Scally v. Texas State Bd. of Med. Examiners

• Decision Date: 18 October 2011
• Docket Number: No. 03–09–00667–CV.,03–09–00667–CV.
• Citation: 351 S.W.3d 434
• Parties: Michael C. SCALLY, M.D., Appellant, v. TEXAS STATE BOARD OF MEDICAL EXAMINERS, Appellee.
• Court: Texas Court of Appeals

351 S.W.3d 434

Michael C. SCALLY, M.D., Appellant,

v.TEXAS STATE BOARD OF MEDICAL EXAMINERS, Appellee.

No. 03–09–00667–CV.

Court of Appeals of Texas, Austin.

Aug. 4, 2011.Rehearing Overruled Oct. 18, 2011.

Philip J. Sweitzer, Attorney at Law, Baltimore, MD, L.T. “Butch” Bradt, Houston, TX, for Appellant.

John S. Langley, Assistant Attorney General, Environmental Protection and Administrative Law Division, Austin, TX, for Appellee.

Before Justices PEMBERTON, HENSON and GOODWIN.

OPINION

DIANE M. HENSON, Justice.

Michael C. Scally, M.D., appeals the district court's judgment affirming the final order of the Texas State Board of Medical Examiners (the Board), which revoked his license to practice medicine in Texas. The Board ordered the license revocation after determining that Scally violated the Texas Medical Practice Act, Tex. Occ.Code Ann. §§ 151.001–167.202 (West 2004 & Supp. 2010), by prescribing anabolic steroids to patients without a valid medical purpose and by failing to keep adequate medical records for some of those patients. In six issues, Scally contends that the district court erred by affirming the Board's final order. We will affirm the district court's judgment because we find no error in the Board's final order and conclude that it was supported by substantial evidence.

BACKGROUND

The Board's staff sought to revoke Scally's medical license by filing a complaint against Scally with the Board and at the State Office of Administrative Hearings in August 2002.¹ The complaint alleged in essence that Scally had prescribed anabolic steroids to healthy patients for the improper purpose of bodybuilding.² Throughout the proceedings, Scally admitted to prescribing anabolic steroids, but maintained that he only prescribed the drugs to improve the patients' overall health and to treat medical conditions like steroid-induced hypogonadism or associated symptoms, not for the purpose of bodybuilding.³

After an unsuccessful mediated settlement conference, the case went to an administrative law judge (ALJ) for a contested-case hearing. The Board amended its complaint in July 2003, alleging that Scally violated the Medical Practice Act by improperly prescribing anabolic steroids to nine patients and failing to keep adequate medical records and to conduct appropriate testing for those patients. See id. §§ 164.001; .051(a)(1), (3), (6); .052(a)(5); . 053(a)(1), (5), (6). At the contested-case hearing, Scally took the position that prescribing anabolic steroids along with other medications to stimulate the hypothalamic-pituitary-testicular axis (HPTA) is the proper standard of care for reducing the severity and duration of steroid-induced hypogonadism. ⁴ He also asserted that he performed the proper diagnostic tests before prescribing anabolic steroids and that he maintained adequate medical records for these patients.

The ALJ conducted an eleven-day evidentiary hearing, during which the Board offered the expert testimony of two board-certified endocrinologists, Dr. Harold Werner and Dr. Jeffrey Jackson. Scally offered his own testimony along with expert testimony from Dr. Mauro DiPasquale, a doctor licensed in Ontario, Canada, who has practiced sports medicine for thirty years.⁵ In addition, Scally offered testimony from Greg Seal, a patient treated by Scally beginning in 2000 (after most of the patients cited in the Board's complaint), and Andrew Hodge, Scally's assistant as of January 2000. The parties also submitted post-hearing briefing to the ALJ.

After the record was closed, the ALJ issued a proposal for decision that included 271 findings of fact and 25 conclusions of law. For each of the nine patients at issue, the ALJ analyzed the Board's factual allegations and whether Scally had violated the Medical Practice Act or the Board's rules by (1) prescribing anabolic steroids to the patients outside the standard of care, (2) failing to keep adequate medical records for them, and (3) failing to conduct appropriate tests to rule out diagnoses other than hypogonadism. The ALJ concluded that Scally (1) violated the standard of care by prescribing anabolic steroids to patients M.W., J.S., J.M., T.W., J.B., J.Bi., S.L., and S.D. without a valid medical purpose and for the purpose of bodybuilding; (2) failed to practice medicine in an acceptable professional manner consistent with the public health and welfare; (3) committed unprofessional or dishonorable acts that were likely to deceive or defraud the public; and (4) prescribed controlled substances to these patients in a manner inconsistent with public health and welfare.⁶ See id. §§ 164.051(a)(1), .052(a)(5), .053(a)(1), (5); Tex. Health & Safety Code Ann. § 481.071 (West 2010). The ALJ concluded that Scally's conduct was intentional based on his pattern of marketing to people interested in bodybuilding and providing them with anabolic steroids. The ALJ also concluded that Scally failed to maintain adequate medical records for T.C., M.W., J.S., T.W., J.B., and J.Bi. After considering both the aggravating and mitigating factors provided as guidelines in the Board's rules, the ALJ recommended that Scally's license be revoked and that the Board assess an administrative penalty against him in the amount of $190,000, as well as transcription costs of $12,809.50.⁷ The Board reviewed the ALJ's proposal for decision and adopted it in full. Scally sought judicial review of the Board's order in district court. After a hearing on the merits, the district court affirmed the Board's final order. This appeal followed.

STANDARD OF REVIEW

The substantial-evidence standard of the Texas Administrative Procedure Act (APA) governs our review of the Board's final order. See Tex. Gov't Code Ann. § 2001.174 (West 2008). The APA authorizes reversal or remand of an agency's decision that prejudices the appellant's substantial rights because the administrative findings, inferences, conclusions, or decisions (1) violate a constitutional or statutory provision, (2) exceed the agency's statutory authority, (3) were made through unlawful procedure, (4) are affected by other error of law, or (5) are arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion. Id. § 2001.174(2)(A)-(D), (F).

The APA also authorizes a reviewing court to test an agency's findings, inferences, conclusions, and decisions to determine whether they are reasonably supported by substantial evidence considering the reliable and probative evidence in the record as a whole. Graff Chevrolet Co. v. Texas Motor Vehicle Bd., 60 S.W.3d 154, 159 (Tex.App.-Austin 2001, pet. denied); see Tex. Gov't Code Ann. § 2001.174(2)(E). Under this deferential standard, we presume that the Board's order is supported by substantial evidence, and Scally bears the burden of proving otherwise. Texas Health Facilities Comm'n v. Charter Medical–Dallas, Inc., 665 S.W.2d 446, 453 (Tex.1984). The burden is a heavy one—even a showing that the evidence preponderates against the agency's decision will not be enough to overcome it, if there is some reasonable basis in the record for the action taken by the agency. Id. at 452. Our ultimate concern is the reasonableness of the agency's order, not its correctness. Firemen's & Policemen's Civil Serv. Comm'n v. Brinkmeyer, 662 S.W.2d 953, 956 (Tex.1984).

Whether the agency's order satisfies the substantial-evidence standard is a question of law. Id. Thus, the district court's judgment that there was substantial evidence supporting the Board's final order is not entitled to deference on appeal. Texas Dep't of Pub. Safety v. Alford, 209 S.W.3d 101, 103 (Tex.2006) (per curiam). On appeal from the district court's judgment, the focus of the appellate court's review, as in the district court, is on the Board's decision. See Montgomery Indep. Sch. Dist. v. Davis, 34 S.W.3d 559, 562 (Tex.2000); Tave v. Alanis, 109 S.W.3d 890, 893 (Tex.App.-Dallas 2003, no pet.).

We review the Board's legal conclusions for errors of law and its factual findings for support by substantial evidence. Heat Energy Advanced Tech., Inc. v. West Dallas Coal. for Envtl. Justice, 962 S.W.2d 288, 294–95 (Tex.App.-Austin 1998, pet. denied). Substantial evidence “does not mean a large or considerable amount of evidence, but rather such relevant evidence as a reasonable mind might accept as adequate to support a conclusion of fact.” Lauderdale v. Texas Dep't of Agric., 923 S.W.2d 834, 836 (Tex.App.-Austin 1996, no writ) (quoting Pierce v. Underwood, 487 U.S. 552, 564–65, 108 S.Ct. 2541, 101 L.Ed.2d 490 (1988)) (internal quotation marks omitted). Thus, we will sustain the agency's action if the evidence as a whole is such that reasonable minds could have reached the conclusion that the agency must have reached in order to justify its action. Texas State Bd. of Dental Exam'rs v. Sizemore, 759 S.W.2d 114, 116 (Tex.1988).

We may not substitute our judgment for that of the Board on the weight of the evidence on questions committed to agency discretion. Charter Med., 665 S.W.2d at 452; see also Tex. Gov't Code Ann. § 2001.174. The ALJ, as factfinder, determines the credibility of witnesses and the weight of their testimony. Granek v. Texas State Bd. of Med. Exam'rs, 172 S.W.3d 761, 778 (Tex.App.-Austin 2005, no pet). We may not set aside an agency decision merely because testimony was conflicting or disputed or because it did not compel the agency's decision. See Brinkmeyer, 662 S.W.2d at 956. Consequently, if the evidence would support either affirmative or negative findings on a specific matter, we must uphold the agency's decision. Charter Med., 665 S.W.2d at 453.

DISCUSSION

Scally asserts that the district court erred by affirming the Board's final order for several reasons. Scally contends in his first issue that the process provided by the APA for judicial review of the Board's final order violated his rights to due process and equal protection by denying him a jury trial and...