The unexplained and highly publicized death of an 18-year-old woman in a New York Hospital in 1984 became the focus for debate throughout the country concerning working conditions and supervision of house officers. It also led to charges by the State of New York of gross negligence against her resident physicians. The residents were exonerated of all charges by a review panel with lay and physician representation after testimony of expert witnesses. Although the Commissioner of Health concurred with this verdict, residents were charged with gross negligence by the Board of Regents, a lay panel. Fundamental contrasts in the way the two panels made their judgments supports the importance of peer review in disciplining physicians in matters of medical judgment. Analysis of the actions by New York State against the residents also underscores the importance of other principles in the oversight of physician behavior that are applicable to all jurisdictions: resolution of charges without undo delay, an equitable and consistent standard for the administration of sanctions, and adherence to a clearly defined standard for the level of culpability required for disciplinary action. Both the structure of the review process and its application in this instance led to violations of each of these principles.