Mullet v. MillerMullet v. Miller
- Reporters:
- , , ,
- Before:
- Howard
OPINION
HOWARD, Presiding Judge.Petitioner Michael Mullet (Mullet) seeks special action relief from the order of the respondent judge denying his motion to dismiss the underlying criminal charges on double jeopardy grounds in light of a prior proceeding before and an order entered by the Arizona Corporation Commission (the Commission). Because this is a matter of statewide importance and requires consideration of legal issues as opposed to controverted questions of fact, we accept jurisdiction. University of Arizona Health Sciences Center v. Superior Court, 136 Ariz. 579, 667 P.2d 1294 (1983). For the reasons stated below, we grant relief.
The relevant facts and procedural history are as follows. On January 24, 1990, the Commission conducted a hearing regarding allegations that Mullet and Intercontinental Foreign Exchange, Ltd., Mullet’s corporation, had offered or sold unregistered securities in violation of
The issue raised by this special action is whether the administrative proceeding before the Commission placed Mullet in jeopardy and whether the administrative penalty imposed by the Commission was a punishment, thus precluding the criminal prosecution based on the same conduct. 1
The double jeopardy clause of the Fifth Amendment to the United States Constitution “protects against a second prosecution for the same offense after acquittal . . . a second prosecution for the same offense after conviction . . . [a]nd . . . multiple punishments for the same offense.” North Carolina v. Pearce, 395 U.S. 711, 717, 89 S.Ct. 2072, 2076, 23 L.Ed.2d 656, 664-665 (1969). The meaning of the clause as it relates to successive prosecutions was further elucidated in Grady v. Corbin, 495 U.S. -, -, 110 S.Ct. 2084, 2093, 109 L.Ed.2d 548, 564 (1990), where the Supreme Court held that:
[T]he Double Jeopardy Clause bars any subsequent prosecution in which the government, to establish an essential element of an offense charged in that prosecution, will prove conduct that constitutes an offense for which the defendant has already been prosecuted____
In
United States v. Halper,
490 U.S. 435, 109 S.Ct. 1892, 104 L.Ed.2d 487 (1989), the Supreme Court addressed the double punishment aspect of the clause. Specifically, the Court considered whether a civil proceeding brought by the United States in which a fine was imposed for the submission of false claims to an insurance company subjected the defendant, who had previously been convicted of various related criminal charges, to double jeopardy by punishing the defendant twice for the same conduct. Crucial to the Court’s analysis
Based primarily on Grady and Halper, this court recently found that evidence of civil traffic offenses, in connection with which default judgments were entered against the defendant, could not be used against the defendant in a subsequent criminal prosecution on aggravated assault and criminal damage charges. Taylor v. Sherrill, 166 Ariz. 359, 802 P.2d 1058 (App. 1990). We concluded that “the sanctions that flow from violating the speeding and unsafe turning laws are clearly intended to deter the offender and other drivers from committing such infractions and to promote retribution.” Id. at 364, 802 P.2d at 1062. We further noted that one’s license may be suspended or revoked for excessive infractions. Thus, the sanctions for the civil traffic violations were found to be punitive in nature, as they were designed to serve the goals of punishment.
Relying on Pearce, Grady, and Taylor, Mullet argues that the proceeding before the Commission placed him in jeopardy, particularly in light of the administrative penalty imposed which petitioner contends is punitive, rather than remedial, in nature.
In light of what we consider to be the unique nature of the Commission specifically, and administrative bodies generally, we do not believe jeopardy attached here under
Grady,
as we do not believe the proceeding may be considered a prosecution. The Commission was created by article XV, § 1 of the Arizona Constitution. The constitution grants the Commission various powers, including the power to inspect and investigate,
Even where the administrative proceeding has resulted in the loss of liberty, courts have recognized the distinction between administrative and criminal proceedings, rejecting double jeopardy arguments. In
United States v. Rising,
867 F.2d 1255 (10th Cir.1989), for example, the Tenth Cir
In Railroad Commission of Texas v. F.E.R.C., 874 F.2d 1338 (10th Cir.1989), in a different context, the court rejected a well operator’s appeal from the order of the Federal Energy Regulatory Commission which affirmed an administrative law judge’s determination that the operator had violated the Natural Gas Policy Act, based on the argument that a second stage of an administrative investigation constituted double jeopardy. Pointing to the “fundamental differences” between administrative and criminal proceedings, the court, quoting a decision from the Second Circuit court of appeals, noted as follows:
Every person doing business and every investor knows that government agencies conduct investigations for a variety of reasons and most of them feel the duty to respond to a proper inquiry. As for those whose practices are investigated, it is a necessary hazard of doing business to be the subject of inquiry by a government regulatory agency. SEC v. Brigadoon Scotch Distrib. Co., 480 F.2d 1047, 1056 (2d Cir.1973), cert. denied, 415 U.S. 915, 94 S.Ct. 1410, 39 L.Ed.2d 469 (1974).
In engaging in the business of selling securities, Mullet brought himself within the purview of the Commission’s regulatory and investigative powers. That the Commission investigated him, found him to have violated various state statutes and ordered him to pay restitution, as well as constitutionally and statutorily sanctioned fines, was a “hazard of doing business” that Mullet assumed. It was not a prosecution for purposes of the double jeopardy clause. 3
The fact that proceedings before the Commission are administrative and, therefore, not prosecutions under
Grady
does not end the double jeopardy inquiry. Under
Halper,
if the administrative penalty of $380,000 is purely punitive as opposed to remedial, the fact that it was imposed in an administrative proceeding, as opposed to a civil or criminal proceeding, does not change its nature. A cow, after all, does not become a horse simply by calling it a horse. As in
Halper,
we are unable to determine from the record before us, which does not contain an accounting of the state’s damages, whether the administrative penalty is rationally related to making the state whole in connection with the proceedings before the Commission. As the Court in
Halper
stated, “[w]e must leave to the trial court the discretion to determine on the basis of such an accounting, the size of the . . . sanction the Government may receive without crossing the line between remedy and punishment.” 490 U.S. at 450, 109 S.Ct. at 1902, 104 L.Ed.2d at 502-503. We therefore remand this matter to the trial court for such a determination. In the event that the administrative penalty
We grant special action relief and remand this matter for further proceedings consistent with this opinion.
FERNANDEZ, C.J., and CARRUTH, J., * concur.
Notes
. We note that the state does not dispute Mullet‘s assertion that the criminal prosecution is based on the same conduct that was the subject of the proceeding before the Commission.
. We note, as we did in Taylor, that in Grady, one of the prosecutions, unlawful lane change, was also a civil violation.
. It is irrelevant whether