Court of Appeals of Texas,
BOARD OF MEDICAL EXAMINERS for the State of Texas and Donald W. Patrick, M.D., J.D., as Executive Director of the Board of Medical Examiners for the State of Texas, Appellants,
Vivian Adaobi O. NZEDU, M.D., Appellee.
May 4, 2007.
Rehearing Overruled June 18, 2007.
Attorneys & Firms
*267 Joseph A. Pitner III, Deputy Chief Administrative Law Division, Austin, for appellant.
Jasper J. Nzedu, Houston, for appellee.
Before Chief Justice PEMBERTON and WALDROP.
G. ALAN WALDROP, Justice.
This case involves the application of the statute and board rules that limit the number of times an applicant for a medical license in Texas may attempt to pass qualifying examinations. See 165.160 (West 2004 & Supp.2006). The Board included in its calculation an examination attempt by Dr. Nzedu taken prior to the effective date of the amendment to the Medical Practice Act that limited the number of permissible attempts to three. The amended statute was effective September 1, 1993, and is sometimes referred to as the “three-attempts statute.” The trial court reversed the Board’s decision, granted summary judgment in favor of Dr. Nzedu, and declared that the Board may not count her attempt to pass the USMLE before September 1, 1993, as one of her permitted examination attempts. The trial court awarded Dr. Nzedu $45,000 in attorneys’ fees through trial, and made a contingent award of appellate attorneys’ fees.
The issue presented is whether counting Dr. Nzedu’s pre-September 1, 1993, attempt to pass the USMLE as one of the total attempts allowed pursuant to post-September 1993 law is an unconstitutional retroactive application of section 155.056. Accordingly, we reverse the judgment of the trial court and grant judgment in favor of the Board denying Dr. Nzedu’s request for declaratory relief.
Factual and Procedural Background
Dr. Nzedu was born and educated in Nigeria. She received her medical training and degree from the University of Nigeria College of Medicine in 1990. In 1993, while living and practicing medicine in Nigeria, Dr. Nzedu applied to take the USMLE. She wanted to join her husband, who was living in Texas,1 and continue her medical practice in the United States.2 She attempted Step 2 of the *268 USMLE for the first time on March 30, 1993, but did not pass the examination.3 After September 1, 1993, when the three-attempts statute was enacted, Dr. Nzedu attempted Step 2 three more times, passing on her third post-September 1993 attempt but fourth overall attempt. Additionally, after September 1, 1993, Dr. Nzedu took four attempts to pass Step 1 and two attempts to pass Step 3 of the USMLE. She passed the last of the USMLE Steps on December 31, 1998, but she did not apply for a Texas medical license at that time. Under the law in effect in 1998 and most of 1999, Dr. Nzedu was not eligible to be licensed because she had taken four attempts to pass Step 1 of the examination (all taken after September 1, 1993), and the statute required an applicant to pass within three attempts. Under the state of the law at that time, Dr. Nzedu failed to qualify regardless of whether the pre-September 1993 attempt on Step 2 was counted.
The three-attempts statute was amended in 2001 to allow a fourth attempt on one of the three Steps of the USMLE:
[a]n applicant must pass each part of an examination within three attempts, except that an applicant who has passed all but one part of an examination within three attempts may take the remaining part one additional time.
Act of May 22, 2001, 77th Leg., R.S., ch. 1420, § 14.027, 2001 Tex. Gen Laws 4210, 4353 (codified at Tex. Occ.Code Ann. § 155.056(a)) (amended in 2005). In light of the 2001 amendment allowing one more attempt on one step of the examination, Dr. Nzedu applied to the Board in August 2002 for a license to practice medicine in Texas. She took the position that her four attempts on Step 1 were now allowed and her first (pre-September 1993) attempt on Step 2 should not be counted. Using this methodology, Dr. Nzedu would have passed the USMLE within the permissible number of attempts.
On November 14, 2002, the Board informed Dr. Nzedu that she was ineligible for licensure because she had required four attempts to pass both Step 1 and Step 2 of the USMLE. In reaching this determination, the Board included Dr. Nzedu’s first attempt at Step 2, which occurred before September 1, 1993, in the total number of permissible attempts under the statute. Dr. Nzedu then withdrew her 2002 application for licensure and did not appeal the Board ruling. In April 2004, Dr. Nzedu resubmitted her application for licensure to the Board and simultaneously filed this suit seeking declaratory relief in the district court. Dr. Nzedu challenges the Board’s interpretation of section 155.056 of the Medical Practice Act as an unconstitutional retroactive application of the statute.
The parties filed cross-motions for summary judgment. In her motion, Dr. Nzedu asserted that the presumptions in Texas law against retroactive legislation prevent section 155.056 allowed the Board to look back and consider events that occurred prior to its effective date, the statute is not unconstitutionally retroactive in its application. The Board also contended that section 163.4(a)(6) of the Board’s administrative rules required Dr. Nzedu to meet the statutory requirements in effect when she applied for licensure in 2002 and not the requirements in effect when she first attempted Step 2 of the USMLE in March 1993.
The district court granted Dr. Nzedu’s motion for summary judgment and held that (1) under section 155.003(6) of the Act relating to passing within the statutorily prescribed number of attempts for an examination accepted or administered by the Board.
On appeal, the Board contends that (1) the inclusion of Dr. Nzedu’s pre-September 1, 1993, attempt to pass the USMLE as one of the total attempts allowed pursuant to post-September 1993 law does not constitute an unconstitutional retroactive application of section 155.056 of the Medical Practice Act, (2) certain board rules permit the Board to consider Dr. Nzedu’s one failed examination attempt prior to September 1, 1993, in their determination of her eligibility for licensure, and (3) the district court abused its discretion by awarding attorneys’ fees to Dr. Nzedu.
Standard of Review
The material facts are not in dispute. Consequently, the propriety of summary judgment is a question of law. FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex.2000).
The Medical Practice Act
The licensing portion of the Medical Practice Act begins by providing that the Board, at its sole discretion, may issue a license to practice medicine to applicants who meet certain eligibility and examination requirements. See 22 Tex. Admin. Code § 163.4(a)(6) (2002–2003).
At all times relevant to this appeal, the Medical Practice Act has required that an *270 applicant for a Texas medical license pass each part of a qualifying examination, although the number of attempts allowed has varied. In March 1993, when Dr. Nzedu first attempted Step 2 of the USMLE, the relevant portion of the statute read as follows:
If any applicant, because of failure to pass the required examination, is refused a license, the applicant, at a time as the board may fix, shall be permitted to take a subsequent examination upon any subject required in the original examination as the board may prescribe....
Former Tex. Occ.Code Ann. § 155.056).
On September 1, 1993, shortly before Dr. Nzedu made her second attempt at a part of the USMLE, the Medical Practice Act was amended to provide that an applicant who fails an examination “shall be permitted to take a subsequent examination not more than two additional times.” Act of May 30, 1993, 73d Leg., R.S. ch. 862 § 14, 1993 Tex. Gen. Laws 3374, 3385. This version of the statute was in effect when Dr. Nzedu passed Step 1 and Step 2 in 1995, each on her fourth attempt, and passed Step 3 on her second attempt in 1998. When Dr. Nzedu completed her USMLE testing on December 31, 1998, she did not meet the licensing requirements in effect at that time. Because she had taken Step 1 four times since September 1993, the question of whether the Board could have considered her first attempt on Step 2 was, at the time, moot.
The legislature amended the Act in 1999 to allow for one additional examination attempt on any one of the three steps. The amended statute provided that an applicant could satisfy the examination requirements:
if, before, on, or after the effective date of this act, the applicant passed all but one part of an examination attempt within three attempts and passed the remaining part of the examination on the fourth attempt.
Act of May 20, 1999, 76th Leg., R.S., ch. 874, § 1, 1999 Tex. Gen. Laws 3568, 3570 (effective June 18, 1999) (emphasis added). This version of the statute was only in effect for two and a half months—June 18, 1999 to September 1, 1999. The same legislature, while codifying the Medical Practice Act, enacted a slightly different version of the statute in the codification process that did not permit a fourth attempt and did not include the “before, on, or after” language that replaced the June 18 version on September 1. Act of May 10, 1999, 76th Leg., R.S., ch. 388, §§ 1, 6, 1999 Tex. Gen Laws 1431, 2440. In 2001, the legislature again amended the Act to provide that:
an applicant must pass each part of an examination within three attempts, except that an applicant who has passed all but one part of an examination within three attempts may take the remaining part one additional time.
Act of May 22, 2001, 77th Leg., R.S., ch. 1420, § 14.027, 2001 Tex. Gen Laws 4210, 4353 (codified at Tex. Occ.Code Ann. § 155.056(a)).4 This version of the statute was in effect when Dr. Nzedu first submitted her application for a Texas medical license to the Board in 2002 and when she *271 resubmitted her application to the Board in 2004.
The Board interprets Tex. Const. art. I § 16 (“No bill of attainder, ex post facto law, retroactive law, or any law impairing the obligation of contracts, shall be made.”)
“ ‘While statutory retroactivity has long been disfavored, deciding when a statute operates ‘retroactively’ is not always a simple or mechanical task.’ ” Landgraf v. USI Film Prods., 511 U.S. 244, 280, 114 S.Ct. 1483, 128 L.Ed.2d 229 (1994)). In Quick, the Texas Supreme Court took particular note of the following language from the U.S. Supreme Court’s opinion in Landgraf:
A statute does not operate “retrospectively” merely because it is applied in a case arising from conduct antedating the statute’s enactment, or upsets expectations based in prior law. Rather, the court must ask whether the new provision attaches new legal consequences to events completed before its enactment. The conclusion that a particular rule operates “retroactively” comes at the end of a process of judgment concerning the nature and extent of the change in the law and the degree of connection between the operation of the new rule and a relevant past event. Any test of retroactivity will leave room for disagreement in hard cases, and is unlikely to classify the enormous variety of legal changes with perfect philosophical clarity. However, retroactivity is a matter on which judges tend to have “sound ... instincts,” and familiar considerations of fair notice, reasonable reliance, and settled expectations offer sound guidance.
Lewis v. Fidelity & Deposit Co., 292 U.S. 559, 571, 54 S.Ct. 848, 78 L.Ed. 1425 (1933)).
This Court’s opinion in General Dynamics Corp. v. Sharp analyzed a tax-related statute that drew upon antecedent facts for its operation. Id. at 864. General Dynamics then filed suit against the Comptroller to recoup the protested franchise taxes.
On appeal, General Dynamics asserted that the amendment to the franchise tax was unconstitutionally retroactive because it allowed consideration of the amount of income from 1991, the previous calendar year before the amendment was effective, to determine the amount of franchise taxes due in 1992 (the first year the new amendment was in effect). Id.
Similarly, section 155.056 of the Medical Practice Act affects antecedent conduct or “looks back” before its enactment only in the sense that it permits consideration of examination attempts that took place prior to its effective date.
Dr. Nzedu contends that such a “look back” feature makes the statute unconstitutionally retroactive. We disagree. As outlined in General Dynamics, there is a distinction between an unconstitutionally retroactive statute and a prospective statute that merely draws upon certain facts or conduct that took place before the statute became law in the process of operating after its effective date. Here, the three-attempts statute only applies to applications submitted while it is in effect, not those submitted prior to its enactment. Merely allowing consideration of pre-statute conduct in the form of counting the number of attempts to pass the USMLE does not amount to unconstitutional retroactivity.
*273 There are numerous examples of how statutes can take into account antecedent facts: college course-work requirements, age parameters, statutory bars based on prior criminal convictions, residence requirements, tax assessments, and others. Taking into account historical data, does not, by itself, make a statute unconstitutionally retroactive. Here, the three-attempts statute simply draws on historical data in assessing the qualifications of applicants applying after the effective date of the statute.
Middleton v. Texas Power & Light Co., 108 Tex. 96, 185 S.W. 556, 560 (1916)). No one has a vested right in the continuance of present laws in relation to a particular subject. See id.
Dr. Nzedu argues that she had a vested right to take Step 2 of the USMLE in March 1993 for practice without that one attempt being charged against her once the limit was put into effect. She argues that if the three-attempts statute is interpreted to allow counting pre-September 1993 attempts, the statute retroactively impairs her vested right to take the USMLE for practice. She asserts that the September 1993 amendment to Smith v. Davis, 426 S.W.2d 827, 834 (Tex.1968)).
The law in effect when Dr. Nzedu first attempted Step 2 of the USMLE in March 1993 provided that “[i]f any applicant, because of a failure to pass the required examination, is refused a license, the applicant ... shall be permitted to take a subsequent examination upon any subjects required in the original examination as the board may prescribe....” Former Tex.Rev.Civ. Stat. Ann. art. 4495b, § 3.05(c). The parties dispute whether the Board would allow an applicant to retake each part of an examination as many times as necessary to achieve a passing score under this version of the statute. Dr. Nzedu contends that applicants who failed a required examination could retake an unlimited number of subsequent examinations under this version of the statute. The Board contends that applicants who failed a required examination were permitted to retake only one subsequent examination and not multiple, subsequent examinations. We do not address the merits of either Dr. Nzedu’s or the Board’s construction of the March 1993 statute. For purposes of this appeal, we will assume that Dr. Nzedu believed that the March 1993 version of *274 the statute placed no limitation on examination attempts and that she relied on the continuance of a statute placing no limitation on examination attempts when she decided to take Step 2 of the USMLE for practice in March 1993.
While Dr. Nzedu may have relied on this statute when she decided to take Step 2 of the USMLE for practice, she did not have a vested right in the continuation of this particular procedure for reexamination attempts. Just as General Dynamics did not have a vested right in the continuation of a particular taxing structure, Dr. Nzedu does not have a vested right in the continuation of a particular licensing examination structure. See General Dynamics, 919 S.W.2d at 867). To rule otherwise would mean that licensing examination requirements could not ever be changed for anyone who had at least attempted the examination. Licensing requirements are not immutable, and there can be no reasonable expectation on the part of a potential applicant that the requirements will not change before an application is made.
In addition, her reliance on the state of the law in March 1993 with respect to the number of permissible attempts did not bestow upon her a vested right to take Step 2 of the USMLE free of any consequence. Instead, according to the plain words of the March 1993 statute, an applicant who was “refused a license” would be allowed to take a subsequent examination “at a time as the board may fix, ... upon any subject required in the original examination as the board may prescribe.” Former Tex.Rev.Civ. Stat. Ann. art. 4495b, § 3.05(c). In other words, the Board would consider an applicant’s failure on a required exam before allowing that applicant to take a subsequent examination. Therefore, we are not persuaded that Dr. Nzedu had a vested right to take Step 2 of the USMLE in March 1993 and fail the examination with a statutory guarantee that the failure would not ever be counted against her by the Board.
Our willingness to uphold the Board’s construction of Stanford v. Butler, 142 Tex. 692, 181 S.W.2d 269, 273 (Tex.1944)).
The Board of Medical Examiners is the agency charged with the enforcement of the Medical Practice Act in connection with its regulation of the practice of medicine in Texas. See section 155.056 of the Medical Practice Act.
Dr. Nzedu contends that this Court’s recent opinion in Mid–Century Insurance Company v. Texas Workers’ Compensation Commission requires us to conclude that the Board exceeded its statutory power by interpreting id.
The rationale of Mid–Century does not apply to this case. The Board’s construction of section 155.056 does not contradict the plain language of the statute and is not inconsistent with any other statute in the Medical Practice Act concerning an applicant’s eligibility for a Texas medical license. No other statute in the Medical Practice Act sheds light on which of an applicant’s examination attempts may be considered by the Board in its determination of his or her eligibility for a Texas medical license. Instead, the relevant statutes in the Medical Practice Act evidence the Legislature’s intent for the Board to determine an applicant’s eligibility for a Texas medical license based on certain, strict requirements. For example, the Medical Practice Act contains the following legislative findings:
(1) the practice of medicine is a privilege and not a natural right of individuals and as a matter of public policy it is necessary to protect the public interest through enactment of this subtitle to regulate the granting of that privilege and its subsequent use and control; and
(2) the board should remain the primary means of licensing, regulating, and disciplining physicians.
section 155.056 of the Medical Practice Act.
The Board Rules
The legislature expressly granted the Board the power to propose and adopt rules to carry out its duties under the Act. See section 155.056.
The Board challenges the award of attorneys’ fees to Dr. Nzedu. The trial court awarded attorneys’ fees to Dr. Nzedu as a prevailing party on her claim for declaratory relief. See section 155.056 of the Medical Practice Act and the Board’s rules require that we reverse the district court’s judgment granting Dr. Nzedu’s relief and that we render judgment for the Board. Accordingly, we also reverse the award of attorneys’ fees to Dr. Nzedu in light of the fact that the district court considered the issue of whether attorneys’ fees should be awarded in the context of Dr. Nzedu as the prevailing party. We remand for the trial court to determine what award of attorneys’ fees, if any, is equitable and just in light of our holdings. See id.
We reverse the judgment of the district court and render judgment in favor of the Board denying Dr. Nzedu’s request for declaratory relief. We remand the cause for determination of what award of attorneys’ fees, if any, is appropriate.
Although born in Nigeria, Dr. Nzedu is an American citizen.
An applicant for a medical license in Texas must meet specific eligibility requirements pertaining to training, education, and qualifying examinations. See Tex. Occ.Code Ann. § 155.0511 (West 2004).
The statute specifying the number of permissible attempts to pass the examination was amended four times between Dr. Nzedu’s initial attempt on the USMLE in March 1993 and the time at which she applied for a medical license in August 2002.
The current version of the statute, yet again amended in 2005, provides that an applicant “must pass each part of an examination within three attempts.” Tex. Occ.Code. Ann. § 155.056(a) (West Supp.2006).
In 2002, a department store argued that the application of the same 1991 amendment to the franchise tax law discussed in General Dynamics violated the constitutional prohibition against retroactivity. See Id.