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11 Harv. Negot. L. Rev. 453
Harvard Negotiation Law Review
Spring 2006
Case Comment
MEDIATION’S BOUNDARIES: IN RE LICENSURE OF PENNY V. STATE EX REL. WYOMING
Thomas Tsod1
Copyright (c) 2006 Harvard Negotiation Law Review; Thomas Tso
Introduction
In In re Licensure of Penny v. State ex rel. Wyoming, 1 the Wyoming Supreme Court affirmed a Medical Licensing Board
(“Board”) decision to penalize a self-identified mediator for practicing “clinical social work” without a license.2 As the first
case to offer a formal approach for separating mediation and medical practice, it raises several issues, including how to find
the appropriate procedural and substantive standards to separate the two fields within the administrative law framework.
Additionally, this case highlights the need for an initial policy choice as to who and how one should draw the line between
mediation and medical practice. Analyzing these issues will serve as a starting point for further discussion on the implications
of drawing such a line.
I. Facts and Procedural History
The petitioner and appellant, Jerry Penny, was a clinical social worker who was licensed to practice in 1994 and had his
license renewed in 1996.3 Penny sent in his application for re-licensing two days late in 1997.4 As his old license had already
expired, Penny needed to reapply for a new license to maintain his standing as a licensed practitioner. 5 In fact, Penny
continued practicing without a new license, and denied that he ever received a letter demanding his reapplication. 6
*454 In 1999, the Board received a citizen’s complaint against Penny and sent several letters to him, all of which were
returned unclaimed.7 The Board also sent a private investigator to find him.8 Penny told the investigator that he had contacted
the Board and was assured that his application would be handled.9 He responded to the complaint that he was practicing
without a license by arguing that his “practice was limited to trial consulting, mediation, conflict resolution, and forensic
social work, none of which fit the definition of ‘clinical social work.”’10 The Board reviewed his response, but rejected his
argument,11 defining his work as “clinical social work” that required a license.12
After Penny submitted a new request for licensing, a second complaint was filed against him. Penny was denied a new
license.13 These consumers’ complaints were the evidentiary basis for denying the appellant’s relicensing request, and the
State used these complaints as evidence for how he was continuing to practice “clinical social work” without a license.14
Penny requested a hearing, after which the Board rejected his request for re-licensing because: (1) he fraudulently represented
during the district court proceedings that he was a licensed counselor in response to the 1999 complaint; (2) he continued to
practice until criminal charges were brought against him, and; (3) he violated medical ethics rules when he was unable to
locate client files regarding the second complaint and when he practiced for two years without a license. 15 These three main
violations constituted malpractice.16 The district court affirmed the denial, and the appeal moved to the Supreme Court of
Wyoming, resulting in this opinion.17 During the appeals, two other clients filed complaints against Penny for “providing
mental health counseling, without a license, in a divorce visitation situation, and fail[ing] to return telephone calls or
cooperate with the court-ordered visitation supervisor”; *455 and “fail[ing] or refus[ing] to provide periodic billing
statements for counseling [a client’s] children.”18
II. Holding
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There are two main issues that the court considered in reaffirming the Board’s determination that Penny was performing
“clinical social work” instead of mediation and thus was subject to the Board’s requirements are discussed below.
A. Whether Expert Testimony Is Required to Determine the Occurrence of a Licensing Violation
The Board relied on a Board member’s testimony “that the appellant knowingly practiced clinical social work without a
license, a statutory violation, and that he violated the profession’s code of ethics when he could not locate the client’s
confidential file.”19 “In presenting these opinions, [the Board member] opined that the work the appellant performed in the
matters underlying the four complaints was regulated practice that required a license.”20 Penny objected to the consideration
of this testimony, arguing that the Board member was not an expert and that a Board member should not be allowed to testify
as an expert in Board hearings.21 The court agreed: “Stated differently, judicial review is impossible if board members, rather
than relying upon a standard of care established by the evidence, rely upon their own respective unidentified and
unarticulated standards.”22 However, the court did not find unarticulated standards here, but rather found that since the Board
was interpreting a clear standard set out in title 33, chapter 38 of the Wyoming Statutes, 23 it could rely on its own members’
interpretation of that standard. The court thus sided with the Board, finding that the Board did not rely on “its members’
individual standards,” but “detailed in its order the applicable statutory and administrative standards, including the ethical
codes adopted therein.”24 Since the statute contained a clear definition of what constituted “clinical social work” and its
associated standard of *456 care, Board members could testify as to the proper application of that standard without outside
expert testimony.
B. Whether the Denial of Re-Licensing Was Supported by Substantial Evidence
In addition to arguing that he was a mediator, Penny argued that the record “lack[ed] substantial evidence that he made any
representation to [the district] court that he was licensed or practicing as a ‘counselor,’ which is substantially different from
being licensed or practicing as a clinical social worker.”25 The court did not delve into the substance of the argument but
rather focused on whether there was sufficient evidence for the Board to accept the conclusion that he was working as a
clinical social worker. As a finding of fact, the court deferred to the Board’s conclusion that the applicant’s self-identification
as a mediator was not credible given other inconsistencies in his testimony.26 The Board also found that, as a conclusion of
law, Penny did carry out the clear statutorily-defined functions of a clinical social worker.27 The court found the Board had
evidence “fully” supporting “the conclusion that the appellant engaged in practices clearly identified in Wyo. Stat. Ann. §
33-38-102(a)(v) (1977) as ‘clinical social work,’ including diagnosis and counseling.”28
With regard to this conclusion of law, the court pointed to evidence from the complaints of Penny’s clients, circumstantial
evidence, and the Board’s findings of fact to establish that Penny functioned as a “clinical social worker” under the statutory
definition. For the court, sufficient evidence existed:
[All four complaints indicated] that he provided counseling or psychotherapy services during the period of time in which he
was not licensed to do so. In the four separate cases he provided pre-adoption counseling to a child, he counseled a child
concerning visitation after a divorce, he provided psychotherapy services to a child in a court-ordered supervised visitation
situation, and he provided conflict resolution and parenting education in an ongoing divorce litigation. That evidence was
sufficient to place the appellant’s conduct squarely within the statutory definition of counseling. In addition, the Board also
*457 found that the appellant provided assessments and made diagnoses under the mental health profession’s Diagnostic and
Statistical Manual (DSM-IV). While the appellant characterized his work as “mediation” and “conflict resolution” in a
“forensic” setting, it is clear that, in each of these cases at least, he had a specific client that he counseled in the statutory
sense.29
The court also found that he was a clinical social worker, since he represented himself to be one while he knew his license
was expired and continued to do the same work as when licensed. The court concluded: “An unlicensed clinical social worker
who practices counseling is practicing clinical social work without a license.”30 As a “clinical social worker” and not a
mediator, Penny was under the jurisdiction of the Board and thus bound by its application of its ethical rules. He violated
these rules in two main respects: (a) by representing himself as licensed and (b) by failing to produce a client file.31 Based on
these ethical violations, a denial of re-licensing was justified. The court found ample evidence to support the Board’s
conclusion in all respects.
III. Issues Raised by Penny
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In the past, the few commentators and courts concerned with possibly biased behavior by occupational licensing schemes
have viewed the problem as one for legislatures, not for the courts. 32 The following section will analyze how mediation may
be protected given the current occupational licensing agency and judicial review structures. General issues concerning how
the legislature might redesign licensing institutions and statutory language will be considered in the final section.
A. Administrative Agency and Licensing Mediators
Penny highlights the issue of whether licensing board proceedings are biased against self-professed unlicensed professionals.
In other words, does a licensing board with a mandate to license professionals institutionally prefer to mandate increased
licensing and thus bias itself against claims of unlicensed professionals? Licensed professionals may have a legitimate group
interest in both aggrandizing *458 the administrative agency’s domain and protecting its board members’ licensed practices
against unlicensed competition. Similar issues have emerged when distinguishing between unlicensed alternative medicine
practitioners and medical boards, but the courts have not been favorable to the former as they continue to defer to adverse
Board judgments against unlicensed medical practitioners. 33 Penny is not the most sympathetic defendant, as his assertion of
being a “non-professional” may appear like an ad hoc defense that lacks credibility. 34 However, the Board never seriously
inquired into the extent to which some of his activities may be defined as mediation and thus possibly exempt him from the
professional standards violations that serve as the basis of his re-licensing denial.
Courts have recognized very narrow grounds for overturning administrative agency decisions based on a claim of bias. These
narrow grounds are usually limited to cases when a board member has a specific financial stake in the success of one party.35
Claims of bias by factions within a profession against board dominance by another faction do not fit into these limited
financial grounds; courts have simply framed these claims as requests for a “sympathetic” adjudication.36 Nevertheless,
commentators have observed that an administrative board’s protection of its turf can be analogized to the protection of
financial bias, one of the most salient claims of administrative adjudicative bias. 37 For example, an occupation board
protecting its power over licensing a profession will protect its turf by ignoring exemptions for competing unlicensed
professions. These claims of bias are distinct from both party-specific claims of bias from board members’ financial interests
and requests for a “sympathetic” board composition; *459 instead, mediators would like to claim that licensing agencies are
inherently institutionally biased against competing unlicensed professions (regardless of board composition or the specific
financial interests).
Most judicial discussion of institutional bias appears in the context of bias within a profession or regulated industry, and
almost no recent challenge to this bias has been successful. 38 One litigated example claimed that a board was dominated by
members from a professional trade association, the American Psychological Association (APA), which thus potentially
biased the board decisions against non-members from the same profession.39 However, there are important differences
between institutional bias within an industry or profession and bias against another industry or profession. The bias between
competing groups within an industry or profession is probably foreseen when designing the agency, and there is likely a
legislative struggle between these groups during the creation of the licensing scheme.40 In addition, board composition could
theoretically rotate among factions within the same profession. However, potential bias against other professionals is likely
not an issue that informs the deliberations when creating the administrative agency. While such institutional bias does not rise
to the narrow view of bias sufficient for a judicially reviewable due process violation,41 these concerns should motivate
agency-level reform.42
Penny suggests two agency-level solutions to alleviate potential problems in drawing the line between mediation and the
licensed professions if redesign is not pursued. One such solution, often used by the courts as evidence of an internal check
against institutional bias, is to require the Board to include non-professional, or “public,” *460 members as a statutory
requirement of Board composition.43 In Abramson v. Gonzalez,44 the Eleventh Circuit decided that membership in the APA
did not disqualify the Board Examiners from examining licensing of non-APA members, because “two board members must
be lay persons not associated with the profession or the APA.”45 In Penny, likewise, the statute required the Board to have
“two (2) members . . . from the public at large.”46
The assumption that public members will remedy the potential for institutional bias described above poses several problems.
Even with the presence of two, public, at-large members, a majority of board members are still licensed professionals.
Moreover, the presence of the minority public board members is often justified as protecting a public interest, closely
analogous to representing consumer interests.47 These consumer interests, though, are not directly implicated when
discussing inter-professional line-drawing. Line-drawing between professions may be seen by the public members as
unrelated to any consumer interests.48 As there is no explicit mandate for either the public at-large members’ role on the
Board, or the interests that they should represent, increased licensing requirements on practitioners is often described as
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furthering a public interest.49 Thus, public at-large members themselves will see the weeding out of unlicensed practitioners
as upholding the legislative intent and representing the public interest.50 Their interests would not be aligned with those of
unlicensed practitioners. In addition, mere participation within an institution specialized in occupational licensing could bias
previously neutral public members to be in favor of licensing more individuals as it appears to satisfy their institution’s
statutory *461 purpose.51 Finally, the Penny case already notes the difficulties in meeting quorum requirements, 52 so there is
no assurance that a public, at-large member would be present at the hearing to represent the interests of unlicensed
practitioners or any other similarly situated, under-represented interest.53
The second solution, rejected by the Penny court, is to require licensing hearings concerned with the distinction between
clinical social work and mediation to include the testimony of outside experts. Originally, the hearing examiner called the
Board’s chairman, a licensed clinical social worker, to testify as an expert to determine whether Penny had performed work
within the statutory definition of “clinical social work” while unlicensed.54 The Board’s own lawyer stopped the proceedings
and identified the procedural defect in having a Board member testify as an expert. 55 The court, however, ruled that the
inclusion of that testimony was not reversible error, since the Board member was testifying about an interpretation of the
standard of care implied within its organic statute--a clear expertise of the Board--which did not require impartial external
expertise.56 The Board’s ultimate determination was most likely reasonable in this case, because Penny provided assessments
and diagnoses based on DSM-IV and continued his previously licensed work without much change. 57 As a previously
licensed practitioner, Penny was likely aware of the professional standards implicated and he plausibly intended to perform
“clinical social work.” Penny can be viewed as the narrow exception to an outside expert requirement: outside expertise *462
is unnecessary because mediation is used as a bad-faith defense. Outside expertise should be required, however, for any
definitional assessment (e.g., what is “clinical social work”) so that the court can carefully evaluate the necessary
jurisdictional lines between the professions, especially when the statute is somewhat unclear. Medical boards of some states
require, and the courts take a hard look at, the conclusions of experts when drawing the line between practices that require
licensing and those that do not.58 An agency’s purported expertise in assessing the often unclear lines between unauthorized
and authorized practice must be balanced against the need for impartiality when making these distinctions, and thus outside
expertise should be the required.
B. Judicial Review of Line-Drawing
While the former Section dealt with possible procedural safeguards at the agency level, a more active review by the judiciary
of agency decisions could also provide some protection to mediators. There has generally been concern, both in Wyoming
state courts and in federal common law, for the deference accorded to an administrative agency that derives its own statutory
boundaries. Within administrative law, there is some room to adjust the level of deference given occupational licensing
boards, particularly when there is suspicion of institutional bias.59
One of the issues in Penny was whether the determination that mediators are “clinical social workers” is a finding of fact or a
conclusion of law. As is often the case, the question is mixed, and both findings of fact and conclusions of law influenced the
Penny decision. For example, Penny’s assertion that he was a mediator and counselor were deemed not credible as a finding
of fact. The fact that his unlicensed clinical practice included DSM-IV diagnosis, though, rendered it “clinical social work”
that required licensing as a conclusion of law.60 While questions of fact and law are usually mixed, the distinction remains
important in state law jurisprudence under which most challenges to occupational licensing boards occur. With respect to
*463 conclusions of law, state courts, including Wyoming’s, should not accord any deference to the administrative board. 61
Even in this case, the conclusion of law that using DSM-IV is a sufficient condition for defining a practice as “clinical social
work” is not explicitly found in the statute. The statute does not mention DSM-IV and merely states: “Professional clinical
social work services consist of assessment, diagnosis, treatment, including psychotherapy and counseling, client-centered
advocacy, consultation and evaluation with individuals, families, groups, communities and organizations.”62 From a plain
reading of the text, it is unclear what level of assessment and diagnosis constitutes “professional clinical social work.”
Assessment and diagnosis are necessary, but not sufficient conditions for this definition. In addition, it is unclear if the other
elements of the definition, such as “client-centered advocacy” and “consultation,” sufficiently constitute “clinical social
work.” Future cases should require courts to engage in a searching de novo inquiry into legislative intent and hear testimony
from expert witnesses to define these technical terms, or even engage in a more searching plain language analysis of these
statutory definitions. No such analysis was applied in this case, however, as the majority of the opinion merely repeated the
Board’s conclusion of law without any analysis of Penny’s defense that he was practicing as a mediator.63 Under de novo
review, the court, as a more impartial forum, has more freedom to deliberate over the proper lines between definitions of
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mediation and licensed practices.
Further, even if a finding that a person is performing “clinical social work” is considered a finding of fact, it is a
“jurisdictional fact” (i.e. a fact that establishes the agency’s jurisdiction over the individual). 64 Jurisdictional facts deserve
less judicial deference, since groups outside the intended regulatory framework are affected by the agency’s exertion of
authority or jurisdiction over them. The concern is especially heightened in the case of Penny, since protection of *464
mediators is often a state and Congressional priority. 65 “Jurisdictional fact” doctrine is still an important distinction in some
state administrative law regimes,66 even though there is a general decline of its use within administrative law. 67 If applicable,
“jurisdictional fact” doctrine is another route to permit more scrutiny during judicial review.
Finally, even under substantial deference regimes, a concern for a lack of accountability could result in less deference to
agency determinations when considering whether such determinations are reasonable or arbitrary and capricious. 68 The lack
of accountability is heightened when a medical board can define who is subject to its jurisdiction and impinge on other
professional definitions, such as “mediators.” The relationship between deference and administrative accountability loomed
in the background of a First Circuit case, Werle v. Rhode Island Bar Ass’n, 69 which concerned the Rhode Island Bar
Association’s determinations of unauthorized practices of law. In Werle, the First Circuit held the bar association immune
from judicial review when it determines who is practicing law without authorization and, thus, who is subject to its licensing
jurisdiction.70 Unlike the Penny court, the Werle court implicitly considered the accountability of these agency
determinations as a factor in deciding the level *465 of judicial deference accorded them. Due to statutory reform subsequent
to the start of litigation, the bar committee responsible for determining unauthorized practices of law had lost its independent
discretion and was held accountable to the Supreme Court of Rhode Island. Statutory reform that provided accountability for
the bar association determinations, in part, justified the substantial judicial deference and agency immunity shown by the
Werle court. It noted that, at least “[t]hose [statutory] amendments created a new unauthorized practice of law committee
appointed by, and directly accountable to, the Supreme Court of Rhode Island, not the Bar Association.”71 As a result of this
statutory solution to the accountability concerns in prosecutions of the unauthorized practice of law, the courts now do not
defer to bar associations, because the judiciary has original jurisdiction in many states to oversee these unauthorized practice
of law determinations.72 The same accountability concerns without a parallel accountability solution should lessen the
deference given to a medical board’s findings, such as those in the Penny case.
C. Guidance for Mixed Roles
One of the issues that Penny implicates is the treatment of practitioners with mixed roles. According to the court and clients,
Penny performed licensed clinical social work, but he himself described some of his work as mediation. The Penny court
framed the issue as a simple, line-drawing exercise separating the pure “mediators” from “medical professionals,” and under
this formulation Penny was really a medical professional, not purely a mediator, despite his self-description. As noted in
many real examples,73 the mediation and medical professions are fluid, overlapping, and often indeterminate; moreover,
licensed professionals often engage in the mediation business and vice versa. 74 Following Penny, Boards and courts can
impose strict licensing requirements on unlicensed mediators, whose *466 practice may include some psychological
techniques, as long as they touch upon psychological counseling and do not have purely mediation practices. This regime
would create monopoly protection for already licensed professionals who also take on mediation practices by preventing
competition from unlicensed mediators who want to use psychological techniques. The Wyoming statute in Penny allows
currently qualified members of “other legally recognized” professions to engage in clinical social work and other counseling
services that would otherwise require licensing; unrecognized professions, like mediators, have no similar rights.75 Without
further guidance, no one is certain which types of techniques or level of use suffice to take mediators out of the mediation
realm and into the licensed realm of the medical professions.
In effect, the mediation business will slowly be moved out of the hands of informal and Alternative Dispute Resolution
(ADR) practitioners and into the hands of state licensed practitioners, such as psychologists and lawyers, whose governing
formal institutions can now annex the mediation business by threatening prosecution for unauthorized practices. Licensed
practitioners act from perspectives informed by their formal roles within the judicial system as court-appointed psychologists
and lawyers. Informality in mediation will now be threatened as efforts to experiment with mediation techniques that utilize
alternative methods, such as psychological theories, will be curtailed. There could also be threats from other licensing
agencies, such as counselors or accountants, whenever their expertise or techniques are used in conflict resolution. 76 The
decision over who should be empowered to define and how they should interpret the distinctions between these very fluid
roles will have great implications for the mediation industry. Defining when mediators are acting in their capacity as licensed
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therapists and when they are *467 acting as unlicensed mediators will have also important consequences as to when
confidentiality and ethical rules apply.77 If confidentiality and ethical rules are applied to mediation practices by licensed
practitioners for fear of ethical violations, mediation’s informality will be equally threatened. Thus, it is important for the
administrative agency in charge to be understanding of a practitioner’s multiple roles and possible intermingling of functions.
IV. General Policy Issues
A. Carving “Mediation” Out of the Statutory Mandate
The need to explicitly formalize and recognize the mediation profession may be detrimental to the essence of mediation,
which lies in its informality. Statutory guidance is one possible solution to line-drawing and may carve out an informal space
outside of the administrative state, while still protecting the mediation profession from the dual threats of unauthorized
practice of law,78 as displayed in Werle, and unauthorized practice of medicine, as shown in Penny. The vague and expansive
categories of “lawyers,” “law work,” “licensed medical professional,” and “medical work” within current organic statutes for
licensing boards should be explicitly limited within the statutory language. The limitations drafted into these statutes curtail
the threat of unauthorized practice for unlicensed practitioners, creating a space outside of the statutory and judicially
protected categories of licensed law and medical work.
The statutory boundaries should not be based purely upon a Penny approach that engages in the formal categorization of
whether a “mediator” is or is not acting as a “lawyer” or a “medical professional.” Equally, a definition based on categories
of “functions” belonging to each profession will not work. If the “professions” and their “functions” are formally categorized,
there is a distinct possibility that mediation, without a formalized and legally protected category, will become co-opted by the
other professions that do have broad formal and legally-protected categories. The current statutory *468 definitions of
medical and legal work are in fact flexible, formal, and judicially protected categories.
There were broad definitions in the statutory licensing mandate available to the Board in Penny. For example, clinical social
work includes “counseling” and “consulting.”79 “‘Counseling’ means assisting clients through the counseling relationship,
using a combination of mental health, psychotherapy and human development principles, methods and techniques, to achieve
mental, emotional, physical, social, moral, educational, spiritual or career development and adjustment through the life span,
but shall not include religious instruction,” and “‘[c]onsulting’ means the application of scientific principles and procedures
in counseling and human development to provide assistance in understanding and solving current or potential problems that
the client may have in relation to a third party, be it an individual, a group or an organization.”80 The Board’s statutory
mandate is prefaced with a potentially unrestricted domain: “Mental health procedures means engaging in methods and
techniques which include, but are not restricted to,”81 implying a possible expansion of the list of medical functions that may
require Board licensing. It is also unclear whether the statute is an illustrative or an exclusive list of conditions for medical
functions that require licensing.82
A similar threat exists under unauthorized legal practice doctrine. For example, the Kentucky Supreme Court noted that:
“This Court has defined the practice of law as any service rendered involving legal knowledge or legal advice, whether of
representation, counsel or advocacy in or out of court, rendered in respect to the rights, duties, obligations, liabilities, or
business relations of one requiring the services.”83 Deborah Rhode concurs: “A number of jurisdictions simply proscribe,
without defining, the practice of law. Other states employ a circularity scarcely less cryptic: The practice of law is what
lawyers do.”84 The same fear of the expansive definition of medical *469 professions may equally threaten mediation
practices in the legal realm.
These vague and potentially expansive categories are unclear to the professionals involved.85 With stiff penalties for
unauthorized practice, these broad definitions may significantly chill unlicensed mediation. While suggesting a
comprehensive solution is challenging, it is important that legislatures narrow these definitions or attempt to specify the
definition of “practice of law” or “practice of medicine” before assigning independence and deference to boards responsible
for prosecuting unauthorized practices. More statutory guidance, deliberation, and debate will be an important start for
increasing procedural safeguards for protecting mediation’s boundaries. Requiring agencies to provide case-by-case,
impartial, fact-intensive inquiry into each mediator’s effect on its consumers--whether the effect is more like dispute
resolution or psychological counseling--may be the most judicious, albeit costly, procedure required for safeguarding
mediation within the administrative state. Such an approach might also provide a safe harbor from medical board rules when
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dual practitioners provide mediation services.
B. Considering Alternative Regimes
There are several possibilities for reforming the current system. The most obvious and important ones are: (1) creating an
administrative agency for ADR; (2) leaving line-drawing to the market; and (3) forming a hybrid scheme within the current
framework.
Much of the limited academic work on protecting mediation’s boundaries has been in the area of institutional design. A few
other commentators have highlighted the issue of protecting mediation’s “turf” in the face of licensing threats.86 One
proposed solution is the *470 creation of new, independent state boards of ADR.87 Institutionalizing ADR within the
administrative state itself creates an administrative voice to protect this turf from encroachment. 88 Without a parallel
administrative agency, a medical board can easily increase its jurisdiction at the expense of the unorganized and informal
mediation profession. By creating an ADR board, a bureaucrat and insider is, at least, representing the interests of the
mediation profession within the executive branch. Representation in the executive branch may be more effective than relying
on deferential judicial review (such as in Penny) and lobbying the legislature. A variation of this solution is what occurred in
Werle, where the unauthorized practice of law committee was held directly accountable to the judiciary. Making the licensing
board accountable to an impartial governing committee with a mix of ADR and medical professionals may be feasible, while
adding mediation practitioners as temporary medical board members or outside experts represents a less radical solution.
The second option is a free-market certification regime. Even under a free-market regime, state regulations protecting
consumer interests, such as those against fraud, are necessary. For example, under a certification regime, the main purpose of
state regulation is to differentiate for consumers those professionals who can perform professional functions with certification
and those who perform them without certification.89 Certification allows for a free commercial speech regime, whereby the
only important violation is conveying a false impression that one is licensed. 90 Thus, mediators can advertise their use of
psychological techniques, but must warn consumers about their lack of licensing with regard to their use of those
psychological techniques. Mandatory licensing of the medical profession with regard to clinical social work and
psychological therapy is only a *471 very recent development. In Wyoming, mandatory licensing began in 1993. Before
1987, there was no licensing regime, and between 1987 and 1993, a voluntary certification regime existed. 91 Now, mandatory
licensing has created high market barriers.92 The licensing regime is usually justified as a form of consumer protection, but
many commentators have suggested that this protection is often a fallacious goal, clouding the actual motivation of
monopolization by licensed professions.93 “The scholars have found that governmental restrictions on the professions create
barriers to entry, reduce competition, and raise professional incomes, without bringing about compensating increases in the
quality of professional services.”94 The debate over whether occupational licensing regimes, in fact, benefit consumers has
been a battle among commentators. However, courts have been reluctant to challenge occupational licensing based on these
purely economic grounds.95
Under a market-based rule (i.e. no direct regulation of the line between mediators and the regulators), regulation would be
purely private: regulation relies on consumers (the market), insurance agencies, and--only when fraud is implicated--the
courts. Under this regime, the court in Penny could have dismissed the action and reframed the complaint as a basic fraud
action--a mediator representing himself as a licensed social worker--without establishing a broad rule that power rests with
the Board to decide when mediators are acting as medical professionals. Indeed, the court even relied on market-based and
private determinations as support for their affirmation of the Board’s decision: “While [the appellant] asserted such services
constituted conflict resolution, trial consultation and mediation, neither the clients, nor their insurance companies, were
informed of limited services [the appellant] insisted he was providing. Instead, [the appellant] billed for the clinical social
work services he was providing without a license.”96 Imposing increased insurance company monitoring and insurance costs
on mediators who attempt *472 to use psychological techniques, while also requiring them to warn consumers about their
lack of licensing, might be sufficient protection for consumers.97
The final option is a hybrid licensing scheme, a solution inspired by the rule announced by the Kentucky Supreme Court in
Turner v. Kentucky Bar Ass’n.98 This rule does not adhere to the strict categorization of the professions, but instead attempts
to create a hybrid licensing regime that tailors licensing requirements for different types of members within a profession.
Turner analogized workmen’s compensation specialists to paralegals and allowed these specialists to perform limited
lawyerly functions without a license, but required general supervision by a head attorney. 99 As in Turner, a court or
legislature could analogize mediators who perform psychological functions to medical assistants; 100 they may have
significant discretion, but such discretion is contingent on general supervision by licensed medical professionals. Some
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licensing may also be required, but it can be so with much more relaxed standards. Unlike the current regime, this one would
confer upon the mediators some relative informal discretion.
Footnotes
d1
Thomas Tso is a J.D./A.M. candidate, 2006, Harvard Law School and Harvard Graduate School of the Arts & Sciences. He would
like to thank Matthew Senatore and Jane VanLare for their help in editing this article.
1
120 P.3d 152 (Wyo. 2005)
2
Id.
3
Id. at 157-58.
4
Id. at 158.
5
In re Licensure of Penny v. Wyo., 120 P.3d 152, 158 (Wyo. 2005).
6
Id.
7
Penny, 120 P.3d at 158.
8
Id.
9
Id.
10
Id.
11
Penny, 120 P.3d at 158.
12
Id.
13
Id.
14
Id. at 175.
15
Penny, 120 P.3d at 158-59. In addition, his continuing education was deficient. Id.
16
Id.
17
Id.
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18
Id.
19
Penny, 120 P.3d at 162.
20
Id.
21
Id. at 162-63.
22
Id. at 164.
23
Wyo. Stat. Ann. §§ 33-38-100 to -113 (2005). The statute is under title 33, “Professions and Occupations,” chapter 38,
“Professional Counselors, Marriage and Family Therapists, Social Workers and Chemical Dependency Specialists.”
24
Penny, 120 P.3d at 170.
25
Penny, 120 P.3d at 171.
26
Id. at 171.
27
Id. at 166-67.
28
Id. at 171.
29
Penny, 120 P.3d at 174.
30
Id. at 172.
31
Id. at 165.
32
See, e.g., Abramson v. Gonzalez, 949 F.2d 1567, 1579 (11th Cir. 1992) (“Any general challenges to the licensing scheme are
properly addressed to the legislature, not this court.”).
33
See Barbara L. Atwell, Mainstreaming Complementary and Alternative Medicine in the Face of Uncertainty, 72 UMKC L. Rev.
593, 616-19 (2004).
34
Penny, 120 P.3d at 167.
35
See Note, Due Process Limitation on Occupational Licensing, 59 Va. L. Rev. 1097, 1119 (1973).
36
The blurry line between actionable claims of “partiality” versus non-actionable claims for “sympathy” began with the most
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important administrative law case on occupational boards, Friedman v. Rogers, 440 U.S. 1, 18 (1979) (“Although Rogers has no
constitutional right to be regulated by a Board that is sympathetic to the commercial practice of optometry, he does have a
constitutional right to a fair and impartial hearing in any disciplinary proceeding conducted against him by the Board.”).
37
See, e.g., Earth Island Inst. v. U.S. Forest Serv., 351 F.3d 1291, 1309 (9th Cir. 2003) (Noonan, J., concurring) (“It is scarcely
surprising that, as administrative proceedings have come to determine more and more rights and responsibilities, the desire to
purge administrative proceedings of possible financial bias should have become definitive. A bureaucracy, protecting its turf and
cherishing the number of its employees and the extent of its empire, can have as lively a bias towards its budget as any
old-fashioned venal politician might have in his pocketbook.”).
38
See, e.g., Friedman, 440 U.S. at 17-18.
39
Abramson v. Gonzalez, 949 F.2d 1567, 1579 (11th Cir. 1992).
40
Cf. Friedman, 440 U.S. at 17-18 (describing the struggles during the legislative decision to design the professional rules
governing the optometric profession).
41
See Brooks v. N.H. Sup. Ct., 80 F.3d 633, 640 (1st Cir. 1996) (“To implicate due process, claims of general institutional bias must
be harnessed to a further showing, such as a potential conflict of interest or a pecuniary stake in the outcome of the litigation.”)
(citations omitted).
42
The Supreme Court famously held in Vt. Yankee Nuclear Power Corp. v. Natural Res. Def. Council, Inc., 435 U.S. 519, 524
(1978), that while the judiciary is generally unable to require additional procedural safeguards, the agency itself has discretion to
increase procedural safeguards. Wyoming and other state courts have adopted this proposition. See, e.g., Tri-State Generation and
Transmission Ass’n, Inc. v. Envtl. Quality Council, 590 P.2d 1324, 1331-32 (Wyo. 1979).
43
See, e.g., Alliance of Auto. Mfrs. v. Gwadosky, 353 F. Supp. 2d 97, 108 (D. Me. 2005).
44
949 F.2d 1567 (11th Cir. 1992).
45
Id. at 1579.
46
Wyo. Stat. Ann. § 33-38-104 (1977).
47
See, e.g., Finucane v. Pa. Milk Mktg. Bd., 581 A.2d 1023, 1026-27 (Pa. 1990) (noting the analogy between consumer members
within industry boards and public at-large members in occupational boards).
48
Cf. Friedman v. Rogers, 440 U.S. 1, 17-18 (1979) (noting the legislative intent for the created agency was to enforce the rules
favored by one professional faction against another faction).
49
See, e.g., Leone v. Med. Bd. of Cal., 94 Cal. Rptr. 2d 61, 69 (Cal. 2000) (“The restriction on appellate review serves a significant
public interest in the speedy removal of incompetent physicians from the practice of medicine.”); Colo. State Bd. of Med.
Exam’rs v. McCroskey, 940 P.2d 1044, 1047 (Colo. Ct. App. 1996) (describing the statutory purpose of the Colorado organic
statute of the Board of Medical Examiners).
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50
See, e.g., Leone, 94 Cal. Rptr. 2d at 69; McCroskey, 940 P.2d at 1047.
51
Cf. Holmes Group, Inc. v. Vornado Air Circulation Sys., Inc., 535 U.S. 826, 839 n.4 (2002) (Stevens, J., concurring in part and
concurring in the judgment) (noting the risk that the Federal Circuit would exhibit pro-patent bias due to its specialization while
discounting that risk based on the ability of other circuits to check the bias).
52
In re Licensure of Penny v. Wyo., 120 P.3d 152, 159 (Wyo. 2005) (“The Board twice granted the appellant’s motions for a
continuance, but denied a third motion, leaving the hearing set for July 25, 2003. That date was vacated, however, because the
Board could not meet quorum requirements. The hearing, at which both parties presented evidence, finally took place on October
23-24, 2003. Thereafter, the Board issued a detailed order denying re-licensure.”). Four members constitute a quorum. Wyo. Stat.
Ann. § 33-38-105(c) (2005). The board is composed of four medical professionals and two public at-large members, so the four
members may or may not all be medical professionals. Wyo. Stat. Ann. § 33-38-104(b).
53
This concern is evidenced by the problems with assuming impartiality when it depends on the actual presence of public members.
See Alliance of Auto. Mfrs. v. Gwadosky, 353 F. Supp. 2d 97, 108 n.14 (D. Me. 2005).
54
Penny, 120 P.3d at 162.
55
Id.
56
Id. at 170-71.
57
Id. at 167.
58
See, e.g., Snyder v. Colo. Podiatry Bd., 100 P.3d 496, 499-501 (Colo. Ct. App. 2004).
59
Gibson v. Berryhill. 411 U.S. 564, 577 n.16 (1973). In Gibson, a pre-Chevron case, the Supreme Court acknowledged that
“incompetent” boards, by “reason of bias,” are entitled to less deference. See also Note, supra note 35, at 1119.
60
Penny, 120 P.3d at 166-67 (Finding of Fact 17; Conclusion of Law 10).
61
See, e.g., Kunkle v. State ex rel. Wyo. Workers’ Safety & Comp. Div., 109 P.3d 887, 889 (Wyo. 2005) (“We afford no deference
to the agency’s legal conclusions. Statutory interpretation raises questions of law over which our review authority is plenary.
Conclusions of law made by an administrative agency are affirmed only if they are in accord with the law.”).
62
Wyo. Stat. Ann. § 33-38-102 (2005).
63
Penny, 120 P. 3d at 166-67.
64
See Crowell v. Benson, 285 U.S. 22, 55-57 (1932). Even though the “jurisdictional fact” doctrine has been unused in federal
administrative law jurisprudence, it may be important for such a distinction under a state law regime where the fact/law
distinction is still important for review. See, e.g., Kunkle, 109 P.3d at 889.
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65
See, e.g., Onvoy, Inc. v. Shall, L.L.C., 669 N.W.2d 344, 359-60 (Minn. 2003) (Gilbert, J., concurring in part, dissenting in part)
(“In recent times, the importance of ADR has grown and has not only continually been favored by both Congress and the
Minnesota legislature for a number of years, but the Minnesota courts also adopted rules of practice to institutionalize ADR
within the judiciary.”). Cf. FDA v. Brown & Williamson, 529 U.S. 120, 132-33 (2000) (arguing that there should be no deference
to the administrative agency if it is counter to a long-standing Congressional regime).
66
See, e.g., Castro v. Viera, 541 A.2d 1216, 1222-23 (Conn. 1988) (defining “jurisdictional fact”); Stern v. Connecticut Medical
Examining Bd., 545 A.2d 1080, 1084-85 (Conn. 1988) (applying the doctrine to the medical licensing context).
67
See Anstey v. Iowa State Commerce Comm’n, 292 N.W.2d 380, 383-84 (Iowa 1980).
68
With regards to deference accorded to the agency’s conclusions of law, see Newman v. Apfel, 223 F.3d 937, 943 (9th Cir. 2000)
(“The fact that an agency has broad discretion in choosing whether to act does not establish that the agency may justify its choice
on specious grounds. To concede otherwise would be to disregard entirely the value of political accountability, which itself is the
very premise of administrative discretion in all its forms.”). With regards to the deference accorded to the agency’s factual
determinations, see Universal Camera Corp. v. NLRB, 340 U.S. 474, 489-90 (1951) (noting the “substantial evidence” standards
act as proxies for judicial inquiry in the “fairness and reasonableness” of administrative agency decisions).
69
755 F.2d 195 (1st Cir. 1985).
70
Id. at 198-99.
71
Werle, 755 F.2d at 198 n.4 (emphasis added).
72
The ultimate arbiter and jurisdiction over bar membership is with the state supreme court, so there is no deferential posture
towards the recommendations of the bar as to disbarment or unauthorized practice of law. See Meyer v. Norman, 780 P.2d 283,
287 (Wyo. 1989). This is also the case is most other states. See, e.g., Cleveland Bar Assn. v. Pearlman, 832 N.E.2d 1193, 1194-95
(Ohio 2005) (quoting Ohio Const. art. IV § 2(B)(1)(g) and Ohio Const. art. IV § 5(B)).
73
See, e.g., American Home Assurance Co., 864 F.Supp. 767, 774 (N.D. Ill. 1994); Anderson v. Anderson, 514 S.E.2d 369,
372-374 (Va. App. 1999).
74
There are many proposals for mixed techniques, for example, Sonja C. Grover, The Psychologist as Child Advocate: Ethical and
Legal Issues in the Clinical Context, 71 U. Cin. L. Rev. 43, 61-62 (2002), who suggests that psychologists use mediation
techniques.
75
Wyo. Stat. Ann. § 33-38-103 (2005) (“Qualified members of other legally recognized professions who are otherwise licensed or
certified by this state, such as physicians, psychologists or registered nurses, from performing services consistent with the laws of
this state, their training and the code of ethics of their professions, provided they do not represent themselves to be practicing the
professions regulated under this act and do not represent themselves to be professional counselors, clinical social workers,
marriage and family therapists or addiction therapists, or certified social workers, certified addictions practitioners or certified
mental health workers.”).
76
The possibility is there for example in “public accountancy,” see, e.g., Project Control Services, Inc. v. Reynolds, 545 S.E.2d 593,
596-97 (Ga. App. 2001).
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77
See Michael Moffitt, Case Comment, Loyalty, Confidentiality and Attorney-Mediators: Professional Responsibility in
Cross-Professional Practice, 1 Harv. Negot. L. Rev. 203, 204-05 (1996) (noting the different confidentiality rules for attorney
mediators); Anderson, 514 S.E.2d at 370-74 (noting the different confidentiality rules for therapist-mediators).
78
See generally Jacqueline M. Nolan-Haley, Lawyers, Non-Lawyers And Mediation: Rethinking the Professional Monopoly From a
Problem-Solving Perspective, 7 Harv. Negot. L. Rev. 235, 261-71 (2002).
79
Wyo. Stat. Ann. § 33-38-102(a)(v).
80
Wyo. Stat. Ann. § 33-38-102 (a)(ii) (A) & (C).
81
Wyo. Stat. Ann. § 33-38-102 (a)(ii) (emphasis added). Those who perform “medical health procedures” must be certified by the
board, subject to the Board’s ethical requirements, and act under a licensed practitioner. See Wyo. Stat. Ann. § 33-38-102(a)(xii),
-110(a), -112.
82
Cf. Wyo. Stat. Ann. § 33-38-102 (v).
83
Turner v. Kentucky Bar Ass’n, 980 S.W.2d 560, 563 (Ky. 1998).
84
Deborah Rhode, Policing the Professional Monopoly: A Constitutional and Empirical Analysis of Unauthorized Practice
Prohibitions, 34 Stan. L. Rev. 1, 45-46 (1981). A laundry list approach that lists functions of what “lawyers” do is equally
problematic in the unauthorized practice of law context. Id. at 46.
85
See Werle v. Rhode Island Bar Ass’n, 755 F.2d 195, 199 (1st Cir. 1985) (“Although Dr. Werle told Margolis at their meeting that
only the ‘advisory attorney’ would give legal advice, the fact that the role of this attorney was so vaguely defined in Dr. Werle’s
own mind (apparently the attorney’s client was to be either the couple or the mediation process itself, not either of the spouses
individually) raises significant doubts that a proper separation of the legal and psychological aspects of the counseling services
had yet been worked out.”).
86
See Adam Furlan Gislason, Comment and Note, Demystifying ADR Neutral Regulation in Minnesota: The Need for Uniformity
and Public Trust in the Twenty-First Century ADR System, 83 Minn. L. Rev. 1839, 1867 (1999) (noting the threat that
materialized in Penny: “The need for universal and uniform standards of ADR professional conduct will only be greatly amplified
in the event that the occupational boards begin to investigate and discipline professional ADR misconduct”).
87
Id. at 1889-90. See also Onvoy, Inc. v. Shall, L.L.C., 669 N.W.2d 344, 359-60 (Minn. 2003) (Gilbert, J., concurring in part,
dissenting in part).
88
For an example of how an official administrative board can provide legitimacy in defense against encroachment by other
administrative agencies, see, e.g., Texas State Bd. of Podiatric Med. Examiners v. Texas Orthopaedic Ass’n, No.
03-04-00253-CV, 2004 WL 2556917, *2-3 (Tex. App. Nov. 12, 2004).
89
One example is medical laboratory technicians. See, e.g., Higgins v. American Soc. of Clinical Pathologists, 238 A.2d 665, 670
(N.J. 1968).
90
See Moore v. California State Bd. of Accountancy, 831 P.2d 798, 813 (Cal. 1992) (allowing professionals engaged in
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accountancy services to hold themselves out as accountants under the protection of the First Amendment, though not as licensed
accountants, as long as the state allows for unlicensed accountants). See also Abramson v. Gonzalez, 949 F.2d 1567, 1573 (11th
Cir. 1992) (describing the changes to Florida law in 1995, which occurred at a similar time as the Wyoming law in Penny,
whereby the free speech of advertising psychological services was restricted because there was no “unlicensed” category of such
medical professions).
91
Allhusen v. Wyoming Mental Health Professions Licensing Bd., 898 P.2d 878, 881 (Wyo. 1995).
92
There are fees for licensing and certification under Wyo. Stat. Ann. § 33-38-105 (g) (1977) and other barriers to entry (see Wyo.
Stat. Ann. § 33-38-106 (2005)).
93
See Kathleen Eleanor Justice, Note, There Goes the Monopoly: The California Proposal to Allow Nonlawyers to Practice Law, 44
Vand. L. Rev. 179, 212 (1991).
94
Illinois Psychological Ass’n v. Falk, 818 F.2d 1337, 1341 (7th Cir. 1987) (citing the academic literature on debates over the lack
of economic benefits from regulation of professional occupations).
95
See id.
96
In re Licensure of Penny v. Wyo., 120 P.3d 152, 169-70 (Wyo. 2005).
97
Cf. Ibanez v. Florida Dept. of Business and Professional Regulation, Bd. of Accountancy, 512 U.S. 136, 145 n.9 (1994)
(summarizing the debate between the majority and dissent over whether the line drawn between certification of accountancy
services and lawyer services is sufficiently clear in advertising for protection of consumers).
98
980 S.W.2d 560, 563-64 (Ky. 1998).
99
Id.
100 Mediators who use psychological techniques could be considered within a category similar to the category of “certified mental
health worker,” see Wyo. Stat. Ann. § 33-38-102(a)(xii) (2005), but there must be some flexibility in certification requirements
and regulations to accommodate the diversity of mediators and mediation practices that may want to use psychological
techniques.
End of Document
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