On this date in 2006, the Supreme Court decided In re License Issued to Zahl, ___ N.J. ___ (2006). The opinion of Justice Zazzali, for a unanimous Court, upheld the decision of the Board of Medical Examiners to revoke the medical license of Kenneth Zahl. The Appellate Division had reversed the revocation of the license, but the Supreme Court stepped in and reinstated the Board’s action.
As Justice Zazzali recounted in detail, the Board had found Zahl to be a “fundamentally corrupt licensee.” That conclusion was supported by multiple types of highly wrongful conduct. Though the Court’s opinion described the situation in much more detail, Justice Zazzali summarized in a single sentence the core of Zahl’s wrongdoing: “[O]ver a course of years and under varying circumstances, Zahl repeatedly engaged in deceitful and fraudulent conduct. He over-billed Medicare, retained duplicate payments from his patient’s insurance company, made misrepresentations to his own disability carrier, and inserted his colleagues’ names into patient records for patients they did not treat.”
Such rampant “dishonesty [was] a sufficient basis to justify license revocation,” as “[e]ngaging in dishonest behavior with … non-patient actors has ramifications for the public at large in the form of increased taxes to fund public healthcare programs, higher insurance premiums, added litigation, and the like. Moreover, patients rightfully may fear entrusting a deceitful physician with their lives and the lives of their loved ones for it is difficult to compartmentalize dishonesty in such a way that a person who is willing to cheat his government . . . may yet be considered honest in his dealings with his patients.”
Zahl argued that there was no evidence that he had harmed any patients, and he cited evidence he submitted from patients who lauded his services. But “Zahl’s level of patient care was never an issue in this matter because the Attorney General stipulated that Zahl’s misconduct did not result in patient harm before disciplinary proceedings began. Nonetheless, the Board found that regardless of the level of patient care that Zahl provided, Zahl’s dishonest and deceptive conduct was so extreme as to be ‘inimical to the practice of medicine,’ necessitating the revocation of his license to protect the public.”
Besides, Justice Zazzali said, “[t]he Board did not rest its penalty determination on Zahl’s fraudulent conduct in a vacuum, divorced from the individual circumstances of his case. Rather, the Board stated that it was affording particular deference to the ALJ’s credibility judgment in respect of Zahl’s shifting and inconsistent testimony. Moreover, observing Zahl over the course of a seven-day hearing, the ALJ found that he lacked remorse and continued to exhibit a sense of entitlement to the fraudulently obtained funds. As an appellate tribunal, we too defer to those credibility and character judgments.”
This opinion, which continues to be cited, emphasizes the deference to which administrative agencies who see witnesses and exercise their subject matter expertise receive from appellate courts. There are continuing lessons here for agencies, parties, and the attorneys who represent those parties.