In The
Court of Appeals
Seventh District of Texas at Amarillo
No. 07-17-00135-CV
LEONARD MICHAEL HABERMAN, APPELLANT
V.
TEXAS MEDICAL BOARD, ET AL., APPELLEES
On Appeal from the 250th District Court
Travis County, Texas1
Trial Court No. D-1-GN-16-004988, Honorable Gisela D. Triana, Presiding
September 25, 2018
MEMORANDUM OPINION
Before CAMPBELL and PIRTLE and PARKER, JJ.
This is an appeal of a contested case under the Texas Administrative Procedure
Act.2 Leonard Michael Haberman, appellant, filed an application with the Texas Medical
Board for a license to practice medicine. After the Board determined he was ineligible for
1Originally appealed to the Third Court of Appeals, this case was transferred to this Court by the
Texas Supreme Court pursuant to its docket equalization efforts. See TEX. GOV’T CODE ANN. § 73.001
(West 2013). Should a conflict exist between precedent of the Third Court of Appeals and this Court on
any relevant issue, this appeal will be decided in accordance with the precedent of the transferor court.
TEX. R. APP. P. 41.3
2 TEX. GOV’T CODE ANN. ch. 2001 (West Supp. 2017 and West 2016).
a license, Haberman filed suit for judicial review in the district court of Travis County. The
district court affirmed the Board’s order, and Haberman filed this appeal. We affirm.
Background
Haberman earned a bachelor’s degree in chemistry from New York University and
a doctoral degree in chemistry from the University of Minnesota. He also received a
master’s degree in business from the University of Texas. Following an eighteen-year
career at Shell Chemical and its affiliates, Haberman returned to school as a medical
student. He graduated from the Texas Tech University Health Sciences Center School
of Medicine in 2009. He then joined a general surgery residency program at Baylor
College of Medicine in Houston, but left the program after eight months. In 2011, he
entered a post-graduate medical education program in clinical and anatomic pathology in
Colorado Springs, Colorado. The program was accredited by the Accreditation Council
on Graduate Medical Education and sponsored by Catholic Health Initiative Colorado
d/b/a Centura Health—Penrose-St. Francis Health Services.
Haberman completed the first two years of the program; however, he was placed
on academic probation for some of that time. Four months into his third year, Haberman
was dismissed from the residency program for lack of improvement.
In 2014, Haberman applied to the Board for licensure. His application was referred
to the Board’s licensure committee for consideration. Based on Haberman’s dismissal
from the residency program, the committee determined that Haberman had been subject
to “disciplinary action” and was therefore ineligible for a license.
2
The Board adopted the committee’s recommendation. Haberman was advised of
his right to contest the decision at a hearing at the State Office of Administrative Hearings
(SOAH), which he did. Following the SOAH hearing, the administrative law judge (ALJ)
issued a proposal for decision which included factual findings and conclusions of law.
The ALJ determined that the Board had authority to deny Haberman’s application for a
medical license. The Board then issued a final order adopting the ALJ’s findings and
conclusions and determining Haberman ineligible for a Texas medical license. The Board
denied Haberman’s request for a rehearing and Haberman sought judicial review. The
trial court determined that the Board’s order was supported by substantial evidence and
affirmed it. Haberman filed this appeal, contending that his dismissal from the residency
program was not “disciplinary action,” and that he meets the requirements for licensure
in Texas.
Analysis
Issue 1: Substantial Evidence
In his first issue, Haberman argues that the Board’s final order is not supported by
substantial evidence. When reviewing an agency decision under the “substantial
evidence” standard, a court “may not substitute its judgment for the judgment of the state
agency on the weight of the evidence on questions committed to agency discretion . . . .”
TEX. GOV’T CODE ANN. § 2001.174 (West. 2016). Whether the agency’s order satisfies
the substantial-evidence standard is a question of law. See Firemen’s & Policemen’s
Civil Serv. Comm’n v. Brinkmeyer, 662 S.W.2d 953, 956 (Tex. 1984). Substantial
evidence review is essentially “a rational-basis test to determine, as a matter of law,
3
whether an agency’s order finds reasonable support in the record.” Jenkins v. Crosby
Indep. Sch. Dist., 537 S.W.3d 142, 149 (Tex. App.—Austin 2017, no pet.). To meet the
substantial evidence standard, one must show “such relevant evidence as a reasonable
mind might accept as adequate to support a conclusion of fact.” CPS Energy v. Public
Util. Comm’n of Tex., 537 S.W.3d 157, 169 (Tex. App.—Austin 2017, pet. filed). We
presume that the Board’s order is supported by substantial evidence. Id.
The Board’s decision was based on section 164.051 of the Medical Practice Act,
which provides that the Board may refuse to issue a license to practice medicine to
someone who:
is disciplined by a licensed hospital or medical staff of a hospital, including
removal, suspension, limitation of hospital privileges, or other disciplinary
action, if the board finds that the action: (A) was based on unprofessional
conduct or professional incompetence that was likely to harm the public;
and (B) was appropriate and reasonably supported by evidence submitted
to the board.
TEX. OCC. CODE ANN. § 164.051(a)(7) (West 2012). According to Haberman, he was not
subject to “disciplinary action”; was not disciplined by a licensed hospital or the medical
staff of one; did not face removal, suspension, or limitation of his hospital privileges; and
did not have action taken against him that was based on professional incompetence likely
to harm the public. We will address each of Haberman’s challenges in turn.
Disciplinary Action
The Board concluded that Haberman’s dismissal from the residency program
constituted disciplinary action by a licensed hospital or medical staff of a hospital under
section 164.051(a)(7). Haberman asserts that substantial evidence does not support this
4
finding. Haberman contends that “disciplinary action” concerns behavior that the
institution deems unacceptable, and does not encompass action meant to regulate
academic matters.
In the administrative hearing, Haberman testified that he was never disciplined
while in the postgraduate training program. According to Haberman, his probation and
dismissal from the program were based on academic issues. During cross-examination,
Haberman acknowledged that, other than being a resident, he did not have experience in
physician discipline.
Dr. David Newton, the former director of the pathology residency program
Haberman attended, testified that he completed the Board’s form for verification of
Haberman’s postgraduate medical training. One of the questions asked whether
Haberman had ever been “warned, censured, disciplined, [or] had admissions monitored
or privileges limited.” Newton answered “yes” in response to that question. He explained
that he answered affirmatively because Haberman had been placed on remediation, had
been placed on an individual performance improvement plan, and he was ultimately
recommended for termination from the program. He also answered “yes” in response to
the question asking whether Haberman had been placed on probation, asked to withdraw,
or reprimanded, stating that “probation and remediation are sort of similar,” and that
Haberman “had also been reprimanded on multiple occasions.” Newton testified that
Haberman’s performance in the residency program was not satisfactory; evaluations
indicated Haberman made errors and had difficulty performing bone marrow biopsies,
properly administering anesthesia, and arriving at an accurate diagnosis. Newton gave
Haberman the rating of “poor” on the question of professional ability.
5
On cross-examination, Newton agreed that academic probation and disciplinary
probation were different things. He stated that he was not referring to “aberrant behavior”
but to Haberman’s ability and his progression in the residency program. Newton also
agreed that Haberman “was doing fine in clinical pathology.”
Monique Johnston, the Board’s licensure manager, testified that the Board’s
concerns about Haberman’s application for licensure were based on Haberman’s
competence during his training program, remediation during training, and his subsequent
dismissal from the program. She stated, “So the last period of his practice was in regards
to his competence, and there was disciplinary action. So that was of concern for the
Board Staff.” According to Johnston, disciplinary action “would attest to someone’s
clinical competence or their professional character, depending on what the issues were.”
The testimony from Newton and Johnston indicates that “disciplinary action” may
encompass Haberman’s probation during and dismissal from the graduate program. We
conclude that substantial evidence supports the Board’s conclusion that Haberman’s
dismissal from the residency program constituted a disciplinary action within the meaning
of the statute.
Action by a Licensed Hospital
Next, Haberman challenges whether his dismissal was an action “by a licensed
hospital.” Dr. Newton testified that the residency program Haberman attended is located
in a hospital, namely Penrose-St. Francis in Colorado Springs. He explained that the
hospital is the sponsoring institution for the program and pays the residents their salaries.
His pathology group is contracted to run the residency program and is reimbursed by the
6
hospital. Newton testified that his group recommended to the hospital’s graduate
education committee that Haberman be dismissed, and the hospital then dismissed
Haberman from the program.
Haberman concedes in his brief that Colorado law, like Texas law, requires a
hospital to be licensed by the state. During the hearing, Haberman acknowledged that
he signed a resident employment agreement with an entity identified as “Catholic Health
Initiatives Colorado [which] is doing business as Centura Health, Penrose-St. Francis
Hospital, ‘the Hospital.’” The agreement recites that “the Hospital” includes the pathology
residency program which employed and educated Haberman. Haberman’s application
reflected that he obtained work experience during his pathology residency at “Penrose
Hospital.” Haberman also listed “Penrose Hospital” as the evaluating hospital/institution
on his form for verification of postgraduate training.
We conclude that this is substantial evidence supporting the Board’s finding that
“Penrose-St. Francis is a hospital” and its conclusion that Haberman’s dismissal from the
residency program “constituted a disciplinary action by a licensed hospital or medical staff
of a hospital.”
Action by Medical Staff
Haberman next challenges whether his dismissal was an action by a “medical staff
of a hospital.” Newton explained that his pathology group “can’t do anything regarding
termination of a resident, as they are hospital employees,” but that they could recommend
to the hospital’s graduate medical education committee that a resident be terminated.
The evidence showed that Haberman was employed by Penrose-St. Francis, and that the
7
residency program was sponsored by and part of the hospital. Newton testified that
Haberman could not participate in the residency program without signing the resident
employment agreement with the hospital. Newton further testified that the members of
the graduate medical education committee who recommended that Haberman be
terminated were employees or medical staff of the hospital.
We conclude that substantial evidence supports the Board’s conclusion that
Haberman’s dismissal constituted action by the “medical staff of a hospital.”
Removal, Suspension, or Limitation on Hospital Privileges
Haberman next asserts that the action by the residency program “was not to
remove, suspend or limit” his hospital privileges. We note that not only did the Board not
make any such finding or conclusion, it was not required to do so. Under the plain
language of section 164.051, discipline includes “removal, suspension, [and] limitation of
hospital privileges,” but discipline is not limited to those actions. Because the Board made
no finding of fact or conclusion of law that Haberman’s hospital privileges were affected,
we find that Haberman’s complaint is without merit.
Based on Professional Incompetence Likely to Harm the Public
In his final substantial-evidence challenge, Haberman argues that his dismissal
was not a disciplinary action based on professional incompetence likely to harm the
public. Haberman maintains that none of the complained-of errors on which his
termination was based “related to the independent practice of medicine.” Essentially, he
contends that because his mistakes were made in the process of his graduate education,
they do not constitute “professional incompetence.”
8
Newton testified that the pathology staff had enough concerns about Haberman’s
errors that they provided direct supervision for him and reduced the volume of his gross
dissection work by about half. Newton stated that had Haberman not been closely
supervised, his errors could have been harmful to patients. Newton recounted several
instances of misdiagnosis by Haberman, which could have led to improper treatment or
even the “patient’s demise.”
The Board found that Haberman “made several significant errors or omissions that
resulted in, or had the potential to result in, the misdiagnosis of cancers and other serious
infections in patients” and that such errors, if not caught by Haberman’s supervisors,
“could have seriously harmed patients.” The Board concluded that Haberman’s dismissal
“was based on professional incompetence that was likely to harm . . . the public.” We
conclude that the evidence demonstrates that Haberman lacked or failed to develop
certain professional skills or abilities; therefore, substantial evidence supports the Board’s
conclusion.
Haberman’s first issue is overruled.
Issue 2: Statutory Authority
In his second issue, Haberman claims that the Board’s final order exceeds the
statutory authority of the Board. According to Haberman, the Board exceeded its
statutory authority when it found that the actions of the graduate medical program
constituted disciplinary action by a licensed hospital or medical staff of a hospital in
violation of section 164.051(a)(7).
9
A state agency has “only those powers expressly conferred upon it by the
Legislature.” Public Util. Comm’n v. City Public Serv. Bd., 53 S.W.3d 310, 316 (Tex.
2001). But “when the Legislature expressly confers a power on an agency, it also
impliedly intends that the agency have whatever powers are reasonably necessary to
fulfill its express functions or duties.” Id. An agency’s construction or interpretation of a
statute that it is charged with enforcing is entitled to serious consideration by reviewing
courts, so long as that construction is reasonable and does not contradict the plain
language of the statute. Employees Ret. Sys. v. Jones, 58 S.W.3d 148, 151 (Tex. App.—
Austin 2001, no pet.).
Section 164.051(a)(7) gives the Board statutory authority to refuse to issue a
license to practice medicine to a person who “is disciplined by a licensed hospital or
medical staff of a hospital, including removal, suspension, limitation of hospital privileges,
or other disciplinary action.” The Board must determine that “the action was based on
unprofessional conduct or professional incompetence that was likely to harm the public;
and was appropriate and reasonably supported by evidence submitted to the board.” TEX.
OCC. CODE ANN. § 164.051(a)(7).
The statute governing licensure invests the Board with discretion to decide whether
to issue a license to practice medicine to an individual based on conduct that violated
section 164.051. Haberman’s application was denied on grounds identified in the statute
and, as we have discussed above, the Board’s decision was supported by substantial
evidence. The Board did not exercise any power beyond its statutory grant of authority.
10
Because we conclude the Board did not exceed its statutory authority in declining
to issue Haberman a license based on section 164.051(a)(7), we overrule Haberman’s
second issue.
Issue 3: Arbitrary or Capricious
In his third issue, Haberman contends that the Board’s final order is arbitrary or
capricious or characterized by abuse of discretion or a clearly unwarranted exercise of
discretion. “An agency’s decision is arbitrary or results from an abuse of discretion if the
agency: (1) failed to consider a factor the legislature directs it to consider; (2) considers
an irrelevant factor; or (3) weighs only relevant factors that the legislature directs it to
consider but still reaches a completely unreasonable result.” City of El Paso v. Pub. Util.
Comm’n of Tex., 883 S.W.2d 179, 184 (Tex. 1994).
Appellant argues that the Board failed to consider factors relating to the elements
of section 164.051(a)(7). He alleges the Board “failed to consider that the GME program
did not discipline Dr. Haberman,” “failed to consider that the actions of the GME program
were not taken by a licensed hospital or any hospital at all,” and “failed to consider that
the GME program’s action were [sic] not those of a medical staff of a hospital not based
on professional incompetency.”
Appellant’s third issue amounts to a repackaging of the arguments made in his first
issue. In addressing appellant’s first issue, we concluded that substantial evidence
supported the Board’s determination that appellant was subject to disciplinary action; was
disciplined by a licensed hospital or the medical staff of a hospital; and had action taken
against him that was based on professional incompetence likely to harm the public. On
11
this record, we conclude that the Board’s order is not arbitrary or capricious. We overrule
Haberman’s third issue.
Conclusion
We affirm the decision of the Board.
Judy C. Parker
Justice
12