Arizona Supreme Court Clarifies the Right to a Trial De Novo for Health Professional Licensing Board Decisions

By EJ Odigwe, Ryan P. Hogan, Claudia E. Stedman, and Robert F. Kethcart

For health care providers, their reputation and license are of paramount importance. Over the course of their careers, health care providers devote themselves to the well-being of countless patients — yet a single patient complaint can jeopardize a successful and unblemished career. State licensing boards (such as the Arizona Medical Board, Arizona Board of Nursing, Arizona State Board of Dental Examiners, and many others) can initiate administrative proceedings against a health care provider and these proceedings can result in sanctions, including discipline, and in some cases the suspension or revocation of the provider’s license. Further, licensing board proceedings are perceived — often with good reason — as being weighted in the licensing board’s favor and against the health care provider. Thus, much depends on the appeal process, namely, the right to seek relief in state court.

In the past, health care providers appealing an administrative agency decision to a court faced an uphill battle. Since the early 1980s, courts typically deferred to determinations by licensing boards and upheld a board’s decision if it was supported by evidence in the administrative proceeding, even if the evidence would also support a different determination. This was referred to as the “substantial evidence” standard. As a result, once a licensing board made its determination, health care providers were often stuck with the board’s determination, and a court would rarely second-guess the board.

However, dissatisfaction with the deference given to administrative agency and licensing board determinations led the Arizona Legislature to pass legislation that gives courts the freedom to examine and overturn licensing board determinations. Indeed, a recent case from the Arizona Supreme Court, Simms v. Arizona Racing Commission, highlights an underappreciated, but very important, aspect of the appeals process for health care professionals: the right to request a trial de novo.

When a health care provider receives an adverse determination from a licensing board, the health care provider may contest the adverse agency decision to the courts by filing a notice of appeal. See A.R.S. § 12-910(A). The health care provider is entitled to a trial de novo at the superior court, if a demand for a trial de novo is included in the notice of appeal. See A.R.S. § 12-910(D). Simply put, the health care provider is entitled to go to a court where the court hears all evidence and decides the facts and outcome as if the licensing board proceeding never happened. Moreover, a health care provider can request a jury for the trial de novo. See A.R.S. § 12-910(C). This means that the health care provider has an opportunity to present their side of the story to individuals who have no connection to the licensing board.

In Simms, the Arizona Supreme Court clarified any confusion regarding a health care provider’s right to a trial de novo. For many other regulated parties, a court is only allowed to conduct an evidentiary hearing to supplement the record from the administrative proceeding, and it is not permitted to authorize a full trial de novo. However, the Supreme Court affirmed that the Arizona Legislature “authorized a different proceeding in limited circumstances.” Those limited circumstances include “parties in proceedings before certain agencies that regulate a profession.” In other words, A.R.S. § 12-910(F) (and its limits on de novo proceedings) does not apply to health care providers. The Supreme Court confirmed that appeals by health care providers are governed by A.R.S. § 12-910(D), and in those proceedings, the court makes all determinations as if the case originated in the court, rather than the licensing board. Plus, if a health care provider requests a trial de novo by jury, as provided in A.R.S. § 12-910(C), then the jury will need to decide the facts and any sanction.

Fighting a licensing board’s efforts to investigate, discipline, suspend, or revoke a professional license is stressful and complicated. Health care providers must first proceed with the licensing board and may only seek review in a trial court after the licensing board makes a final administrative decision. However, for health care providers willing to invest the time and resources to protect their professional and financial livelihoods, Simms affirms the opportunity for a clean slate. In a trial de novo, the court or, if requested, the jury is required to take a “fresh look” at the allegations made by the licensing board, evaluate whether the licensing board satisfied the burden of proof, and determine the appropriate penalty (if any at all). Given the lack of deference to the licensing board’s decision, Simms boosts the likelihood that appealing licensing board decisions has a greater chance of success than in the past.