HLADYS v. COMMONWEALTH, 235 Va. 145 (1988)


366 S.E.2d 98

JACOB J. HLADYS v. COMMONWEALTH OF VIRGINIA

45608 Record No. 841636Supreme Court of Virginia.
March 4, 1988

Present: All the Justices

There being no showing of bias or improper conduct in the administrative determination here under review, the institutional connection between the assistant attorneys general involved in this proceeding was in itself insufficient to impair the right of the plaintiff to due process.

Practice and Procedure — Administrative Process — Constitutional Law — Due Process

Plaintiff doctor was a “physician-provider” with the Virginia Medicaid Program and rendered medical care to patients, for which he was compensated by the Commonwealth. After a controversy concerning his billing practices, his contract to provide services was terminated. The doctor appealed an adverse decision in an administrative hearing to the circuit court, which found the record of that hearing defective and remanded the matter for further proceedings. Eight years later an assistant health commissioner was appointed to serve as hearing officer in the remanded proceedings, and an assistant attorney general was designated to advise him on procedural and evidentiary matters. Another assistant attorney general prosecuted the case for the Commonwealth. The result of the hearing, which was adverse to the plaintiff, was affirmed by the State Health Commissioner. The circuit court affirmed the Commissioner’s decision and denied a motion to vacate the judgment. The Court granted plaintiff an appeal limited to the question whether the second hearing was so procedurally flawed as to deny plaintiff due process of law.

1. The U.S. Supreme Court specified the minimum requirements of constitutional due process which must attend administrative hearings and observed that an official of the agency involved may serve as decision-maker, and would not be barred from serving even if he had some prior involvement in the case before him, provided that he did not participate in making the determination under review. Goldberg v. Kelly, 397 U.S. 254
(1970), discussed.

2. The U.S. Supreme Court has also said that without a showing to the contrary, state administrators are assumed to be men of conscience, capable of judging a particular controversy fairly on the basis of its merits. Withrow v. Larkin, 421 U.S. 35 (1975).

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3. This Court also applies a presumption that public officials have acted correctly, which may be overcome by evidence of bias or improper conduct. Such a showing was not made in this case.

4. The Attorney General’s office here complied with the mandate of Code Sec. 2.1-12 by assigning different assistants to prosecute the case and to advise the hearing officer on procedure.

5. The official conduct of assistant attorneys general is entitled to a presumption of honesty and fairness no less than that accorded to the acts of other public officials and, in the absence of a showing of bias or improper conduct, the Court will assume that their conduct was proper and that the impartiality of the tribunal was unimpaired.

Appeal from a judgment of the Circuit Court of the City of Richmond. Hon. Willard I. Walker, judge presiding.

Affirmed.

(Charles E. Samuels; Cabell, Paris, Lowenstein Bareford, on brief), for appellant. Appellant submitting on brief.

Gail Starling Marshall, Deputy Attorney General (William G. Broaddus, Attorney General; Maston T. Jacks, Deputy Attorney General; Teresa D. Creef Assistant Attorney General, on brief), for appellee.

RUSSELL, J., delivered the opinion of the Court.

This appeal raises a question concerning the due process requirements governing administrative hearings and decisions.

Jacob J. Hladys, M.D., was a licensed physician practicing in the Richmond area. In 1969, he entered into a contract with the State Department of Health to act as a “physician-provider” with the Virginia Medical Assistance Program (Medicaid). In that capacity, he rendered medical services to Medicaid patients and was compensated by the Commonwealth. In May 1972, after an extended controversy concerning his billing practices, Dr. Hladys received a letter from the State Department of Health, advising him that his contract would be terminated, effective June 15, 1972, pursuant to a clause in the contract providing for termination upon 30 days written notice by either party.

Dr. Hladys requested and received an administrative hearing before the State Health Commissioner. That hearing was held in June 1973. Receiving an adverse decision, Dr. Hladys appealed to

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the circuit court, which found the record of the 1973 hearing to be defective and remanded the matter to the State Health Commissioner for further proceedings. A new administrative hearing was not held until May 20, 1981

At the 1981 hearing, Dr. Bedford H. Berrey, assistant health commissioner, was appointed to serve as hearing officer. Leonard Vance, an assistant attorney general, was designated as counsel to Dr. Berrey for the purpose of advising him on procedural and evidentiary matters. Howard M. Casway, also an assistant attorney general, prosecuted the case for the Commonwealth. The Commonwealth’s chief witness against Dr. Hladys was Dr. Edwin M. Brown, the deputy health commissioner.

The result of the hearing was adverse to Dr. Hladys. On October 15, 1981, the State Health Commissioner affirmed the decision to terminate the contract. Dr. Hladys petitioned the circuit court for review in 1983. In 1984, the court, Judge James E. Sheffield presiding, affirmed the commissioner’s decision. Dr. Hladys filed a motion to vacate the judgment, which the court, Judge Willard I. Walker presiding, denied. We granted Dr. Hladys an appeal limited to the question whether the 1981 hearing was so procedurally flawed as to deny him due process of law.

Dr. Hladys’ due process argument is twofold. He contends that the combining of adjudicative and prosecutorial functions in the office of the Attorney General, as well as the appointment of a hearing officer who was an official of the agency which investigated and presented the case against him, and who was also a colleague of the chief witness against him, denied his due process rights per se.

[1] In Goldberg v. Kelly, 397 U.S. 254 (1970), the Supreme Court specified the minimum requirements of constitutional due process which must attend administrative hearings: timely and adequate notice, the right to confront adverse witnesses and present one’s own evidence, the right to the assistance of retained counsel, and an impartial decision-maker. The Court observed that an official of the agency involved might serve as decision-maker and would not be barred from serving even if he had some prior involvement in the case before him, provided he had not ‘ participated in making the determination under review. Id. at 271.

[2] In Withrow v. Larkin, 421 U.S. 35 (1975), the Supreme Court reversed a lower federal court’s decision which had held unconstitutional, on due process grounds, an administrative proceeding

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in which a single state agency had investigated, prosecuted, and decided a case. The Court said: “The initial charge or determination of proximate cause and the ultimate adjudication have different bases and purposes. The fact that the same agency makes them in tandem and that they relate to the same issues does not result in a procedural due process violation.”Id. at 58. The Court expressed the underlying rationale: “Without a showing to the contrary, state administrators ‘are assumed to be men of conscience and intellectual discipline, capable of judging a particular controversy fairly on the basis of its own circumstances.’ ” Id. at 55 quoting United States v. Morgan, 313 U.S. 409, 421 (1941). See also Schweiker v. McClure, 456 U.S. 188 (1982).

[3] We also apply a presumption that public officials have acted correctly. State Bd. of Health v. Godfrey, 223 Va. 423, 436, 290 S.E.2d 875, 882 (1982). That presumption may be overcome by evidence of bias or improper conduct, see Schweiker, 456 U.S. at 95-96, but no such showing was made in the case before us. Dr. Hladys does not contend that any impropriety actually existed, but merely that the administrative proceedings were structurally flawed by the decision-maker’s institutional connection with the investigating agency and its chief witness. In the absence of a showing of bias or improper conduct, we do not agree.

We take a similar view, for a similar reason, of the dual role of the Attorney General’s office. Mr. Vance, advisor to the hearing officer, stated on the record that he had not discussed the case with Mr. Casway, the prosecutor. Mr. Vance further represented that he would offer no advice to the hearing officer as to “what kind of decision he should render,” and that his role was to advise the hearing officer on procedure.

[4] The Attorney General is directed by Code Sec. 2.1-121 to render “all legal service” in civil matters for the Commonwealth and all its agencies. In the present case, the Attorney General complied with that mandate by assigning separate assistants to prosecute the case and to advise the hearing officer on procedure. The Supreme Court of Washington, considering a similar problem, decided that the assignment of a single assistant attorney general to perform such a dual role would impair at least the appearance of fairness of the tribunal, but that the potential problem would be resolved by the appointment of different attorneys general for the performance of disparate functions. Medical Disciplinary

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Board v. Johnston, 99 Wn.2d 466, 480, 663 P.2d 457, 465 (1983).

[5] The official conduct of assistant attorneys general is entitled to a presumption of honesty and fairness no less than that accorded to the acts of other public officials. In the absence of a showing of bias or improper conduct on their part, we will assume that their conduct was proper and that the impartiality of the tribunal was unimpaired. No showing of bias or improper conduct was made in this case, and the institutional connection between the two assistant attorneys general involved in this proceeding did not, per se, impair the right of Dr. Hladys to procedural due process.

For the reasons stated, the judgment will be

Affirmed.

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