ZARNOCH, J.
Appellants and cross-appellees, Dr. Kathy Mesbahi, Mina Nazemzadeh, and Aghdas Rahmati, challenge a judgment of the Circuit Court for Montgomery County upholding the decision of the Maryland Board of Physicians ("the Board"), appellee/ cross-appellant. The Board sanctioned Dr. Mesbahi for aiding an unauthorized person in the practice of medicine and unprofessional conduct in the practice of medicine, and the remaining appellants for practicing medicine without a license. In a cross-appeal, the Board challenges the circuit court's finding that certain sanctions imposed against appellants/cross-appellees were arbitrary and capricious. The circuit court remanded the case to the Board with instructions to articulate its reasons for imposing those sanctions.
Appellants
In its cross appeal, appellee presents an additional question for our review:
For the following reasons, the decision of the circuit court is affirmed in part and reversed in part.
Dr. Mesbahi has been licensed to practice medicine in Maryland since 1982 and is board-certified in obstetrics and gynecology. She maintains offices in Gaithersburg and Rockville.
Dr. Mesbahi later signed a sales contract and initialed the page of the contract which contained the following provision:
Both of Dr. Mesbahi's sisters worked in her Rockville office, Nazemzadeh as the business manager and Rahmati as the office receptionist. Neither sister is licensed as a physician, nurse practitioner, or physician's assistant. Nazemzadeh has an MBA and has been working as Dr. Mesbahi's office manager for at least twenty years. Rahmati has a bachelor's degree in "clinical lab" from Iran and worked as a hairdresser for several years before going to work as a receptionist for Dr. Mesbahi in 1989. In 2002, Nazemzadeh and Rahmati were trained by the laser machine manufacturer's representative and certified competent to perform laser hair removal procedures. Between early 2003 and August of 2005, Nazemzadeh performed approximately four to eight laser hair removal procedures a day in Dr. Mesbahi's Rockville office. Rahmati performed one to two laser hair removal procedures per day in the Rockville office between the summer of 2004 and August of 2005. Appellants do not dispute that both Nazemzadeh and Rahmati performed laser hair removal procedures, even when Dr. Mesbahi was not in the office.
On December 1, 2004, a patient ("Patient A")
The Board received a second complaint from Patient A in February 2005. In this
Patient A suggested that the Board's investigator contact her friend, Patient B, who also went to Nazemzadeh for laser hair removal. In a telephone interview, Patient B told the investigator that she had received laser hair removal treatments from Nazemzadeh approximately twice a month for one and a half years. She stopped going in August or September of 2004 because she was concerned about ongoing exposure to the laser and she heard about Patient A's burns and scars. Patient B also told the investigator that she has had laser treatments performed by other people. In comparison, Nazemzadeh's technique was different and her sessions were much quicker. Patient B never sustained injuries as a result of her treatments. Like Patient A, Patient B reported that Nazemzadeh had performed the initial consultation and all treatments. She never met Dr. Mesbahi, even though she indicated a history of herpes simplex and accutane use on her intake form.
On May 23, 2005, the Board assigned compliance analyst Patricia Bramlet to conduct an investigation of the complaints. As described above, Bramlet interviewed Patient A and Patient B. In August of 2005, Bramlet subpoenaed medical records and other documents from Dr. Mesbahi's office and took recorded statements from Nazemzadeh and Dr. Mesbahi. In October 2005, the Board sent Cease and Desist Consent Orders for Nazemzadeh and Rahmati, which they signed. Their attorney advised the Board that Nazemzadeh and Rahmati had ceased providing laser hair removal services on August 18, 2005. Also in March 2006, Bramlet conducted a telephone interview with another patient ("Patient C") who had received laser hair removal treatments from Dr. Mesbahi's office. Patient C reported that she had received approximately five laser hair removal treatments performed by Rahmati. She took a year off from the sessions when she became pregnant, but planned to resume treatments in April 2006. Patient C stated that her April treatments would be performed by Dr. Mesbahi, but she had no concerns or issues with the care received from Rahmati.
On April 18, 2006, Dr. Mesbahi, Nazemzadeh, and Rahmati received notice of the charges filed against them by the Board.
The cases were consolidated for a hearing, which took place on January 11, January 19, and February 2, 2007 at the Office of Administrative Hearings. Dr. Mesbahi testified in her own defense, explaining that she did not consider laser hair removal to be "invasive surgery" because there "was no anesthesia involved, no cutting, no deep penetration to the tissue, no bleeding, no sedation required."
The Board issued its final opinion and order on May 11, 2009. After adopting the ALJ's findings of fact, the Board concluded that Dr. Mesbahi aided an unauthorized person in the practice of medicine, in violation of the Maryland Medical Practice Act, Md.Code Ann. (1981, 2009 Repl.Vol.), Health Occ. Art. (HO) § 14-404(a)(2), (3) and (18), by inappropriately delegating laser hair removal procedures to Nazemzadeh and Rahmati. The Board also found that Dr. Mesbahi's actions constituted unprofessional conduct in the practice of medicine. As for Nazemzadeh and Rahmati, the Board concluded that both sisters engaged in the unlicensed practice of medicine, in violation of HO §§ 14-301, 14-601, 14-602(a) and 14-606, as well as Code of Maryland Regulations (COMAR) 10.32.02.06B(2).
The Board relied on Declaratory Ruling 00-1 in concluding that laser hair removal constitutes the practice of medicine.
The Board also concluded that the sections of the Medical Practice Act violated by appellants do not require a finding that the appellants acted knowingly. Thus, the Board found that it was irrelevant whether appellants were aware of DR 00-1 or otherwise knew that laser hair removal constituted the practice of medicine. The Board imposed the following sanctions on Dr. Mesbahi: (1) a reprimand; (2) one year probation; (3) an order to permanently cease and desist from the practice of laser hair removal; (4) an order to permanently cease and desist aiding unlicensed individuals in the practice of medicine; and (5) a $20,000 fine. The Board ordered both Nazemzadeh and Rahmati to cease and desist from engaging in the unauthorized practice of medicine. In addition, the Board imposed fines of $5000 on Nazemzadeh and $1000 on Rahmati.
In an order dated January 11, 2010, the Circuit Court for Montgomery County affirmed the Board's final decision. However, the court vacated the fines imposed on appellants and the permanent cease and desist order against Dr. Mesbahi on the grounds that they were "arbitrary and capricious because the Board did not sufficiently articulate its reasons for imposing these sanctions." The court remanded the case for further proceedings, specifically instructing that "the Board, during any such proceedings, shall articulate its reasons for imposing the fine amounts upon Petitioners and for the cease and desist order imposed upon Dr. Mesbahi permanently banning her from performing laser hair removal surgery."
In Maryland, an appellate court's review of an administrative agency's decision "is limited to determining if there is
Appellants' remaining arguments concern questions of law or procedure. An appellate court generally owes no deference to agency decisions on pure issues of law, and is free to substitute its judgment for that of the agency on such questions. See Liberty Nursing Ctr. v. Dept. Of Health & Mental Hygiene, 330 Md. 433, 443, 624 A.2d 941 (1993). However, as the Court of Appeals explained in Finucan v. Maryland Board of Physician Quality Assurance:
380 Md. 577, 590, 846 A.2d 377 (2004) (internal citations omitted). Finally, where the agency exercises its discretionary authority, as when imposing sanctions, its decision will be disturbed only if arbitrary or capricious. See Spencer v. Board of Pharmacy, 380 Md. 515, 529, 846 A.2d 341 (2004).
Appellants first argue that the Board erroneously relied on DR 00-1 in concluding that laser hair removal is a surgical procedure that constitutes the practice of medicine. Appellants cite three reasons that the Board's reliance on DR 00-1 is misplaced: (1) the Board erroneously treated DR 00-1 as a binding regulation; (2) DR 00-1 is void; and (3), even assuming DR 00-1 is valid and applicable, there was not substantial evidence to support the Board's decision. We will address each of these in turn.
As an initial matter, appellants claim that the Board improperly treated DR 00-1 as if it were binding on appellants. We disagree. The Board correctly stated that it, not the appellants, was bound by DR 00-1. See SG § 10-305(b) ("A declaratory ruling binds the unit and
Here, the Board gave the appropriate weight to DR 00-1, treating it akin to a precedential adjudicatory ruling. The Board recognized that it could have reconsidered DR 00-1, but "none of the respondents presented any expert testimony to try to persuade the Board that the ruling should be re-examined." In other words, appellants failed to prove to the Board that the facts in this case were significantly different from the facts in the petition on which DR 00-1 was based, or that DR 00-1 should otherwise be reconsidered. It appears that appellants would have the Board disregard DR 00-1 altogether, and conduct a de novo evaluation of whether laser hair removal constitutes the practice of medicine. However, the Board was not free to ignore its prior policy statements. SG § 10-305(b). See United States v. Heffner, 420 F.2d 809, 811 (4th Cir.1969) (holding that "an agency of the government must scrupulously observe rules, regulations or procedures which it has established"); Hopkins v. Maryland Inmate Grievance Comm'n, 40 Md.App. 329, 335-36, 391 A.2d 1213 (1978); Drafter's Note to SG § 10-214, 1993 Laws of Maryland Ch. 59.
We also reject the appellants' contention that, by relying on DR 00-1, the Board gave it the force of a regulation. As we just discussed, the Board properly treated DR 00-1 as binding precedent, not as a regulation. It is quite clear that appellants were charged with violating the Maryland Medical Practice Act, not DR 00-1. Moreover, we do not agree with appellants that the Board was required to address its laser hair removal policy through the formal rulemaking process. An administrative agency generally has discretion over whether to proceed by adjudication or by rulemaking in developing a particular policy. See Consumer Protection Div. v. Consumer Publishing Co., 304 Md. 731, 754-56, 501 A.2d 48 (1985). However, an agency must follow the formal rulemaking process when "a policy of general application, embodied in or represented by a rule, is changed to a different policy of general application." CBS, Inc. v. Comptroller of Treasury, 319 Md. 687, 696, 575 A.2d 324 (1990).
Here, the Board's reliance on DR 00-1 did not change prior policy of general application to a new policy of general application. Appellants have submitted no evidence that, prior to their hearing, it was the generally applicable policy of the Board that a person who is not a nurse, physician assistant, or licensed health professional of any kind, may perform laser hair removal procedures without any medical supervision.
Appellants also challenge the validity of DR 00-1 itself, arguing that the ruling is void because the Board failed to follow its own regulations in issuing the ruling. The appellants did not make this argument in the proceedings below, and the Board argues that the argument is therefore waived. We agree. The Court of Appeals has repeatedly emphasized that a reviewing court "may not pass upon issues presented to it for the first time on judicial review and that are not encompassed in the final decision of the administrative agency." Dept. Health & Mental Hygiene v. Campbell, 364 Md. 108, 123, 771 A.2d 1051 (2001).
Appellants cite Motor Vehicle Administration v. Lytle, 374 Md. 37, 821 A.2d 62 (2003), for the proposition that pure questions of law, like issues of statutory construction, are reviewable even if not raised in the initial agency proceedings. In Lytle, the Court held that the MVA did not waive its right to appeal the ALJ's interpretation of a statute, even though it appeared at the administrative hearing only through submitted documents, presenting no additional argument. Id. at 55-56, 821 A.2d 62. The Court held that it was only limited to the hearing record on questions of fact, and that the purely legal issue of statutory interpretation was reviewable because the "grounds relied on by the agency are identical to the issues the MVA raises [on appeal.]" Id. Thus, Lytle is fully consistent with Campbell and offers no support for the appellants. The administrative decision in this case in no way encompasses the question of whether the Board complied with procedures set forth by SG § 10-304(b) and COMAR 10.32.16.03(c) when it issued DR 00-1. Therefore, despite the purely legal nature of the question, it is not preserved for appellate review.
Next, appellants argue that "even assuming DR 00-1 was valid and could be used against appellants, the Board's decision that laser hair removal constitutes the practice of medicine is entitled to little deference and was erroneous." Rather than focusing on the board's decision at the hearing below that laser hair removal constitutes the practice of medicine, appellants have chosen to attack the substance of DR 00-1 and the process by which the Board arrived at that ruling. The Board issued DR 00-1 in 2002, one year before Nazemzadeh and Rahmati began performing laser hair removal and seven years prior to appellants' hearing in this case. There is a statutory procedure for judicial review of declaratory rulings, SG § 10-305, and agency reconsideration of such rulings, COMAR 10.32.16.04. The time for appealing DR 00-1 has long since expired. See Md. Rule 7-203. Thus we will not review DR 00-1, except to the extent that the ruling was discussed by witnesses at appellants' hearing and relied upon by the Board in its final decision.
As defined in, HO § 14-101(l)(1), to "practice medicine" is "to engage, with or without compensation, in medical: (i) diagnosis, (ii) healing, (iii) treatment, or (iv) surgery." The question before the Board at appellants' hearing was whether laser hair removal constituted "surgery," as suggested by DR 00-1. Karen Wulff, a public policy analyst for the Board of Physicians, testified that the Practice of Medicine Committee ("POMC") had made at least two public statements on the subject of laser hair removal prior to issuing DR 00-1. First, in 1997, the committee concluded that laser hair removal was a "non-delegable act," meaning that it had to be performed by the physician. In 1998, the POMC reconsidered, at the request of the Physician Assistant Advisory Committee, and concluded that a licensed Physician Assistant could perform laser hair removal under the supervision of a physician. When the Board received the petition for a declaratory ruling in 2000, it was referred to the POMC, which conducted a more thorough review of the literature and concluded that laser hair removal was a surgical act.
In DR 00-1, the Board adopted the Board of Nursing's definition of an "ablative surgical procedure"
Additionally, Wulff explained that physicians may delegate a "technical act" to nonlicensed individuals. A "technical act" is defined by COMAR 10.32.12.02 as "a routine medical or surgical act which does not require medical judgment and is performed with the supervision as specified within this chapter." (emphasis added). Wulff testified that, in the absence of a declaratory ruling, a physician is expected to rely upon the training and education
Given the above, we find that it was reasonable for the Board to find that laser hair removal was a surgical act, encompassed in HO § 14-101(l)(1)'s definition of the practice of medicine. The Board was entitled to treat DR 00-1 as precedent, as we have already discussed, and appellants presented no expert testimony or other evidence on which the Board could rely in finding that laser hair removal was not surgical, aside from the personal opinion of Dr. Mesbahi. Moreover, appellants cite no authority supporting the proposition that Maryland law permits a layman, unlicensed in any health profession, to perform laser hair removal without any supervision. We therefore agree with the Board's legal conclusions.
Next, appellants claim that because the Board failed to notify them of Declaratory Ruling 00-1 until October of 2005, they were deprived of due process in violation of the Fourteenth Amendment to the U.S. Constitution and Article 24 of the Maryland Declaration of Rights.
It is well-established that an individual has a legitimate property interest in the outcome of a regulatory board's proceedings regarding a professional license. See Regan v. Board of Chiropractic Examiners, 120 Md.App. 494, 510, 707 A.2d 891 (1998). Due process requires that the interested party be afforded notice and the opportunity to be heard. See Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314-15, 70 S.Ct. 652, 94 L.Ed. 865 (1950). There is no allegation that appellants were not notified of the hearing or that they did not have the opportunity to appear.
Rather, appellants claim that they were not notified of the illegality of their conduct. In Benik v. Hatcher, the Court of Appeals noted that a landlord is presumed to know the law governing habitability of premises, just as a motorist is presumed to know the laws regulating motor vehicles. 358 Md. 507, 532, 750 A.2d 10 (2000). A physician is likewise presumed to know the laws regulating the practice of medicine, as are other individuals who provide services to patients in a medical setting. Importantly, appellants were charged with violating the Maryland Medical Practice Act, not DR 00-1. There is no dispute that the Maryland Medical Practice Act is a law and everyone is charged with knowledge of the law. Samson v. State, 27 Md.App. 326, 330, 341 A.2d 817 (1975). The Board's alleged failure to notify appellants of DR 00-1 is irrelevant.
Next, appellants contend that the Board erred by failing to require proof that they knowingly violated the law. At the proceeding below, the Board concluded that a finding of knowing or willful violation was not required because the statutes appellants violated contained no mens rea requirement. The Board also rejected appellants' attempt to rely on criminal cases for the proposition that strict liability crimes are disfavored. We agree with the Board on both points.
Appellants were charged with violating several civil regulatory statutes. The statutes, HO §§ 14-301, 14-601, and 14-404(a)(2), (3) and (18), do not contain a mens rea requirement. Other provisions within the same statutory scheme contain the language "willful" or "knowing" where the legislature intended to require a particular mens rea. See, e.g., HO § 14-404(a)(12) (stating that the licensee may be penalized if he or she "willfully makes or files a false report ..."); § 14-404(a)(17) ("makes a willful misrepresentation in treatment"). Thus, it is clear that this was not an accidental omission. See State Cent. Collection Unit v. Jordan, 405 Md. 420, 431, 952 A.2d 266 (2008) (concluding that legislature intentionally omitted a mens rea requirement from a particular provision when other provisions within the same statutory scheme contained such a requirement).
The presumption against strict liability offenses in criminal law is irrelevant. Strict liability is common in the area of regulatory offenses. As the Supreme Court has explained:
Morissette v. United States, 342 U.S. 246, 255, 72 S.Ct. 240, 96 L.Ed. 288 (1952) (emphasis added). For all of the reasons suggested by the Supreme Court, public policy mitigates strongly against permitting
Finally, in the cross-appeal, appellee contends that the circuit court erred by finding that the fines imposed on Nazemzadeh ($5000) and Rahmati ($1000) and the order that Dr. Mesbahi permanently cease and desist from performing laser hair removal were arbitrary and capricious "because the Board did not sufficiently articulate its reasons for imposing these sanctions."
An administrative agency has broad discretion to impose sanctions it deems appropriate, and the reviewing court must give great deference to the agency's decisions on the issue of sanctions. Md. Transp. Auth. v. King, 369 Md. 274, 291, 799 A.2d 1246 (2002). An agency's sanction should not be disturbed on appellate review unless "the disproportionality or abuse of discretion was so extreme and egregious that the reviewing court can properly deem the decision to be `arbitrary or capricious.'" Id. The party challenging the sanction has the burden of proving that it was arbitrary and capricious. See Md. Aviation Admin., 386 Md. at 581, 873 A.2d 1145. In our view, appellants/cross-appellees have not met that burden in this case.
The circuit court found the fines against Rahmati and Nazemzadeh to be arbitrary and capricious because the Board did not
We believe that the circuit court exceeded the proper scope of judicial review of an administrative sanction. The issue was limited to whether the sanction was so grossly disproportionate to the conduct or such an extreme abuse of discretion as to be arbitrary and capricious. The court made no such finding before remanding the case, and seemingly placed the burden on the Board to justify its sanctions, rather than on the appellants to prove the sanctions were excessive. Indeed, appellants/cross-appellees offered no evidence that the $1000 fine against Rahmati, $5000 fine against Nazemzadeh, or the permanent cease and desist order were grossly disproportionate given the facts of the case.
Additionally, there is no legal support for the circuit court's conclusion that the Board must articulate the reasons for its sanctions the same way it must make findings of fact. To the contrary, the Court of Appeals has recently stated:
Md. Aviation Admin. v. Noland, 386 Md. 556, 580, 873 A.2d 1145 (2005).
Even if an articulation of reasons for the sanctions were required, the Board's opinion and that of the ALJ attached as an exhibit to the Board's opinion provided sufficient explanation. With respect to the monetary penalties, the Board and the ALJ considered the factors specified in COMAR 10.32.02.06B(3).
In proposing the cease and desist order against Dr. Mesbahi, the ALJ said:
The Board obviously agreed with this reasoning when it noted: "The Board is especially concerned about ... the potential for patient harm brought about by Dr. Mesbahi's use of unlicensed persons to provide treatment to her patients in her office."
We find that the appellants did not meet their burden of showing that the sanctions imposed against them were arbitrary and capricious.
Also attached to the opinion was the ALJ's proposed decision, which also made specific findings with respect to the sanctions and penalties adopted by the Board.