count draft Administrative Complaint described above.
The Petition alleges that, shortly prior to the administrative hearing to take place in March 2005 on the two Administrative Complaints, Petitioner agreed to a consent agreement, but the Board rejected it, presenting Petitioner with another counter-consent agreement, which Petitioner rejected.
The case was allegedly returned to the Division of Administrative Hearings, which scheduled the final hearing for December 2005. The Petition alleges that, shortly prior to the start of the hearing, Petitioner discharged his attorneys, but was unable to obtain a continuance, so the hearing took place on December 6 and 7, 2005.
The Petition alleges that, on May 5, 2006, the Administrative Law Judge issued a Recommended Order with findings adverse to Petitioner as to four patients. On September 7, 2006, the Board of Medicine allegedly entered a Final Order substantially in accordance with the Recommended Order and issued an Amended Final Order on October 9, 2006, with some revisions to the manner of calculating the administrative fine.
Petitioner allegedly appealed to the Fourth District Court of Appeal the Final Order and Amended Final Order on October 6, 2006. On January 23, 2008, the Fourth District Court of Appeal allegedly issued an opinion vacating the Final Order and Amended Final Order.
The Petition alleges that Petitioner satisfies the conditions of Section 57.111, Florida Statutes. The Petition notes that the Fourth District Court of Appeal awarded costs of the appeal in the amount of $610. The Petition alleges that the attorneys who succeeded Mr. Furlow expended 688.5 hours for a total attorneys' fee of $219,662.
At the hearing, neither party called a witness. Petitioner offered into evidence three exhibits: Petitioner Exhibits 1-3. Respondent offered into evidence two exhibits: Respondent Exhibits A and B. All exhibits were admitted.
The court reporter filed the Transcript on June 13, 2008.
The parties filed Proposed Final Orders on July 13, 2008.
At all material times, Petitioner has been a licensed physician in Florida, holding license number ME 0051631. He is Board-certified in ophthalmology. At all material times, Petitioner has been a "small business party," within the meaning of Section 57.111(3)(d), Florida Statutes.
From 1996-98, Petitioner worked part-time at The Metabolic Treatment Center in Ft. Myers. Twice weekly, Petitioner visited the center and saw patients, who generally complained of symptoms consistent with metabolic conditions.
Toward the end of Petitioner's term of employment at The Metabolic Treatment Center, its owners, one or more natural
persons, sold the facility to a publicly traded corporation. Petitioner's relationship with the new chief operating officer was poor. One day, Petitioner reported to work and found the facility had been closed, leaving Petitioner without access to the records kept by the center.
Petitioner commenced litigation with the corporate owner of The Metabolic Center to obtain copies of medical records. Petitioner obtained a court order compelling the corporation to turn over medical records, but the corporation did not do so, and the case was closed in February 1999 without Petitioner's ever obtaining the records that he had sought. The corporate owner was administratively dissolved by the Department of State in September 1999.
On November 21, 2000, Respondent filed an Administrative Complaint against Petitioner concerning one patient whom he treated in 1997 at The Metabolic Treatment Center. In 2001, Respondent prepared a 50-count Administrative Complaint against Petitioner concerning 10 patients whom he had treated at The Metabolic Treatment Center.
In 2001, Petitioner was represented by attorney William Furlow. Mr. Furlow and a representative of Respondent negotiated a settlement, but Petitioner claimed that he had lacked the authority to enter into the settlement. The Board of Medicine declined to reopen the settlement and issued a Final
Order to this effect. Petitioner appealed to the First District Court of Appeal, which issued an opinion on March 26, 2004, requiring the Board of Medicine to give Petitioner an evidentiary hearing on the factual issue of whether he had authorized Mr. Furlow to settle the case on the conditions set forth in the settlement agreement.
Rather than litigate the authorization question, the Board of Medicine filed an amended Administrative Complaint on August 20, 2004, concerning the lone patient who had been the subject of the earlier-filed Administrative Complaint, and filed a second Administrative Complaint on October 27, 2004, concerning the 10 patients who had been the subject of the
never-filed, 50-count Administrative Complaint. After transmittal to the Division of Administrative Hearings, these cases, which were consolidated, became DOAH Case Nos. 04-3222PL and 04-4111PL, respectively.
By the time of the filing of the 2004 Administrative Complaints, Petitioner was represented by his present counsel. However, this representation has not been continuous. Shortly before the final hearing in the consolidated cases, Petitioner's counsel moved for leave to withdraw because Petitioner had fired them. The motion was granted, an accompanying request for continuance was denied, and Petitioner represented himself at the hearing, which took place on December 6 and 7, 2005.
The undersigned Administrative Law Judge issued a Recommended Order on May 5, 2006. The Recommended Order excluded all of Respondent's evidence consisting of purported medical records, except for the records that Petitioner had identified in a prehearing deposition. These evidentiary rulings left evidence concerning only four patients.
The recommendation was for the Board of Medicine to enter a Final Order dismissing all charges against Petitioner concerning all but the four patients mentioned above. For these patients, the recommendation was for the Board to enter a Final Order finding Petitioner guilty of the financial exploitation of four patients, failure to perform a statutory obligation as to three patients, failure to maintain adequate medical records on three patients, preparation of inappropriate prescriptions for two patients, and violation of the applicable standard of care as to one patient. The Recommended Order recommended an administrative fine of $29,000 and five years' probation.
In Final Orders issued September 7 and October 9, 2006, the Board of Medicine substantially adopted the Recommended Order with revisions to the penalty. Petitioner appealed the Final Orders and, on January 23, 2008, the Fourth District Court of Appeal vacated the Final Orders. The reasoning of the court was that Petitioner had been denied access to medical records at The Metabolic Treatment Center,
and, thus, there was no competent substantial evidence, given the clear and convincing standard, to support the findings of violations.
On March 17 and 21, 2008, pursuant to the mandate, the Board of Medicine entered Final Orders dismissing all charges against Petitioner and taxing appellate costs of $610. On
March 21, 2008, Petitioner filed his Petition Pursuant to the Florida Equal Access to Justice Act.
The attorneys whom Petitioner had discharged immediately prior to the final hearing were re-engaged immediately after the issuance of the Recommended Order. These attorneys, who are presently representing Petitioner, prepared the briefs and argued the appeal.
Petitioner seeks attorneys' fees for three phases of this litigation: 1) litigation over the purported consent agreement, concluding with the filing of the two Administrative Complaints that were transmitted to the Division of Administrative Hearings; 2) litigation in the two Division of Administrative Hearings cases through the appellate court's mandate; and 3) litigation with the Board of Medicine in obtaining the Final Order vacating the earlier Final Orders.
To the extent that the first claim concerns the consent agreement, it is untimely for the reasons discussed in the Conclusions of Law. To the extent that the first claim
concerns the same allegations covered in the second claim, it is part of the second claim. The second claim is really two claims: one concerns the proceeding at the Division of Administrative Hearings and culminating with the Final Orders issued by the Board of Medicine, and the second is for the appellate proceeding. The third claim really is part of the second claim, as the Board of Medicine never filed anything to initiate this phase of the overall proceeding.
The question underlying the claim for attorneys' fees for the second phase of litigation is whether the Board of Medicine was substantially justified in filing the two Administrative Complaints in August and October 2004.
Respondent has submitted as Respondent Exhibit A a voluminous stack of investigative reports prepared by the Agency for Heath Care Administration (AHCA) in connection with the disciplinary cases prosecuted against Petitioner. The periods of investigation run from July 9, 1998, through August 28, 2001, although the whole period is not covered and the periods covered by some reports overlap the periods covered by other reports. The investigative reports contain opinion letters from five physicians.
The investigative report for the period of July 9, 1998, through September 9, 1998, contains an undated letter from Kevin M. Holthaus, M.D. Dr. Holthaus's letter addresses three
patients, including one for whom AHCA had obtained medical records. Dr. Holthaus opined that Petitioner fell below the standard of care in the diagnosis and management of endocrine disorders like hypothyroidism and diabetes. Dr. Holthaus added that Petitioner failed to perform an appropriate history and physical examination prior to ordering extensive diagnostic studies. Dr. Holthaus noted that Petitioner's prescription of thyroid hormone, despite laboratory studies obviating the need for this treatment, posed a threat to the wellbeing of the patient. Dr. Holthaus's letter also states that Petitioner stood to gain from his actions, which included inadequate assessments of patient complaints and symptoms and inappropriate or inadequate diagnoses.
The investigative report for October 14, 1998, through February 4, 1999, contains the notes of a telephone interview with Craig R. Sweet, M.D., who said that he had contacted The Metabolic Treatment Center about Petitioner's treatment of one patient. An unidentified person said that Petitioner no longer worked at the center, but had treated patients for nonexistent thyroid problems. Dr. Sweet stated that he had seen nothing justifying Petitioner's administration of thyroid medication or human growth hormone to the patient.
This investigative report also contained a letter dated April 18, 1999, from E. Timothy Shapiro, M.D., who treats
patients for a wide variety of endocrine problems. Dr. Shapiro, who was also an assistant clinical professor at the University of Miami, addressed one patient and found excessive and unjustified lab work, inappropriate treatment with thyroid hormone despite normal thyroid functions, inappropriate treatment with testosterone despite normal testosterone levels, and inappropriate treatment with growth hormone despite inadequate growth hormone testing and no clinical features of growth hormone deficiency. Dr. Shapiro concluded that the evidence "points to a scheme to extract money."
The investigative report for May 2, 2000, to July 19, 2000, includes an undated letter from H. Curtis Benson, M.D. Dr. Benson found that Petitioner ordered unnecessary lab tests, treated a patient for hypothyroidism despite normal thyroid function studies, and kept "cursory" medical records containing no mention of a complete physical examination.
The investigative report for September 21, 2000, through November 8, 2000, notes that one patient reported that Petitioner had told her that she had a fatal blood disease, but, when she was seen by her regular physician, he found no problems with her blood. Interestingly, this complainant was the insurance investigator who had submitted the other complaints, which were the bases of the insurance company's concern of excessive and unnecessary testing. A principal of The Metabolic
Treatment Center had invited the insurance investigator to visit The Metabolic Treatment Center as a patient and see the operation for herself. Also in this report is a letter from
Mr. Furlow, dated November 20, 2000, stating that many of Petitioner's records were out of his possession when he was forced out by the center.
The investigative report for March 22, 2001, through June 8, 2001, contains a letter dated January 2, 2001, from Dr. Shapiro. Stating that he had reviewed four more cases,
Dr. Shapiro stated that Petitioner was performing excessive lab testing, usually of tests that carry high reimbursement levels. Dr. Shapiro questioned the accuracy of the numerous diagnoses of peripheral neuropathy, noting that Petitioner routinely ordered nerve conduction tests, which were performed by a radiologist, rather than, as was common in Dr. Shapiro's experience, a neurologist. Dr. Shapiro also stated that Petitioner treated patients with thyroid hormone despite their normal thyroid function. He concluded that this pattern of medical practice was fraudulent and below the applicable standard of care.
This investigative report also contains a letter dated January 18, 2001, from Hamilton R. Fish, M.D., who had examined the records of three patients. Dr. Fish summarized his concerns as: 1) many unnecessary lab tests, including reported abnormalities in the nerve conduction studies with no follow-up
or referral; 2) no follow-up or referral on a patient diagnosed with hyerinsulinemia and insulin resistance; 3) lab tests and an EKG done on one patient prior to an evaluation by a physician; and 4) inaccurate medical advice contained in The Metabolic Treatment Center handbook given to patients, such as a warning that exercise makes insulin levels rise.
The investigative reports for January 12, 2001, through February 7, 2001, and March 22, 2001, through June 8, 2001, contain letters from Dr. Shapiro dated December 27, 2000, and March 19, 2001. In each of these letters, Dr. Shapiro analyzes another patient and finds excessive and inappropriate lab testing, inappropriate diagnoses and treatment, a failure to refer a patient with neuropathy to a neurologist, and a failure to meet the applicable standard of care.
The transcript of the probable cause meeting held on October 22, 2004, reveals that the probable cause panel had all of the above-described investigative materials, which included extensive medical records. Counsel summarized to the panel the important portions of the Administrative Complaint concerning the 10 patients who were the subject thereof. In authorizing the filing of the Administrative Complaint, the chair noted that he had never seen such unanimity of opinion among the consultants and suggested an emergency suspension. Although the transcript of the probable cause meeting on the Administrative
Complaint involving only one patient has been lost, it must be inferred, based on the memorandum of action, that a probable cause panel similarly considered the file materials and similarly authorized the filing of that Administrative Complaint a couple of months earlier.
Respondent contends that Petitioner never claimed the existence of additional medical records until the final hearing. This is not exactly true, as the records contain representations that Petitioner was unable to obtain all of the records from The Metabolic Treatment Center. On the other hand, Petitioner did not provide the probable cause panels with any expert opinion in his favor, except for Petitioner's medical claims for his treatment methods, which are detailed in the Recommended Order.
The first Administrative Complaint filed in this case was on November 21, 2000; it was the complaint concerning one patient, so it was the precursor to the Administrative Complaint filed on August 20, 2004, in DOAH Case No. 04-3222PL. The next Administrative Complaint was filed in 2001, and it was the precursor to the Administrative Complaint filed on October 27, 2004, in DOAH Case No. 04-4111PL. From the earliest of these dates to the latest, Respondent had a reasonable basis in fact to proceed.
Viewing the investigative materials in the manner most favorable to Petitioner, they presented a conflict between
mainstream medical opinions concerning the proper diagnosis and treatment of endocrinal disorders and Petitioner's opinion, unsupported by other authorities (at least, in the investigative file), that conventional, acceptable ranges for various items, such as T-3 or TSH, are wrong or that holistic approaches are medically necessary to treat certain metabolic syndromes. At best, from Petitioner's point of view, this was a conflict in opinions between five practitioners, on the one hand, and Petitioner, on the other, and the informed, well-reasoned opinions of the five experts with whom Respondent consulted provided a reasonable basis in fact for the filing of all the Administrative Complaints and all of the charges contained
within them.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter. §§ 57.111(4)(b)1, 120.569 and 120.57(1), Fla. Stat. (2008).
Section 57.111(4)(a), Florida Statutes, provides:
Unless otherwise provided by law, an award of attorney's fees and costs shall be made to a prevailing small business party in any adjudicatory proceeding or administrative proceeding pursuant to chapter 120 initiated by a state agency, unless the actions of the agency were substantially justified or special circumstances exist which would make the award unjust.
Section 57.111(3)(b) and (c), Florida Statutes, provides:
The term "initiated by a state agency" means that the state agency:
Filed the first pleading in any state or federal court in this state;
Filed a request for an administrative hearing pursuant to chapter 120; or
Was required by law or rule to advise a small business party of a clear point of entry after some recognizable event in the investigatory or other free-form proceeding of the agency.
A small business party is a "prevailing small business party" when:
A final judgment or order has been entered in favor of the small business party and such judgment or order has not been reversed on appeal or the time for seeking judicial review of the judgment or order has expired;
A settlement has been obtained by the small business party which is favorable to the small business party on the majority of issues which such party raised during the course of the proceeding; or
The state agency has sought a voluntary dismissal of its complaint.
Section 57.111(4)(b)1 and 2, Florida Statutes, states:
1. To apply for an award under this section, the attorney for the prevailing small business party must submit an itemized affidavit to the court which first conducted the adversarial proceeding in the underlying action, or to the Division of Administrative Hearings which shall assign an administrative law judge, in the case of a proceeding pursuant to chapter 120, which affidavit shall reveal the nature and extent of the services rendered by the attorney as well as the costs incurred in preparations,
motions, hearings, and appeals in the proceeding.
2. The application for an award of attorney's fees must be made within 60 days after the date that the small business party becomes a prevailing small business party.
This case raises several substantial legal questions that, due to the determination that Respondent was substantially justified, as a matter of law and a matter of fact, are unnecessary to resolve. First, it is unclear whether Petitioner has timely sought fees for the initiation of the proceedings in 2000 and 2001, which were resolved in Petitioner's favor by an appellate decision on March 26, 2004. At least as to the fees expended on the appeal, which was related solely to the issue of whether Petitioner was entitled to an evidentiary hearing on the authorization question, this claim is untimely, although perhaps the claim concerning the underlying issues in the two Administrative Complaints, which were essentially refiled in 2004, may be tacked onto the timely claims. The claims on appeal are also subject to the legal restraints listed below, as to whether a trial court may award appellate fees, absent a remand ordering it to do so.
Second, it is unnecessary to address Respondent's contention that, under the plain language of Section 57.111(3)(c), Florida Statutes, Petitioner was not a prevailing party because the Final Order was adverse to him, even though it
was later reversed on appeal. It would seem that the remedial purpose of the statute would be ill-served by Respondent's interpretation. Otherwise, no relief under Section 57.111 would be available when an agency issues a Final Order adverse to the non-agency party, and an appellate court vacates the Final Order and remands the case to the agency for the issuance of a corrected Final Order consistent with the court's opinion.
Third, it is unnecessary to consider the extent, if any, to which this forum may award attorneys' fees for services on appeal, notwithstanding the reference to "appeals" in Section 57.111(4)(b)1, Florida Statutes. Fully capable of policing their litigants, appellate courts routinely prohibit trial courts from awarding appellate fees, absent a remand specifically authorizing the trial court to do so, even when the award of fees is mandated by statute. Respiratory Care Services, Inc., v. Murray D. Shear, P.A., 715 So. 2d 1054 (Fla. 5th DCA 1998).
Petitioner's claims in this case fail because Respondent was substantially justified in taking the action that it did in filing the two sets of Administrative Complaints. Substantial justification is defined in Section 57.111(3)(e), Florida Statutes, as "a reasonable basis in law and fact at the time it was initiated by a state agency."
As noted in the findings of fact, Respondent had a reasonable factual basis for proceeding, based on the material contained in the investigative file. It is appropriate to find a reasonable basis in fact based on material contained in the investigative report. Department of Professional Regulation v. Toledo Realty, Inc., 549 So. 2d 715 (Fla. 1st DCA 1989).
Compare Gentele v. Department of Professional Regulation, 513 So. 2d 672 (Fla. 1st DCA) (agency's reliance on credibility of investigator's testimony provided reasonable basis in law and fact).
This determination is not based on Respondent's contention that, whenever a probable cause panel approves the filing of an Administrative Complaint, the ensuing proceeding had a reasonable basis in law and fact. The incompetence of a probable cause panel may preclude a finding of a reasonable basis for the ensuing administrative proceeding. Helmy v. Department of Business and Professional Regulation, 707 So. 2d
366 (Fla. 1st DCA 1998).
However, in this case, the probable cause panel considered the opinions of five experts, all of whom concurred as to the general nature of the violations alleged in the Administrative Complaints. Although Petitioner offered opinions to the contrary, the Board of Medicine was not constrained to adopt Petitioner's opinion or run the risk of fees if it failed
to do so. Department of Health v. Thomas, 890 So. 2d 400 (Fla. 1st DCA 2004).
Substantial justification requires that the probable cause panel had a "solid though not necessarily correct basis in fact and law for the position it took." Fish v. Department of Health, 825 So. 2d 421, 423 (Fla. 4th DCA 2002) (citing McDonald v. Schweiker, 726 F.2d 311, 316 (7th Cir. 1983)).
The legal justification in this case is that, if the facts were proved, violations of the cited statutes would have followed. Casa Febe Retirement Home, Inc., v. Agency for Health Care Administration, 892 So. 2d 1103 (Fla. 2d DCA 2004) (agency is liable for fees when it relied on a rule that did not exist). In this case, the probable cause panel correctly identified statutes that would have been violated if the underlying facts were proved.
Nor does the legal error identified by the Fourth District Court of Appeal preclude a finding of a reasonable basis in law for the filing of these Administrative Complaints. As noted above, the court reversed the Final Orders because it found a lack of competent substantial evidence to support the findings by the clear and convincing standard of proof. Reich v. Department of Health, 973 So. 2d 1233, 1235 (Fla. 4th DCA 2008). It is sufficient that "some evidence considered by the panel would reasonably indicate that a violation had . . .
