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### STATE OF MICHIGAN

COURT OF APPEALS

NATHAN MURPHY-DUBAY,

Plaintiff-Appellant, FOR PUBLICATION August 18, 2015 9:00 a.m.

v No. 321380 Court of Claims DEPARTMENT OF LICENSING AND REGULATORY AFFAIRS and DIRECTOR, DEPARTMENT OF LICENSING AND REGULATORY AFFAIRS, LC No. 14-000019-MZ

Defendants-Appellees.

NATHAN MURPHY-DUBAY,

Plaintiff-Appellant,

v No. 321749 Ingham Circuit Court DEPARTMENT OF LICENSING AND REGULATORY AFFAIRS,

Defendant-Appellee. LC No. 13-001164AA

Before: S AWYER , P.J., and M. J. K ELLY and S HAPIRO , JJ.

P ER C URIAM

. In Docket No. 321380, plaintiff appeals as of right from an op inion and order of the Court of Claims granting defendants’ motion for summary disposi tion on plaintiff’s complaint for a writ of mandamus and declaratory judgment; plaintiff soug ht to compel the Department of Licensing and Regulatory Affair s to take action on his purporte d application for a limited license to practice medicine. In Doc ket No. 321749, plaintiff appeals as of right from a final order of the circuit court affirming the decision of the Department of Licen sing and Regulatory Affairs, Bureau of Health Care Services, Professional Licensing Section, which rejected the application. We affirm.-2- I. FACTS

Plaintiff attended Saba Univers ity School of Medicine, located on the island of Saba in the Netherland Antilles. He completed two years of coursework, followed by two years of clinical rotations through Dal housie University in Nova Scotia, Canada. After his clinical rotations, plaintiff returned to Michigan and began seeking ent rance into postgraduate clinical training programs (commonly known a s “residencies”), but was un able to secure a position. 1

On June 18, 2013, plaintiff submitted an application on a form he created himself, seeking a “limited license” to practice medicine within the Sta te of Michigan pursuant to MCL 333.16182(1). On July 29, 2013, plaintiff sent defendants a fo llow-up letter, asking for a favorable response, or, in the event of a denial, for an opport unity to be heard pursuant to MCL 333.16232. On September 23, 2013, plaintiff filed a complaint for a writ of mandamus and declaratory judgment in the Ingham Circuit Court seeking an ord er directing defendants to take action on his June 18, 2013 application and entry of a judgment declaring the rights of the parties regarding medical licensure under applicable constitutional, st atutory, and administrative law.

On September 30, 2013, the manager of the Bureau of Health Car e Services, Professional Licensing Section, sent plaintiff a letter explaining that the board of medicine does not issue limited licenses to individuals upon request and that limited l icenses are “typically issued for a group of licensees who either hav e restrictions to the location in which they may physically practice such as with an educat ional limited license or for dis ciplinary purposes for someone who has previously held a full license.” In addition, the manager explained that MCL 333.16232 does not authorize a hearing for someone whose education or training does not meet the requirements for licensure as a physician, but a pplies to initial licensure applicants who meet the educational and training requirements, but a re denied licensure for reasons related to past criminal convictions, previous disciplinary actions, or other issues tha t may impact or relate to their overall good moral character and ability to practice safely and legally in the State of Michigan, giving those individuals the opportunity for a hearing to demon strate that, despite their history, they currently possess good moral character and can practice th eir profession safely. On October 18, 2013, plaintiff filed an appeal in the Ingham Circuit Court seeking judicial review of defendants’ September 30, 2013 lett er rejecting his application for a limited license and request for a hearing. 2

On October 28, 2013, defendants filed a motion for summary dis position of plaintiff’s complaint for a writ of mandamus and declaratory judgment pursu ant to MCR 2.116(C)(8) and

1 Plaintiff has also taken and passed “Step 3” of the United Sta tes Medical Licensing Examination (USMLE), which is ty pically taken after one has com pleted a residency.

2 Although plaintiff characterizes the agency’s action as “denyi ng” him a license, the agency’s action is more accurately charact erized as rejecting his applic ation (again, the application form was created by plaintiff himself because the agency had not and does not recognize the type of license plaintiff believed he was entitled to under MCL 333.161 82(1)). The agency refunded the application fee plaintiff in cluded with his application.-3- (C)(10). On November 1, 2013, plaintiff filed a response. On January 23, 2014, due to statutory changes, plaintiff’s writ of ma ndamus and request for declarato ry judgment claims were transferred to the Court of Claims pursuant to MCL 600.6404(3), while the appeal of the agency decision remained in circuit court.

On April 1, 2014, the Court of Claims issued an opinion and or der granting defendants’ motion for summary disposition on plaintiff’s complaint for a w rit of mandamus and declaratory judgment pursuant to MCR 2.116(C)(8). On April 28, 2014, the I ngham Circuit Court issued a final order affirming the S eptember 30, 2013 agency decision.

II. INTERPRETATION OF MCL 333.16182

Plaintiff first asserts that def endants misinterpreted and mis applied the Public Health Code, 1978 PA 368, as amended, MCL 333.1101 et seq ., when they failed to issue him a “limited license” to practice medicine, which he contended was permitted by MCL 333.16182(1). We disagree. 3

MCL 333.16182 states as follows:

(1) A board may grant a limited license to an individual if th e board determines that the limitation is consistent with the ability o f the individual to practice the health profession in a safe and competent manner, is necessary to protect the health and safety of patients or clients, or is app ropriate to promote the efficient and effective deliv ery of health care services.

(2) In addition to the licenses issued under subsection (1), a board may grant the following types of l imited licenses upon application by an individual or upon its own determination:

(a) Educational, to an indivi dual engaged in postgraduate educ ation.

(b) Nonclinical, to an individual who functions only in a nonc linical academic, research, or administrative setting and who does not hold himself or herself out to the public as bei ng actively engaged in the prac tice of the health profession, or otherwise directl y solicit patients or clients.

(c) Clinical academic, to an individual who practices the heal th profession only as part of an academic institution and only in connection with his or her employment or other contractual relationship with that academic institution. For an individual applying for a lim ited license under this subdivi sion to engage in the

3 This issue of statutory interpr etation presents a question of law reviewed de novo. Huron Behavioral Health v Dep’t of Community Health , 293 Mich App 491, 497; 813 NW2d 763 (2011).-4- practice of medicine under part 170, “academic institution” mea ns that term as defined in section 17001.

Specifically, plaintiff asserts that part 1 of subsection (1), which authorizes a limited license when “consistent with the ability of the individual to practice the health profession in a competent manner,” is applicable here, and “[i]t is this provis ion that authorizes the Agency to issue Appellant a limited licen se which it refuses to do.”

Subsection (1) permits a limited license to be issued if any o f its three criteria are met, including the “consistent with the ability” condition upon whic h plaintiff relies. However, the Legislature via the Public Heal th Code invested in the various medical boards broad discretion with respect to the licensing of applicants to practice medicin e. It did not, as plaintiff asserts, unambiguously provide in subsection (1) that a board grant a li mited license to practice medicine to someone in plaintiff’s particular situation.

For example, MCL 333.16174(1) permits a board to enact rules t hat promote safe and competent practice and informed consumer choice:

An individual who is licensed or registered under this article shall meet all of the following requirements:

* * *

(c) Have a specific education or experience in the health prof ession or in a health profession subfield or health profession specialty field of the health profession, or training equivale nt, or both, as prescribed by t his article or rules of a board necessary to promote safe and competent practice and in formed consumer choice.

MCL 333.16141(3) makes it clear that it is the boards that set the standards: “The department may promulgate rules to promote the effective and consistent ad ministration of this article. However, the department shall not promulgate rules that constit ute the licensure, registration, or examination of health professionals.” Likewise, MCL 333.16148( 1) provides that “a board may promulgate rules to establish standards for the education and t raining of individuals to be licensed or registered, or whose licenses or registrations are to be renewed, for the purposes of determining whether graduates of a training program have the kn owledge and skills requisite for practice of a health profession or use of a title.” MCL 333.16 146(2)(b) permits a board to “[r]eclassify licenses on the ba sis of a determination that the addition or removal of conditions or restrictions is appropriate.” And, MCL 333.16145(3) states tha t “[o]nly a board or task force shall promulgate rules to specify requirements for licenses, re gistrations, renewa ls, examinations, and required passing scores.”

In MCL 333.16175, the Legislature directed that a board or its task forces “consider” various factors in deve loping the standards:

In developing minimum standards of educational prerequisites f or licensure or registra tion, a board and its task forces shall co nsider equivalency and proficiency testing and other mechanisms, and where appropriate grant credit for-5- past training, education, or experience in health and related f ields. Standards may include those for formal educat ion, practice proficiency, and o ther training, education, or experience which m ay provide equivalence to compl etion of formal educational requirements.

This statute does not restrict a board in its decisions that fo llow the above considerations. Rather, it reflects a gran t of power and discretion.

Finally, it is evident from viewing the entire regulatory sche me (rather than only looking at MCL 333.16182 in isolation), that subsection (1) was provide d so that a board or task force may, in its discretion, issue limited licenses in disciplinary proceedings. See Nolan v Mich Dep’t of Licensing & Regulation , 151 Mich App 641, 653; 391 NW2d 424 (1986); MCL 333.16108 (defining “reinstatement” as “the granting of a license or cert ificate of registration, with or without limitations or conditions, to an individual whose licen se or certificate of registration has been suspended or revoked,” and “reclassification” as “an actio n by a disciplinary subcommittee by which restrictions or conditi ons, or both, applicable to a l icense are added or removed.”); MCL 333.16106 (defining “limitation” as “an action by which a b oard imposes restrictions or conditions, or both, on a license,” and “limited license” as “a license to which restrictions or conditions, or both, as to scope o f practice, place of practice , supervision of practice, duration of licensed status, or type or condition of patient or client serv ed are imposed by a board.”); MCL 333.16226 (instructing disciplinary subcommittees to order a li mited license as a sanction for certain violations); MCL 333.16245(“an individual whose license is limited, suspended, or revoked under this part may apply to his or her board or task f orce for a reinstatement of a revoked or suspended license or reclassification of a limited l icense pursuant to section 16247 or 16249.”); MCL 333.16247(1)(“A board or task force may reinstate a license or issue a limited license to an individual whose license has been suspended or re voked under this part if after a hearing the board or task force is satisfied by clear and convi ncing evidence that the applicant is of good moral character, is able to practice the profession wit h reasonable skill and safety to patients, has met the criteria in the rules promulgated under s ection 16245(6), and should be permitted in the public interest to practice.”); MCL 333.16249( “A disciplinary subcommittee may reclassify a license limited under this part to alter or re move the limitations if, after a hearing, it is satisfied that the applicant will practice the p rofession safely and competently within the area of practice and under conditions stipulated by the disciplinary subcommittee, and should be permitted in the public interest to so practice.”).

Plaintiff’s argument that defe ndants misinterpreted and misapp lied the relevant portions of the Public Health Code fails. Plaintiff’s argument that the availability of medical care woul d be enhanced by issuance of the t ype of limited license he seeks should be directed to the Legislature and/or the appropriate agencies for consideration a s a matter of policy.

III. CONSTITUTIONAL ARGUMENTS

Plaintiff next argues that if the licensing rules at issue do not authorize at least a limited medical license for individuals who have demonstrated competenc e through the testing process, i.e., passing “Step 3” of the USMLE, those rules should be decl ared an unconstitutional exercise-6- of the state’s authority to regulate the professions because th ey violate his due process and equal protection guarant ees. We disagree. 4

“That the State through the legislature may provide for the li censure and regulation of professions, like the healing arts in which the public interest is very great, is not open to question.” Fowler v Bd of Registration in Chiropody , 374 Mich 254, 256; 132 NW2d 82 (1965). This is because the right to e ngage in business is subject to t he state’s police powers to enact laws in furtherance of the public health, safety, welfare, and morals. Grocers Dairy Co. v. Dep’t of Agriculture Director , 377 Mich 71, 75, 138 NW2d 767 (1966). Accordingly, when legi slation is challenged on due process and equal protection grounds becau se of its interference with economic or business activity, the challenger must establish ei ther that no legitimate public purpose is served by the legislation or that there is no ration al relationship between the provisions and a legitimate public purpose. Stanfield v Dep’t of Licensing & Regulation , 128 Mich App 207, 211-212; 339 NW2d 876 (1983). Thus, there is a t wo-step inquiry: (1) whether there is a legitimate public purpose, and if so, (2) whether th ere a rational relationship between the legislation and the public pu rpose sought to be achieved.

In this case, there is a legitimate public purpose served by t he legislation: to protect the public by ensuring that medicine is practiced in a safe and com petent manner. The real dispute is over whether there is a rationa l relationship between the postg raduate residency requirement and this legitimate public purpose.

We conclude that the Public Health Code’s requirement that a p eriod of postgraduate education must be completed before a license may be issued is r ationally related to ensuring that medicine is practiced in a safe and competent manner. The requ irement that a residency must be completed before a person can be licensed to practice medicine is rationally related to this public purpose because it ensures that those who practice medicine pos sess a certain amount of medical education and training and that t hey have adequately demonstrat ed their fitness and capacity to practice medicine in a safe and competent manner by completing a residency. Although plaintiff may be correct that there is a physician shortage and extensive areas of the state are medically underserved, that fact is of lit tle relevance. The legitimate public purpose that m ust be rationally related to the residency requirement is ensuring the safe and c ompetent practice of medicine, not reducing physician shortage and eliminating medical underservic e. The residency requirement helps ensure that all licensed physicians attain proficiency in the practice of medicine. Although eliminating this requirement may reduce physician shortage and medical underservice, it would also frustrate the board of medicine’s ability to ensure that a ll licensed physicians have attained the requisite proficiency. Accordingly, because the Public Hea lth Code’s requirement that a period of postgraduate education must be completed before a lic ense may be issued is rationally related to a legitimate public purpose, it neither violates due process nor constitutes a denial of equal protection and plaintiff’s constitutional claims fail.

4 This Court reviews constitutional questions de novo. In re Ayers , 239 Mich App 8, 10; 608 NW2d 132 (1999).-7- IV. ACTS IN EXCESS OF STATUTORY AUTHORITY AND UNLAWFUL SUBDELEGATION

Plaintiff next argues that the b oard of medicine exceeded its authority under MCL 333.17031(1) and that the Public Health Code’s regulatory schem e results in the improper subdelegation of the licensing decision. We disagree. 5

MCL 333.17031(1) states: “An applicant for a license must com plete the requirements for the degree in medicine and must complete a period of pos tgraduate education to attain proficiency in the practice of the profession , as prescribed by the board in rules . . . .” (Emphasis added). Pursuant to this statute, the board of medicine adopte d a rule requiring applicants to satisfactorily complete two years of postgraduate clinical trai ning in a program approved by the board in a board-approved hospita l or institution. Mich Admin Code, R 338.2316(4); R 338.2317(4). Regarding approved progr ams and facilities, the b oard adopted the following standards:

(2) The board approves and adopts by reference the standards f or accrediting hospitals which were adopted in April, 1986, by the joint commission on accreditation of hospitals and which were effective January 1, 1987. The board shall consider any hospita l or institution that is accred ited by the joint commission on accreditation of hospitals as a hospital or insti tution approved by the board.

(3) The board approves and adopts by reference the standards f or approving postgraduate clinical training pr ograms which were ad opted in 1987 by the accreditation council for graduate medical education and wh ich were effective July 1, 1987, entitled “The Essentials of Accredited Residencie s in Graduate Medical Education,” an d the board shall designate any program o f postgraduate clinical training approved by the accreditation council for gra duate medical education as a program approved by the board. [Mich Admin Code , R 338.2313.]

Plaintiff asserts that, in adop ting the above rules, the board of medicine exceeded its statutory authority because the goal of MCL 333.17031(1) is “pr oficiency,” and the Accreditation Council for Gradua te Medical Education (ACGME) ha s declared its purpose to be the preparation of physicians fo r practice in a medical special ty. Per plaintiff, while “specialization” in the medical profession may be viewed as a w orthy goal, it is not an objective expressed in the Public Health Code. Thus, according to plaint iff, by adopting ACGME standards, the board enlarged its authority by requiring someth ing that the Public Health Code does not.

5 Whether a decision by an agency is in excess of the statutory authority or jurisdiction of the agency is an issue of statutory i nterpretation, which presents a question of law reviewed de novo. Huron Behavioral Health , 293 Mich App at 497.-8- As discussed above, the flaw in plaintiff’s argument is that t he Legislature, via the Public Health Code, invested in the board of medicine broad discretion with respect to the licensing requirements of applicants to pr actice medicine. Indeed, that the board has discretion to determine what satisfies the requirement of completing a period of postgraduate education to attain proficiency in the practice of the profession is evident in the text of MCL 333.17031(1) itself: An applicant for a license must complete the requireme nts for the degree in medicine and must complete a period of postgra duate education to attain prof iciency in the practice of the profession, “ as prescribed by the board in rules . . . .” (Emphasis added). Although plaintiff characterizes it as “exceeding st atutory authority,” the real q uestion is whether the board’s adoption of these standards confli cts with the Legislature’s in tent as expressed in the language of the statute. Again, given that the Public Health Code invests broad discretion in the board, and MCL 333.17031(1) unambiguously instructs the board to exercise that discretion in setting the postgraduate education standards, we conclude that the board’s adoption of the above standards does not conflict with the Legis lature’s intent as expressed in the language of the statute. Accordingly, plaintiff’s argument is without merit.

Plaintiff also asserts that the regulatory scheme at issue, wh ich requires admission to a postgraduate program to obtain a license, effectively enables t he admissions committees of the programs to deny a license to practice medicine, and is thus an improper subdelegation of the licensing decision. “It is well se ttled that an administrative agency may not subdelegate the exercise of discretionary acts unl ess the Legislature expressly grants it authority to do so.” Edmond v Dep’t of Correction , 143 Mich App 527, 536; 373 NW2d 168 (1985).

Although it is true that the admissions committees of the prog rams determine the individuals who are admitted to the programs, which undoubtedly affects the likelihood of the ultimate goal of full licensure, such a decision is one of many indirect influences on the person’s ability to achieve the goal of licensure. Indeed, the same arg ument could be made concerning the admissions committees of medical schools. We find no imper missible subdelegation of authority.

V. ANTITRUST ARGUMENTS

Plaintiff next argues that the postgraduate clinical training rule violates antitrust law. We disagree. 6

Michigan’s Antitrust Reform Act, MCL 445.771 et seq ., makes it unlawful to engage in anticompetitive conduct in the marketplace:

The establishment, maintenance, or use of a monopoly, or any a ttempt to establish a monopoly, of trade or commerce in a relevant market by any person,

6 Whether the rule requiring the completion of two years of post graduate clinical training in a program approved by the ACGME violates antitrust law presents a question of law reviewed de

novo. Huron Behavioral Health , 293 Mich App at 497.-9- for the purpose of excluding or limiting competition or control ling, fixing, or maintaining prices, is unlawful. [MCL 445.773.]

The act contains an exemption f or state agencies and boards:

This act shall not apply to a t ransaction or conduct specifica lly authorized under the laws of this state or the United States, or specifica lly authorized under laws, rules, regulations, or ord ers administered, promulgated, or issued by a regulatory agency, board, or offi cer acting under statutory aut hority of this state or the United States.[MCL 445.774(4).]

Plaintiff’s argument fails because the challenged anticompetit ive conduct he complains of (requiring the completion of two ye ars of postgraduate clinical training in a program approved by the ACGME before a license may be issued), is undertaken pursua nt to a regulatory scheme that, as discussed above, is authorized by the Public Health Code. T hus, the exemption in MCL 445.774(4) applies.

Regarding federal antitrust law, plaintiff did not raise this issue in his complaint nor argue it before the trial court, and we could very well deem it waived. See Admire v AutoOwners Ins Co , 494 Mich 10, 17 n 5; 831 NW2d 849 (2013) (noting that Michiga n generally follows the “raise or waive” rule of appellate review). 7 In any event, the policy complained of (again, requiring the completion of two years of postgraduate c linical training in a program approved by the ACGME before a license may be issued) is equall y exempt from federal antitrust laws under the “state action” doctrine, because it is clearly articulated and affirmatively expressed as state policy, and the policy is actively supervise d by the State. North Carolina State Bd of Dental Examiners v FTC , ___ US ___; 135 S Ct 1101, 1110; ___ L Ed 2d ___ (2015).

VI. REGULATORY TAKING

Plaintiff next argues that denying him a license is a regulato ry “taking” of private property in violation of state and federal law. We disagree. 8

“The constitutions of both the United States and the State of Michigan provide that private property shall not be ta ken without due process or just compensation.” In re Certified Question , 447 Mich 765, 787; 527 NW2d 468 (1994). “One who asserts an uncompensated taking claim must first establish that a vested property right is affected.” Id. at 788. “Without a property right, a plaintiff has no basis for challenging a stat ute on the ground that it constitutes a confiscatory taking without due process of law.” Id. A vested property right is an interest that is

7 Plaintiff asserts that he raised the federal antitrust issue i n paragraph 48G of his complaint. He did not. All he did was cite a case from this Court and indica te in a parenthetical that this Court was citing the United States Supreme Court. The paragraph repe atedly refers to “Michigan law” and “Michigan’s antitrust act,” and never cites to or mentions any specific federal law.

8 This Court reviews constitutional questions de novo. In re Ayers , 239 Mich App at 10.-10- more than a mere expectation. Id. Rather, it requires a “legitim ate claim of entitlement.” Berkowitz v Dep’t of Licensing & Regulation , 127 Mich App 556, 563, 339 NW2d 484 (1983).

In this case, although plaintiff may have had an expectation t hat his education, examination results, and experience would enable him to obtain a residency and ultimately a full license to practice medicine, that is not a vested property rig ht. See Berkowitz , 127 Mich App at 562–563 (holding that appellant had no property interest protec ted by due process in obtaining a psychology license, because he did not have a legitimate claim to being licensed pursuant to the rules promulgated under the psyc hologists registration act); Nolan , 151 Mich at 655 (“We conclude that appellant’s exp ectation of obtaining a physician’ s assistant license when his interim license expired was not an interest protected by the Du e Process Clause.”). Because plaintiff cannot establish that a vested property right is affe cted, his uncompensated taking claim fails. In re Certified Question , 447 Mich at 788.

VII. DUE PROCESS OR STATUTORY RIGHT TO AN ADMINISTRATIVE HEARIN G

Lastly, plaintiff argues that he was denied his due process an d statutory right to an administrative hearing. We disagree. 9

No person may be deprived of life, liberty, or property withou t due process of law. US Const, Am V; US Const, Am XIV; Const 1963, art 1, § 17. In thi s case, plaintiff did not have a due process right to an administrative hearing because, as disc ussed above, plaintiff cannot establish that a vested property right was affected, and thus h e was not deprived, or at risk of being deprived, of a life, liber ty, or property interest protec ted by due process. Due process protections are only required w hen a life, liberty, or property interest is at stake.

Plaintiff also asserts that he was entitled to a hearing pursu ant to MCL 333.16232, which
states:

(1) The department shall provide an opportunity for a hearing in connection with the denial, recl assification, limitation, reins tatement, suspension, or revocation of a license or a proceeding to reprimand, fine, order restitution, or place a licensee on probation.

(2) The department shall provide an opportunity for a hearing in connection with the denial, limitation, suspension, revocation, or reinstatement of a registration or a proceeding to reprimand, fine, order restit ution, or place a registrant on probation.

9 This Court reviews constitutional questions de novo. In re Ayers , 239 Mich App at 10. Likewise, whether plaintiff had a right to an administrative he aring pursuant to MCL 333.16232(1) is an issue of statutor y interpretation, which pre sents a question of law reviewed de

novo. Huron Behavioral Health , 293 Mich App at 497.-11- (3) A disciplinary subcommittee shall meet within 60 days afte r receipt of the recommended findings of fact a nd conclusions of law from a hearings examiner to impose a penalty.

(4) Only the department shall promulgate rules governing heari ngs under this article, articl e 7, or article 8 and related preliminary p roceedings.

The statute does state that “th e department shall provide an o pportunity for a hearing in connection with the denial . . . of a license . . . .” MCL 333 .16232(1). However, in the instant dispute, defendants did not actually deny plaintiff a license. Rather, they inform ed plaintiff that the “limited license” he sought did not exist and was not autho rized by statute or rules, rejected his self-made “application” for t he non-existent license, and r efunded his money. This was not a “denial . . . of a license,” because no such license exists and no such license is authorized under the Public Health Code. Plaintiff did not have a right to a he aring under these circumstances, where he filed an application f or a non-existent license.

Affirmed.

/s/ David H. Sawyer /s/ Michael J. Kelly /s/ Douglas B. Shapiro