75 N.Y.2d 158 | NY | 1990
Lead Opinion
The issue on this appeal is whether public statements made by the Chairman of the State Liquor Authority (SLA) concerning charges then pending in an SLA proceeding against a licensee, disqualified the Chairman from participating in the administrative review of that proceeding. We conclude that, because the Chairman’s statements to a legislative oversight committee indicated prejudgment of facts in issue in an adjudicatory proceeding, his failure to disqualify himself from that proceeding deprived the licensee of due process of law under the Federal Constitution.
I.
Petitioner 1616 Second Avenue Restaurant, Inc., operates a Manhattan restaurant known as Dorrian’s Red Hand. Since 1962, Dorrian’s has sold alcoholic beverages for on-premises consumption pursuant to a license issued by respondent SLA. In August 1986, attention was focused on Dorrian’s because of its connection with the highly publicized "preppie murder” case: the young victim and the accused killer, Robert Chambers, had been in Dorrian’s on August 26, shortly before the crime. As a result, the SLA and the New York City Police Department’s Social Club Task Force began to closely monitor Dorrian’s for violations of the Alcoholic Beverage Control Law, especially those involving underage drinkers.
On February 10, 1987, Dorrian’s was charged by the SLA with violating section 65 (1) of the Alcoholic Beverage Control Law by allegedly selling or giving away alcoholic beverages to four underage patrons on November 14-16, 1986. Two of the charges were sustained following a hearing before an Administrative Law Judge commenced on April 15, 1987. The findings were controverted by petitioner and the matter was referred to the five Commissioners of the SLA, including its
In the interim between the filing of the charges and the commencement of the hearing, Chairman Duffy had been called upon to testify before a committee of the New York State Senate that oversees SLA operations. The questioning covered a wide range of topics, but for a time focused on the issue of underage drinking and the charges against Dorrian’s. Duffy’s public discussion of the charges prompted petitioner to request that Duffy recuse himself from consideration of the charges against Dorrian’s on the ground that he had prejudged the matter. Chairman Duffy declined to do so and, with his participation, the Commissioners adopted the findings of the Administrative Law Judge and imposed a 10-day suspension, a 10-day deferred suspension and a $1,000 bond claim.
Petitioner then commenced this article 78 proceeding seeking to annul the SLA’s determination. Upon transfer from Supreme Court pursuant to CPLR 7804 (g), the Appellate Division confirmed the determination without comment. We granted leave to consider whether the Chairman’s public statements disqualified him from participating in the SLA proceeding. Concluding that they did, we now reverse.
II.
Before examining the substance of the Chairman’s statements, we turn to the governing principles.
It is beyond dispute that an impartial decision maker is a core guarantee of due process, fully applicable to adjudicatory proceedings before administrative agencies (Withrow v Larkin, 421 US 35, 46-47; Matter of Warder v Board of Regents, 53 NY2d 186, 197; State Administrative Procedure Act § 303). No single standard determines whether an administrative decision maker should disqualify himself from a proceeding for lack of impartiality (see, 3 Davis, Administrative Law § 19:1 [2d ed 1978]). Many concepts are embraced under the heading of bias, including advance knowledge of facts, personal interest, animosity, favoritism and prejudgment. Not all require disqualification in all circumstances. Disqualification is more likely to be required where an administrator has a preconceived view of facts at issue in a specific case as opposed to prejudgment of general questions of law or policy (see, id., §§ 19:2, 19:4).
On the other hand, disqualification may be required for prejudgment of specific facts at issue in an adjudicatory proceeding (Kennecott Copper Corp. v Federal Trade Commn., 467 F2d 67, 80 [10th Cir]; Cinderella Career & Finishing Schools v Federal Trade Commn., 425 F2d 583, 591 [DC Cir]). It has been noted, moreover, that public statements that indicate prejudgment are especially problematic. While conscientious officials are presumably able to put aside privately held prejudgments, public statements touching on the facts of a proceeding create special problems. Such statements "may have the effect of entrenching [the official] in a position which he has publicly stated, making it difficult, if not impossible, for him to reach a different conclusion in the event he deems it necessary to do so after consideration of the record.” (Cinderella Career & Finishing Schools v Federal Trade Commn., supra, at 590.)
Thus, where, as in this case, an administrative official has made public comments concerning a specific dispute that is to come before him in his adjudicatory capacity, he will be disqualified on the ground of prejudgment if " 'a disinterested observer may conclude that [he] has in some measure adjudged the facts as well as the law of a particular case in advance of hearing it.’ ” (Cinderella Career & Finishing Schools v Federal Trade Commn., supra, at 591 [quoting Gilligan, Will & Co. v Securities & Exch. Commn., 267 F2d 461, 469 (2d Cir)]; see, Kennecott Copper Corp. v Federal Trade Commn., supra, at 80; Texaco, Inc. v Federal Trade Commn., 336 F2d 754, 760 [DC Cir].)
III.
Under this standard, Chairman Duffy was disqualified from
"senator Goodman: One case in particular that I’d like to use to exemplify the problem has become rather notorious. It’s the case of a bar called Dorian’s [sic] at number 1616 Second Avenue in New York City.
* * *
"It’s my impression that, despite the issuance of four summons by the police task force and your intervention on several occasions, that absolutely nothing of any use has occurred in preventing the sale to under age people”.
After noting that charges were pending before the SLA on the matter, the Chairman responded:
"chairman duffy: The summonses were served. It turns out that three of the people who were drinking and under age in that premises live outside the state of New York. One lives in Europe, and two are college students who don’t live here. We have one who is a person who lives in New York, and the summonses have been dismissed in Criminal Court, I think for lack of prosecution and what I am trying to do at the State Liquor Authority is to bring to bear on these kind of charges some innovative ways of establishing guilt by substantial evidence.
"For example, I’m not satisfied to say that in the Dorian case, we will dismiss our proceedings against that establishment because we can’t bring in the people who are outside the state. What I’m trying to do, and the reason that we’re taking our time to do this is, I’m trying to come up with alternate ways to establish by a substantial evidence that in fact there was an under age person who consumed and was served alcoholic beverages at that location
* * *
"[A]s far as Dorian’s is concerned, I think that I’m doing a great job in the Dorian’s matter because I am going to bring Dorian’s to justice without begging off and saying, Well, they’re outside the state and I can’t proceed, and I want to make a record in Dorian’s case and, if I can make a record*164 that’s going to establish that they sold drinks to minors — and that’s what we need, a record — there are people that complain. They [know] that these people are less than 21, and I simply can’t do it on somebody’s conjecture that this person is less than 21. I’ve got to have a record.
"I’m in the process of compiling that record and we’re going to be in the process of being able to report to you the results of hearings and board votes with respect to that”.
Viewed as a whole, this testimony could only be regarded by a disinterested observer as evidencing Chairman Duffy’s belief that petitioner had in fact violated the law regarding the sale of alcohol to minors and his commitment to establishing that fact in the SLA proceeding. His remarks contain no hint that the charges might turn out to be unfounded. From all that appears, the only question in the Chairman’s mind was not whether petitioner was guilty, but whether the SLA would be hamstrung in their efforts to establish guilt because some of the witnesses lived out of State.
We understand that the Chairman was in a somewhat hostile environment — Senator Goodman made it clear that he believed that the SLA had not responded adequately to the problem of underage drinking in general and Dorrian’s in particular. It is possible, therefore, that Chairman Duffy was simply appeasing his overseers with his assurances that Dorrian’s would be brought to justice, and was not reflecting his actual prejudgment of petitioner’s guilt.
But whether or not he had actually prejudged the matter, his statements nonetheless gave the impression that he had, and that impression lent an impermissible air of unfairness to the proceeding. More importantly, those statements and the message they conveyed to a "disinterested observer” established the Chairman’s public position on the issue. Whether or not he believed petitioner to be guilty when he made the statements, his public alignment with that position, especially in front of the Senate committee that oversees his agency’s operations, might have made it more difficult to reach a contrary conclusion in the adjudicatory proceeding. In effect, to find petitioner innocent would require a public confession of error by the Chairman. That is an impermissible burden to place on petitioner.
We do not hold that every appearance of impropriety in administrative adjudications violates due process. The rule of law we apply, which is well established in the Federal courts,
Nor do the United States Supreme Court cases cited by the dissent require a different rule. None of them deal with public statements indicating prejudgment of adjudicative facts.
Withrow v Larkin (421 US 35, supra), for example, dealt with a claim that the combination of investigative and adjudicative functions by itself violated due process. Trade Commn. v Cement Inst. (333 US 683) concerned a claim that the Commission had prejudged a legal, rather than factual question — whether a particular pricing system violated the Sherman Act (see, 3 Davis, Administrative Law § 19:2, at 372-373 [2d ed]). Similarly, National Labor Relations Bd. v Donnelly Co. (330 US 219) dealt with alleged prejudgment of a legal issue — the admissibility of certain evidence (see, 3 Davis, op. cit., § 19:2, at 376). The Supreme Court has itself noted that the cases involving public statements indicating prejudgment of facts involve different considerations (see, Withrow v Larkin, supra, at 50-51, n 16 [citing e.g., Texaco, Inc. v Federal Trade Commn., 336 F2d 754, supra; and Cinderella Career & Finishing Schools v Federal Trade Commn., 425 F2d 583, supra]).
Finally, we do not fault the Chairman for responding as he did to the questions put to him. His agency is accountable to the Legislature and he therefore has an obligation to respond to their inquiries. Having done so, however, especially in terms that pronounced petitioner’s guilt, he was obligated to recuse himself from the adjudicatory proceeding.
Inasmuch as the findings of the Administrative Law Judge are not compromised by the Chairman’s apparent prejudgment, the proper remedy is reconsideration of those findings, without the participation of the Chairman, by the remainder of the SLA Commissioners.
Accordingly, the judgment of the Appellate Division should
Dissenting Opinion
(dissenting). I agree with the majority that one appearing before an administrative adjudicatory body is entitled to a fair and impartial hearing. The established New York law requires it as a matter of fundamental fairness. We have held, however, that "a mere allegation of bias will not suffice. There must be a factual demonstration to support the allegation of bias and proof that the outcome flowed from it.” (Matter of Warder v Board of Regents, 53 NY2d 186, 197; see also, Matter of Lowcher v New York City Teachers’ Retirement Sys., 54 NY2d 373; Matter of Grant v Senkowski, 146 AD2d 948, 949-950; Matter of Claffey v Commissioner of Educ., 142 AD2d 845; People v Muka, 72 AD2d 649.) In my view, the petitioner has failed to establish that Commissioner Duffy was biased against it but even it be assumed that he was, the evidence fails to establish that the outcome of the case "flowed from” his bias. Indeed, the majority has not attempted to show that it did. Instead, it has changed the existing rule applying to adjudicatory administrative proceedings by adopting a new rule even broader than that applying to Judges and jurors. It holds that the Due Process Clause of the United States Constitution requires annulment of the order finding petitioner guilty of selling to minors "whether or not [Commissioner Duffy] had actually prejudged the matter” because his statements to the Senate committee gave an impression which lent "an impermissible air of unfairness to the proceeding.” (Majority opn, at 164.) The United States Supreme Court has found no such requirement in the Due Process Clause. On the contrary, it has rejected an expansive application of the clause to administrative adjudicatory proceedings and held that knowledge of evidence to be disputed at administrative hearings is insufficient to require disqualification (see, Withrow v Larkin, 421 US 35, and cases cited, at 47-50)1 While language may be found in some decisions of the Circuit Courts of Appeal seeming to support the majority’s holding that the appearance of impropriety violates due process, the decisions do not stand for that proposition and even if they did they are not binding on this court (see, 423 S. Salina St. v City of Syracuse, 68 NY2d 474, 489; Flanagan v Prudential-Bache Sec., 67 NY2d 500, 506). Finally, as a matter of policy we
I
The Administrative Law Judge hearing the evidence in this case found petitioner guilty of two violations of serving alcoholic beverages to minors and exonerated it on two others. On review, the Authority unanimously sustained the Law Judge’s findings and the Appellate Division subsequently found the Authority’s determination supported by substantial evidence and confirmed it. Thus, absent petitioner’s claim of bias the charges are immune from attack.
It is conceded that decision makers, either in courts or adjudicatory administrative hearings, should be fair and impartial. Not all bias is disqualifying, however; disqualification depends upon the nature of the bias and the affect it may be expected to exert on the outcome of the proceedings. One may have a preconceived view about law or policy, a preconceived view about the facts of a particular case, or partiality or personal prejudice in the sense of an unfair attitude against the parties involved.
Bias based upon a prejudgment of law or policy is, as the majority concede, almost universally held not to be grounds for disqualification. Most administrators, because of their positions and their expertise in the regulatory area in which
But this appeal does not deal with policy. Petitioner asserts there must be a reversal because Commissioner Duffy’s public statements about its case warrant a finding that he had prejudged the factual allegations against it or gave the appearance that he had done so.
There is a presumption that one serving as an administrator or a Judge acts honestly and mere familiarity with the facts of a case obtained in the performance of a statutory duty is not disqualifying (Hortonville Dist. v Hortonville Educ. Assn., 426 US 482, 493; Withrow v Larkin, 421 US 35, 47, supra). In this case, Commissioner Duffy, as Chairman of the Authority, was invested by statute with both executive and quasi-judicial powers and duties requiring him to oversee investigations, present charges and review adjudications once made. He could hardly be expected to be ignorant of petitioner’s case, given his responsibilities. Moreover, the Senate committee insisted he be prepared to discuss it and under the circumstances, no adverse inference can arise from his knowledge of the facts.
The critical question is whether the Commissioner’s prior knowledge prevented him from fairly reviewing the Administrative Law Judge’s findings for, as a person adjudicating a claim of which he had prior knowledge, fundamental fairness required that he be willing to give consideration to evidence that his prejudgment about general facts was unsound. The Commissioner was disqualified only if his knowledge had
II
In looking at the Commissioner’s testimony, it is important to visualize the setting in which it was given. He was newly appointed and called to testify before a Senate committee vested with budgetary control over his agency and headed by a member of the opposite political party. In the past, the committee had been highly critical of the State Liquor Authority and its former Chairman. Its questions to Commissioner Duffy were far-ranging and aggressive. At the outset, the chairman reminded the Commissioner that the Authority had been described previously as a "disorganized and ineffectual toothless tiger” which was "wasting the taxpayers money” and that this "first” committee meeting with him "was to determine in a highly specific way” what Commissioner Duffy had done to remedy those deficiencies. For that purpose, the committee had supplied the Commissioner in advance with "a copious list of questions”, including questions about 34 pending cases. The committee then proceeded to question the Commissioner about proposed administrative reorganization, the Authority’s sensitivity to political influence and the pressures on the Authority and its licensees from gamblers and organized crime. Finally, the committee chairman turned to questions about the Authority’s failure to police its licensees, noting complaints concerning the extensive number of unlicensed premises operating in New York City and violations of the new 21-year-old drinking law and he asked how the Commissioner intended to enforce these laws. Addressing himself specifically to the court’s dismissal of the criminal charges against petitioner for sales to minors, the chairman asked the Commissioner how he intended to handle the "notorious” problem which had existed at petitioner’s premises both before and following the homicide of one of its patrons. The Commissioner was challenged time and again about reports that petitioner was selling alcoholic beverages to minors and criticized for his failure to punish it. His at
It is apparent from this background that the Commissioner was trying, in the passages quoted in the majority opinion (at 163-164), to explain why criminal court had dismissed the charges against petitioner and what he intended to do to follow up administratively the repeated complaints against it to insure that they reached the adjudication stage. In response to committee pressures for action, the Commissioner stated that although he intended to bring petitioner to justice he could not proceed on "somebody’s conjecture”, he had "to have a record.” When viewed in this context the statements indicate the Commissioner’s intention to pursue the charges but to ensure that they were based upon sufficient evidence. Under the circumstances, I cannot agree with petitioner that because the Commissioner failed to cast his remarks in terms of petitioner’s "alleged” sales to minors we must infer the existence of actual bias preventing him from fairly considering the evidence against it. There is nothing in the transcripts of the Senate hearing or the adjudicatory hearing to indicate that he had a closed mind about the charges against petitioner or that his determination was based upon anything other than a careful review of the evidence presented at the hearing and he swears that it was not. Thus, on this record petitioner has failed to prove that bias existed or that it resulted in denial of a fair hearing.
Ill
Nor was petitioner denied the procedural due process guaranteed by the United States Constitution. Adjudicatory administrative hearings occur in a variety of settings and the degree of formality and protection required in each depends upon the relative interests of the citizen and the government and the risk of error from the procedures used (see, Mathews v Eldridge, 424 US 319, 335; see generally, 2 Rotunda-NowakYoung, Constitutional Law: Substance and Procedure § 17.9). Whatever the formality required, however, the Supreme Court has never held that due process requires the avoidance of an appearance of impropriety in an administrative hearing. Even in criminal cases, matters of disqualification rarely rise to constitutional levels or violate procedural due process, absent some interest of the Judge in the outcome of the proceedings, and administrators who exercise both executive and adjudica
Trade Commn. v Cement Inst, (supra) involved a ruling that cement manufacturers had been guilty of unfair market practices. The manufacturers claimed actual bias because prior statements of the Commission expressly condemned multiple basing point pricing, the very practice later found unlawful in proceedings against respondents. The argument there, as here, was that the prehearing statements were so specific that an inference of actual bias affecting the outcome of the proceedings against them was warranted; the appearance, if not the fact, of impropriety was enough. The United States Supreme Court rejected the claim asserting that the prior statements based upon an intensive investigation by the Commission did not prove the Commissioners’ minds were so "irrevocably closed” that they were unable to evaluate the substantial contrary evidence presented by the respondents at the Commission hearing (supra, at 701).
An even more compelling case is National Labor Relations Bd. v Donnelly Co. (330 US 219) which involved charges of unlawful labor practices against an employer. During the hearing, the examiner rejected a substantial item of evidence offered by the employer. The Board confirmed the examiner’s order and found the employer guilty of unfair labor practices but the Court of Appeals reversed. A second hearing was scheduled before the same examiner over the company’s objection that he had prejudged the case because he had previously rejected the disputed evidence as "valueless”. The motion was denied and the hearing proceeded. After reviewing samples of the excluded evidence, the examiner once again rejected it. The Court of Appeals again reversed the NLRB’s order on the ground of "[t]he unfairness of trying issues of fact to those who have prejudged them” (see, 151 F2d 854, 870). On appeal,
While there are Federal cases in the circuits discussing disqualification based upon the appearance of impropriety, they are not binding on us and are readily distinguishable. All involve egregious conduct and none have found appearances, standing alone, sufficient to vitiate the administrative judgment. Cinderella Career & Finishing Schools v Federal Trade Commn. (425 F2d 583 [DC Cir]),
Thus, the cases the majority rely on are factually and legally distinguishable. In Kennecott the court found no due process violation, notwithstanding a Commissioner’s prehearing statements about the case. In both Cinderella and Texaco the Commission had reversed findings of a Hearing Examiner and found violations where the examiner found none and after Commissioner Dixon had given speeches publicly naming the litigants in the two cases, referring to the "evils” they were charged with and all but affirming their guilt before he decided the cases. This case involves none of the irregularities of the Federal cases and there is neither comparable evidence of prehearing bias nor proof that the Authority’s decision was the product of bias. The proceedings were in all respects regular and the Administrative Law Judge’s findings were based upon substantial evidence. The Authority upheld the Law Judge’s findings that petitioner was guilty of two of four charges and the Appellate Division confirmed the sufficiency of the evidence supporting them.
In short, there is no factual basis to reverse this order, no legal requirement that we do so and, as a matter of policy, we should not recognize a broad constitutional rule applying to diverse administrative hearings that due process requires the avoidance of even an appearance of impropriety when it is not required because the specifics of such matters are better left to the other branches of government now addressing them.
Accordingly, I would affirm.
Judges Kaye, Titone and Bellacosa concur with Chief Judge Wachtler; Judge Simons dissents and votes to affirm in a separate opinion in which Judges Alexander and Hancock, Jr., concur.
Judgment reversed, with costs, and petition granted to the
. The Governor’s Executive Order refers to specific prohibited conduct, e.g., ex parte contacts, contact with agency lawyers, promotions or salary increases based on favorable decisions, establishing decision quotas, etc.
. Judiciary Law § 14 and 28 USC § 455 also specify the interest or relationship which will disqualify State and Federal Judges as a matter of law.
. By contrast, a juror, disqualified because possessing "a state of mind that is likely to preclude him from rendering an impartial verdict” (CPL 270.20 [1] [b]) may be qualified, nonetheless, if he or she states unequivocally that the prior state of mind will not influence the verdict, and that he is able to render an impartial verdict solely on the evidence (People v Blyden, 55 NY2d 73, 77-79). A Trial Judge unless proscribed by statute (Judiciary Law § 14) is not disqualified for actual bias and the fact of bias would not, standing alone, invalidate the judgment even if true (see, Matter of Rotwein [Goodman], 291 NY 116, 123). Manifestly, the mere appearance of impropriety, while perhaps grounds for discipline, does not invalidate the judgment.
. In a prior case involving the same petitioner (Federal Trade Commn. v Cinderella Career & Finishing Schools, 404 F2d 1308 [DC Cir]), the court rejected a due process argument based on petitioner’s claim of appearance of impropriety resulting from the Commission’s press releases (id., at 1315).
