Opinion ID: 2569807
Heading Depth: 3
Heading Rank: 5

Heading: Must the Sanctions Against Schnell Be Reconsidered?

Text: Schnell argues that his sanctions are excessive; he claims that his trouble-free record during the long delay in imposing the sanctions confirms his assertion that public protection does not require the harsh sanctions imposed in 1995. The most onerous sanction appears to be the requirement that he give written notice of his conviction to new and existing clients for three years after his suspension ends. [39] Before issuing her final decision in 1995, the director issued a notice that permitted the parties to present written argument. She accepted additional written evidence from the attorney general (bearing on Schnell's pre-1992 conduct) and from Schnell (short 1995 letters from Schnell and his supervisor alleging Schnell's good professional behavior). She conducted no new hearing to supplement the 1992 hearing conducted by the hearing officer, and did not reopen the 1992 hearing. The two short letters Schnell submitted might have supported lesser sanctions; there was no evidence of any misconduct between 1992 and 1995. There was thus no unfavorable current information available to the director in 1995. The director noted Schnell's clean 1992-95 record when she imposed sanctions in 1995; although she declined to revoke his license, she imposed the sanctions to affirm professional standards and to protect the public. After the sanctions were imposed, Schnell appealed and sought a stay in the superior court. His stay motion papers included detailed affidavits from Schnell and his supervisor discussing the long delay, the facts on which Schnell based his estoppel and laches arguments, the severe effect the sanctions would have on Schnell, and Schnell's good professional record. The superior court granted the stay pending appeal. In addition to the equitable arguments we reject above in Parts III.B and C, Schnell also argued in the superior court that the sanctions were excessive and arbitrary, and were so harsh that they were equivalent to revoking his license; he also argued that lesser sanctions (such as increased monitoring and reporting by his employer, special bonding, continuing education, and account auditing) would suffice. He sought complete relief. He alternatively asked the superior court to remand and instruct the director to conduct a new hearing at which Schnell's record to the date of the new hearing could be presented and considered. The superior court granted Schnell complete equitable relief, but also observed that if estoppel did not bar the director, it would have been necessary to remand so the agency could clarify the exact grounds for the sanctions. It is undisputed that Schnell had been convicted of a felony, and that the director has authority to suspend or revoke the license of a person convicted of a felony. [40] The state correctly argues that the director has broad discretion to decide what sanction is appropriate. But such broad discretion must be exercised reasonably, based on the relevant information. Schnell's professional record is highly relevant. Although we have reversed the superior court's grant of complete equitable relief to Schnell, we think it is necessary to allow the alternative relief that the superior court indicated it would grant if estoppel did not apply: remand to the division with instructions to clarify its sanctions order. We further conclude that, on remand, the division must conduct a hearing to consider current evidence relevant to the issue of sanctions, including evidence of Schnell's post-1992 conduct and other circumstances addressed in the two affidavits supporting Schnell's 1995 superior court motion for stay. Schnell did not have an opportunity to present new sanctions evidence before the director issued her final decision; the director's July 1995 Notice of Opportunity only gave Schnell an opportunity to present additional argument pursuant to AS 44.62.500(c). But the updated evidence that Schnell presented to the superior court was highly relevant to the issue of sanctions. It described Schnell's post-1992 conduct, the current effect that the hearing officer's proposed sanctions would have, and alternative supervisory controls available through Schnell's employer. As we have already indicated, this evidence was insufficient to justify dismissal of the administrative action. But given the exceptionally long period of delay before the director's final sanctions decision, as well as the importance of basing that decision on current information, we conclude that it was incumbent on the director to offer Schnell an opportunity to present updated sanctions evidence and to request a pre-decisional hearing on the sanctions issue.