Hackethal v. California Medical Assn.

Decision Date07 December 1982
Citation138 Cal.App.3d 435,187 Cal.Rptr. 811
CourtCalifornia Court of Appeals Court of Appeals
PartiesClemens A. HACKETHAL, Petitioner, Respondent, and Cross-Appellant, v. CALIFORNIA MEDICAL ASSOCIATION and San Bernardino County Medical Society, Respondents, Appellants and Cross-Respondents. Civ. 25940.
OPINION

CHARAMZA, Associate Justice. *

INTRODUCTION

Clemens A. Hackethal, M.D., filed a petition for a peremptory writ of mandate in Superior Court in San Bernardino County. Named as respondents were the California Medical Association (CMA) and the San Bernardino County Medical Society (SBCMS). The objective of the petition was to obtain a peremptory writ ordering respondents to reinstate petitioner to membership in each respondent organization. A judgment granting the writ was entered and a writ was issued by the superior court. CMA and SBCMS appeal from the judgment and the order granting the writ. Petitioner appeals from the judgment since CMA and SBCMS are not foreclosed by the judgment from again processing the charges that resulted in petitioner's expulsion from CMA and SBCMS.

FACTS

Petitioner is a medical doctor licensed to practice in California. He became a member of the SBCMS in 1967. SBCMS is a component society of the CMA and is governed by a constitution and bylaws which incorporates the constitution and bylaws of the CMA with respect to matters of discipline and disciplinary procedures for members.

This dispute arose in May 1975 when the Credentials and Professional Review Committee of the SBCMS filed charges with the secretary of the society initiating disciplinary proceedings against petitioner. The charges were referred to the Judicial Council of the SBCMS 1. The council held preliminary hearings in August and September 1975 to determine whether formal charges should be filed and a formal hearing held.

On September 30 formal charges were filed and petitioner was served with a copy of the formal charges and notice of the hearing on those charges.

The hearing was delayed from October 20, 1975, to December 8, 1975, because of a temporary restraining order which was later quashed permitting the hearing to take place. The hearing took place intermittently from December 8, 1975, to February 25, 1976, before the Judicial Council of the SBCMS. The Judicial Council that conducted the hearing was comprised of the same members that had conducted the preliminary hearings and determined that the formal charges should be filed.

Petitioner appeared at the hearing with counsel. Petitioner's counsel conducted some voir dire of individual members of the Judicial Council but the referee unduly limited the amount and manner of such examination. The bylaws of CMA provide for challenge by the accused of the impartiality of any member and for the record to reflect the referee granted the challenge. Petitioner, through counsel, challenged the panel in toto on a multitude of grounds. Each member of the panel, in response to questions by the referee, denied any preconceived notion of guilt. Each similarly declared their ability to judge the case fairly on the evidence presented at that hearing and that hearing alone.

Petitioner testified on direct examination at the hearing. He and his attorney voluntarily absented themselves on February 24, 1976, and did not return. He was not cross-examined. The hearings proceeded to a conclusion on February 25 in his absence.

During the hearings, private executive sessions of the Judicial Council were held. Included were the referee, a representative of the public service committee and legal counsel for that committee. Petitioner and his counsel were not present. They were aware of the meetings and acquiesced to them.

Prior to the hearing, each member of the Judicial Council was given a "blue pack" of material prepared by staff. That material contained statements alleging misconduct by petitioner on cases on which petitioner was not charged. That "blue pack" was later admitted into evidence. Not all allegations included in that material were substantiated by evidence at the hearing.

The charges to the Judicial Council stated they may not consider evidence of prior conduct on the guilt phase but if guilt were found it may be considered in fixing penalty.

The charges also advised that the burden of proof was by a preponderance of the evidence. That was contrary to the bylaws which required clear and convincing proof of the charges.

On March 26, 1976, the Judicial Council, by written decision, found against petitioner on several charges. Included were improper diagnosis and treatment, false statements and deficiencies in professional competence. The panel found in favor of petitioner on several charges. The council directed that Dr. Hackethal be expelled from the SBCMS. The decision of the Judicial Council of SBCMS was appealed to CMA. The Judicial Commission of the CMA received written briefs and the transcript of the proceedings below. It heard oral argument.

The written decision of the Judicial Commission of the CMA was issued on June 15, 1977. It stated that the CMA panel had conducted a full and independent review of the entire record. It considered all procedural and substantive objections asserted. It exercised its independent judgment as to each charge on which the SBCMS had found against petitioner.

The CMA panel upheld several of the substantive charges of improper diagnosis and treatment and deficient professional competence. It concluded that the allegations of procedural error were not meritorious. The panel did acknowledge the error below in the charge to the SBCMS panel on burden of proof. It applied the clear and convincing proof standard.

The CMA decision ordered expulsion. It stayed the order of expulsion on certain specified terms. Included in the terms were suspension for one year and compliance with terms and conditions to be imposed by the SBCMS for the purpose of education, rehabilitation and improved medical practice.

On September 14, 1978, the SBCMS held a hearing to determine whether petitioner had complied with the terms of probation. It determined that petitioner had not complied and expelled him.

This action had been filed on or about September 1977. It came to the hearing in March 1980, judgment was entered in April 1981. This appeal followed.

On March 11, 1976 (after the hearing had been completed and before the Judicial Council of SBCMS had announced its decision) the Board of Medical Quality Assurance (BMQA) filed an accusation against Dr. Hackethal, the petitioner in this litigation. The BMQA, following the recommendation of the administrative law judge, disciplined Dr. Hackethal. His license was ordered suspended for six months, the suspension was stayed and he was placed on probation for two years. The order was based upon one incident of overprescribing (patient, Loretta B.), one incident of ordering excessive laboratory procedures (patient, Mr. H.) and one incident of overbilling Medicare (patient, Lulu T.). The decision of the BMQA was challenged in a petition for a peremptory writ of administrative mandamus. The petition was denied and the judgment appealed to the Fourth District, Court of Appeal, this division. In an unpublished opinion this court ordered the trial court to set aside its decision as to the incident relating to Loretta B. and Mr. H. The statute under which the BMQA filed its charges as to those incidents (Bus. & Prof. Code, § 2361.5) was repealed before BMQA had rendered its decision. The accused could not be disciplined on a repealed section. In addition the court decided the findings by BMQA did not support discipline under section 2361.5 or Business and Professions Code section 700, the section enacted to replace section 2361.5.

This court found the decision based upon the incident in which Lulu T. was named was supported and that discipline was appropriate. The trial court was ordered to issue a writ requiring BMQA to redetermine the disciplinary measures appropriate to the overbilling, false statement count of the accusation.

ISSUES

It comes as no great surprise that the parties state the issues quite differently. Respondents in the trial court, appellants and cross-respondents here, list five and begin each with the words "Did the trial court err ...." Petitioner in the trial court, respondent and cross-appellant here, lists two and begins each with the words "Does substantial evidence support the trial court's finding." Respondent, as cross-appellant, lists another issue asserting error in that the decision of the trial court permits further administrative hearings.

The gut issue is the procedural sufficiency of the disciplinary hearing conducted by the Judicial Council of the SBCMS. Secondary to that is whether the hearing afforded petitioner by the Judicial Commission of the CMA cured any defects in the prior hearing. If the trial court's order for reinstatement is sustained, petitioner asserts in his cross-appeal that further hearings on the charges should not be allowed.

PROCEDURAL SUFFICIENCY
A. Fair Procedure.

Fair procedure is a developing concept in California. It is applicable when an organization makes a decision to exclude or expel an individual. It is a common law principle under which a private organization is legally required to refrain from arbitrary action. The action to exclude or expel must be substantively rational and procedurally fair. It applies to organizations consisting of licensed professional persons. (Pinsker v. Pacific Coast Society Orthodontists (1974) 12 Cal.3d 541, 116 Cal.Rptr. 245, 526 P.2d 253; Applebaum v. Board of Directors (1980) 104 Cal.App.3d 648, 163 Cal.Rptr. 831.)

The concept is not new. In 1923 in Taboada...

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