Colo. Med. Bd. v. McLaughlin

• Decision Date: 12 November 2019
• Docket Number: Supreme Court Case No. 18SC330
• Citation: 451 P.3d 841
• Parties: COLORADO MEDICAL BOARD, Petitioner, v. Scott Storm MCLAUGHLIN, M.D., Respondent.
• Court: Colorado Supreme Court

451 P.3d 841

COLORADO MEDICAL BOARD, Petitioner,

v.Scott Storm MCLAUGHLIN, M.D., Respondent.

Supreme Court Case No. 18SC330

Supreme Court of Colorado.

November 12, 2019

Attorneys for Petitioner: Philip J. Weiser, Attorney General, Ashley E. Moller, Senior Assistant Attorney General, Sierra Ward, Senior Assistant Attorney General, Denver, Colorado, Maxfield Gunning, LLP, Eric H. Maxfield, Boulder, Colorado

Attorneys for Respondent: Hershey Decker Drake, Carmen Nicole Decker, Kaylyn Peister Lone Tree, Colorado

En Banc

JUSTICE GABRIEL delivered the Opinion of the Court.

¶1 In this case, we are asked to determine whether an investigative subpoena issued by the Colorado Medical Board (the "Board") can have a lawfully authorized purpose if the investigation was prompted by a complaint made by the Colorado Department of Public Health and Environment (the "CDPHE") pursuant to a policy that violated the Open Meetings Law (the "OML") or the State Administrative Procedure Act (the "APA").¹

¶2 In Doe v. Colorado Department of Public Health & Environment , 2019 CO 92, 451 P.3d 851, which we also decide today, we conclude that (1) the CDPHE, as a state agency, is not a "state public body" under the OML and therefore could not violate that statute and (2) the CDPHE did not violate the APA in developing the policy at issue or in referring doctors to the Board under that policy. For this reason alone, we necessarily reject Scott McLaughlin’s argument that the investigative subpoena lacked a lawfully authorized purpose because it was based on a policy that violated the OML and the APA.

¶3 Even if the CDPHE’s adoption of the policy at issue and its reliance on it were invalid, however, we still would conclude that the Board’s investigative subpoena had a lawfully authorized purpose because it was issued pursuant to the Board’s statutory authority to investigate allegations of unprofessional conduct and was properly tailored to that purpose.

¶4 Accordingly, we reverse the judgment of the division below and remand this case for further proceedings consistent with this opinion.

I. Facts and Procedural History

¶5 McLaughlin is a physician licensed to practice medicine in Colorado. As part of his practice, he evaluates patients to see if they have a qualifying condition that would benefit from the use of medical marijuana.

¶6 Information related to medical marijuana in Colorado is maintained by the CDPHE in a confidential registry that includes the names of all patients who have applied for and are entitled to receive a marijuana registry identification card, as well as the names and contact information for the patients’ physicians and, if applicable, their primary caregivers. Colo. Const. art. XVIII, § 14 (3)(b); Dep’t of Pub. Health and Env’t, 5 Colo. Code Regs. 1006-2:1(A) (2019). If the CDPHE has reasonable cause to believe that a physician has violated either section 14 of article XVIII of the state constitution, section 25-1.5-106(5)(a)–(c), C.R.S. (2019), or the rules promulgated by the CDPHE pursuant to section 25-1.5-106(3), all of which govern physicians who certify medical conditions for applicants to the medical marijuana program, then the CDPHE may refer the matter to the Board for an investigation and determination. § 25-1.5-106(6) ; 5 Colo. Code Regs. 1006-2:8(B) (2019).

¶7 In May 2014, the CDPHE implemented Medical Marijuana Policy No. 2014-01 ("the Referral Policy"). The Referral Policy provides that the CDPHE will use its statistical reviews of physician medical marijuana recommendations to determine whether reasonable cause exists to refer a physician to the Board for investigation. Factors to be considered include (1) whether a physician has a high caseload, as determined by the number of patients for whom medical marijuana is recommended (a high caseload is calculated as 3,521 or more patient recommendations in one year); (2) whether a physician recommended increased plant counts for more than thirty percent of his or her caseload; and (3) whether more than one-third of the physician’s patient caseload is under the age of thirty. The CDPHE referred McLaughlin to the Board for investigation on the ground that he allegedly exceeded one of these thresholds.

¶8 Thereafter, the Board served a subpoena duces tecum on McLaughlin, ordering him to produce his complete medical records for certain identified patients whom he examined on specified dates between August 2014 and January 2015. The Board informed McLaughlin that this subpoena was part of an investigation into his medical marijuana recommendations for a possible violation of the Colorado Medical Practice Act, §§ 12-240-101 to - 145, C.R.S. (2019).² The Board further advised McLaughlin that its investigation was based on a complaint that the Board had received about him from the CDPHE pursuant to the Referral Policy.

¶9 McLaughlin refused to comply with the subpoena, arguing that the Referral Policy was adopted in violation of the Colorado Constitution, the APA, and the OML. The Board subsequently reissued the subpoena, but McLaughlin again refused to comply, and the Board sought an ex parte order in the Denver District Court to enforce the subpoena.

¶10 McLaughlin then moved to quash the subpoena, arguing that (1) it stemmed from the CDPHE’s violation of the OML, (2) action taken in violation of the OML is null and void, and (3) the subpoena therefore was not issued for a lawful purpose.

¶11 The district court ultimately denied McLaughlin’s motion to quash. Although by the time of the court’s ruling the court had determined that the Referral Policy violated the OML, the court nevertheless concluded that the Board’s investigation and subpoena were for a lawfully authorized purpose, namely, the Board’s duty to investigate licensed physicians who may fail to meet generally accepted standards of practice.

¶12 McLaughlin appealed, and in a split, published opinion, a division of the court of appeals reversed the district court’s order enforcing the subpoena. Colo. Med. Bd. v. McLaughlin , 2018 COA 41, 425 P.3d 1187. In so ruling, the majority first concluded that the Referral Policy was invalid under both the OML and the APA because the CDPHE and Board "officials" had drafted that Policy without public meetings, public notice, or compliance with applicable notice and comment rulemaking procedures. Id. at ¶¶ 23–26, 425 P.3d at 1192–93.

¶13 The majority then addressed the Board’s authority to investigate complaints. The division opined that (1) although the Board may have had the authority to initiate a complaint against McLaughlin if it suspected that he had engaged in "unprofessional conduct," the Board had not pointed to any provision in the statutory definition of "unprofessional conduct" that McLaughlin was suspected of violating; (2) although the Board can investigate complaints regarding validly adopted agency rules, the Referral Policy was not validly adopted; and (3) although the CDPHE could refer a physician to the Board if it had reasonable cause to believe the physician had violated rules promulgated pursuant to the CDPHE’s rulemaking authority, the Referral Policy was not such a rule. Id. at ¶¶ 32–33, 425 P.3d at 1194. The majority thus concluded, "[B]ecause the [Referral Policy] was void, the referral was void, and it is thus as if there were no complaint at all to prompt the Board’s investigation." Id. at ¶ 33, 425 P.3d at 1194.

¶14 Finally, the majority rejected the Board’s argument that even if the Referral Policy and the referral were void, the investigation and subpoena were still valid because the Board can initiate an investigation even without suspicion of misconduct. Id. at ¶¶ 35–37, 425 P.3d at 1194–95. In so ruling, the majority specifically rejected the Board’s reliance on Oklahoma Press Publishing Co. v. Walling , 327 U.S. 186, 66 S.Ct. 494, 90 L.Ed. 614 (1946). McLaughlin , ¶¶ 35–37, 425 P.3d at 1194–95. In the majority’s view, the subpoena in Walling was "lawful because the agency acted in ‘exact compliance’ with the statute authorizing its investigations." Id. at ¶ 36, 425 P.3d at 1195 (quoting Walling , 327 U.S. at 201, 66 S.Ct. 494 ). This distinguished Walling from the circumstances in the present case, where, according to the majority, the Board had issued a subpoena that had no lawful purpose (because an alleged violation of an invalid policy could not provide a lawful basis for suspecting misconduct). Id. at ¶¶ 34, 37, 425 P.3d at 1194–95. ¶15 Judge Booras dissented, noting that under prevailing authority, courts determine the validity of a subpoena by asking whether it was issued within the scope of the agency’s authority. Id. at ¶¶ 45–46, 425 P.3d at 1196 (Booras, J., dissenting) (citing Equal Emp’t Opportunity Comm’n v. Univ. of N.M. , 504 F.2d 1296, 1302 (10th Cir. 1974) ). She then opined that the subpoena at issue was within the scope of the Board’s authority for four reasons.

¶16 First, she noted that the Board’s authority to investigate matters related to the practice of medicine does not depend on receiving a complaint. McLaughlin , ¶ 47, 425 P.3d at 1196. Indeed, in her view, an administrative agency can investigate solely based on its suspicion that the law was being violated. Id.

¶17 Second, she distinguished Walling on the ground that there, the Supreme Court was concerned not with the subpoena’s purpose, but with its breadth and relevance to the subject matter of the investigation. Id. at ¶ 48, 425 P.3d at 1196.

¶18 Third, she observed that by statute, the Board has authority to (1) "investigate ‘matters relating to the exercise and performance of the powers and duties vested in the board,’ " including allegations of unprofessional conduct; and (2) start an investigation on its own motion or based on a citizen complaint. Id. at ¶ 49, 425 P.3d at 1197 (quoting § 12-240-106(1)(b)). Because the Board’s authority to investigate was not dependent on receiving a complaint, its investigation was not "tainted" by any violation of the OML by a...