Title: IMO Suspension or Revocation of the License Issued to Kenneth Zahl, M.D.
Citation: N/A
Docket Number: a-54-05
State: new-jersey
Issuer: new-jersey Supreme Court
Date: April 26, 2006

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized). On Zahl s appeal, the Appellate Division affirmed the Board s factual findings but remanded the matter for reconsideration of the license revocation penalty. This Court granted the Board s petition for certification. HELD: The Board was within the bounds of its statutory authority and discretion in concluding that the panoply of dishonest acts committed by Zahl warrants the revocation of his license. The Medical Practices Act (MPA) vests the Board with broad authority to regulate the practice of medicine in the State. The Uniform Enforcement Act (UEA) was enacted to create uniform standards for disciplinary proceedings by professional and occupational licensing boards. The UEA, which works in tandem with the MPA, also grants the Board disciplinary powers over medical licensees which include the power to revoke the medical license of a physician on proof that the physician committed certain acts of misconduct. (pp. 15-16) 2. Our appellate review of an agency s choice of sanction is limited. The Court will modify a sanction only when necessary to bring the agency s action into conformity with its delegated authority. It can interpose its views only where it is satisfied that the agency has mistakenly exercised its discretion or misperceived its own statutory authority. The test in reviewing administrative sanctions is whether such punishment is so disproportionate to the offense, in light of all the circumstances, as to be shocking to one s sense of fairness. (pp. 17-18) 3. Applying those principles of deference to the facts of this appeal, we hold that the Board was within the bounds of its discretion in concluding that the panoply of dishonest acts committed by Zahl warrants the revocation of his license. Under N.J.S.A. 45:1-21(b), dishonesty is a sufficient basis to justify license revocation. (pp. 18-19) 4. Because an occupational license is a property right, albeit one that is subject to substantial government regulation, the Board, when exercising its disciplinary authority, must consider mitigating factors. The Board afforded Zahl a hearing at which numerous witnesses offered mitigating testimony on Zahl s behalf. The Board considered the evidence and found that evidence did not alter the fact that Zahl s misconduct shows him to be a fundamentally corrupt and dishonest licensee, that Zahl s dishonest and deceptive conduct was so extreme as to be inimical to the practice of medicine, necessitating the revocation of his license. (pp. 20-22) 5. Zahl argues that because the Board did not adequately consider the lack of patient harm, the penalty of revocation is disproportionate to his misconduct. The Board did not rest its penalty determination on Zahl s fraudulent conduct in a vacuum. The Board stated that it was affording particular deference to the ALJ s credibility judgment in respect of Zahl s shifting and inconsistent testimony. 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. (p.23) The judgment of the Appellate Division is REVERSED and the matter is REMANDED to the Board for revocation of Zahl s license. . CHIEF JUSTICE PORITZ and J USTICES LONG, LaVECCHIA, ALBIN, WALLACE, and RIVERA-S OTO join in JUSTICE ZAZZALI s opinion. SUPREME COURT OF NEW JERSEY A- 54 September Term 2005 IN THE MATTER OF THE SUSPENSION OR REVOCATION OF THE LICENSE ISSUED TO KENNETH ZAHL, M.D. LICENSE NO. MA56413 TO PRACTICE MEDICINE AND SURGERY IN THE STATE OF NEW JERSEY Argued March 6, 2006 Decided April 26, 2006 On certification to the Superior Court, Appellate Division. Douglas J. Harper, Special Counsel, argued the cause for appellant, State Board of Medical Examiners (Zulima V. Farber, Attorney General of New Jersey, attorney; Jeffrey C. Burstein, Assistant Attorney General, of counsel). John Zen Jackson argued the cause for respondent, Kenneth Zahl, M.D. (Kalison, McBride, Jackson &amp; Murphy, attorneys; Mr. Jackson and Leonardo M. Tamburello, on the brief). Robert J. Conroy submitted a letter in lieu of brief on behalf of amicus curiae, Medical Society of New Jersey (Kern Augustine Conroy &amp; Schoppmann, attorneys). JUSTICE ZAZZALI delivered the opinion of the Court. In this matter, the New Jersey State Board of Medical Examiners (Board) petitions the Court to restore the Board s order revoking the medical license of Kenneth Zahl. The Board found that Zahl, a physician specializing in anesthesiology, willfully engaged in numerous dishonest acts over a course of years, including Medicare and insurance fraud and maintaining improper patient records. The Appellate Division reversed the Board s penalty, concluding that license revocation is unduly harsh in view of the absence of patient harm. We hold that the Board was within the bounds of its statutory authority and discretion in revoking Zahl s license after the Board found Zahl to be a fundamentally corrupt licensee. We therefore reverse the Appellate Division decision and reinstate the Board s order. A. The Board also ordered Zahl to pay costs totaling $232,694.36, which includes investigative costs, expert witness fees, transcript fees, and attorneys fees. Zahl appealed the Board s order, and the Appellate Division granted Zahl s motion for a stay of his license revocation pending outcome of the appeal. The panel subjected the stay to the condition that Zahl comply with reporting requirements imposed by the Board. Upon review of the record, the Appellate Division issued an opinion affirming the Board s factual findings. However, the panel remanded the matter for reconsideration of the license revocation penalty because it found revocation to be unnecessarily harsh. The panel reasoned that although Zahl s behavior demonstrates a wide pattern of dishonesty, there is no evidence that any patient s health or safety was even minimally compromised. The panel concluded that in light of the lack of patient harm, lesser penalties, such as controls over Zahl s billing and record-keeping practices, could adequately remedy Zahl s misconduct. The Board appealed the Appellate Division s decision reversing Zahl s license revocation, and we granted certification. 185 N.J. 297 (2005). We denied certification of Zahl s cross-petition seeking review of the Board s findings of fact, conclusions of law, and imposition of litigation costs. Ibid. c. Has engaged in gross negligence, gross malpractice or gross incompetence which damaged or endangered the life, health, welfare, safety or property of any person; d. Has engaged in repeated acts of negligence, malpractice or incompetence; e. Has engaged in professional or occupational misconduct as may be determined by the board; [or] . . . . h. Has violated or failed to comply with the provisions of any act or regulation administered by the board. [Ibid.] [Polk, supra, 90 N.J. at 578.] This Court also has noted: It has been stated that the test in reviewing administrative sanctions is whether such punishment is so disproportionate to the offense, in light of all the circumstances, as to be shocking to one s sense of fairness. Ibid. (quoting Pell v. Bd. of Educ., 34 N.Y.2d 222, 233 (1974) (internal quotation marks and citation omitted)); see also In re Markoff License Revocation, 299 N.J. Super. 607, 613 (App. Div. 1997) (affirming Board s decision not to reinstate physician s license because sanction did not shock one s sense of fairness ) (citing Polk, supra, 90 N.J. at 578). SUPREME COURT OF NEW JERSEY NO. A-54 SEPTEMBER TERM 2005 ON CERTIFICATION TO Appellate Division, Superior Court IN THE MATTER OF THE SUSPENSION OR REVOCATION OF THE LICENSE ISSUED TO KENNETH ZAHL, M.D. LICENSE NO. MA56413 TO PRACTICE MEDICINE AND SURGERY IN THE STATE OF NEW JERSEY DECIDED April 26, 2006 Chief Justice Poritz PRESIDING OPINION BY Justice Zazzali CONCURRING/DISSENTING OPINIONS BY DISSENTING OPINION BY