SC Administrative Law Court Decisions

On November 24, 1997, D. Michael Woodward (Woodward) filed A Motion To Present Additional Evidence and further, on November 25, 1997, filed a Motion to Supplement the Record on Appeal. Both motions were heard on December 2, 1997. The Motion to Present Additional Evidence is granted in part and denied in part. The Motion To Supplement the Record on Appeal is denied as premature due to a discretionary decision to seek a consideration of the alleged procedural irregularities by the Board. Likewise, due to the remand directed by this Order, the appeal hearing set for December 12, 1997 is canceled. Finally, with the Board's order vacated and a remand ordered, the status of Woodward's license is now a matter for the Board's reconsideration.

A. Additional Evidence Presented To the Board or Panel Hearing

1. Applicable Law

Fundamentally, an appeal to an ALJ is based upon the record made at the contested case level. S.C. Code Ann. § 1-23-380(A)(5) (Supp. 1996). However, a party who believes additional evidence should be received may petition the ALJ for permission to present that additional evidence to the agency that held the contested case. S.C. Code Ann. § 1-23-380(A)(4) (Supp. 1996). The decision to grant or deny such a petition is a discretionary decision. Cloyd v. Mabry, 295 S.C. 86, 367 S.E.2d 171 (1988).

The judge must evaluate whether the additional evidence is material and then decide whether good reasons exist for the party's failure to present the evidence in the proceeding below. Byers v. South Carolina Alcoholic Beverage Control Comm'n, 305 S.C. 243, 407 S.E.2d 653, 655 (1991). Generally, evidence is material when a rational connection exists between the fact sought to be presented and a fact which is an issue in the case. Gause v. Livingston, 251 S.C. 8, 159 S.E.2d 604 (1968). Stated negatively, evidence is not material if it seeks to prove a proposition not in issue. 31A C.J.S. Evidence § 202 (1996). Further, even "rational evidence" does not always rise to the level of material evidence. See Atlantic Coast Line R. Co. v Searson, 137 S.C. 468, 135 S.E. 567 (1926) (statements of employees denied admissibility due to indefiniteness). Rather, evidence having only slight probative value may be excluded when viewed in light of the time required to establish such evidence. 31A C.J.S. Evidence § 201 (1996). In this case, Woodward presents three areas for which an inquiry is required on whether to allow presenting additional evidence to the Board or Panel Hearing.⁽¹⁾

2. Assertions of Additional Evidence

a. Alleged Deceptive Practice of Bristol-Myers Squibb

A concern below was the propriety of prescribing Stadol, a drug manufactured by Bristol-Myers Squibb, as a long-term treatment for chronic pain such as that associated with migraine headaches. Woodward now seeks to present evidence that the drug manufacturer intentionally misrepresented the addictive nature of Stadol. The evidence will attempt to establish that the drug manufacturer knew that the addictive nature of Stadol made the drug inappropriate for long-term use to relieve chronic pain. Woodward asserts the evidence of the manufacturer's deceit was not available to him at the time of the hearing and that the evidence substantiates both his state of mind in prescribing Stadol and the reasonableness of his prescription practice.

The record shows the addictive nature of Stadol was in issue. Woodward testified that the existing literature and practices of the medical community accepted Stadol for long-term chronic pain management. Such testimony tends to establish Woodward's state of mind in prescribing the drug and his basis for believing his prescription practice was reasonable. Woodward's expert largely agreed that Stadol was appropriate for long-term chronic pain management and produced articles from pain management literature which generally collaborated Woodward's prescription practice. Given this posture of the case, evidence proving that Bristol-Myers Squibb intentionally misled practicing physicians as to the addictive nature of Stadol is not material.

First, the evidence seeks to prove a proposition not in issue. The pertinent inquiry is not whether the manufacturer intentionally withheld data identifying the addictive nature of Stadol. Rather, the inquiry is what means and methods did the medical community utilize as a standard of care in prescribing Stadol for chronic long-term pain management. Certainly, what Bristol-Myers Squibb told the medical community and what the medical community believed is material. That evidence, however, is already in the record and has been testified to by several witnesses.

Second, at best, the evidence has only a slight probative value. Such evidence should be excluded when viewed in light of the time required and the uncertainty interjected in seeking to establish the evidence. For example, to adequately prove Bristol-Myers Squibb deceived the medical community concerning the addictive nature of Stadol would by necessity require the prosecuting attorney to present witnesses from Bristol-Myers Squibb who, one would assume, would seek to establish no deception was involved. The time and uncertainty associated with such evidence, when coupled with the slight probative value, requires denying Woodward's request to have the Hearing Panel or the Board hear additional evidence on whether the drug manufacturer intentionally misrepresented the addictive nature of Stadol.

b. Alleged Hallucinogenic Properties of Stadol

Woodward seeks to establish testimony that Stadol may produce hallucinations of a sexual nature. The evidence sought to be introduced will include testimony and documentation from Dr. I. Joseph McFadden and Dr. Barry Eliot Cole, who allegedly will support a conclusion that patients on Stadol may have sexual hallucinations. At the December 2, 1997 hearing on the motions now under review, both doctors submitted affidavits stating that within a medical degree of certainty Stadol could produce hallucinations including sexual themes. Further, evidence is sought through testimony and documentation from Dr. Bruce Molholt and Dr. Jay Amsterdam, who will also allegedly testify that Stadol may cause hallucinations.

The evidence of hallucinations overall and sexual hallucinations in particular are material. The evidence already contains uncontradicted documentation that at least one patient with whom Woodward allegedly had sexual contact was in fact having hallucinations, and the evidence confirms both patients were using Stadol. Further, one member of the Hearing Panel asked Woodward's expert whether Stadol exhibited hallucinogenic properties. The prosecuting attorney's closing argument before the hearing panel did not ask for revocation of Woodward's license for overprescribing Stadol, since he stated overprescribing alone was not a sufficient ground for revocation. Rather, the attorney argued that license revocation was required due to Woodward's inappropriate sexual conduct. Thus, a rational connection exists between the fact sought to be presented (i.e. Stadol causes hallucinations and therefore leads to an inference that the sexual contacts with patients may have been hallucinations) and a fact which is an issue in the case (i.e. the allegation that Woodward engaged in inappropriate sexual conduct with patients).

Further, good reason existed for Woodward not knowing of the alleged hallucinogenic properties of Stadol. At the panel hearing in January of 1997, Woodward's expert testified that the ability to hallucinate from the use of Stadol is extremely rare. Thus, presumably having interviewed Woodward's expert prior to testifying, Woodward's attorney had little reason to believe that a possibility of hallucinations presented a reasonable line of inquiry for the defense of Woodward. However, in July of 1997, national publicity from ABC news suggested the manufacturer of Stadol knew the drug had hallucinogenic properties and that such properties were unknown to practicing physicians prescribing the drug. Thus, a valid basis existed for Woodward's expert being unaware of the alleged hallucinogenic tendencies of Stadol. Accordingly, Woodward may introduce to the Hearing Panel or the Board evidence and documentation from Drs. I. Joseph McFadden, Barry Eliot Cole, Bruce Molholt and Jay Amsterdam on the issue of the hallucinogenic properties of Stadol.

c. Lack of Testimony of Alleged Key Witness

At the panel hearing a witness testified Woodward made a house call to her home. The witness testified that prior to Woodward's arrival, Woodward instructed her to have her daughter out of the house. The witness complied with Woodward's request by having the daughter stay "two doors down at my neighbor's house." The witness testified that upon arriving, Woodward injected her with a substance causing her to pass out and then committed an act involving inappropriate sexual contact. The witness testified the injection caused her to remain in a state of sleep until a neighbor woke the witness "a couple of days later." Woodward now seeks to introduce the testimony of the neighbor on the basis that the neighbor's testimony will discredit the testimony given by the witness at the panel hearing.

While Woodward is woefully short on the details of the new evidence, I reluctantly exercise my discretion to find the testimony of the neighbor is material evidence. No affidavit was submitted from the neighbor and nothing explains what the new evidence is except that the neighbor's testimony will allegedly "discredit" the testimony presented at the panel hearing. Despite these shortcomings, since the most critical issue in the panel hearing was whether Woodward engaged in inappropriate sexual contact with a patient, I conclude that the mere discovery that a neighbor exists with knowledge of the events of the night and days following the house call presents sufficiently material evidence to allow the neighbor to testify as to that event.

Good cause exists for Woodward not presenting the testimony of the neighbor. Woodward's inability to know of the neighbor results from the Board's denial of Woodward's request to depose the prosecuting attorney's witnesses. Thus, Woodward was not aware until the witness was testifying that a neighbor existed who could substantiate or discredit some of the events of the night and days following Woodward's house call. Accordingly, Woodward could not have easily known of the neighbor's existence. Therefore, Woodward may introduce evidence as to the neighbor's observations and knowledge of the events surrounding the house call in dispute in this matter.

B. Evidence Of Irregularities In Procedure Committed Below

1. Applicable Law

While generally an ALJ's appellate review is limited to reviewing the record, the ALJ may take proof independent of the record if the proof attempts to establish irregularities in procedures not already shown in the record. S.C. Code Ann. § 1-23-380(A)(5) (Supp. 1996). A reviewing court has the duty to examine the procedural methods employed at an administrative hearing to ensure that a fair and impartial procedure was used. Ross v. Medical University of South Carolina, 317 S.C. 377, 453 S.E.2d 880 (1994). In conducting such a review, the ALJ has discretion in the taking of evidence seeking to establish the asserted irregularities. Id. A failure of the reviewing court to examine the asserted irregularities is a basis for reversal accompanied by a remand directing the judge to accomplish the task. Anton v. South Carolina Coastal Council, 321 S.C. 481, 469 S.E.2d 604 (1996).

2. Procedure For Reviewing Alleged Irregularities

While the reviewing judge has a duty to examine the procedural methods employed by the contested case body to ensure that a fair and impartial procedure was used, that examination does not require ignoring and excluding an existing and otherwise appropriate process available at the level below. Rather, a remand to allow the lower court to deliberate further is proper. See 5 C.J.S. Appeal and Error § 864 (1993) (in a proper case and with sufficient reason the court may remand the case to the court below for further proceedings). The remand can direct the lower body to take additional evidence and reach a conclusion on specified issues when the allegations warrant such treatment. See Payne v. Bouharoun, 292 S.C. 390, 356 S.E.2d 438 (Ct. App. 1987) (case remanded for a hearing on punitive damages where allegations warranted such a hearing). Here, proper reasons exist for a remand requiring the Board to consider the procedural irregularities sought to be raised.

First, while certainly the reviewing judge must probe alleged procedural irregularities, discretion resides in the judge in deciding the most appropriate means to accomplish the evidentiary inquiry. Ross v. Medical University of South Carolina, 317 S.C. 377, 453 S.E.2d 880 (1994). No abuse of discretion occurs where the reviewing body declines to take additional evidence until the lower body addresses the alleged irregularities in the lower body's own forum. Such a procedure is especially fitting in a case such as this in which the Board has its own counsel, Woodward has his counsel and the prosecuting attorney represents the State's interest. No significant prejudice results from such a remand since any party may appeal the Board's final order and challenge the Board's position on any alleged procedural irregularity.

Second, the Board has simply not addressed the concerns raised by Woodward in that the alleged irregularities occurred outside the record. See S.C. Code Ann. § 1-23-380(A)(5) (Supp. 1996) (additional evidence proper to review irregularities occurring outside the record). By way of example only, the Board has not been afforded an opportunity to address the issue of whether the Hearing Panel, without the knowledge of either Woodward or the prosecuting attorney, did or did not receive ex parte material of a factual nature. Additionally, the Board has not addressed whether the composition of the Investigating Review Committee in the Woodward matter properly or improperly consisted of investigators, prosecutors and adjudicators or whether the Investigating Review Committee was legally empowered to act as it did in the Woodward matter. The Board has not addressed the issue of whether it has a policy for or against disclosing allegedly exculpatory evidence to the Investigating Review Committee or to Woodward and whether that policy was followed or violated in this case. A review by the Board of such fundamental issues along with the other issues raised is appropriate.

Third, while I make no findings or intimations as to the facts or conclusions to be reached on any of the allegations raised, Woodward's assertions are not mere allegations of minor irregularities with no degree of evidentiary support. After the Board's final decision, Woodward, pursuant to a circuit court order, obtained depositions of six individuals involved in the Woodward matter. The depositions included two of the Board's investigators, the expert used by the prosecuting attorney, and the three members of the hearing panel. Accordingly, the issues result from investigation by Woodward and present fundamental concerns appropriate for the Board to hear evidence and reach conclusions.

Fourth, allowing the Board to first address these concerns in its own evidentiary hearing is even more appropriate here due to the manner in which the appeal has been presented. Throughout this appeal the prosecuting attorney has presented the responses to the irregularities. While I in no way suggest the prosecuting attorney would intentionally misrepresent any position, he, as a prosecutor in this case, is simply not able to articulate what action or position the Board took or would have taken in a given circumstance.

Finally, allowing the Board to address the alleged procedural irregularities raised by Woodward causes no undue delay. A remand is already required allowing either the Hearing Panel or the Board or both to receive additional evidence on the alleged hallucinogenic properties of Stadol, and to receive testimony of the neighbor's observations on the night and following days related to Woodward's house call. While the Board is considering the additional testimony in those areas, it can also hear and address the procedural irregularities raised by Woodward. Accordingly, considering all of the factors in this case, a remand directing the Board to address Woodward's procedural issues is proper.

C. Status Of Board's Order

In general, a remand from an appellate body is a final decision ending the appeal. See 5 C.J.S. Appeal and Error § 861 (1993) (an appellate body may dispose of a cause by remanding the matter to the lower body for additional proceedings). Likewise, an adjudicatory body issuing a contested case order is subject to having the matter ended by an appellate decision vacating and remanding the matter for additional fact finding. See Hamm v. South Carolina Public Service Comm'n, 298 S.C. 309, 380 S.E.2d 428, (1989) (lower court order upholding order of PSC was vacated and case remanded to PSC to consider the prudence of PSC's derating decision and deciding the effect of the derating on depreciation expense and carrying cost issues). Here, the remand directs the Board to find facts in light of additional evidence to be presented on the alleged hallucinogenic properties of Stadol and testimony of the neighbor's observations on the night and following days related to Woodward's house call. Further, the remand directs the Board to find the facts and state the conclusions of law pertaining to Woodward's allegations of procedural irregularities. Accordingly, the Board's decision is vacated and the matter is remanded for action by the Board consistent with the order stated below.

THE BOARD'S ORDER IS VACATED AND THIS MATTER IS REMANDED

1. The Motion to Present Additional Evidence is granted in part and denied in part as fully explained above.

2. The Motion To Supplement the Record on Appeal is denied as premature due to a discretionary decision to seek a consideration of the alleged procedural irregularities by the Board.

3. The appellate hearing set for December 12, 1997 is canceled.

4. The appeal is ended with the status of Woodward's license a matter for the Board's reconsideration.

5. The Board shall make findings of fact in light of the additional evidence to be presented, and the Board shall find the facts and state conclusions of law pertaining to Woodward's allegations of procedural irregularities, all of which shall address the following particulars:

a. With the Board having the right to limit the presentation of cumulative evidence, the Board or a Hearing Panel appointed by the Board shall hear testimony from Drs. I. Joseph McFadden, Barry Eliot Cole, Bruce Molholt and Jay Amsterdam on the issue of the hallucinogenic properties of Stadol.

b. The Board or a Hearing Panel appointed by the Board shall hear testimony of the neighbor's observations and knowledge of the events occurring on the night and following days related to Woodward's house call.

c. The Board shall take evidence, hear testimony, make findings of fact and reach conclusions of law on the following alleged procedural irregularities:

i. The extent, if any, to which the Woodward matter involved the improper mingling of information and personnel between investigator, prosecutor and adjudicator.

ii. The extent, if any, to which the Woodward matter allowed improper ex parte communications to the Hearing Panel.

iii. The extent, if any, to which the Woodward matter permitted the investigative review committee to have unauthorized members participate in decision making, and whether the investigative review committee is authorized by law.

iv. The extent, if any, to which the Woodward matter involved a Hearing Panel that misapplied or misunderstood the standard of proof in physician licensing matters.

v. The extent, if any, to which the Woodward matter permitted the concealment of exculpatory evidence from Woodward or the investigative review committee.

vi. The extent, if any, to which the Woodward matter involved evidence obtained in violation of the fourth amendment to the United States Constitution.

vii. The extent, if any, to which the Woodward matter improperly failed to disclose the identity of the complaining parties to Woodward.

viii. The extent, if any, to which the Woodward matter involved a violation of due process by the Board's denial of discovery by deposition of the State's witnesses.

AND IT IS SO ORDERED.

RAY N. STEVENS

Administrative Law Judge

This the 9th day of December, 1997

Columbia, South Carolina

1. Woodward's Motion To Present Additional Evidence to the Board also contains allegations of numerous irregularities in procedure committed by the Hearing Panel and the Board. For example, Woodward asserts the hearing involved the improper mingling of information and personnel between investigator and adjudicator, allowed improper ex parte communications to the Hearing Panel, permitted the investigative review committee to have unauthorized members participate in decision making, presented a Hearing Panel that misunderstood the standard of proof, sanctioned the concealment of exculpatory evidence, allowed obtaining evidence illegally, and failed to disclose the identity of the complaining parties to Woodward. These matters are not addressed here since they are more appropriately part of the Motion to Supplement the Record on Appeal which is addressed in a separate part of this Order.