Schmidt v. Iowa State Bd. of Dental Examiners, 87-261

• Decision Date: 11 May 1988
• Docket Number: No. 87-261,87-261
• Citation: 423 N.W.2d 19
• Parties: Duane A. SCHMIDT, Appellant, v. IOWA STATE BOARD OF DENTAL EXAMINERS, Appellee.
• Court: Iowa Supreme Court

Page 19

423 N.W.2d 19

Duane A. SCHMIDT, Appellant, v. IOWA STATE BOARD OF DENTAL EXAMINERS, Appellee.

No. 87-261.

Supreme Court of Iowa.

May 11, 1988.

Rehearing Denied June 15, 1988.

James W. Affeldt of Eells, Blackstock & Affeldt, Cedar Rapids, for appellant.

Keith E. Stapleton of Silliman, Gray & Stapleton, Cedar Rapids, for appellee.

Considered by LARSON, P.J., and SCHULTZ, CARTER, NEUMAN, and SNELL, JJ.

SCHULTZ, Justice.

Petitioner Duane A. Schmidt appeals from a district court decision affirming a ruling of the Iowa State Board of Dental Examiners (dental board) which suspended his dental license for thirty days and restricted his privileges to purchase, possess, and dispense controlled substances indefinitely. On judicial review and on appeal petitioner only challenges the suspension of his license. Thus, the restrictions regarding controlled substances are not in issue. As we agree that the dental board properly exercised its authority in suspending petitioner's license, we affirm.

Petitioner is a dentist licensed to practice in Iowa. He is the sole officer of Dental East, P.C., which employs approximately thirty people, including dental hygienists and dental assistants. Two other licensed dentists also practice in this office as associates of petitioner, each maintaining his own separate practice.

Petitioner holds drug registration permits from both federal and state regulatory agencies to prescribe, purchase, possess, and dispense controlled substances. The two associates were occasionally allowed to dispense controlled substances from the supply petitioner kept in the dental office.

In January 1984, a drug audit of petitioner's records was conducted by the Iowa Board of Pharmacy Examiners (pharmacy board) after it had received a report that excessive amounts of controlled substances were being purchased. The auditor found several severe deficiencies in petitioner's recordkeeping and security systems. A detailed audit revealed that a substantial number of controlled substances had been stolen or diverted from petitioner's office between January 1982 and January 1984 and could not be accounted for.

Up to the time of the audit, petitioner kept controlled substances in a cabinet similar to a kitchen cabinet. It was kept unlocked during the day and was accessible to approximately thirty employees in addition to the three dentists. Petitioner relied upon his employees to inventory and order drugs and did not know how often or how many drugs were being ordered. Unsupervised dental assistants were allowed to dispense drugs from the drug cabinet to the patients.

After the audit revealed the diversion of drugs, petitioner took some remedial security measures. However, following the audit, three more thefts or diversions occurred over the next year. Petitioner did not report any of these thefts to either the dental board or the local police although he did notify the pharmacy board auditor of some of the later thefts.

The dental board was notified of these matters by the pharmacy board and gave petitioner notice of a disciplinary hearing on allegations that he had "failed to provide and maintain effective controls and procedures to guard against a series of recent thefts and diversions of controlled substances" from his dental office. After hearing the dental board rendered the following decision:

The board is satisfied that five separate thefts of controlled substances under the circumstances shown in this record and the failure to implement effective changes in internal security measures to prevent such occurrences demonstrate that the licensee permitted ineffective drug control procedures to be followed in his dental office and carelessly delegated to his employees his personal responsibility to manage and control such substances and warrants sanctions being imposed....

In his petition for judicial review and now on appeal petitioner claims (1) the board lacked authority to suspend his license under the provisions relied on, and (2) the suspension was not supported by substantial evidence. Iowa Code §§ 17A.19(8)(b), (f). Our review is to correct errors of law and to ensure that the district court did not err in determining that the agency action was supported by substantial evidence. Fischer v. Iowa State Commerce Comm'n, 368 N.W.2d 88, 91 (Iowa 1985).

1. Authority. An administrative agency has no inherent power and has only such authority as is conferred by statute or is necessarily inferred from the power expressly granted. Iowa Power & Light Co. v. Iowa State Commerce Comm'n, 410 N.W.2d 236, 240 (Iowa 1987); Iowa State Highway Comm'n v. Hipp, 259 Iowa 1082, 1088, 147 N.W.2d 195, 198 (Iowa 1966) ("As a general rule administrative agencies have, and should be accorded, every power which is indispensable to the powers expressly granted."). Thus, the dental board's authority to suspend petitioner's license must be expressly granted or implied from the grant of other powers.

Express authority to suspend a dental license is found under Iowa Code chapters 153 and 258A. ¹ We conclude that in this case, the dental board was acting under the authority provided in Iowa Code section 258A.3 as it referred to this section both in its notice to petitioner and again in its ruling suspending his license. The power to revoke or suspend a license is provided by subsection (2)(a) of section 258A.3. Subsection (2)(b) does not authorize license suspension. It allows the dental board to revoke or suspend "the privilege of a licensee to engage in one or more specified procedures, methods, or acts incident to the practice of the profession...." Because this case deals with suspension of a license itself rather than a specified procedure, method, or act, subsection (2)(b) does not apply.

Subsection (2)(a) allows the dental board to suspend a license for the grounds specified in Iowa Code section 153.34, other grounds specified in chapter 258A, or for failure to comply with a board order imposing discipline. Of the possible grounds stated in section 153.34, the dental board's notice of hearing cited only section 153.34(6). This subsection provides that the board shall suspend or revoke a license "[f]or...