Erdman v. Ingraham

• Decision Date: 15 June 1967
• Citation: 280 N.Y.S.2d 865,28 A.D.2d 5
• Court: New York Supreme Court — Appellate Division
• Parties: Application of Robert M. ERDMAN, Petitioner, for judgment Under Article 78 of the Civil Practice Law and Rules v. Hollis S. INGRAHAM, Commissioner of Health of the State of New York, Respondent, Annulling Respondent's Determination that the sum of $500 be Assessed Against Petitioner for Alleged Violations of the Public Health Law and Rules and Regulations Thereunder.

Page 865

280 N.Y.S.2d 865

28 A.D.2d 5

Application of Robert M. ERDMAN, Petitioner, for judgment Under Article 78 of the Civil Practice Law and Rules v. Hollis S. INGRAHAM, Commissioner of Health of the State of New York, Respondent, Annulling Respondent's Determination that the sum of $500 be Assessed Against Petitioner for Alleged Violations of the Public Health Law and Rules and Regulations Thereunder.

Supreme Court, Appellate Division, First Department.

June 15, 1967.

Herman Schmertz, New York City, of counsel (Harry A. Gair, New York City, on the brief; Gair & Gair, New York City, attorneys) for petitioner.

Robert E. Hugh, New York City, of counsel (Samuel A. Hirshowitz, New York City, on the brief; Louis J. Lefkowitz, Atty. Gen.) for respondent.

Before STEVENS, J.P., and EAGER, TILZER, RABIN, and McGIVERN, JJ.

EAGER, Justice.

This article 78 proceeding, transferred to this court, was brought to review a determination of the respondent Commissioner of Health of the State of New York imposing penalties of $100 each upon the petitioner for five violations of the Public Health Law and of the Rules and Regulations on Narcotic Control.

The petitioner, a physician, was charged by the Commissioner with several statutory and rule violations in the matter of prescriptions for and the handling of narcotic drugs. Following a hearing before a hearing officer and upon his findings, conclusions and recommendations, the Commissioner determined, ordered and directed that penalties of $100 be assessed against the petitioner for each of the following violations: (1) violation of Public Health Law, § 3333, subd. 1, in that petitioner did fail to maintain records of all narcotic drugs received and disposed of by him; (2) violation of Public Health Law, § 3344, in that petitioner did fail to promptly report to the State Department of Health the names and addresses of persons under treatment by him appearing to be habitual users of narcotic drugs; (3) violation of Public Health Law, § 3351, subd. 1(d), in that petitioner did make and utter false prescriptions calling for narcotic drugs in that such prescriptions were not written in the names of persons for whose use the drugs obtained thereby were intended; (4) violation of Rule 80.15 of Rules and Regulations on Narcotic Control (10 NYCRR 80.15) in that petitioner did obtain narcotic drugs for his professional use by means other than his official order forms in that such drugs were obtained by the use of prescriptions written in the names of various patients; and (5) violation of Rule 80.25 of said Rules and Regulations (10 NYCRR 80.25) in that petitioner did issue prescriptions for narcotic drugs while not being duly licensed so to do.

The attack by petitioner upon the Commissioner's determination rests principally upon the ground that the material findings of fact of the hearing officer, adopted by the Commissioner, are grounded mainly upon hearsay evidence including the written statements of witnesses who were not produced for cross-examination by petitioner.

The case against the petitioner, as presented at the hearing, was based solely upon the testimony of an investigator in the employ of the Department of Health and certain exhibits produced by him. These exhibits included a written case report made by the investigator, a tabulation of prescriptions issued by the petitioner, a written signed statement given by the petitioner to the investigator and sworn statements of certain former patients of the petitioner and other third persons. These former patients and third persons were not called as witnesses at the hearing, and the petitioner was not afforded the opportunity of cross-examining them. There was a suggestion by the hearing officer that the petitioner was entitled to subpoena these persons and it was noted that subpoenas would be issued to him for this purpose. Petitioner's counsel, however, took the position that he was not obliged to subpoena the witnesses for the purpose of cross-examination.

No one may properly question the right of the hearing officer to receive the written report of the investigator and the written statements taken by him from the third persons. The statute expressly provides that the 'written reports of * * * investigators * * * and other representatives of state and local health officers on questions of fact pertaining to, concerning or arising under and in connection with complaints, alleged violations, investigations, proceedings * * * shall be presumptive evidence of the facts so stated therein, and shall be received as such in all courts and places' (Public Health Law, § 10, subd. 2). There is further provision that the Commissioner and hearing officers 'shall not be bound by the laws of evidence in the conduct of hearing proceedings' (Public Health Law, § 12--a, subd. 2). Additionally, it is the well-settled general rule that, in conducting a hearing, an administrative tribunal or officer is not bound by the technical rules of evidence followed in a court of law; third person statements and other hearsay evidence may be received and considered by the tribunal or officer (see Matter of Stammer v. Board of Regents, 287 N.Y. 359, 39 N.E.2d 913; Matter of Carroll v. Knickerbocker Ice Co., 218 N.Y. 435, 113 N.E. 507; Matter of Shields v. Hults, 21 A.D.2d 745, 250 N.Y.S.2d 143; Matter of Reynolds v. Triborough Bridge & T. Auth., 276 App.Div. 388, 390, 94 N.Y.S.2d 841, 843).

The third person statements, taken Ex parte by the investigator, although in the form of affidavits, were in the nature of mere hearsay evidence. (See Richardson on Evidence, 9th Ed., § 207; Bookman v. Stegman, 105 N.Y. 621, 11 N.E. 376; Weil v. Weil, 283 App.Div. 33, 125 N.Y.S.2d 368; Poses v. Travelers' Insurance Co., Hartford, Conn., 245 App.Div. 304, 281 N.Y.S. 126; Jennings v. High Farms Corp., 35 Misc.2d 80, 229 N.Y.S.2d 854; Matter of Geiger, 28 Misc.2d 655, 213 N.Y.S.2d 946.) As hearsay, such statements, standing alone, lack competency and sufficient probative force to sustain material findings or a determination required to be supported by substantial evidence. (See Consolidated Edison Co., etc. v. National Labor Relations Board, 305 U.S. 197, 229 230, 59 S.Ct. 206, 83 L.Ed. 126; New York State Labor Relations Bd. v. Frank G. Shattuck Co., 260 App.Div. 315, 317, 20 N.Y.S.2d 949, 951; Willapoint Oysters v. Ewing, 9 Cir., 174 F.2d 676, 690, 691, cert. den. 338 U.S. 860, 70 S.Ct. 101, 94 L.Ed. 527. See, also, Editorial Note. 'The Weight to be Given Hearsay Evidence by Administrative Agencies: The 'Legal Residuum' Rule', 26 Brooklyn L.Rev. 265.) Moreover, hearsay evidence may not be used by an administrative tribunal or officer in such a manner as to deprive a party of the right to a fair hearing where that right is guaranteed by law. Such right would be illusory if the administrative tribunal or officer could ground its determination on investigatory data and hearsay evidence.

Where, as here, the charges authorized the imposition by the Commissioner of penal sanctions, the accused was entitled to a hearing conducted with proper adherence to due process requirements. There is provision in the statute for the safeguards of a formal hearing in these cases (Public Health Law, § 12--a). In fact, the Assistant Attorney General, representing the Department of Health at the hearing held on these particular charges, stated at the opening of the hearing that 'this is a formal hearing, formal in that testimony will be sworn and a record made. * * * The doctor will be afforded an opportunity to cross-examine the State's witnesses'.

While it has been said that the 'hearing held by an administrative tribunal acting in a judicial or quasi-judicial capacity may be more or less informal' (Matter of Hecht v. Monaghan, 307 N.Y. 461, 470, 121 N.E.2d 421, 425), and it is clear that a hearing by such a tribunal need not follow the strict requirements of the true judicial hearing, nevertheless, the hearing must be fairly conducted with due regard for the proper protection of the basic rights of a party. Although the formalities of a court trial are not required, the essential due process elements of such a trial must be observed. (See Matter of Wignall v. Fletcher, 303 N.Y. 435, 103 N.E.2d 728; Matter of Hecht v. Monaghan, supra; Matter of Shields v. Hults, supra, 21 A.D.2d 745, p. 746, 250 N.Y.S.2d 143, p. 144; Matter of Bender v. Board of Regents, 262 App.Div. 627, 30 N.Y.S.2d 779.)

A reasonable opportunity to test and controvert adverse evidence is an essential element of a fair hearing before an administrative tribunal or officer. Here, there was express provision...