order of the [B]oard may, within 30 days of the order, appeal that order to the Vermont [S]upreme [C]ourt on the basis of the record created before the [B]oard."). On appeal, Dr. Chase challenges the superior court's application of the primary jurisdiction doctrine. While this appeal was pending, the Board issued a final judgment and sanctions on the very charges Dr. Chase prayed for the superior court to dismiss. We dismiss his claims seeking declaratory and injunctive relief as moot. Because the Board proceedings are no longer pending, however, we remand for consideration of Dr. Chase's claims for money damages in counts three and five of his complaint.

¶ 2. The relevant facts are as follows.¹ Dr. Chase, a resident of Shelburne, Vermont practiced general ophthalmology and eye surgery in Burlington for over thirty years. On July 20, 2003, the State moved to summarily suspend Dr. Chase's medical license for allegedly recommending and performing cataract surgeries that were not medically necessary. The State's motion was based in part on the sworn written statement of one of Dr. Chase's former staff members (affiant), who alleged that Dr. Chase had purposefully falsified medical records to "force patients into cataract surgery." This affidavit contained other incriminating accusations. At the summary-suspension hearing, the State represented to the Board that Dr. Chase had engaged in willful misrepresentation in treatments, willful falsification of reports and records, and immoral, unprofessional, and dishonest conduct. Dr. Chase notes that at this hearing neither party was allowed to present evidence or cross-examine witnesses. The State recommended immediate suspension of Dr. Chase's license to practice medicine. See 3 V.S.A. § 814(c) (allowing summary suspension of medical license without evidentiary hearing "[i]f the agency finds that public health, safety, or welfare imperatively requires emergency action").

¶ 3. During the summary-suspension hearing, Dr. Chase denied the State's allegations, but offered to voluntarily cease recommending or performing cataract surgeries until the investigation was complete. He argued that complete suspension of his license to practice medicine was a remedy broader than necessary to protect the public from the violations alleged by the State—all of which related to the surgical aspects of his practice. The Board disagreed with Dr. Chase and summarily suspended his license. No post-suspension evidentiary hearing was held to consider the propriety of the summary suspension because the Vermont Administrative Procedure Act, 3 V.S.A. § 814, does not require such a hearing, although it does require generally that "proceedings shall be promptly instituted and determined."

¶ 4. On December 1, 2003, the State filed a superseding specification of charges, alleging 136 counts of unprofessional conduct related to thirteen separate patients to whom Dr. Chase recommended cataract surgery. During discovery, Dr. Chase's attorneys contacted the State's identified witnesses to begin the interviewing process. According to Dr. Chase, the State told the witnesses that they should not speak with Dr. Chase's attorneys unless the State was present. The State's efforts, according to Dr. Chase, were designed to interfere with his ability to conduct private interviews. Dr. Chase's attorneys, however, eventually conducted depositions. During these depositions, Dr. Chase began to suspect that the State's investigator had falsified key portions of the affiant's sworn written statement. According to Dr. Chase, the investigator knowingly and materially misrepresented the affiant's testimony. Dr. Chase notes that the affiant indicated during her deposition that she did not make many of the most serious allegations attributed to her, and that she either did not believe as true the allegedly falsified statements, or did not know if they were true.

¶ 5. On February 17, 2004, Dr. Chase moved the Board to reinstate his license and to dismiss the charges against him. Dr. Chase argued that the alleged falsification of evidence and the State's interference with the witnesses deprived him of due process. On March 31, 2004, the Board denied the motion to dismiss, but granted the motion to reinstate Dr. Chase's license. On the motion to dismiss, the Board found that "there is not a sufficient connection between the questionable affidavit and the allegations set forth in the [charges] to warrant dismissal, since numerous additional charges have been alleged that are completely independent from the allegations appearing in the affidavit." Regarding the contact with the witnesses, the Board found that the requests from the State did not establish a due process violation, that Dr. Chase had ample opportunity to investigate, and that he was was free to conduct depositions, do interviews—privately if a witness so desired—and use the subpoena process if necessary.

¶ 6. As to the summary suspension, the Board found that even if the questionable parts of the affidavit were disregarded, the remainder of the evidence provided sufficient grounds to warrant summary suspension. The Board nonetheless granted Dr. Chase's motion to reinstate his license, stating that "the Board is not satisfied that the summary suspension order is completely free from the appearance of the reliance on questionable material, even if partial." Subsequently, on April 9, 2004, Dr. Chase entered into a consent agreement to refrain from the practice of medicine until final resolution of the charges.

¶ 7. In September 2004, a federal grand jury indicted Dr. Chase on seventy-one counts of federal health-care fraud, alleging that he recommended or performed unnecessary cataract surgery with respect to thirty-six former patients. Dr. Chase argues that the federal investigation into his practice for possible federal criminal health-care fraud was prompted by the press reports regarding his summary suspension. The United States then filed a civil suit against Dr. Chase, seeking damages for the same alleged conduct as was charged in the criminal case. At Dr. Chase's request, the Board stayed its disciplinary proceedings pending the outcome of the federal case. Dr. Chase was eventually exonerated of all the federal charges against him—the court dismissed forty-five of the seventy-one charges, the government dismissed two, and the jury acquitted him on the remaining twenty-four. Subsequently, the government dismissed the federal civil suit.

¶ 8. Between September 11, 2006 and February 8, 2007, the Board conducted a full hearing on the merits of the charges against Dr. Chase. Believing that the Board refused to adequately address potential due process defects in its own proceedings, Dr. Chase did not await the Board's final decision before filing a civil rights action in the Washington Superior Court pursuant to 42 U.S.C. § 1983, the Vermont Tort Claims Act, 12 V.S.A. § 5602, and the Vermont Declaratory Judgment Act, 12 V.S.A. § 4711. Dr. Chase named as defendants the State of Vermont, the Secretary of the Agency of Human Services, the Commissioner of the Department of Health, the Executive Director of the Medical Practice Board, the interim director of the Board, and the investigator employed by the Board. In that action, Dr. Chase alleged six counts of misconduct by defendants. He claimed that defendants violated his constitutional and common-law rights and damaged his medical practice, his right to earn a living as a physician, and his professional and personal reputation when: (1) the Board summarily suspended his medical license without a hearing after he agreed to voluntarily cease performing surgeries; (2) defendants failed to provide a post-suspension hearing at which he could contest the summary suspension of his license; (3) the investigator falsified evidence in support of the Board's summary suspension and superseding specification of charges, and knowingly submitted the evidence after he was told it was false; (4) the Board suspended his license on the basis of falsified evidence, refused to decide whether the investigator had in fact falsified the evidence, and failed to take action to remedy the effects of the falsification; (5) the interim director invited the media to attend the Board's summary-suspension hearing with the intention of disseminating the allegations against Dr. Chase; and (6) defendants failed in their duty to supervise the investigator and the Board, and to remedy unconstitutional actions. Counts one through five all alleged due process and § 1983 violations.

¶ 9. Dr. Chase...