Gazing Out the Window

For years, you have gone to school and studied hard to meet the educational requirements for a professional license. You have completed the work requirements by spending a number of years gaining experience in your chosen field. You completed the licensing application, scheduled the licensing exam, completed a “crash course” to prepare for the exam and passed. You are on your way—or are you?

While others that took the examination are quickly receiving their licenses, there seems to be an inordinate delay in receiving your license. You might be told (if you can reach the agency by phone—no small feat!) that your application is under review. Sometimes you are told there are issues. Sometimes you receive no communication whatsoever for months at a time. Finally, either you receive a letter denying the application or the agency issues a denial in the form of a Statement of Issues. In either case, you must act quickly to challenge the denial in an administrative proceeding or risk not being able to pursue your chosen career!

While most people think administrative proceedings are informal in nature, do not be misled. Administrative hearings are not just “meetings” or “conferences.” They are presided over by an administrative law judge. There are specific rules of procedure and evidence that apply. The decisions made by the hearing officer can have the same consequences as a court judgment. The failure to assert defenses or comply with the technical rules of procedure can have disastrous consequences for your future career. In short, it would be pennywise and pound foolish not to retain a very competent attorney knowledgeable in administrative law to represent you.

While this article is not intended to be a substitute for a good attorney, the information provided below will provide an overview of the procedural steps necessary to present your matter and the traps to be avoided.

Initiating the Proceedings

If you are given a letter denying your application, it will specify the reasons why your application has been denied. You have the right to appeal the denial of your application by requesting a Statement of Issues hearing, pursuant to the California Administrative Procedure Act (Government Code section 11370, et seq.). Typically, you must submit a written request for such a hearing within 60 days of the date of the letter advising you that your application has been denied although the length of time may vary from agency to agency.

Alternatively, the agency may skip the denial letter and instead send a “Statement of Issues” specifying the reasons for the denial. You must respond to the Statement of Issues within fifteen (15) days by filing a Notice of Defense. The Notice will preserve your right to contest the allegations in the Statement of Issues. The Notice of Defense will only serve to deny the allegations contained in the Statement of Issues. If you have other affirmative defenses, such as the statute of limitations, those must also be asserted by you.

Basis for the Denial

Professional licensing statutes generally specify the grounds on which a license can be denied. The most benign ground is that the applicant has not proven his or her qualifications for a license. Other grounds for denial might be a prior criminal conviction, or the prior revocation of a professional license by another governmental agency or that the applicant engaged in conduct that casts doubt on the applicant’s honesty, integrity and financial responsibility. The exact grounds for denial vary from agency to agency depending on the precise grounds specified in the governing statute. In general, however, the applicant must show that he is of good character.

Engage in Discovery

While you have the right to discovery in administrative matters to find out the evidence relied upon by the agency in denying your license, you must prepare and serve the discovery request within thirty (30) days of the service or mailing of the Statement of Issues or fifteen (15) days after service of an additional pleading, such as an amended Statement of Issues. Unlike discovery in a normal civil action, Government Code section 11507.6 limits your rights to discovery to obtaining the names and contact information for witnesses and demanding that the other side produce relevant documents. The taking of depositions is very limited and usually requires either the consent of the other side or an order of the administrative law judge after consideration of a showing for the necessity of the deposition.

Burden of Proof

The burden of proof refers to who is responsible for proving that the applicant is qualified to receive the license. When license issuance is denied, the burden is on the applicant to prove his good character or demonstrate that the grounds asserted by the agency justifying the denial are insufficient. The applicant must prove his assertions by a preponderance of the evidence (i.e., it is more likely than not that he or she is of good moral character). (This stands in sharp contrast to the burden of proof when the state agency is attempting to revoke or otherwise discipline an existing licensee. In such cases, the burden is on the agency attempting to impose discipline to prove its case by “clear and convincing evidence” that the licensee is disqualified from holding the license.)

How to prove you are of Good Character

Normally, the administrative agency will specify in the Statement of Issues specific acts or events that it believes disqualify the applicant. It will be your obligation to prove that the underlying facts are either untrue or that there are facts in mitigation that demonstrate your good character. This can be difficult to do, particularly if the disqualifying fact is the prior revocation of another professional license or a criminal conviction. That is because of the legal concepts of res judicata and collateral estoppel.

Both res judicata and collateral estoppel may prevent a party from re-litigating issues decided in a (1) prior judicial or (2) administrative proceeding if the administrative agency was acting in an adjudicatory capacity. There are, however, exceptions that can be raised. You might demonstrate that collateral estoppel does not apply because the other decision is not yet final or because the standard of proof used the other proceeding was lower than that permitted in California proceedings. For example, a few years ago the Nevada Commissioner of Mortgage Lending promulgated a regulation providing that the standard of proof for disciplining a mortgage loan broker or agent is merely “substantial evidence” (i.e., less than a preponderance of evidence--the substantial evidence standard of proof is more aptly called, the "he might have done it standard of proof"). Under such circumstances, the California Real Estate Commissioner would not be able to use the prior Nevada license revocation as a basis for imposing discipline against a California real estate licensee since the California standard of proof for professional license discipline is "clear and convincing evidence." (This legal principle is discussed in Grubb Co., Inc. v. Department of Real Estate (2011) 194 Cal. App. 4th 1494, 1502-1503)

There are also many other defenses that can be raised. In appropriate circumstances, you can raise the statute of limitations or its equitable counterpart “laches;” demonstrate that the regulatory agency is acting in excess of its jurisdiction; that you have been denied due process; that the agency misled you in some way and now is estopped from asserting you are unqualified; that in engaging in the so-called wrongful conduct, you were making a good faith attempt to comply with another regulatory agency’s requirements; the lack of harm or injury caused by the conduct; or even that you have been rehabilitated since the prior conduct occurred. It will be necessary to present qualified witnesses and documentary evidence to support these contentions.

One area not to overlook is witnesses that can attest to your good moral character. Such testimony is particularly effective if presented by witnesses that have known you for a long time and have had the opportunity to see your conduct in other business settings.


A denial of a professional license can obviously influence your life in ways you may not now even be able to contemplate. It is crucial that you treat such denials seriously and that you promptly respond to either the denial letter or the Statement of Issues. If you fail to do so, it can have a devastating effect on your life. In this deceptively complex area of law, obtaining legal advice from a well-qualified attorney is your best hope of avoiding unwanted and unwarranted consequences.

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