New York Law Review

Tag: professional licensing

  • People v. Friedman, 68 N.Y.2d 943 (1986): Establishing the Burden of Proof for Exemptions to Professional Licensing Requirements

    People v. Friedman, 68 N.Y.2d 943 (1986)

    A defendant claiming an exemption to a professional licensing requirement bears the initial burden of producing sufficient evidence to raise a colorable claim that their conduct falls within the scope of the exemption.

    Summary

    Friedman, a dentist who had surrendered his New York license after a Medicaid fraud conviction, was charged with practicing dentistry without a license after performing dental services. He argued that he was exempt because he was licensed in other states and acted as a consultant. The Court of Appeals held that even if the exemption were an ordinary defense, Friedman failed to meet his initial burden of presenting evidence that he acted as a consultant. The court reasoned that simply performing dental examinations, which fall under the practice of dentistry, does not automatically raise a defense without evidence showing the examinations were for consultation purposes.

    Facts

    In 1984, Friedman pleaded guilty to grand larceny related to Medicaid fraud. As a result, he surrendered his New York dental license and sold his practice.
    After serving his prison sentence, he returned to the clinic and performed dental services.
    He was subsequently indicted for practicing a profession without a license (Education Law § 6512 [1]).
    At trial, Friedman presented evidence that he was licensed in other states and claimed he acted as a consultant, which is permitted for dentists licensed elsewhere (Education Law § 6610 [5]).
    Evidence showed he examined patients, prescribed treatment, and filled cavities.
    Clinic records only indicated that patients received dental examinations.

    Procedural History

    The jury found Friedman guilty on two counts of practicing a profession without a license.
    The Appellate Division affirmed the conviction.
    Friedman appealed to the New York Court of Appeals, arguing the trial court’s jury charge regarding the consultant exemption was erroneous.

    Issue(s)

    Whether the trial court erred in its jury charge by allegedly placing the burden on the defendant to prove his status as a consulting dentist under the Education Law § 6610[5] exemption.
    Whether the defendant presented sufficient evidence to warrant a jury instruction on the consulting dentist exemption.

    Holding

    No, because even if the burden was improperly placed, Friedman failed to present sufficient evidence to raise a colorable claim that he acted only as a consultant. Therefore, any error in the jury charge was harmless.

    Court’s Reasoning

    The Court of Appeals reasoned that even if the consultant exemption were an ordinary defense, placing the ultimate burden of disproving it on the People, Friedman still bore the initial burden of producing enough evidence to suggest he acted as a consultant.
    “Even if, as the defendant contends, the exemption creates an ordinary defense which the People had the ultimate burden of disproving, the defendant had the initial burden of eliciting sufficient facts to raise a colorable claim that he acted only as a consultant.”
    The court emphasized that the practice of dentistry includes examinations (Education Law § 6601), and the statute doesn’t provide a blanket exemption for dentists licensed in other states to perform examinations in New York. “The practice of dentistry includes performing examinations (Education Law § 6601), and the statute does not create a broad exemption from the licensing requirement that permits dentists licensed in an other State to perform examinations whenever they occur in the office of a physician licensed here.”
    The exemption applies specifically to consultations. Friedman presented no evidence showing his examinations were for the limited purpose and special character of a consultation.
    Therefore, the court concluded that Friedman’s actions constituted a violation of the law and, without additional evidence, could not simultaneously raise a valid defense. “The evidence in this case was merely that the defendant, licensed in another State, performed dental examinations here in the office of a dentist licensed in New York. That simply established a violation of the law and cannot, without more, simultaneously raise the defense.”
    The Court found any error in the jury charge to be harmless because Friedman did not meet his initial burden of raising a colorable claim.

  • Charlebois v. J.M. Weller Associates, Inc., 72 N.Y.2d 587 (1988): Enforceability of Design-Build Contracts with Licensed Professionals

    Charlebois v. J.M. Weller Associates, Inc., 72 N.Y.2d 587 (1988)

    A construction contract requiring a contractor to engage a separately retained licensed professional engineer to perform the design function does not violate Education Law licensing protections or public policy.

    Summary

    Claude and Lesley Charlebois contracted with J.M. Weller Associates, Inc., for the construction of a warehouse and an addition to their existing building. Disputes arose, and the Charleboises refused to make further payments, claiming $600,000 was owed. Weller Associates demanded arbitration, but the Charleboises sued, seeking a declaration that the contract was invalid as against public policy because it violated Education Law §§ 7202 and 7209(4). The New York Court of Appeals held that the contract was valid because it expressly required a separately retained, licensed professional engineer (James M. Weller, P.E.) to perform the design function, thus satisfying the underlying public policy concerns of the Education Law.

    Facts

    The Charleboises contracted with Weller Associates, an unlicensed business corporation, for a construction project. The contract stipulated that an “Architect/Engineer” would be furnished by the Contractor pursuant to an agreement between the Contractor and the Architect/Engineer, specifically naming James M. Weller, P.E., to provide all architectural and structural engineering services. Disputes arose concerning cost, design, and code compliance, leading to the Charleboises withholding payment.

    Procedural History

    The Charleboises sued Weller Associates, seeking a declaratory judgment that the contract was invalid. Supreme Court ruled in favor of Weller Associates, finding the contract valid because a licensed engineer was engaged. The Appellate Division affirmed. The Court of Appeals granted leave to appeal based on a two-Justice dissent at the Appellate Division.

    Issue(s)

    Whether a construction contract entered into between an owner and an unlicensed business corporation building contractor is invalid as against public policy when the contract provides that the project design must be fulfilled by the builder by engaging a specified licensed engineer.

    Holding

    No, because under the contractual arrangements, the builder does not engage in the unauthorized practice of engineering. The engineer engaged to do the professional work is subject to the regulatory mechanisms of the State Education Department, regardless of whether they are a formal signatory to the contract.

    Court’s Reasoning

    The Court of Appeals reasoned that Education Law § 7202 prohibits unlicensed individuals from practicing engineering. However, the contract did not require Weller Associates to perform engineering services. Instead, it explicitly mandated the engagement of a licensed engineer, James M. Weller, P.E., who was subject to the State Education Department’s regulatory oversight. The court distinguished this case from American Store Equip. & Constr. Corp. v Dempsey’s Punch Bowl, where the unlicensed corporation itself prepared architectural plans, a direct violation of public policy.

    The court emphasized that the key factor was the independent professional judgment of the licensed engineer, James M. Weller, P.E., flowing directly to the Charleboises. The court quoted Vereinigte Osterreichische Eisen und Stahlwerke v Modular Bldg. & Dev. Corp., stating that “The rights sought to be protected by the statute are adequately covered when the contractor, manufacturer or builder engages a properly licensed person to perform those tasks which the law specifies call for certified skills.” The court also noted that the Charleboises were occupying the completed structures and operating their business from it and now sought to disaffirm the contract and be forgiven $600,000 in payments.

    The court further stated, “Even if a violation were to be hypothesized for the sake of argument, the public policy that underlies the statute would not be furthered by complete avoidance of this contract.” The court found the remedy of voiding the contract disproportionate, especially since the Charleboises benefited from the completed project and the licensed engineer was subject to professional regulation and potential malpractice liability. The court concluded that forfeitures by operation of law are disfavored and should not be used as a sword for personal gain rather than a shield for the public good.

  • Matter of New York State Osteopathic Soc., Inc. v. Allen, 26 N.Y.2d 24 (1970): Agency Discretion in Professional Licensing

    Matter of New York State Osteopathic Soc., Inc. v. Allen, 26 N.Y.2d 24 (1970)

    An administrative agency’s decision regarding professional licensing standards, based on its expertise and not expressly prohibited by statute, will be upheld if reasonable and not arbitrary.

    Summary

    The New York State Osteopathic Society challenged the State Department of Education’s decision to inscribe “D.O., M.D.” on the medical licenses of physicians who initially trained as osteopaths but later obtained M.D. degrees from a California institution. The court held that the Department’s action was permissible. The court reasoned that, absent a specific statutory prohibition and considering the equal quality of osteopathic and medical education in New York, the Department had discretion to recognize the additional M.D. degree on the licenses. This case underscores the deference courts give to administrative agencies in interpreting licensing requirements within their area of expertise.

    Facts

    Several New York physicians initially received Doctor of Osteopathy (D.O.) degrees from osteopathic colleges. They were licensed to practice medicine and surgery in New York. Subsequently, they obtained M.D. degrees from the California College of Medicine (CCM) after California eliminated osteopathy as a separate field. The physicians requested the New York State Education Department to inscribe “M.D.” on their licenses, which already bore the “D.O.” designation, and the department agreed and issued licenses with the inscription “D.O., M.D.”

    Procedural History

    The New York State Osteopathic Society, Inc. petitioned the court to compel the Department to rescind the licenses with the “M.D.” inscription. Special Term sustained the petition. The Appellate Division affirmed. The New York Court of Appeals granted leave to appeal.

    Issue(s)

    Whether the New York State Department of Education exceeded its authority by inscribing “D.O., M.D.” on the licenses of physicians who initially trained as osteopaths but later obtained M.D. degrees, given the statutory requirement to inscribe “D.O.” on licenses of osteopathic graduates and the argument that the inscription is misleading.

    Holding

    No, because in the absence of an express statutory prohibition and considering the equivalent quality of osteopathic and medical education, the Department had the discretion to recognize the additional M.D. degree by inscribing it on the licenses.

    Court’s Reasoning

    The court emphasized that the physicians were fully qualified to practice medicine and surgery, and could represent themselves as medical doctors. The core issue was the Department’s power to officially recognize the M.D. degree on their licenses. The court found that Section 6509 of the Education Law, which requires licenses to reflect the applicant’s qualifications, doesn’t mandate that all qualifications be listed on the license itself. The statute only specifically requires the “D.O.” inscription for graduates of osteopathic colleges, a requirement that was met here. The court deferred to the Education Department’s expertise, stating that it could not conclude the Department’s determination was arbitrary or unreasonable. The court noted the stipulation that osteopathic colleges provide medical education equal in substance and quality to non-osteopathic schools. The court distinguished Matter of Kurk v. Medical Soc. of Queens County, emphasizing that private medical groups can distinguish between M.D. degree holders, but the Education Department has the power to recognize both. The court stated, “Indeed, although we do not question the petitioner’s claim that it is acting in what it considers to be the best interests of the osteopathic profession, the entire thrust of its argument appears to be that persons trained in osteopathic institutions are somehow less qualified as physicians than those trained in medical schools. This position is not only contrary to the stipulated facts but goes against the express legislative policy of this State, which is to recognize such persons as fully competent, in every respect, to practice medicine and surgery.”

  • Patrician Plastic Corp. v. Board of Regents, 17 A.D.2d 436 (1962): Upholding Licensing Requirements for Landscape Architects

    Patrician Plastic Corp. v. Board of Regents of the University of the State of New York, 17 A.D.2d 436 (3d Dep’t 1962)

    A state statute requiring the licensing of landscape architects is a valid exercise of police power when it serves to safeguard life, health, and property and provides sufficiently clear standards for those regulated.

    Summary

    Five plaintiffs challenged the constitutionality of Article 148 of the Education Law, which mandates the licensing of landscape architects in New York. After their applications for licenses without examination were denied, the plaintiffs sought a declaration that the law was unconstitutional and an injunction against its enforcement. The court upheld the statute, finding that the regulation of landscape architecture is related to public health and welfare and constitutes a valid exercise of the state’s police power. The court also found the statute provided sufficiently clear standards and did not improperly delegate legislative power.

    Facts

    In 1960, New York enacted Article 148 of the Education Law, requiring the licensing of landscape architects. The law defined landscape architecture as professional services related to the development of land areas, with a focus on preserving and enhancing land uses, natural features, and aesthetic values. The law also established a Board of Examiners to administer the licensing process and prescribed penalties for violations. Five plaintiffs, who were practicing in the field, applied for licenses under a “grandfather clause” but were denied. They then filed suit challenging the law’s constitutionality.

    Procedural History

    The plaintiffs initially filed suit seeking a declaratory judgment that Article 148 was unconstitutional and an injunction against its enforcement. The trial court upheld the statute. The Appellate Division affirmed the trial court’s decision, finding the statute constitutional. The New York Court of Appeals affirmed the Appellate Division’s order, upholding the constitutionality of the landscape architecture licensing statute.

    Issue(s)

    1. Whether Article 148 of the Education Law is unconstitutional as a denial of due process because it lacks sufficiently clear standards.

    2. Whether Article 148 constitutes an improper delegation of legislative power to the Board of Examiners.

    Holding

    1. No, because when the prohibitions of section 7321 are read in conjunction with the exceptions contained in section 7326, a sufficiently clear standard of conduct is set forth to give fair notice to one concerned with or engaged in the activities regulated as to what acts are criminal and those that are innocent.

    2. No, because Boards of Examiners are the usual and ordinary bodies to pass on the qualifications for professional preferment.

    Court’s Reasoning

    The court reasoned that the practice of landscape architecture is a recognized profession requiring specialized knowledge. The Legislature enacted the licensing law to safeguard life, health, and property. The court emphasized the strong presumption of constitutionality afforded to legislative enactments, stating, “Every legislative enactment carries a strong presumption of constitutionality including a rebuttable presumption of the existence of necessary factual support for its provisions.” The court found that the statute’s definition of landscape architecture, in conjunction with its exemptions for other professions and activities, provided a sufficiently clear standard of conduct. The court also rejected the argument that the statute constituted an improper delegation of legislative power, noting that Boards of Examiners are commonly used to assess qualifications for professional licenses, and some discretion in evaluating an applicant’s qualifications is permissible. The court stated, “Although standards or guides must be prescribed where legislative power is delegated, it need be done in only so detailed a fashion as is reasonably practical in the light of the complexities of the particular area to be regulated.” The court concluded that the law did not interfere with existing businesses unless they misrepresented themselves as licensed landscape architects, and that the law’s preliminary requirements and grandfather clauses indicated no legislative intent to disrupt legitimate businesses.

  • Matter of Koster v. Holz, 3 N.Y.2d 639 (1958): Trustworthiness and Prior Convictions in Professional Licensing

    Matter of Koster v. Holz, 3 N.Y.2d 639 (1958)

    An administrative agency cannot deny a professional license based solely on a prior conviction without considering the underlying conduct and the applicant’s present trustworthiness.

    Summary

    Koster, a conscientious objector convicted of violating the Selective Service Act, applied for an insurance broker’s license. The Superintendent of Insurance denied his application, deeming him untrustworthy based on the conviction. The New York Court of Appeals reversed, holding that the Superintendent must conduct a formal hearing to assess Koster’s trustworthiness, considering the circumstances surrounding the conviction and Koster’s present character. The court emphasized that denying a license solely based on the conviction, without evaluating the underlying conduct and present trustworthiness, is arbitrary and capricious.

    Facts

    Koster applied for an insurance broker’s license, disclosing his 1951 conviction for violating the Selective Service Act due to his conscientious objector status. He argued his beliefs were sincere, and he should not be deemed untrustworthy. The Insurance Department denied the license without a formal hearing, citing the conviction as evidence of untrustworthiness. Koster’s application included statements attesting to his character and sincerity.

    Procedural History

    The Superintendent of Insurance denied Koster’s application. Koster filed an Article 78 proceeding challenging the denial. Special Term upheld the Superintendent’s decision. The Appellate Division affirmed. Koster appealed to the New York Court of Appeals.

    Issue(s)

    1. Whether the Superintendent of Insurance must hold a formal hearing to determine an applicant’s trustworthiness before denying an insurance broker’s license based on a prior conviction.
    2. Whether denying a license solely based on a conviction for refusing military service as a conscientious objector, without considering the applicant’s present trustworthiness and the sincerity of their beliefs, is arbitrary and capricious.

    Holding

    1. Yes, because Section 119 of the Insurance Law, read in light of its history, requires a formal hearing on the issue of trustworthiness.
    2. Yes, because such a denial could be arbitrary and capricious if the applicant’s beliefs were sincere and their untrustworthiness is not otherwise established.

    Court’s Reasoning

    The Court of Appeals reasoned that the Superintendent’s discretion is not unlimited. While a prior conviction is relevant, it cannot be the sole basis for denying a license. The Superintendent must consider the underlying conduct and the applicant’s present trustworthiness. The court emphasized the importance of distinguishing between conscientious objectors whose beliefs were deemed insincere by the Selective Service Board and those whose beliefs, though sincere, didn’t meet the statutory definition. Denying a license without this distinction could penalize individuals for adhering to deeply held, sincere beliefs. The Court cited Schware v. Board of Bar Examiners, emphasizing the need for a rational basis for the Superintendent’s findings. The court highlighted that the statute empowers the Superintendent to evaluate trustworthiness based on conduct, even without a conviction, but the conviction of a crime cannot by itself, be the sole determining factor.

    The court stated, “If it is determined upon evidence that the Selective Service Board believed petitioner to be a sincere person, but one whose beliefs did not entitle him to conscientious objector status under the congressional act, then denial of his application for a license where this is the only evidence of his untrustworthiness would be arbitrary and capricious. On the other hand, if it is found that said board believed him to be insincere, then denial of petitioner’s application is within the discretion of the Superintendent.” The court reversed the lower courts’ orders and remitted the matter to the Superintendent for further proceedings consistent with its opinion.