By Matthew Putorti, Julia Judish, and Jerald Jacobs 

A federal court has held that antidiscrimination laws that apply to governmental licensure and permit decisions cannot be used to assert claims against non-governmental professional certification bodies, even when a state mandates that individuals hold the professional certification as a “condition precedent” to licensure.

The December 3, 2018 decision by the U.S. District Court for the Eastern District of New York in Setarehshenas v. NCCPA dismissed a discrimination claim against the National Commission on Certification of Physician Assistants (“NCCPA”) brought by a graduate of an accredited PA program. NCCPA is a private nonprofit organization that develops and administers certification examinations for physician assistants (“PAs”). All 50 states require that PAs pass the initial certification examination that NCCPA administers, called the Physician Assistant National Certifying Exam (“PANCE.”). NCCPA requires candidates seeking NCCPA certification to pass PANCE in no more than six attempts within six years following their completion of accredited physician assistant education. A candidate whose eligibility to take PANCE expires can reestablish eligibility only by again completing an accredited physician assistant accreditation program. In rare cases, however, NCCPA grants exceptions to the PANCE eligibility policy and extends the eligibility period if a candidate demonstrates severe and extenuating circumstances, such as medical incapacity, that prevented the candidate from sitting for and passing PANCE within the six-year eligibility period.

In this case, the plaintiff completed his physician assistant education but never applied to take PANCE. Prior to obtaining his physician assistant education, he engaged in the practice of dentistry without a license and was criminally convicted for doing so. The plaintiff sought a temporary permit to practice under supervision as a PA in New York pending passage of PANCE (an option available under New York’s licensure law), but the licensing authority denied the permit on the basis of the plaintiff’s prior felony health care fraud conviction. The plaintiff appealed the agency’s decision. When the six-year PANCE eligibility period expired, the plaintiff still had not applied to take PANCE, but he submitted a request for an exception to NCCPA’s policy, seeking an extension of the six-year eligibility period. The plaintiff based his request on his claimed extenuating circumstances, including his legal difficulties arising from his criminal conviction history. NCCPA denied his extension request, determining that the reasons given in the plaintiff’s request were not “severe and extenuating circumstances” that merited an exception to its policy of requiring retraining by candidates who failed to pass PANCE within six years of completing their PA education. The plaintiff appealed under NCCPA’s administrative appeal process, and NCCPA also denied the plaintiff’s appeal.   

The plaintiff sued NCCPA, alleging that NCCPA violated the New York State Human Rights Law, which, subject to limited exceptions, makes it unlawful “to deny any license or employment to any individual by reason of his or her having been convicted of one or more criminal offenses, or by reason of a finding of a lack of ‘good moral character’ which is based upon his or her having been convicted of one or more criminal offenses.” The plaintiff also alleged violation of a similar provision of the New York City Human Rights Law. Under both statutes, the term “license” is defined as “any certificate, license, permit or grant of permission required by the laws of this state ... as a condition for the lawful practice of any occupation, employment, trade, vocation, business, or profession.” 

NCCPA sought dismissal on the pleadings, arguing that, as a non-governmental certification program, it neither employed nor licensed the plaintiff and therefore was not subject to the statutes on which plaintiff based his claims. The plaintiff argued that, because passing PANCE is required to hold a license in any state, “the PANCE exam is a grant of permission for lawful practice” of the PA profession. In its decision, the court rejected the plaintiff’s reasoning and granted judgment to NCCPA. The court stated that “NCCPA does not, and cannot, issue licenses, permits or consents for the lawful practice as a physician assistant or any other occupation in New York.” The court therefore held that NCCPA’s certification could not be treated as equivalent to licensure, even though it is a “condition precedent to licensure”: 

[E]ven assuming that the state statute and administrative code provisions that the parties agree are the exclusive bases for plaintiff’s claims have extraterritorial reach to regulate NCCPA's conduct in Georgia and that such extraterritorial application of New York law is constitutional, since NCCPA is not a licensing authority within the meaning of these provisions of law, the cause of action fails. 

This case has ramifications for all non-governmental professional certification bodies whose credentialing programs are used as the bases for state occupational licensing. It holds that those private bodies are not themselves government licensing agencies and are not required to comply with provisions that apply to government licensing agencies. There is a well-publicized wave of state laws and regulations increasingly being imposed on state occupational licensing, relating to issues such as limitations on restrictions based on criminal conviction history, reciprocity with other state licensing decisions, and “sunrise” or “sunset” reviews of occupational licensing regulations. The court’s decision provides important precedent that shields the decisions of private certification programs from legal challenges based on laws governing licensure decisions. 

The case is Setarehshenas v. Nat’l Commission on Certification of Physician Assistants, 16-cv-284 (E.D.N.Y. Dec. 3, 2018).  The authors of this article represented NCCPA in the case.