Court Opinion

ID: 9854986
Source: CourtListenerOpinion
Date Created: 2023-09-24 06:17:51.636181+00
Date Added: 2024-06-11T09:23:38.201503
License: Public Domain

ROSSMAN, P. J.,
dissenting.
Because the majority decides that the facts of this case are distinguishable from other cases in which we have held that the clear and convincing standard of proof is applicable to proof of fraud in an administrative proceeding, it concludes that it need not discuss the authority most relevant to the question of whether that higher standard of proof might not also be applicable under these facts. I would answer, rather than avoid, the question that the parties have put to us. I would hold that the clear and convincing standard of proof is applicable and would reverse the Board and remand the case for yet another round of agency roulette.
In two cases, both of which involved proceedings before the Board of Dental Examiners, we held that the clear and convincing evidence standard of proof is applicable to show fraud as a basis for revoking a license to practice dentistry. Bernard v. Board of Dental Examiners, 2 Or App 22, 465 P2d 917 (1970); Van Gordon v. Ore. State Bd. of *382Dental Examiners, 52 Or App 749, 629 P2d 848 (1981). In a separate line of cases, decided both before and after Bernard and Van Gordon, and not expressly related to proof of fraud, the general rule that has developed is that the standard of proof in an administrative proceeding is the preponderance of the evidence standard. Cook v. Employment Division, 47 Or App 437, 614 P2d 1193 (1980); Metcalf v. AFSD, 65 Or App 761, 672 P2d 379 (1983), rev den 296 Or 411 (1984); Automotive Technology v. Employment Division, 97 Or App 320, 775 P2d 916 (1989); OSCI v. Bureau of Labor and Industries, 98 Or App 548, 555, 780 P2d 743, rev den 308 Or 660 (1989); see Bay v. State Board of Education, 233 Or 601, 378 P2d 558 (1963). The quandary is readily apparent. When fraud is asserted in an administrative proceeding as a basis for denying a license to practice a profession, is the standard by which the fraud must be shown the preponderance of the evidence standard, or is some higher level of proof appropriate?
The majority rationalizes that, because this case involves denied admission to a profession rather than revocation of a license, the holdings of Bernard and Van Gordon are not applicable. There being no statutory basis for applying a higher standard of proof in this case, the majority concludes that the preponderance of the evidence standard controls. I cannot accept the majority’s basis for distinguishing this case from Bernard and Van Gordon. A person who is denied access to a profession on the ground of fraud after years of preparation suffers, no less indignity than one who is ousted from it. The same stigma of guilt is laid upon each. The majority does not attempt to support its distinction with a citation to authorities, and I assume that that is because there are none. The question that we must answer is whether fraud as a basis for exclusion from a profession should be subject to a higher standard of proof. Even apart from our holdings in Bernard and Van Gordon, decisions of the Supreme Court require that we answer that question in the affirmative.
The law of fraud, not unlike administrative law, has evolved along a unique course. Oregon, like most states, has held that, despite a statutory provision establishing the preponderance of the evidence standard as the standard applicable to civil cases generally, see ORS 10.095(5), the clear and convincing evidence standard is applicable to *383proof of common law fraud. Riley Hill General Contractor v. Tandy Corp., 303 Or 390, 407, 737 P2d 595 (1987). One reason for imposing the higher standard of proof is that the defendant against whom fraud has been shown is branded with something akin to guilt. 303 Or at 403.
This case does not involve common law fraud. Rather, petitioner is charged with violating a statutory provision that prohibits fraud or intentional misrepresentation on an application for licensure. In Mutual of Enumclaw v. McBride, 295 Or 398, 667 P2d 494 (1983), the Supreme Court enunciated the test for determining when a statutory action based on fraud, although characterized as civil, requires proof by the higher clear and convincing evidence standard. If the fraud is against a private parly and the stakes are solely financial, the aim of the action is to obtain compensation for the private plaintiff rather than to punish. The loss to the party against whom fraud has been shown is no more severe than the consequences attaching to many disputes in tort or contract. The general preponderance of the evidence standard is applicable. When, however, the fraud is against the public and it is the public’s interest that is being protected by the proceeding, the stakes in the dispute are much higher. If the fraud carries with it not mere financial consequence, but public stigma or loss of liberty, then the clear and convincing evidence standard is appropriate:
“The ‘proper occasion’ for interpolating an intermediate measure of proof is in cases that are between ‘civil’ and ‘criminal’ and where what is to be established is akin to ‘guilt.’ ” 295 Or at 405.
The ultimate inquiry is whether the statutory action is quasi-criminal or threatens the individual involved with “a significant deprivation of liberty or stigma.” 295 Or at 407.
Contrary to the majority’s thinking, the Supreme Court’s analysis in Mutual of Enumclaw is applicable here. The fraud of an applicant in attempting to secure a license to practice pharmacy carries with it consequences that are more severe than the consequences attached to civil disputes generally. The loss of the ability to practice one’s livelihood is more than financial. It is punitive. Additionally, it carries with it a negative stigma akin to guilt. Considering those consequences, I would hold that a determination that one has *384committed fraud so as to bar the person from the practice of pharmacy is a determination that warrants application of the clear and convincing standard of proof. I would reverse the Board and remand the case for reconsideration.