Texas Medical Board v. Grayce Yannuzzi

Opinion

ACCEPTED 15-24-00048-CV FIFTEENTH COURT OF APPEALS AUSTIN, TEXAS 5/9/2025 3:56 PM NO. 15-24-00048-CV CHRISTOPHER A. PRINE CLERK

IN THE COURT OF APPEALS 15th COURT FILED IN OF APPEALS FOR THE FIFTEEENTH JUDICIAL DISTRICT AUSTIN, TEXAS 5/9/2025 3:56:19 PM AUSTIN, TEXAS CHRISTOPHER A. PRINE Clerk

TEXAS MEDICAL BOARD APPELLANT VS. GRAYCE YANNUZZI APPELLEE

DIRECT APPEAL FROM CAUSE NO. D-1-GN-23-001175 419TH JUDICIAL DISTRICT COURT OF TRAVIS COUNTY, TEXAS

SUPPLEMENTAL BRIEF OF APPELLEE

DAVID M. GONZALEZ State Bar No. 24012711 SUMPTER & GONZÁLEZ, LLP 1100 B Guadalupe Street Austin, Texas 78701 Telephone: (512) 381-9955 Facsimile: (512) 485-3121 david@sg-llp.com Counsel for Appellee TABLE OF CONTENTS Table of Contents .................................................................................................... 1

Table of Authorities................................................................................................ 2

Summary of the Argument ................................................................................... 4

Argument................................................................................................................. 5

I. This Was Not A “Contested Case.” ........................................................... 5

II. The Cease and Desist Order Was Effective Immediately and Not Subject to a Motion for Rehearing. ................................................................... 7

III. The Cease and Desist Order Was Inadequate, Erroneous, and Misleading Which Denied Ms. Yannuzzi Due Process. ................................ 8

IV. The Specific Provision Governing Appeal of a Cease and Desist Order Requires a Petition, Not a Motion for Rehearing. ............................ 13

CERTIFICATE OF COMPLIANCE................................................................................ 15

CERTIFICATE OF SERVICE ........................................................................................ 15

1 TABLE OF AUTHORITIES

CASES

Brooks v. Tex. Med. Bd., No. 03-14-00239-CV, 2015 WL 3827327, at *1 (Tex. App.—Austin June 18, 2015, no pet.) ...................................................................................................... 13

Gonzalez v. Tex. Med. Bd., No. 03-22-00205-CV, 2023 WL 7134982, at *1 (Tex. App.—Austin Oct. 31, 2023, pet. filed)................................................................................................. 5, 6

Mosley v. Tex. Health & Human Services Comm'n, 593 S.W.3d 250 (Tex. 2019) ................................................. 4, 8, 9, 10, 11, 12, 13

Mosser v. Plano Three Venture, 893 S.W.2d 8, 12 (Tex. App.—Dallas 1994, no writ) ..................................... 10

Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950) ..................................................................................... 10

Ramirez v. Tex. State Bd. of Med. Examiners, 927 S.W.2d 770 (Tex. App.—Austin 1996, no writ) ........................................ 6

Tex. Med. Bd. v. Wiseman, No. 03-13-00210-CV, 2015 WL 410330, at *4 (Tex. App.—Austin Jan. 30, 2015, pet. denied) ................................................................................................ 6

Univ. of Tex. Med. Sch. at Hous. v. Than, 901 S.W.2d 926, 929 (Tex. 1995) ....................................................................... 11

2 STATUTES

Texas Administrative Code, Title 22, Part 9, §187.83 ............................ 8, 10, 13

Texas Government Code §2001.003 ..................................................................... 5

Texas Government Code §2001.054(a) ................................................................ 7

Texas Government Code §2001.144 ..................................................................... 7

Texas Government Code §2001.145 ..................................................................... 7

Texas Occupational Code §165.052 ...................................................................... 6

3 SUMMARY OF THE ARGUMENT

First, the trial court had subject matter jurisdiction to review the

Cease and Desist Order because a Cease and Desist hearing is not a

“contested case” that mandates a motion for rehearing as a prerequisite for

appeal. Second, both the language of the order and the statute governing

Cease and Desist orders made this a final order subject to immediate

judicial review. Third, relief is proper pursuant to Mosley v. Tex. Health &

Human Services Comm'n, 593 S.W.3d 250, 254 (Tex. 2019). Ms. Yannuzzi was

directed by the Texas Medical Board to file a petition in order to appeal,

and, as was found in Mosley, Ms. Yannuzzi has a due process right to

judicial review. Finally, Ms. Yannuzzi followed the specific procedure that

the Board referenced in its Order. At no time has the Texas Medical Board

argued the trial court was without jurisdiction, especially when Ms.

Yannuzzi followed the very process to appeal as indicated in the rules cited

by the Board.

4 ARGUMENT

I. This Was Not A “Contested Case.”

The trial court had jurisdiction because a Cease and Desist

proceeding is not a “contested case” under the Administrative Practice and

Remedies Act. Under the Act, a “contested case” means “a proceeding,

including a ratemaking or licensing proceeding, in which the legal rights,

duties, or privileges of a party are to be determined by a state agency after

an opportunity for adjudicative hearing.” TEX. GOV’T. CODE §2001.003. Ms.

Yannuzzi was not seeking an adjudication of her legal rights, duties, or

privileges. She is not a license holder. She is not a doctor. She was not

asking to adjudicate her legal rights, duties, or privileges or claim the status

of a physician. She was defending an accusation that she was practicing

medicine. In her case, the Cease and Desist proceeding was not a

“contested case” under the Act.

Compare Ms. Yannuzzi’s case to Reynaldo Gonzalez, Jr., M.D., J.D. in

the unpublished case of Gonzalez v. Tex. Med. Bd., No. 03-22-00205-CV, 2023

WL 7134982, at *1 (Tex. App.—Austin Oct. 31, 2023, pet. filed). There, the

individual had a medical degree and referred to himself as a physician and

sought the right to call himself a doctor because he had M.D. and J.D.

5 degrees. Id. He referred to himself a physician, he used the title of Dr. Rey

Gonzalez, and advertised that he was a doctor. Id. He sought judicial

review to vindicate his right to refer to himself as a doctor, and raised First

Amendment claims for the restraint on his speech. Id. at *3.

Many years ago the Texas Medical Board itself took the position that

even applications for reinstatement of medical licenses were not “contested

cases.” See Ramirez v. Tex. State Bd. of Med. Examiners, 927 S.W.2d 770, 773

(Tex. App.—Austin 1996, no writ). Even temporary suspension orders for

licensed physicians are not “contested cases.” Tex. Med. Bd. v. Wiseman, No.

03-13-00210-CV, 2015 WL 410330, at *4 (Tex. App.—Austin Jan. 30, 2015,

pet. denied).

Throughout Subchapter B (Contested Cases) there is no mention of

Cease and Desist proceedings. Cease and Desist proceedings are governed

under Board Rule §179.35 of Title 22, Part 9, Chapter 179 of the Texas

Administrative Code and §165.052 of the Medical Practice Act under the

Texas Occupations Code. Procedures for Cease and Desist Orders are

classified under Subchapter B of the Occupations Code which provide for

injunctive relief. See Tex. Occup. Code §165.052. All the provisions, due

process rights, and rights to discovery under Subchapter B are for license

6 holders. See, e.g. TEX. GOV’T. CODE §2001.054(a) (“The provisions of this

chapter concerning contested cases apply to the grant, denial, or renewal of

a license that is required to be preceded by notice and opportunity for

hearing.”) Ms. Yannuzzi was not applying or contesting the denial of any

license as contemplated under the definition of a “contested case.”

Both TEX. GOV’T. CODE §2001.144 and §2001.145 are classified under

Subchapter F: CONTESTED CASES: FINAL DECISIONS AND ORDERS; MOTIONS

FOR REHEARING. The trial court was not divested of jurisdiction because the

explicit statutory definition of “contested case” means the motion-for-

rehearing requirement is inapplicable. Ms. Yannuzzi needed to file a

petition in order to vest the trial court with jurisdiction, and she did.

II. The Cease and Desist Order Was Effective Immediately and Not Subject to a Motion for Rehearing.

Texas Government Code §2001.145(b) states that an order that is final

under §2001.144(a)(4) is appealable. While §2001.144(a)(4)(A) refers to an

agreed to the specified date in writing, both the language of the order and

the statute governing Cease and Desist orders made this a final order

subject to immediate judicial review.

7 First, the text of the order indicate it is final and public. The Cease

and Desist Order ends with the following admonishment in bold and all

caps: THIS ORDER IS A PUBLIC RECORD. A.R. 186-190.

Second, the Cease and Desist order admonishes that any violation of

the order – which is effective immediately – is punishable up to $5,000.00

for each violation. A.R. 186-190.

Finally, the statute itself holds that the Cease and Desist Order is

effective immediately. See 22 Tex. Admin. Code §187.83(3)(B) (“If the panel

determines that the individual has practiced medicine without a license,

the panel shall direct the Executive Director to issue a cease and desist

order, effective immediately, in accordance with § 165.052 of the Act.”)

There is no indication nor guidance that this is anything other than a

final order, and the only remedy is to file a petition with the Travis County

District Court.

III. The Cease and Desist Order Was Inadequate, Erroneous, and Misleading Which Denied Ms. Yannuzzi Due Process.

Ms. Yannuzzi’s situation is similar to the Petitioner in Mosley v. Tex.

Health & Human Services Comm'n, 593 S.W.3d 250, 254 (Tex. 2019). In

Mosley, the Texas Supreme Court granted relief because “[I]nstead of

8 directing her to file a motion for rehearing, the letter mislead Mosley to

believe the order would become ‘final’ and that her name would be placed

on the Registry ‘unless’ she filed ‘a timely petition for judicial review’

within thirty days. Id. at 263. The Supreme Court directed the Health and

Human Services Commission to reinstate Mosley’s administrative case to

afford her an opportunity to seek rehearing of the order against her, thus

allowing her to seek judicial review by the district court anew should the

commission deny her motion. Id. at 269.

Ms. Yannuzzi seeks the same relief. First, and even more severe than

in Mosley, the order declares “THIS ORDER IS A PUBLIC RECORD.”

A.R. 186-190. At least in Mosley the agency referred to the ability to appeal

or prevent the order from becoming final. Ms. Yannuzzi’s order was final.

Second, there is absolutely no guidance, admonishment, or instruction

to Ms. Yannuzzi that the Cease and Desist Order is anything other than a

final order. At least in Mosley there was a cover letter advising of a right to

appeal. Ms. Yannuzzi received a Cease and Desist order admonishing that

any violation of the order – which is effective immediately – is punishable

up to $5,000.00 for each violation. A.R. 186-190.

9 Third, as in Mosley, Ms. Yannuzzi is directed by the Texas Medical

Board to file a petition in order to appeal. Paragraph 10 of the Cease and

Desist Order advises Ms. Yannuzzi to review Section 22 Tex. Admin. Code,

Chapter 187. A.R. 186-190. Specifically, it admonishes Ms. Yannuzzi to

reference “Section 22 Tex. Admin. Code, Chapter 187 [for] the Board’s

procedural rules for all Board proceedings; Subchapter I, Chapter 187, sets

for the Board’s rules regarding cease and desist proceedings.” Id. In the

very rules cited in the Order, 22 Tex. Admin. Code § 187.83(f) provides this

instruction to Ms. Yannuzzi: “If after the issuance of a cease and desist

order the individual wishes to appeal the entry of the order, the individual

may file a petition at the Travis County District Court.” (emphasis added).

The Texas Supreme Court discusses this exact situation in Mosley. It is

well-established that “[t]he failure to give adequate notice violates the most

rudimentary demands of due process of law.” Mosser v. Plano Three

Venture, 893 S.W.2d 8, 12 (Tex. App.—Dallas 1994, no writ); Mullane v. Cent.

Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950) (“The notice must be of

such nature as reasonably to convey the required information.”); Mosley at

265. Here, the Board’s Cease and Desist Order instructs her to file a petition

in order to appeal the order. This Court should not prevent Ms. Yannuzzi

10 from her right to judicial review when she followed the instructions she

was told.

Ms. Yannuzzi has a due process right to her “good name, reputation,

honor, or integrity is at stake because of what the government is doing to

[her].” Univ. of Tex. Med. Sch. at Hous. v. Than, 901 S.W.2d 926, 929 (Tex.

1995). Ms. Yannuzzi undoubtedly has a liberty interest entitled to due-

process protection; the placement of her name in a public order damages

her personal and professional reputation. Id. at 929-30. And like the

petitioner in Mosley, Ms. Yannuzzi has a statutory right to judicial review.

This situation is nearly identical to Mosley. As the Supreme Court

explained in granting relief:

The notice to Mosley—the letter and regulation on which it relies—effectively said her career would be over unless she filed for judicial review within thirty days. It failed to state the need to first file a motion for rehearing and affirmatively misrepresented that filing a petition for judicial review was the appropriate and necessary next course of action. … [W]e conclude the notice sent to Mosley and the regulation it quoted were so misleading as to prevent Mosley from filing the motion for rehearing the APA requires. Consequently, we hold that the Agencies violated Mosely's due-course-of-law rights. . . Because “the remedy for a denial of due process is due process,” Univ. of Tex. Med. Sch. at Hous. v. Than, 901 S.W.2d 926, 933 (Tex. 1995), we remand Mosley's case to the Commission to allow Mosley an opportunity to file her motion for rehearing.

11 Mosley at 267-68.

Chief Justice Blacklock’s concurrence in Mosley is more blunt:

Instead of helping Mosley avoid the procedural mines, it turns out the government's letter—and its rule—instructed her to step right on top of one by pursuing judicial review without first seeking rehearing at the agency. And now the same government that asks courts to put our faith in agency rulemaking says a regular citizen like Mosley was naive to do so. According to the government, instead of simply following its administrative rule, Mosley should first have read Chapter 48 of the Human Resources Code. Then she should have read Chapter 2001 of the Government Code, because Chapter 48 of the Human Resources Code refers to it. Then she should have compared those statutes to the Administrative Code sections quoted in the government's letter. Next, she should have correctly discerned that the Administrative Code sections quoted in the letter do not comport with the requirements of the Human Resources Code and the Government Code on the necessity of a motion for agency rehearing. After reaching that conclusion, she should have known that, even though in some sense the Administrative Code has “the force of law,” it is nevertheless inferior to statutes. She therefore should have followed the statutes instead of the rules and moved for rehearing at the agency before seeking judicial review.

Of course, the incorrect administrative rule the government told Mosley to follow only existed because the government itself did not interpret the Human Resources Code and the Government Code to require a motion for agency rehearing prior to judicial review. So the government's position boils down to this: Mosley should have ignored our advice and then done a better job than we did of understanding our own administrative procedures. People already have plenty of reasons not to trust their government. Apparently now the government agrees it shouldn't be trusted. And it invites this Court to say that those who do trust the government—even to know its own

12 administrative procedures—may forfeit their right to judicial review of the government's deprivation of their liberty. The Court rightly rejects that invitation. The history of this case gives Texans little reason to trust their government agencies, but hopefully the Court's decision today helps to reinforce their trust in the Constitution.

Mosley at 270 (Blacklock, J. concurring in which Justice Devine and Justice

Busby joined).

IV. The Specific Provision Governing Appeal of a Cease and Desist Order Requires a Petition, Not a Motion for Rehearing.

The statutory provisions for judicial review of Cease and Desist

Orders is articulated under Rule § 187.83(f) of the Texas Administrative

Code (“If after the issuance of a cease and desist order the individual

wishes to appeal the entry of the order, the individual may file a petition at

the Travis County District Court.”). Ms. Yannuzzi followed the exact same

process for judicial review as indicated in Brooks v. Tex. Med. Bd., No. 03-14-

00239-CV, 2015 WL 3827327, at *1 (Tex. App.—Austin June 18, 2015, no

pet.) (“At the conclusion of the hearing, the Board ruled in favor of issuing

a cease-and-desist order. Brooks challenged that order by filing suit in a

Travis County district court. The district court affirmed the Board's

decision, and this appeal followed.”)

13 Ms. Yannuzzi properly filed for judicial review according to the

terms of the Cease and Desist Order and the trial court had subject matter

jurisdiction. If this Court finds that the trial court lacked jurisdiction, this

Court should direct the Texas Medical Board to reinstate her case to afford

her an opportunity to seek rehearing of the order in order to seek judicial

review should the Board deny rehearing.

Respectfully submitted,

By: /s/David M. Gonzalez DAVID M. GONZALEZ State Bar No. 24012711

SUMPTER & GONZÁLEZ, L.L.P. 1100 B Guadalupe Street Austin, Texas 78701 david@sg-llp.com

ATTORNEY FOR APPELLEE GRAYCE YANNUZZI

14 CERTIFICATE OF COMPLIANCE

I hereby certify that this document complies with the margin,

spacing, and typeface requirements pursuant to Tex. R. App. P. 9.4(b)-(g).

This supplemental brief contains 2,301 words based upon the word count

feature of Microsoft Word, the computer program used to prepare this

document.

By: /s/David M. Gonzalez DAVID M. GONZALEZ

CERTIFICATE OF SERVICE I hereby certify that Appellee’s Supplemental Brief has been served

on all counsel of record via the Court’s electronic filing system this the 9th

day of May, 2025, specifically to:

TED A. ROSS Texas State Bar No. 24008890 Assistant Attorney General

OFFICE OF THE ATTORNEY GENERAL OF TEXAS ADMINISTRATIVE LAW DIVISION P.O. Box 12548, Capitol Station Austin, Texas 78711-2548 Telephone: (512) 475-4191

15 Automated Certificate of eService This automated certificate of service was created by the efiling system. The filer served this document via email generated by the efiling system on the date and to the persons listed below. The rules governing certificates of service have not changed. Filers must still provide a certificate of service that complies with all applicable rules.

Carina Vockell on behalf of David Gonzalez Bar No. 24012711 carina@sg-llp.com Envelope ID: 100668994 Filing Code Description: Other Brief Filing Description: Supplemental Brief of Appellee Status as of 5/9/2025 3:58 PM CST

Associated Case Party: Grayce Yannuzzi

Name BarNumber Email TimestampSubmitted Status

David Gonzalez david@sg-llp.com 5/9/2025 3:56:19 PM SENT

Associated Case Party: Texas Medical Board

Jeff Lutz jeff.lutz@oag.texas.gov 5/9/2025 3:56:19 PM SENT

Ted Ross ted.ross@oag.texas.gov 5/9/2025 3:56:19 PM SENT

Lauren McGee lauren.mcgee@oag.texas.gov 5/9/2025 3:56:19 PM SENT