273 N.E.2d 783 | Ohio Ct. App. | 1970
Lead Opinion
The Clermont National Bank, hereinafter referred to as Clermont, sought a review of an order of Robert M. Edwards, superintendent of banks for the state of Ohio, granting permission for the establishment of a new branch bank to The Citizens Banking Company of Felicity, Ohio, to be located in the Clermont Shopping Center, Milford, Ohio. An appeal from the order was *92 attempted under the Administrative Procedure Act to the Common Pleas Court of Franklin County. That court sustained a motion to dismiss the appeal.
In a decision filed December 3, 1969, the Common Pleas Court said:
"* * * This court resolves the unresolvable by concluding that the so-called appellant does not have standing to prosecute the matter on this appeal."
Clermont's notice of appeal recites the entry of the court, March 31, 1970, as the order from which appeal is taken, and urges two assignments of error in support thereof. Although more elaborately stated, the assignments of error urge, in substance, that the Common Pleas Court was in error in that it failed to recognize that the June 2, 1969, order of the superintendent of banks was an "adjudication" order, and appealable, and that Clermont was a proper party to bring the appeal, having standing to prosecute the matter on appeal.
To narrow the scope of this discussion, a recent Supreme Court decision in Fortner v. Thomas (1970),
"1. The review of proceedings of administrative officers and agencies authorized by Section
"2. Courts will not aid in making or revising rules of administrative officers, boards or commissions, being confined to deciding whether such rules are reasonable and lawful as applied to the facts of a particular justiciable case. (Zangerle v.Evatt,
"3. R. C.
The portion of R. C.
"Any person adversely affected by an order of an agency in adopting, amending, or rescinding a rule * * * may appeal to the court of common pleas of Franklin county on the ground that said agency failed to comply with the law * * * or that the rule * * * is unreasonable or unlawful * * *."
Fortner was a permit holder who lodged an appeal from an amended Ohio Liquor Control Commission regulation although he had never been directly subjected to the application of the amended regulation. He was one of a substantial number of persons who, knowing that, under R. C.
The decision in Fortner serves to make it clear that courts are not to be concerned in the rule-making or rule-reversing function of administrative officers, boards or commissions, nor will they permit the challenging of the lawfulness of an administrative regulation in a vacuum. The court in Fortner states that a review of "quasi-legislative" proceedings of administrative officers and agencies, such as "was done in the instant case," is no longer possible because of the adoption of the Modern Courts Amendment to the Ohio Constitution.
This review is not concerned with administrative rule-making or revision, and Fortner, therefore, would appear to have no bearing on the instant case. Neither is the appellant challenging the adoption of or the "lawfulness of an administrative regulation." Justice Herbert calls attention, however, to R. C.
"* * * Furthermore, it seems logical that any order which effectuates or employs a rule, amendment or rescission that is unreasonable or unlawful could not be an order `in accordance with law' as that language appears in R. C.
The comment prompted concurring Justice Duncan to observe that "Justice Herbert points out that quasi-judicial proceedings are open to attack under Section
The superintendent of banks is authorized and directed, under R. C.
That the superintendent of banks is susceptible to the Administrative Procedure Act is apparent from a reading of R. C.
"(A) `Agency' means, except as limited by this division, any official, board, or commission having authority to promulgate rules or make adjudications in * * *, and the licensing functions of any administrative or executive officer, department, division, bureau, board, or commission of the government of the state having the authority or responsibility of issuing, suspending, revoking or canceling licenses. Section
R. C.
Before dealing with the more knotty problems presented by this case, and to provide a little more background for the discussion, a few more statutory provisions need be noted. The definitions section of the Administrative Procedure Act, R. C.
"(F) `Person' means a person, firm, corporation, association, or partnership.
"(G) `Party' means the person whose interests are the subject of an adjudication by an agency."
The applicable portion of R. C.
"Any party adversely affected by any order of an agency issued pursuant to an adjudication denying * * * the issuance * * * of a license * * * may appeal from the order of the agency to the court of common pleas * * *.
"Any party adversely affected by any order of an agency issued pursuant to any other adjudication may appeal to the court of common pleas of Franklin county * * *."
Parts of R. C. chapter 1111, on "Banks-Branches," are pertinent, as follows:
R. C.
"(B) Upon receipt of an application under division (A) of this section, the superintendent shall give written notice of its filing to each other bank whose principal place of business is located in the county where the proposed branch is to be located or within fifteen miles of the proposed branch. * * *" *96
R. C.
"(C) In considering an application for a branch under division (A) of this section, the superintendent shall ascertain whether:
"(1) The convenience and needs of the public will be served by the proposed branch;
"(2) The population and economic characteristics of the area primarily to be served afford reasonable promise of adequate support for the proposed branch;
"(3) The proposed branch meets such other reasonable criteria as he may require."
The nub of this discussion is the contention of the appellant, Clermont, that it was subject to an "adjudication" and was adversely affected by the resultant order and for which reason it has "standing" and is a proper party to prosecute an appeal under R. C.
This court recently gave attention to the basic matters with which this appeal is concerned in an unpublished decision cited as Papp v. Darke County Agricultural Society, No. 9402, issued December 2, 1969, examining necessary concepts as to "adjudication," "party adversely affected," and, who is a "proper party," or who has "standing" to appeal. The decision in the Papp case contributes to the consideration of this appeal by way of contrast and comparison.
Steve A. Papp et al., citizens, taxpayers, and members of the Darke County Agricultural Society, first sought a restraining order in the Court of Common Pleas of this county against the Director of Agriculture of the state of Ohio. The case reached this court and it was decided that the rather indefinite language contained in R. C.
"* * * There is no reason to deny the right of protest, deny a public hearing, or refuse a determination of the questions submitted by the group of citizens authorized to file a protest under the rule."
The director of agriculture did hold a hearing, and did so in conformity with R. C.
"(D) `Adjudication' means the determination by the highest or ultimate authority of an agency of the rights, duties, privileges, benefits, or legal relationships of a specified person * * *."
In order for Steve A. Papp to have "standing," he must have established that he was a "party" — the person whose interests were the subject of adjudication — and that he was not only a "person," but a "specified person" adversely affected by the order. Most significant in the determination of the status of Papp is the legislative provision affording him an entrance into the legal picture. R. C.
"If it is shown from the report of any county agricultural society, from witnesses, or otherwise that the annual exhibition held by such society was not conducted along moral or agricultural lines or was not of sufficient educational value to justify the expenditure of funds as provided * * * the certificate for such financial aid may be withheld by the director of agriculture."
This court has previously held that a "witness" who wanted to be heard should be afforded a hearing. A hearing was held at which Papp et al. appeared as "witnesses." They were "protesters," even "hostile" to the Drake County Agricultural Society. The group of citizens (Papp et al.) authorized by rule to appear at the hearing was never in any sense a "party." The only possible party involved directly in any action of the director, to withhold *98
or issue a certificate of participation in state funds, was a local agricultural society, as provided in R. C.
"`Adverse' as used in the statutes reviewed is a troublesome term. In the sense that Steve Papp et al. were opposed, or hostile, to the decision of the director it was adverse to them. Mere discontent with an adjudication does not, however, make it adverse in the context of the statute using the term. A much more appropriate synonym is detrimental, that is, harmful to one's interests. The term is always coupled with `party,' and if one is not a party, however detrimental an adjudication may be to one's ideas or state of mind, or even to his pocketbook, any definition of `adverse' will suffice."
Applicable statutes afforded Mr. Papp no "standing" as a party or a "specified person," and he was not in fact adversely affected. Only his feelings were offended.
There is another group of cases strikingly similar to thePapp case, in fact and applicable law, typical of which are:State, ex rel. The Lakewood Methodist Church, v. The LiquorControl Comm. (1965), Franklin County Common Pleas Court Case No. 225,107, upon which appellees rely; Erlenbach v. LiquorControl Comm. (1965),
A review of decisions pertaining to permit applications within the statutory limit as to schools, churches, etc., makes it abundantly clear that appearance at a hearing as *99 a protester does not produce a "party." Courts have required the hearing and considered the testimony adduced by the authorities as bearing "upon the admissibility of the issuance of the said permit," as suggested by the section, but those "authorities" offering only a "naked objection" (Corwin, supra) have never been recognized as having "standing" to appeal as parties or specific persons adversely affected.
R. C.
A "party" or "specified person," adversely affected acquires "standing" most assuredly by legislative enactment. The legislature did not provide it to the citizens and taxpayers of Darke county, nor for the "authorities" of schools, churches, libraries and playgrounds under R. C.
R. C.
(1) The convenience and needs of the public will be served by the proposed branch;
(2) The population and economic characteristics of the area primarily to be served afford reasonable promise of adequate support for the proposed branch;
(3) The proposed branch meets such other reasonable criteria as he may require.
As if to forestall the possibility that these requirements be taken lightly, the legislature closes R. C.
"(D) * * * Further, no such application shall be approved unless in conformity with section
The inescapable result of the legislative pronouncements noted is to bind together the interests of the applicant bank, the banks within the county, or within 15 miles, and the convenience and needs of the public to the business and economic future of the proposed branch. All are parties to the necessary "consent" of the superintendent, which is "specified" in the statutes. The legislature contemplated the possibility of adverse results from the granting of permission for a branch. The new branch might not get necessary support and fail; other existing banks might be hurt economically and, therefore, must be given notice of the pending application; and, the needs and convenience of the public might not be served by the proposed branch or they may already be adequately met.
In the composite legislative enactment, the applicant bank, the existing banks, and members of the general public are specified parties enjoying the possibility of being adversely affected. To consent or withhold consent to the establishment of a branch bank is an act of "adjudication" by the superintendent, in which he determines rights, privileges, and benefits of specified persons. As such, his decision is quasi-judicial in nature.
Court decisions, Fortner, supra, and others, speak of the administrative, or quasi-legislative, proceedings of administrative *101 officers and agencies, and of the quasi-judicial function, or proceedings of those same officers and agencies. Legal concepts are not always completely clear and adequate: thus, to dispose of a specific administrative proceeding categorically is sometimes difficult. Administrative duties or proceedings, sometimes referred to as ministerial functions, are least troublesome. The "quasi-legislative" duties are those assigned to an agency, which Fortner seems to identify as the rule-making processes, in which the courts may not participate and most assuredly will not interpret in the abstract, or in a vacuum asFortner puts it. It would seem that such "quasi-legislative" duties should be subject to review in essentially the same manner as the acts of a legislature can be reviewed. Not in the abstract, of course, not by way of advisory opinion, but in determining whether a given act, legislative or quasi-legislative, as to a person affected, is unreasonable or unlawful.
Whether or not the decision in Fortner has limited, or nullified, possible appeals under R. C.
Appellant, Clermont National Bank, has standing to appeal under R. C.
The order in the instant case is, it is further emphasized, quasi-judicial, being an "adjudication," and judicial decisions, in the Ohio concept, are subject to at least one appeal. A very broad view urges that whenever an administrative order adjudicates rights it should be subject to review.
Portions of our appeals statutes, R. C.
R. C.
"(A) `Appeal' means all proceedings whereby one court reviews or retries a cause determined by another court, an administrative officer, tribunal, or commission."
R. C.
"* * * an order affecting a substantial right made in a special proceeding * * *"
R. C.
"Every final order, judgment, or decree of a court and, when provided by law, the final order of any administrative officer, tribunal, or commission may be reviewed * * *"
The quasi-judicial decisions and orders of administrative officers and agencies require review, particularly because many of them arise out of regulations having the force of law and generally are ascribed to regularly enacted statutes or ordinances, passed by duly constituted legislative bodies. An example of such orders are those coming from zoning authorities which are predicated upon regulations adopted by an administrative or legislative body. Many orders result in injury — an injury to a private person, real or corporate. The still more difficult adjudication order, resulting in private injury, but justified in the light of public good, is common. It must not be *103 overlooked also that the continually increasing trend in government is government by administrative device, encompassing more and larger areas of economic and social life, and it has in it the dangers inherent in autocratic attitudes, human judgments, and the insidious possibility of the use of political and financial influence opposed to the public good. The imminency of such distortions of justice make an "adjudication," as some courts put it, "ripe" for review. An administrative order, "applied," not in a vacuum, may be unreasonable and unlawful, or the order resulting from an adjudication may not be supported by reliable, probative, and substantial evidence. Review is essential.
This court reviewed an appeal from a rule of the Ohio State Racing Commission in Ohio Thoroughbred Racing Assn. v. OhioState Racing Comm. (1961),
Ohio decisions squarely confronting the "standing" of a party entitled to appeal are not available in abundance, and, with the seemingly broadened effect of Fortner, the questions presented by this appeal need more than cursory examination. Federal courts have given considerable attention to many of the problems here presented in a number of decisions necessary to interpret the federal Administrative Procedure Act. Those decisions deal only with appeals from the endless number of federal administrative agencies, but they do produce some policy attitudes and general rules significant in this present review.
Two 1970 United States Supreme Court decisions, which refer to many prior decisions of the court, are noted *104
particularly. One of the cases, Association of Data ProcessingService Organizations, Inc. v. Camp (1970),
In Data Processing the court reviewed an order of the comptroller and held that the plaintiffs were competitors of national banks who offered data processing services and were, therefore, "aggrieved" under the Administrative Procedure Act and entitled to a judicial review. The decision has much to say about "standing," to appeal, and the somewhat synonymous term, "legal interest." At page 829 of 90 S. Ct. the court said: "Generalizations about standing to sue are largely worthless as such." Citing Flast v. Cohen (1968),
"* * * dispute sought to be adjudicated will be presented in an adversary context and in a form historically viewed as capable of judicial resolution."
The test of appealability, the court said, is "whether the plaintiff alleges that the challenged action has caused him injury in fact, economic or otherwise."
The language in the federal Administrative Procedure Act which was the center of interest for the court is as follows:
"* * * aggrieved by agency action within the meaning of a relevant statute."
The Ohio act does not contain this precise language, but, even so, Ohio statutes provide, or deny, standing. Statutory provision is, therefore, equally pertinent to our consideration. The importance of statutory provision is brought out in the court's elaboration of the "legal interest" test. At page 830 of 90 S. Ct. the court speaks as follows:
"* * * It concerns, apart from the `case' or `controversy' test, the question whether the interest sought to be *105 protected by the complainant is arguably within the zone of interests to be protected or regulated by the statute or constitutional guarantee in question. * * *"
At page 831 of 90 S. Ct. the court notes a decision in AbbottLaboratories v. Gardner (1967),
"There is no presumption against judicial review and in favor of administrative absolutism * * * unless that purpose is fairly discernible in the statutory scheme."
Barlow, supra, involved, also, the question of "standing." It was an action in which tenant farmers, recipients of benefits under the "Upland Cotton Program," challenged an amendment to a regulation made by the Secretary of Agriculture. The Supreme Court held that the act establishing the program "evinced Congressional intent that tenant farmers," alleging that they suffered injury in fact from the amended regulation, "could have judicial review of the Secretary's action." The court said the farmers have the personal stake and interest that impart adverseness and are clearly within the zone of interest protected by the act (page 836).
The Supreme Court of Ohio, in a recent decision, Ohio PowerCo. v. Attica (1970),
Before considering the merits of the appeal, Justice Corrigan said that it was necessary first to "determine whether the appellant, Ohio Power, has standing to prosecute the action." That question was resolved and the appeal decided on the merits. The court held Ohio Power did have "standing." At page 38, the conclusion reads as follows:
"* * * Ohio Power, as a supplier of power to the *106 village under an existing franchise, has a vital interest. We conclude, therefore, that Ohio Power has standing, and proceed to the merits."
The attitude of the court toward appeal from, and judicial review of, administrative orders is reflected in several generalizations found in Barlow, as follows:
"* * * As we said in Data Processing Service, preclusion of judicial review of administrative action adjudicating private rights is not lightly to be inferred. * * *" (Page 837.)
"* * * Indeed, judicial review of such administrative action is the rule, and nonreviewability an exception which must be demonstrated. * * *" (Page 838.)
The court said they held in Abbott that "judicial review of a final agency action by an aggrieved person will not be cut off unless there is persuasive reason to believe that such was the purpose of Congress." And, at page 838 of 90 S. Ct., the following was stated:
"* * * The right of judicial review is ordinarily inferred where congressional intent to protect the interests of the class of which the plaintiff is a member can be found; in such cases, unless members of the protected class may have judicial review the statutory objectives might not be realized. * * *"
Justices Brennan and White concur in the conclusion reached by the court in Data Processing and Barlow. They seem to draw some rather fine lines in their concurring opinion, but agree in substance with the opinion of the court. Speaking about the task of the court in which a regulation of an administrative officer or agency is challenged, they urge that before the court permits argument on the merits it must "canvass" the situation. At page 839, the two justices speak as follows:
"* * * But the canvass is made not to determine standing but to determine an aspect of reviewability, that is whether Congress meant to deny or to allow judicial review of the agency action at the instance of the plaintiff. * * *"
In their concurring opinion Justices Brennan and *107 White discuss "standing," "reviewability," and "merits." As to standing, at page 840, they say:
"* * * standing exists when the plaintiff alleges, as the plaintiffs in each of these cases alleged, that the challenged action has caused him injury in fact, economic or otherwise. * * *"
As to reviewability, at page 841, the comment is:
"When the legality of administrative action is at issue, standing alone will not entitle the plaintiff to a decision on the merits. Pertinent statutory language, legislative history and public policy considerations must be examined to determine whether Congress precluded all judicial review, and, if not, whether Congress nevertheless foreclosed review to the class to which the plaintiff belongs. * * *"
And, at page 842, the following appears:
"In the light of Abbott Laboratories, slight indicia that the plaintiff's class is a beneficiary will suffice to support the inference."
Related to the comment on Abbott is footnote 9 on the same page, as follows:
"This is particularly the case when the plaintiff is the only party likely to challenge the action. Refusal to allow him review would, in effect, commit the action wholly to agency discretion, thus risking the frustration of the statutory objectives."
After the "canvass" to determine standing and reviewability, "inquiry proceeds to the merits — to whether the specific legal interest claimed by the plaintiff is protected by the statute and to whether the protested agency action invaded that interest." Certain aspects of the merits may be touched in establishing standing and reviewability, but the identification of injury "in fact" is squarely a burden upon the one who requests review.
R. C.
"Any party adversely affected by any order of an agency issued pursuant to any other adjudication may appeal * * *."
Clermont is "any party," and it claims to be "adversely *108
affected," not by an adjudication as to a "license," but "any other adjudication." If the order is "unreasonable or unlawful" it cannot be an order "in accordance with law," and is appealable under R. C.
The United States Supreme Court decisions, supra, look to the legislation under which a plaintiff, or appellant, claims protection to see if Congress precluded all judicial review or precluded it as to the class the plaintiff, or appellant, belongs. In the Papp case, supra, R. C.
R. C.
The administrative act of the superintendent, the subject of this review, is governed by R. C.
Notice alone certainly does not provide "standing" to appeal. But, R. C.
The language of these sections noted does not specifically preclude all judicial review, nor does it appear reasonable to conclude that it precludes such review to the class to which this appellant belongs. In fact, the legislative pronouncement in these two sections makes it difficult to conclude that the legislature meant to preclude judicial review.
Banks were required to have notice. Banks are inextricably interwoven into the economic area in which the public seeks not only convenience and the meeting of its needs, but a bank with a "promise" of "adequate" support. Banks which fail scorch the good earth of the people and bring trouble and even chaos to all banks. The mere recognition of existing banks acknowledges that competition may not only destroy "adequate support," but likewise recognizes potential injury to, or failure of, the banks already there.
In the instant case, Clermont is not a mere "witness" or protester. Statutory enactment makes an existing bank an integrant part of the economic area in which a branch is proposed. It is a "party," a "specified person" as a named factor requiring consideration as a part of the areas which the legislature said the superintendent "shall" investigate.
The general rules announced by the United States Supreme Court in the decisions noted reflect a legal philosophy which is sound and necessary in this day of government by administrative officers and agencies. It is our considered opinion that they are appropriate for application in Ohio in providing the broader rights of appeal suggested *110
by Fortner relative to appeals under R. C.
Clermont has "standing" to appeal under R. C.
The order of the Common Pleas Court is reversed and the cause remanded for further proceeding according to law and this decision.
Judgment reversed.
STERN, J., concurs.
Dissenting Opinion
I reluctantly dissent from the opinion of the majority herein for a basic singular reason.
The appellant herein is invoking R. C.
Without determining whether or not the order of the superintendent of banks is an order of an "agency" within the purview of R. C.
It is my opinion that the appellant is not a party adversely affected as provided for in such R. C.
The word "party" is defined in R. C.
"* * * the person whose interests are the subject of an adjudication by an agency."
The subject of adjudication of this administrative body in the matter before this court was the granting of *111 consent by the superintendent of banks to the Citizens Bank to conduct a branch banking business.
The "specified person" of the "adjudication" was then the Citizens Bank, not the appellant, Clermont National Bank.
An affected or interested bank may not become a "party" by virtue of having been given notice under the requirements of R. C.
The inability of a "person" rather than a "party" to appeal an adjudication order of an administrative agency seems to be well documented, Harrison v. Public Utilities Commission,
If the competitive aspects of branch banking are sufficiently significant to require those who would be damaged thereby to be heard, and parenthetically I believe in the significance of such, then amendments to our banking laws should be effected.
If it be desirable to afford affected banks, in an applicant branch bank area, standing to appeal the superintendent's orders in such proceedings, and parenthetically I believe it to be desirable, then such should be done by the legislature. Such involves a matter of policy determination and legislative action rather than judicial action. *112