Can a Texas licensing board decide a discipline case on its own after watching the hearing, or must it wait for the administrative law judge's ruling?

Plain-English summary

In 1991 the Texas Legislature set up a new agency, the State Office of Administrative Hearings, to run the contested-case hearings that many state licensing boards used to run for themselves. The idea was to put a neutral administrative law judge, not the agency that brought the charges, in charge of the hearing. After a hearing, that judge issues a "proposal for decision," which lays out the facts the judge found and the legal conclusions that follow.

The Texas State Board of Pharmacy asked a practical question. If enough board members (a quorum) sit in the room and watch one of these hearings themselves, can the board skip the judge's proposal and just make its own findings and vote on the punishment? The Attorney General said no. An agency that is required to use the State Office of Administrative Hearings cannot substitute its own fact-finding for the judge's, even if the whole board watched the hearing. The board has to wait for the judge's proposal for decision.

That does not leave the board powerless. The board can adopt the judge's proposal, and it can change a finding or conclusion, but only for a policy reason and only in writing, under the rules the same 1991 law added to the Administrative Procedure and Texas Register Act. The Attorney General also addressed the board's worry that this process would slow down discipline of pharmacists who illegally divert controlled substances. The opinion pointed out that the hearings office must hear cases within a reasonable time and that the board still had other tools, including going to district court to stop a pharmacist from breaking the drug laws.

Currency note

This opinion was issued in 1993. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. The State Office of Administrative Hearings statute (then V.T.C.S. article 6252-13f) and the Administrative Procedure and Texas Register Act (then V.T.C.S. article 6252-13a) have since been recodified into the Government Code, and the Texas Pharmacy Act (then V.T.C.S. article 4542a-1) into the Occupations Code, so the article and section numbers described here have changed; confirm current law before relying on anything described here.

Background and statutory framework

The Legislature created the State Office of Administrative Hearings in 1991 through Senate Bill 884 (Acts 1991, 72d Leg., ch. 591), codified at V.T.C.S. article 6252-13f. The office conducts contested-case hearings under the Administrative Procedure and Texas Register Act (APTRA), V.T.C.S. article 6252-13a, for agencies that do not employ their own dedicated hearings officers. The Legislature's stated aims were to pool hearing resources for smaller agencies and to create an independent, judicial-style decisionmaker separate from the agency prosecuting the case.

Section 3(b) of article 6252-13f authorizes a SOAH administrative law judge to rule on evidence and discovery, impose sanctions subject to agency review, and issue proposals for decision that include findings of fact and conclusions of law. Senate Bill 884 also added section 13(j) to APTRA, which provides that the administrative law judge conducting the hearing may not be supervised by the agency over the contested case, and which permits the agency to change a finding of fact or conclusion of law only for a policy reason and only in writing.

The Attorney General read these provisions, together with the bill's legislative history, to mean that an agency required to use the SOAH must receive a proposal for decision from the administrative law judge and cannot make its own findings of fact and conclusions of law. The board's disciplinary actions are governed by APTRA and by the board's rules under section 27 of the Texas Pharmacy Act, V.T.C.S. article 4542a-1. APTRA section 15 sets out how an agency renders a final decision adverse to a party when a majority of the deciding officials did not hear the case or read the record. Addressing the board's concern about delay in cases involving illegal diversion of controlled substances, the opinion noted that the SOAH must hear cases within a reasonable time and that the board retained other remedies, including suing in district court to restrain or enjoin violations of the Controlled Substances Act and the Dangerous Drug Act.

Citations

• V.T.C.S. article 6252-13f, § 3(b) (administrative law judge may issue proposals for decision with findings of fact and conclusions of law); § 2(h) (SOAH conducts hearings for agencies without their own hearings officers)
• V.T.C.S. article 6252-13a (APTRA), § 13(j) (agency may not supervise the administrative law judge over the contested case; agency may change a finding or conclusion only for a policy reason and only in writing); § 15 (final decision adverse to a party when officials did not hear the case or read the record)
• V.T.C.S. article 4542a-1 (Texas Pharmacy Act), § 27 (APTRA and board rules govern disciplinary actions)
• Senate Bill 884 (Acts 1991, 72d Leg., ch. 591, §§ 1-4, at 2127-28) (created the State Office of Administrative Hearings)

Common questions

If the whole licensing board watches the hearing, can it decide the case itself?
Under this opinion, no. The Attorney General concluded that a board required to use the State Office of Administrative Hearings could not make its own findings of fact and conclusions of law even when a quorum attended the hearing. The board had to receive a proposal for decision from the administrative law judge.

What is a "proposal for decision"?
It is the document the administrative law judge issues after the hearing, setting out the findings of fact and conclusions of law. Under section 3(b) of article 6252-13f, the judge has authority to issue it, and the agency acts on it rather than starting its fact-finding over.

Can the board ever change what the judge proposed?
Yes, but narrowly. Under APTRA section 13(j), the agency could change a finding of fact or conclusion of law only for a policy reason and only in writing. The agency could not simply supervise or override the judge's handling of the contested case.

Did this slow down discipline of pharmacists who divert drugs?
The Attorney General addressed that concern directly. The opinion noted the State Office of Administrative Hearings must hear cases within a reasonable time, and that the board kept other tools, including asking a district court to restrain or enjoin a pharmacist from violating the Controlled Substances Act and the Dangerous Drug Act.

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/dan-morales/dm-0231
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1993/dm0231.pdf

Original opinion text

Best-effort transcription from a scanned PDF. This opinion's scan is heavily degraded; passages that could not be read with confidence are marked [illegible in source scan]. The linked PDF is authoritative.

Office of the Attorney General
State of Texas

DAN MORALES
ATTORNEY GENERAL

June 24, 1993

Mr. Fred S. Brinkley, Jr., R.Ph.
Executive Director/Secretary
Texas State Board of Pharmacy
8505 Cross Park Drive, Suite 110
Austin, Texas 78754-4594

Opinion No. DM-231

Re: Whether a quorum of a licensing board attending a licensee disciplinary hearing conducted by the State Office of Administrative Hearings may make findings of fact, conclusions of law, and vote on discipline without receiving from the State Office of Administrative Hearings a proposal for decision (RQ-408)

Dear Mr. Brinkley:

The legislature created the State Office of Administrative Hearings (the "SOAH") in 1991 by enacting Senate Bill 884. See Acts 1991, 72d Leg., ch. 591, at 2127-28 (codified V.T.C.S. article 6252-13f). The legislature directed the SOAH to conduct hearings in contested cases under the Administrative Procedure and Texas Register Act ("APTRA"), V.T.C.S. article 6252-13a, for those agencies that do not employ a person whose sole duty is to preside as a hearings officer over matters related to contested cases before the agency. V.T.C.S. art. 6252-13f, § 2(h). The legislature hoped that the implementation of Senate Bill 884 would accomplish at least two purposes. First, the legislature hoped to increase economic efficiency by pooling the resources of smaller agencies that are unable to employ full-time administrative law judges. Second, the legislature hoped to create a more judicial body, independent of the agency, that could fairly and objectively resolve disputes. Hearings on Senate Bill 884 Before the Senate Comm. on State Affairs (Apr. 8, 1991) (testimony of the author) (tape available from Senate Staff Services).

Among other things, Senate Bill 884 added article 6252-13f to the Revised Civil Statutes. See Acts 1991, 72d Leg., ch. 591, §§ 1-4, at 2127-28. Section 3(b) of article 6252-13f authorizes an administrative law judge to perform the following functions:

. . . .

(3) rule on questions of evidence;

(4) issue orders relating to discovery and other hearing or prehearing matters, including orders imposing sanctions that the agency before whom the contested case is pending may impose, subject to review by the agency; and

(5) issue proposals for decision that include findings of fact and conclusions of law.

See also State Office of Administrative Hearings, 17 Tex. Reg. 6442-43 (1992) (to be codified at 1 T.A.C. §§ 155.15(b), 155.51). You believe that this provision merely authorizes, but does not require, an administrative law judge for the SOAH to issue a proposal for decision, and you support your contention that the board may make its own findings of fact and conclusions of law after observing a hearing on a disciplinary matter before the SOAH. However, the plain language of other sections of Senate Bill 884, as well as the bill's legislative history, indicates that the legislature intended the SOAH to make findings of fact and conclusions of law on matters before it. The agency may adopt the administrative law judge's findings and conclusions, but must do so in compliance with the requirements stated in Senate Bill 884.

APTRA, as well as the rules of practice and procedure before the board governing disciplinary actions, governs the board's actions under section 26 of the Texas Pharmacy Act, V.T.C.S. article 4542a-1. V.T.C.S. art. 4542a-1, § 27. Senate Bill 884 added to APTRA section 13(j), which provides as follows:

This subsection applies only to an administrative law judge employed by the State Office of Administrative Hearings. The . . . administrative law judge who conducts the hearings shall consider any applicable agency rules or policies in conducting the hearing, but may not be supervised by the agency over the contested case before [the judge]. The agency shall provide the administrative law judge with a written statement of applicable rules or policies. [Remainder of subsection illegible in source scan.]

[Before beginning the] hearing process, the agency must provide the administrative law judge with a written statement of rules or policies it considers relevant to the contested case (see also State Office of Administrative Hearings, 17 Tex. Reg. 6441 (1992) (to be codified at 1 T.A.C. § 155.5(c))); the agency may present evidence and legal argument to the [administrative law judge].

. . . .

The legislative history of Senate Bill 884 supports our determination. A member of the committee that drafted Senate Bill 884 testified before the House Committee on State Affairs that the committee had tried to balance the powers of the agency and the SOAH. Hearings on S.B. 884 Before the House Comm. on State Affairs (May 6, 1991) (testimony of Reggie James, [illegible in source scan]) (tape available from House Committee Coordinator). Section 5(b) of the bill, which added section 13(j) to APTRA, [reflects] the committee's concern: the SOAH is responsible for making and submitting to the agency findings of fact and conclusions of law, but the agency has the ultimate authority to approve the proposal for decision. See id. Furthermore, the committee drafted the bill to restrict an agency's power to overturn an administrative law judge's decision by permitting the agency to change a finding of fact or a conclusion of law only for policy reasons and only in writing. See id.

In our opinion, the legislature wanted to ensure that those agencies that were required to use the services of the SOAH would not interfere with the administrative law judge's decision. See id. (testimony of Judith Sokolow, representing Advocacy, Inc.) (testifying about need for impartial administrative hearings conducted by judiciary independent of agency); id. (testimony of Mary Jo [illegible in source scan], representing Texas Planning Council for Developmental Disabilities) (same). Until the . . . [agency] has received a proposal for decision from the administrative law judge, the agency can participate in the administrative [hearing] only by presenting evidence and making legal argument at the hearing. See V.T.C.S. art. 6252-13a, § 13(j); Hearing on Senate Bill 884 Before the House Comm. on State Affairs (May 4, 1991) (testimony of Linda Sword, [Office of the Attorney General]) (tape available from House Committee Coordinator).

We do not believe that article 6252-13f, section 3(b), V.T.C.S., undermines this conclusion in stating that an administrative law judge "may," instead of "shall," issue a proposal for decision. In this provision, "may" means "to have authority to" or "to be permitted to." See B. Garner, A Dictionary of Modern Legal Usage 354 (1987). Section 3(b) lists several tasks an administrative law judge "may" perform. The bill analysis for Senate Bill 884 describes the list in section 3(b) as a list of prerogatives of the administrative law judge. A "prerogative is an exclusive or special right, power, or privilege: as . . . one belonging to an office or an official body." Webster's Ninth New Collegiate Dictionary 930 (1990). We believe that the characterization of section 3(b) as a list of prerogatives is consistent with the legislative intent: the legislature intended to leave to those agencies required to utilize the services of the SOAH, the SOAH and only the SOAH, the authority to conduct a hearing and issue the proposal for decision. The agency [has authority] to modify the proposal but only in accordance with section 13(j) of APTRA.

You argue that section 15 of APTRA authorizes the board to forgo receiving a proposal for decision from the SOAH if a majority of the board members have heard the case or read the record. Section 15 provides in pertinent part as follows:

If in a contested case a majority of the officials of the agency who are to render the final decision have not heard the case or read the record, the decision, if adverse to a party to the proceeding other than the agency itself, may not be made until a proposal for decision is served on the parties, and an opportunity is afforded to each party adversely affected to file exceptions and present briefs to the officials who are to render the decision.

Section 15 does not authorize an agency to forgo receiving a proposal for decision from the SOAH in any circumstance. For those agencies that are subject to APTRA and that must use the services of the SOAH, section 13(j) of APTRA, together with article 6252-13f, section 3(b), V.T.C.S., requires the SOAH administrative law judge to conduct a hearing and prepare a proposal for decision for the agency's approval. If the administrative law judge proposes a decision that will be adverse to a party to the proceeding other than the agency, section 15 provides that the agency cannot render a final decision until it has satisfied the requirements articulated in section 15.

You also suggest that because many contested cases before the board involve a pharmacist accused of illegally diverting controlled substances, the board should be able to revoke the accused pharmacist's license on an expedited basis. You contend that requiring such a case to be heard before an administrative law judge of the SOAH will delay such an order, posing a serious threat to the public health and welfare. We note, however, that article 6252-13f, section 3(c), V.T.C.S., requires the SOAH to hear a case within a reasonable time. See State Office of Administrative Hearings, 17 Tex. Reg. 2565, 6442, 6443 (1992) (to be codified at 1 T.A.C. §§ 155.15(a)(2), 157.1(a)). Furthermore, section 19A of APTRA authorizes the agency, including the board, to request the attorney general to bring an action in a district court with jurisdiction over the matter to compel compliance with an agency rule. See 22 T.A.C. § 281.24(a)(3), (4), (5) (listing among grounds for discipline the unlawful possession and distribution of drugs in violation of the Controlled Substances Act and Dangerous Drug Act). Section 17(k) of the Texas Pharmacy Act, V.T.C.S. article 4542a-1, also authorizes the board to sue in district court to restrain or enjoin a person from violating article 4542a-1. See V.T.C.S. art. 4542a-1, § 26(a)(9) (providing that board may discipline pharmacist who violates any provision of the Controlled Substances Act or Dangerous Drug Act). In our opinion, therefore, the board has alternatives by which it may seek to restrain or enjoin a pharmacist from illegally [diverting controlled substances].

SUMMARY

Absent reaching an agreed final disposition of a matter, a licensing board that is required to use the services of the State Office of Administrative Hearings may not make its own findings of fact, conclusions of law, or vote on discipline. Instead, the board must receive from the SOAH a proposal for decision, which the board may modify only in compliance with section 13(j) of the Administrative Procedure and Texas Register Act, V.T.C.S. article 6252-13a. Furthermore, a board may not premise a rule giving it the ability to make its own findings of fact and conclusions of law.

DAN MORALES
Attorney General of Texas

WILL PRYOR
First Assistant Attorney General

MARY KELLER
Deputy Attorney General for Litigation

RENEA HICKS
State Solicitor

MADELEINE B. JOHNSON
Chair, Opinion Committee