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Shaddy v. State of Vermont Office of Professional Regulation

Supreme Court of Vermont

September 19, 2014

David Shaddy
State of Vermont Office of Professional Regulation

On Appeal from Superior Court, Washington Unit, Civil Division April Term, 2014 Robert R. Bent, J.

Gabriel M. Gilman, Montpelier, for Appellant.

David Shaddy, Pro Se, Kyburz, California, Appellee.

PRESENT: Reiber, C.J., Dooley, Skoglund, Robinson and Crawford, JJ. [1]


¶ 1. This is an interlocutory appeal from a decision of the superior court, on appeal from a decision of an appellate officer, remanding this disciplinary case to the Board of Nursing to determine whether the Board intends that the case be continued. The central question is whether an attorney for the Office of Professional Regulation (OPR) within the office of the Vermont Secretary of State has the power to appeal from a Board of Nursing decision vacating an earlier consent order suspending from practice appellee, David Shaddy. We conclude that the attorney had this power and reinstate the decision of the appellate officer.

¶ 2. The underlying controversy resulted from a charge by Brattleboro Retreat, an in-patient mental health facility, that while working there as a nurse, Mr. Shaddy improperly took into his possession certain narcotic drugs. The charge and its consequences have been the subject of two earlier reported decisions from this Court. Shaddy v. Brattleboro Retreat, 2012 VT 67, 192 Vt. 215, 57 A.3d 700; Shaddy v. Dep’t of Labor, 2009 VT 103, 186 Vt. 633, 987 A.2d 311. This case started with a report from Brattleboro Retreat to the Board, stating its determination that Mr. Shaddy diverted the narcotics. In response, the Board director referred the case to an OPR attorney to bring a summary suspension proceeding and created an investigation team consisting of the OPR attorney, the Board director, and a Board member. The OPR attorney filed a charging document in the name of the State of Vermont alleging unprofessional conduct based on the violation of four statutes and sought, and obtained, a summary suspension of Mr. Shaddy’s license to practice nursing.

¶ 3. The process at this point in the case was conducted pursuant to 3 V.S.A. § 129(c), which provides:

A board may assign one or more members of the board to investigate complaints and license applications. These members shall have the assistance of an investigator for the Office and an attorney assigned by the Office of Professional Regulation who shall be responsible for prosecuting disciplinary and licensing cases before the board.
According to 3 V.S.A. § 123(a), the function of OPR is to “provide administrative, secretarial, financial, investigatory, inspection, and legal services to the boards.”

¶ 4. The OPR attorney and Mr. Shaddy, then represented by counsel, reached a consent order in February of 2011, and it was approved by the Board in April 2011. The consent order states that it is not an admission of liability by Mr. Shaddy but he does not dispute that the State could prove its charges by a preponderance of the evidence. The consent order continued Mr. Shaddy’s suspension and set the conditions for reinstatement of his license. Just over a year later, in April 2012, Mr. Shaddy, without counsel, sent the Board a letter seeking that the Board vacate or amend the stipulated order because he did not commit the unprofessional conduct alleged and he signed the stipulation under duress from his attorneys who threatened to cease representing him if he did not sign. He included with the letter a packet of supporting materials. The OPR lawyer filed an objection to Mr. Shaddy’s request for relief. The Board held a hearing, presided over by a different OPR lawyer, [2] at which Mr. Shaddy was the only witness. Relying upon V.R.C.P. 60(b)(6), the Board granted Mr. Shaddy most of the relief he requested, finding his testimony was “well organized and credible, ” that he showed “a good reason for his request for relief, ” that he sought relief “within a reasonable time, ” that his claims were “supported by the documentation he provided at the hearing, ” that “the evidence against Mr. Shaddy is insufficient, ” that “there has been a miscarriage of justice, ” and that the facts demonstrated an extraordinary situation “that warrant[s] the reopening of final judgment.” The Board vacated the consent order and suspension and dismissed the charges against Mr. Shaddy without prejudice to bring them again.

¶ 5. The OPR attorney appealed the Board decision, on behalf of the State, pursuant to 3 V.S.A. § 130a(a). Under the statute, the Director of OPR assigns the appeal to an appellate officer, who conducts an on-the-record review without taking new evidence. Id. Generally, the appellate officer is bound by the fact-finding of the Board and can overturn the Board decision only “if substantial rights of the appellant have been prejudiced” for any of seven listed reasons. Id. § 130a(b). In this case, the appellate officer reversed [3] the Board of Nursing decision for multiple reasons: (1) the Board should not have considered evidence related to the merits of the disciplinary charges, (2) the Board improperly failed to find grounds to vacate the earlier judgment, (3) the facts and circumstances did not meet the standard of Rule 60(b)(6), (4) the Board made no findings of fact, and (5) the Board improperly deprived the State of the opportunity to offer evidence. Mr. Shaddy then appealed the appellate officer’s decision to the superior court, raising one relevant argument: the OPR attorney had no power to appeal the Board of Nursing decision, and, as a result, the appellate officer decision has to be struck.

¶ 6. In an extensive decision, the superior court ruled that the power to prosecute a disciplinary complaint is vested in the Board and not in OPR. Thus, it ruled that if the Board’s decision was intended to exercise its power of prosecution by withdrawing the disciplinary complaint, its decision was final and could not be appealed by the OPR attorney. It reached this conclusion despite its conclusion that “the appellate officer explained in detail that the Board’s Rule 60 proceeding and decision were egregiously flawed and the court agrees.” The court’s order remanded the case to the Board of Nursing “for clarification whether its Rule 60 decision represents a determination that the original decision to prosecute Mr. Shaddy has been replaced by a decision not to prosecute Mr. Shaddy and any further proceedings consistent with this decision.” On the request of the OPR attorney, the court granted an interlocutory appeal to this Court.

¶ 7. Although this appeal ostensibly involves one issue, there are actually two issues: (1) whether the State could appeal the decision of the Board of Nursing pursuant to 3 V.S.A. § 130a(a); and (2) whether the OPR attorney acts for the State in filing and pursuing the appeal. The State argues that the first issue is determined by our decision in In re Lakatos, 2007 VT 114, 182 Vt. 487, 939 A.2d 510. Lakatos was also a disciplinary action, albeit for a different profession, ...

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