Opinion ID: 2820086
Heading Depth: 2
Heading Rank: 2

Heading: Tsirelman’s Due Process Challenges

Text: We turn now to the merits of Tsirelman’s appeal. Tsirelman makes two separate but related challenges to New York’s use of the preponderance‐of‐the‐evidence standard: (a) a facial challenge to the standard as used in all fraud‐based medical disciplinary proceedings, and (b) an as‐applied challenge to use of the standard in his own proceeding.
New York’s medical misconduct committees base their conclusions on a statutorily‐prescribed preponderance‐of‐the‐ evidence standard. N.Y. Pub. Health L. § 230(10)(f). Tsirelman argues that New York’s use of the preponderance standard fails to comport with the minimum requirements of due process in fraud‐ based disciplinary proceedings because of the compelling private and public interests in avoiding erroneous license revocations. Tsirelman contends that only the higher clear and convincing standard comports with due process. The preponderance standard is constitutionally adequate. “The function of a standard of proof . . . is to instruct the factfinder concerning the degree of confidence our society thinks he should have in the correctness of factual conclusions for a particular type of 10 No. 14‐2154‐cv adjudication.” Addington v. Texas, 441 U.S. 418, 423 (1979) (internal quotation marks omitted). “The standard serves to allocate the risk of error between the litigants and to indicate the relative importance attached to the ultimate decision.” Id. To determine the standard of proof required by the Constitution, we balance: (1) “the private interests affected by the proceeding”; (2) “the risk of error created by the State’s chosen procedure”; and (3) “the countervailing governmental interest supporting use of the challenged procedure.” Santosky v. Kramer, 455 U.S. 745, 754 (1982) (citing Mathews v. Eldridge, 424 U.S. 319, 335 (1976)). The preponderance standard strikes the proper balance between these competing interests. First, physicians have an important, but not compelling, property interest in their medical licenses and a liberty interest in pursuing their chosen profession. See Donk v. Miller, 365 F.3d 159, 163 (2d Cir. 2004); RRI Realty Corp. v. Inc. Vill. of Southhampton, 870 F.2d 911, 917 n.4 (2d Cir. 1989). However, if a physician loses his license, he remains free to pursue other employment and otherwise participate in life’s activities. For this reason, we find a physician’s interest in his license to be less compelling than those interests that the Supreme Court has determined require clear and convincing proof before the state can effect a deprivation. Compare Addington, 441 U.S. at 433 (civil commitment proceedings must be conducted under at least a clear and convincing standard), with Vance v. 11 No. 14‐2154‐cv Terrazas, 444 U.S. 252, 266 (1980) (abandonment of citizenship proceedings may be conducted under a preponderance standard). Tsirelman also argues that a physician’s interest in a fraud‐ based medical disciplinary hearing is more substantial than in other disciplinary proceedings because the resulting reputational harm can extend beyond the medical field. This distinction is unpersuasive. A license revocation based on medical incompetence, sexual impropriety, or another serious charge would also tend to taint a physician’s other future endeavors. In any event, even if we accepted Tsirelman’s argument that physicians have a greater interest in fraud‐based revocation proceedings, that interest still does not rise to the fundamental level that requires the application of a heightened standard of proof as a matter of federal due process. See Herman & MacLean v. Huddleston, 459 U.S. 375, 390 (1983) (preponderance‐of‐the‐evidence standard applied in securities‐fraud case despite “the risk of opprobrium that may result from a finding of fraudulent conduct”). Second, the preponderance standard “fairly distributes the risk of error” between the state and the physician. Santosky, 455 U.S. at 765. The corresponding consequences of error to the physician and the state in a fraud‐based license revocation are roughly equivalent. If a doctor’s license is erroneously revoked, he should be, but is not, allowed to practice medicine. If a doctor’s license is 12 No. 14‐2154‐cv erroneously maintained, he should not be, but is, allowed to continue to practice. Thus, the “social disutility” of each potential outcome is about the same, and it is not in general more serious for a license to be erroneously revoked than to be erroneously maintained. See In re Winship, 397 U.S. 358, 371 (1970) (Harlan, J., concurring). Third, the countervailing governmental interest is strong. The State, on behalf of the public, has a substantial interest in revoking the licenses of doctors who engage in fraud or are otherwise found to be unfit to practice medicine. See Doe v. Connecticut, 75 F.3d 81, 85 (2d Cir. 1996) (per curiam). Although he recognizes this interest, Tsirelman argues that fraud‐based revocations do not further it because they do not target physicians providing substandard care. But Tsirelman’s conception focuses on only one of the State’s many healthcare interests. New York has an interest in ensuring that its citizens receive adequate care and that they have access to that care. Fraudulent insurance claims drive up the costs of health insurance for everyone, making it difficult for some New Yorkers to afford quality healthcare, and thus limiting their access to care. Moreover, as a major consumer of healthcare through the insurance programs operated by the State, New York has a direct interest in affordable medical care. 13 No. 14‐2154‐cv In sum, while we acknowledge a physician’s interest in maintaining his license, the State has at least as substantial an interest in protecting the public, and the cost of error is about the same. Thus, we find no constitutional basis for exempting fraud‐ based medical disciplinary proceedings from the traditional powers of state legislatures to prescribe standards of proof in state proceedings.4 See Vance, 444 U.S. at 265; see also In re Friedman, 51 F.3d 20, 22 (2d Cir. 1995) (holding that a federal court may constitutionally impose reciprocal attorney discipline based on an underlying state disciplinary proceeding conducted under the preponderance‐of‐the‐evidence standard). Accordingly, we affirm the district court’s dismissal of Tsirelman’s facial challenge to the State’s use of the preponderance standard in fraud‐based medical disciplinary proceedings.5 We recognize that this conclusion conflicts with the conclusions of the 4 supreme courts of Oklahoma, Washington, and Wyoming. See Johnson v. Bd. of Governors of Registered Dentists, 913 P.2d 1339, 1347 (Okla. 1996); Nguyen v. State, 29 P.3d 689, 697 (Wash. 2001); Painter v. Abels, 998 P.2d 931, 940‐41 (Wyo. 2000). In so holding, the Oklahoma and Wyoming Supreme Courts explicitly recognized that their state constitutions can afford greater due process safeguards than the Federal Constitution. Johnson, 913 P.2d at 1346; Painter, 998 P.2d at 941. 5 We have also considered Tsirelman’s facial and as‐applied challenges to the absence of formal rules of evidence and find them to be without merit. “[P]rocedural due process does not require rigid adherence to technical evidentiary rules in administrative hearings, as long as the evidence introduced is reliable.” United States v. Intʹl Bhd. of Teamsters, 941 F.2d 1292, 1298 (2d Cir. 1991). There is no support for the inference, 14 No. 14‐2154‐cv
Finally, we turn to Tsirelman’s claim that, even if use of the preponderance‐of‐the‐evidence standard is not on its face unconstitutional, its use in this case violated due process as applied to him because of the limited evidence from which the Hearing Committee could infer fraudulent intent. Tsirelman’s as‐applied challenge requires us to consider the particular facts of his case to determine whether the application of the preponderance standard, although constitutional on its face, deprived him of a protected right. See, e.g., Field Day, LLC v. Cty. of Suffolk, 463 F.3d 167, 174 (2d Cir. 2006). Tsirelman’s hearing did not deviate from normal hearing procedures in any material respect. In any event, the details of the necessary to Tsirelman’s position, that evidence of fraud in medical disciplinary hearings will necessarily be unreliable unless governed by formal rules of evidence. See United States v. Salerno, 481 U.S. 739, 745 (1987) (to sustain a facial challenge, “the challenger must establish that no set of circumstances exists under which the Act would be valid.”). Likewise, Tsirelman has failed to allege any facts suggesting the lack of formal rules of evidence resulted in an as‐applied due process violation. The Hearing Committee expressly acknowledged certain gaps in the evidentiary record and afforded Tsirelman the benefit of the doubt on any claims as to which “there was even a slight possibility” that additional information might have bolstered his position. In re Tsirelman, No. 07‐269, at 41, J.A. 232. And, as noted above, the Appellate Division annulled an entire subset of charges for which it concluded that additional evidence might have proven exculpatory. 15 No. 14‐2154‐cv hearing show that application of the preponderance standard did not deprive Tsirelman of due process because it did not unacceptably increase the risk of error. As the Appellate Division has already concluded, there was ample evidence from which the Hearing Committee could infer Tsirelman’s fraudulent intent, including discrepancies between patient medical records and the bills LaMed submitted to insurers, as well as Tsirelman’s “complete lack” of credible testimony. Tsirelman v. Daines, 876 N.Y.S.2d at 239. Tsirelman also availed himself of the robust procedures permitted in New York’s disciplinary hearings, including representation by counsel, presentation of evidence, witness testimony, and cross‐ examination of the State’s witnesses. Finally, Tsirelman obtained review of the Hearing Committee’s determination in an Article 78 proceeding. In sum, there is nothing exceptional about Tsirelman’s hearing that rendered the Hearing Committee’s use of the preponderance standard unconstitutional as applied to Tsirelman. In essence, Tsirelman asks us to reevaluate the Hearing Committee’s findings, but due process guarantees only a fair hearing, which Tsirelman received in full. See Conopco, Inc. v. Roll Int’l, 231 F.3d 82, 88 (2d Cir. 2000). Accordingly, the district court’s dismissal of Tsirelman’s as‐ applied challenge is affirmed. 16 No. 14‐2154‐cv