PROCEDURAL DUE PROCESS LIMITATIONS ON THE MUNICIPAL LAWYER COMBINING QUASI-JUDICIAL AND PROSECUTORIAL OR INVESTIGATORY FUNCTIONS

I. Introduction

This paper discusses the host of questions and concerns that have been spawned by recent California appellate cases elevating principles of administrative law concerning the propriety of combining quasi-judicial, investigatory and prosecutorial functions to the status of a procedural due process mandate. As a threshold matter, the paper discusses when procedural due process safeguards are triggered. In describing the differences in approach, in this respect, under the United States and California constitutions, the paper relies almost entirely on the attached excellent paper on this question written by UCLA Professor Emeritus, Michael Asimow. Professor Asimow is a well-known and highly respected authority on administrative law and was a consultant to the California Legislature when it enacted the California Administrative Procedure Act (“APA”) Government Code §§ 11340 -11529. The paper also examines the degree to which the fair hearing guarantees of Code of Civil Procedure section 1094.5 require procedural protections, which are akin to those triggered by due process. The heart of the paper takes up the due process discussion where the November 2003 Hastings Municipal Law Institute symposium on due process left off, namely, when might a city be found to have improperly combined adjudicatory and investigative or prosecutorial functions due to the conduct of the municipal lawyer, and how can such problems be avoided or remedied?

II. When is Procedural Due Process Triggered?

A. United States Constitution

Modern due process jurisprudence, under the United States constitution instructs that it is only when the government deprives an individual of a property or liberty interest that it is under an obligation to afford that individual procedural due process protections. Mathew v. Eldridge, 424 U.S. 319, 332-33 (1976). “Procedural due process imposes constraints on governmental decisions which deprive individuals of “liberty” or

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“property” interests within the meaning of the Due Process Clause of the Fifth and Fourteenth Amendment.” Id. at 331.

Interestingly, in Horn v. County of Ventura, 24 Cal.3d 605, 615 (1979), the California Supreme Court glossed over this distinction and went on to reach the due process issue. In assuming that due process applied, the court relied on language from an earlier case, Scott v. City of Indian Wells, 6 Cal.3d 541, 548-549 (1972) “land use decisions which ‘substantially affect’ the property rights of owners of adjacent parcels may constitute “deprivations” of property within the context of procedural due process” in combination with allegations of Horn’s complaint that the subdivision plan he opposed “will substantially interfere with his use of the only access from his parcel to the street and will increase traffic congestion and air pollution.” (Emphasis added) Horn v. County of Ventura, 24 Cal. 3d 615. Professor Asimow pointed out that the implied assumption in Scott v. City of Indian Wells, 6 Cal.3d 541, 548-549 (1972), that discretionary decisions are automatically subject to due process protections, was expressly disavowed in Board of Regents v. Roth, 408 U.S. 564 (1972). In that case the Court rejected a claim by a probationary university professor that his rejection during probation was protected by due process. The Court explained that a property or liberty interest had to be at stake before due process protections were triggered. Id at 569-570. Thus, Professor Asimow concludes that Scott seems incorrect as a matter of federal constitutional law. (408 U.S. 564 (1972).)

In Horn the court held that, under due process, the adjacent property owner was entitled to notice and an opportunity to be heard with respect to his neighbor’s subdivision application. Horn v. County of Ventura, 24 Cal. 3d 615. Subsequent cases which cite Horn treat it as requiring reasonable notice and an opportunity to be heard to be provided to land owners in land use cases; these cases do not address the threshold question of whether there is a triggering liberty or property interest at stake and thus whether due process even applies. See e.g. Cohan v. City of Thousand Oaks, 30 Cal.App.4th 547, 555-56 (1994); Van’t Rood v. County of Santa Clara, 113 Cal. App. 4th 549, 570 (2003).

The California Supreme Court has yet to squarely resolve whether due process would be applicable to a mere denial of an application for a land use entitlement since, in its most recent pronouncement on the issue, due process was assumed to be applicable. For example, in the Court of Appeal

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decision in Haas v. County of San Bernardino, 69 Cal.App. 4th 1019, 1025, n. 1 (1999), the Court of Appeal noted that “neither party disputes that Haas is entitled to constitutionally mandated due process protections in appealing revocation of his massage clinic license.” (Emphasis added) The California Supreme Court decision in Haas v. County of San Bernardino, 27 Cal.4th 1017, (2002) is silent on the question of when due process is triggered, since the sole issue before it involved the scope of due process limitations on the manner in which outside hearing officers are retained. The applicability of due process was conceded, as the Court of Appeal decision notes.

The United States Supreme Court in American Manufacturers Mutual Insurance, 526 U.S. 40, 59-61, rejected a claim that an initial denial of eligibility for workers’ compensation benefits created a liberty or property interest protected by due process.

“In Goldberg v. Kelly, 397 U.S. 254, 25 L. Ed. 2d 287, 90 S. Ct. 1011 (1970), we held that an individual receiving federal welfare assistance has a statutorily created property interest in the continued receipt of those benefits. Likewise, in Mathews, supra, we recognized that the same was true for an individual receiving Social Security disability benefits. In both cases, an individual's entitlement to benefits had been established, and the question presented was whether predeprivation notice and a hearing were required before the individual's interest in continued payment of benefits could be terminated. See Goldberg, supra, 397 U.S. at 261-263; Mathews, supra, at 332.

(Emphasis in original) 526 U.S. 60.

From federal due process law, one can thus derive the following guidance: that federal due process is triggered only by revocation, reduction or termination of land uses and other entitlements that the government had previously granted. Such governmental actions triggering due process would include nuisance abatement actions, terminations of non-conforming uses, revocation of a use, discipline or termination of employment, placing liens on property or other unique circumstance involving taking away or significantly diminishing an existing property right.

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Conversely, a simple denial of a permit, employment, a license and the like would not trigger due process in light of the absence of any property or liberty interest. This rule of thumb is necessarily a gross oversimplification of the issue. There is no shortcut for analyzing the particular deprivation at stake in order to ascertain whether a liberty or property interest may be at issue. In any event, defining when federal due process protection is triggered may be only of academic interest in California, in light of the California Supreme Court’s broad reading of when California constitutional due process applies.

B. California Constitution

In People v. Ramirez, 25 Cal.3d 260, 268-69 (1979), a criminal sentenced to incarceration for burglary and heroin possession challenged his exclusion without due process from the California Rehabilitation Center (“CRC”), which provided treatment for drug problems. The Court found that the defendant had a liberty interest in remaining in the CRC, the deprivation of which was subject to due process protections. In reaching its conclusion, the California Supreme Court criticized the circularity of federal due process doctrine, noting that it only recognized a federally protected liberty or property interest if a court found that a state constitution or statute created such an interest on specified terms.

In rejecting this approach, the California Supreme Court reasoned that a legislature could simply legislate its way around due process guarantees by the manner in which it defined the protected interest, since most such interests will be derived from statutory and not constitutional law. In the Court’s view, the federal approach did not lead to any predictability in administrative decisions or sufficiently recognize, “the dignity and worth of an individual by treating him as a fully participating and responsible member of society.” Id at 320. It therefore concluded that, under the California Constitution, “due process safeguards required for protection of an individual’s statutory interest must be analyzed applying the principle that freedom from arbitrary adjudicative procedures is a substantive element of one’s liberty.” (Emphasis added.) Id.

Due process guaranteed under Article I § 7 of the California Constitution thus, “presumes that when an individual is subject to deprivatory governmental action, he always has a due process liberty interest both in fair and unprejudiced decision-making and in being treated with respect

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and dignity.” (Emphasis added) Id. It is important to note that Ramirez was not challenging termination from a continuing program in which he was already enrolled. Rather, he was challenging the initial decision to exclude him from the program.

The principle that procedural due process protection is applicable to all adjudicatory action was affirmed in Saleeby v. State Bar of California, 39 Cal.3d 547, 563-64 (1985). There the court upheld a client’s claim that the State Bar’s rules governing a Client Security Fund violated due process.1 Like the Ramirez case, Saleeby involved an application for benefits, not a termination of existing benefits.

The most important distinction to bear in mind here is that due process under the California Constitution applies to all adjudicative actions, whereas due process under the United States Constitution is triggered only when liberty or property interests are at stake.

C. In the Land Use Context, Later California Cases Have Rejected Due Process Analysis, Instead Applying the Fair Hearing Requirements of Code of Civil Procedure Section 1094.5 or Have Applied Due Process Protections Without First Discussing Whether Due Process Applies

In the land use context, later California cases have rejected analyzing fair hearing issues under due process, and have relied only on federal cases without any discussion of either Horn v. County of Ventura, supra, 24 Cal. 3d 605, 723, People v. Ramirez, supra, 25 Cal.3d 260, 268-69, or Saleeby v. State Bar of California, supra, 39 Cal.3d 547, 563-64.

The leading case of this genre is Clark v. City of Hermosa Beach, 48 Cal.App. 4th 1152 (1996) a second appellate district, Division One case. There, plaintiff Clark claimed that the City’s denial of his permit to build a two-unit condominium violated substantive and procedural due process based upon the animus of a particular Council member who, as a neighbor, had actively opposed the project. The neighbor was subsequently elected to the Council and participated in a hearing to deny the project. For this reason, Clark asserted that the Council was not an impartial decision maker.

1 Professor Asimow’s paper describes the application of this principle in subsequent cases.

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The Court first observed that Code of Civil Procedure 1094.5 creates a statutory right to a fair hearing, which must be conducted before an impartial tribunal. Id at 1170. “Biased decision makers are … impermissible and even the probability of unfairness is to be avoided….” Examples of factors which would prejudice a tribunal are common law pecuniary bias and personal embroilment. Id. The Court found that the neighbor/council member was biased in both respects because of the effect of the condominium project on the property in which he lived in and because of his personal animosity towards the applicant for the City permit. With respect to the plaintiff’s claim that the City had violated his federal civil rights by denying him due process, the court determined that there was no protected property or liberty interest at stake because the level of discretion granted the City in approving or denying the permit vitiated any claim that the permit was an entitlement rising to the level of a property interest. Id. In this respect, the opinion made no attempt to distinguish or even discuss Horn v. County of Ventura, supra, 24 Cal. 3d 605, 723. The opinion is silent on the applicability of the California Constitution’s due process protections, apparently because Clark’s due process claim was an element of his cause of action that his federal civil rights were denied. Id at 1159.

The holding in Clark v. City of Hermosa Beach that federal due process is not triggered by a land use permit denial was reiterated in another Second Appellate District case from Division Two, Breakzone Billiards v. City of Torrance, 81 Cal.Ap.4th 1205, 1223-24 (2000). That court went on to analyze the procedural claims made in that case under the fair hearing requirements of Code of Civil procedure 1094.5 and the California Constitution. Neither the Clark v. Hermosa Beach nor the Breakzone Billiards v. City of Torrance courts discussed whether an individual may have a liberty interest under the California constitution in “fair and unprejudiced decision-making and in being treated with respect and dignity.” See People v. Ramirez, supra, 25 Cal.3d at 320. Both of these cases reiterated that Code of Civil Procedure Section 1094.5 requires adjudicatory decision to be fair and decision makers to be impartial.

Interestingly, one of the central issues in Breakzone Billiards v. City of Torrance 81 Cal.App.4th 1205, 1235-36 was whether the City Council proceedings had resulted in a biased decision maker since a member of the Council had appealed the decision to the Council and had participated in making the decision itself. The court rejected the contention that the City

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had improperly combined adjudicative and prosecutorial functions and in this regard pointed out that the California cases follow federal law, starting with the seminal case of Withrow v. Larkin, 421 U.S. 35 (1975). Breakzone Billiards v. City of Torrance 81 Cal.Ap.4th at 1235-36. (As this paper will later explain at greater length, in Withrow v. Larkin the United States Supreme Court rejected the argument that an agency violates due process if it combines adjudicatory and prosecutorial or investigatory functions.)

In conclusion, on the threshold question of whether due process is even applicable, it is best to apply due process principles to any adjudicatory hearing, since, one of the standards of review under the administrative mandamus procedures of Code of Civil Procedure Section 1094.5 is whether the agency provided a fair hearing before an impartial decision maker and the California Constitution has been interpreted to apply to all adjudicatory hearings. In any event, whether the decision maker is deemed actually biased because of the improper combination of adjudicatory and prosecutorial or investigatory functions is resolved by reference to the federal due process cases starting with Withrow v. Larkin, supra, 421 U.S. 35.

III. What Process Is Due?

A. General Standards

1. United States Constitution

Due Process “unlike some technical rules, is not a technical conception with a fixed content unrelated to time, place and circumstances [citations omitted].” Mathews v. Eldridge, supra, 424 U.S. at 334. It is “flexible and calls for such procedural protections as the situation demands [citations omitted].” Id A court must weigh the private and governmental interest involved using three factors: 1) the private interest to be affected by the governmental action; 2) the risk that the procedures used will result in an erroneous deprivation of that interest; and 3) the probable value, if any, of using different procedures weighed against the governmental burden entailed by the additional procedures. The California Supreme Court cases construing the California Constitution consider an additional factor.

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2. California Constitution

The California Supreme Court in People v. Ramirez, 25 Cal.3d 260, 268-69 adopted the federal factors laid out in Mathews v. Eldridge, but weaved into them the dignitary values it used to trigger due process protections in the first place. Under the California Constitution, the constitutionality of the process which the government has provided will turn on: 1) the private interest that will be affected by the official action; (2) the risk of an erroneous deprivation of such interest through procedures used, and the probable value, if any, of additional safeguards, (3) the dignitary interest in informing individuals of the nature, grounds and consequences of the action and in enabling them to present their side of the story before a responsible government official, and the governmental interest, including the function involved and the fiscal and administrative burdens that the additional or substantive procedural requirement would entail. Id .

Notwithstanding the seemingly disparate standards used under the United States and California Constitutions for determining what process is due, on the issue which is the subject of this paper, namely whether a decision making agency is biased because it improperly combined adjudicatory and prosecutorial functions, it appears that California follows federal due process cases. See Breakzone Billiards v. City of Torrance, 81 Cal.Ap.4th at 1235-36. However, the most recent cases have not discussed the genesis of the improper combination of functions doctrine, probably because it does not appear to have been briefed.

3. Code of Civil Procedure Section 1094.5

A trial court may issue a writ of administrative mandate where an agency has deprived the petitioner of a fair hearing. Code of Civ. Proc., § 1094.5, subd.(b). The court in Clark v. City of Hermosa Beach, supra, 48 Cal.App. 4th at 1170, delineated the elements of a fair hearing which can be derived from applicable case law:

“[A]n individual has the right to a tribunal 'which meets . . . standards of impartiality.' . . . Biased decision makers are . . . impermissible and even the probability of unfairness is to be avoided. . . . The factor most often considered destructive of administrative board impartiality is bias arising from

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pecuniary interests of board members. . . . Personal embroilment in the dispute will also void the administrative decision . . ., although neither prior knowledge of the factual background which bears on a decision nor prehearing expressions of opinions on the result disqualifies an administrative body from acting on a matter before it. . . . [P] . . . Our Supreme Court has declined to fix rigid procedures for the protection of fair procedure rights . . ., but it is inconceivable to us that such rights would not include impartiality of the adjudicators."

B. Impartial Decision Maker - Improper Combination of Functions

1. United States Supreme Court

The argument that it is improper to combine adjudicatory functions with prosecutorial or investigatory ones is another way of saying that a decisionmaking agency is biased because it has also acted in a prosecutorial role as an advocate on one side of the dispute to be adjudicated. Stated differently, the partiality of an advocate is inconsistent with the impartiality required of the quasi-judicial decisionmaker.

The leading United States Supreme case on this subject is Withrow , 421 U.S. 35, supra. There the Court noted that as contrasted with claims of pecuniary bias:

The contention that the combination of investigative and adjudicative functions necessarily creates an unconstitutional risk of bias in administrative adjudication has a much more difficult burden of persuasion to carry. It must overcome a presumption of honesty and integrity in those serving as adjudicators; and it must convince that, under a realistic appraisal of psychological tendencies and human weakness, conferring investigative and adjudicative powers on the same individuals poses such a risk of actual bias or prejudgment that the practice must be forbidden if the guarantee of due process is to be adequately implemented.

Id. at 47- 48.

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It is worth reading Withrow closely for its discussion of the cases up to that point on this issue in both finding and rejecting bias. The Court summarized its own conclusions and that of a leading administrative law treatise thusly

[I]t is not surprising, therefore, to find that "[t]he case law, both federal and state, generally rejects the idea that the combination [of] judging [and] investigating functions is a denial of due process...." 2 K. Davis, Administrative Law Treatise § 13.02, p. 175 (1958). Similarly, our cases, although they reflect the substance of the problem, offer no support for the bald proposition applied in this case by the District Court that agency members who participate in an investigation are disqualified from adjudicating. The incredible variety of administrative mechanisms in this country will not yield to any single organizing principle.

Id. at 726. The Court distinguished cases in which the decisionmaker becomes an adversary and an advocate. Id at 727-28. Professor Asimow also points out that some language in Goldberg v. Kelly, 397 U.S. 254 (1970) needs to be reconciled with the decision in Withrow. In Goldberg v. Kelly the Court held that due process required an evidentiary hearing prior to the termination of welfare assistance. 397 U.S. 254, 267-270. It noted that “prior involvement in some aspects of a case will not necessarily bar a welfare official from acting as a decision maker. He should not, however, have participated in making the determination under review.” Professor Asimow believes that these cases are best reconciled as permitting the head of an agency to supervise both adjudicatory and administrative functions but to prevent a lower level employee from being both a prosecutor and judge.

Subsequently, in Hortonville Joint School Dist. v. Hortonville Education Assn., 426 U.S. 482 (1976) the Supreme Court rejected the argument that a school board was biased because it conducted a hearing concerning teachers’ discharge after it had been involved in an adversary relationship with them because they were on strike. The court concluded that there was no evidence that the Board had the kind of “personal or financial stake in the decision that might create a conflict of interest, and there is nothing in the record to support charges of personal animosity.” According to the Court, the school teachers had, “failed to demonstrate that the decision to

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terminate their employment was infected by the sort of bias that we have held to disqualify other decisionmakers as a matter of federal due process. Showing that the Board was "involved" in the events preceding this decision, in light of the important interest in leaving with the Board the power given by the state legislature, is not enough to overcome the presumption of honesty and integrity in policymakers with decisionmaking power.” Hortonville Joint School Dist. v. Hortonville Education Assn., 426 U.S. 496-497.

In Marshall v. Jerrico, Inc., 446 U.S. 238 (1980) the Court found due process was satisfied and no impermissible bias was indicated where the assistant regional administrator of the Employment Standards Administration was responsible for both investigating violations of child labor standards and assessing penalties for those violations, because his salary was fixed by law and because the administrator was entitled to a presumption of honesty. However, there the facts did not involve the combination of prosecutorial functions with adjudicatory ones.

In Schweiker v. McClure, 456 U.S. 188, 195 (1982) the Court rejected a due process challenge to a Part B Medicare system in which private insurance carriers assessed, on behalf of the secretary of health and human services, whether or not the claimed procedure was medically necessary. There, a denial of benefits was reviewed, upon request, by a different claims assessor from the same carrier and, if the claimant was still unsatisfied, he could be heard in an oral hearing by that carrier. Because the moneys paid by the carriers came out of federal funds and not their own funds, there was no bias indicated in this procedure. The Court found that the challengers had failed to make any showing to rebut the presumption of honesty and integrity to which the decisionmakers were entitled.

2. Ninth Circuit

The federal court cases in Court of Appeal and the district court in the Ninth Circuit have been almost uniformly hostile to claims that decision makers were biased because of the institutional structure of the tribunal. In two cases, the decisionmaker was found to be prejudiced because of pecuniary bias, and the only remaining case to conclude that bias was present was based on the unique set of facts involving pending litigation against the city handled by the attorney who was advising the decision

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maker. The discussion of these cases is grouped below by whether or not bias was found. a) Federal Cases in the Ninth Circuit-No Bias

United States v. Garcia-Martinez, 228 F.3d 956, 961 (9th Cir. 2000) (No impermissible bias found because deciding officer is under the supervision of officers who exercise prosecutorial functions. “We will not presume bias from the mere institutional structure of the INS’).

Ortiz v. Stewart, 149 F.3d 923 (9th Cir.1998) (Murder defendant unable to overcome presumption of judicial honesty upon the sole allegation that the judge in his trial had also presided over the defendant’s wife’s trial for the same crime and expressed “doubts” about her guilt.)

Hirsh v. Justices of the Supreme Court, 67 F.3d 708 (9th Cir.1995) (Petitioner failed to overcome the presumption of judicial honesty by allegation that California Supreme Court justices and Bar Court justices were biased decisionmakers in attorney disciplinary hearings because such judges were competitors with attorneys being disciplined (in the sense that all attorneys within a state are competitors with one another) or that disciplinary fees were paid into the treasury of the state bar, from which Bar Court justices salaries were paid (though the salaries were set by statute).)

United States v. Oregon, Water Resources Dep't, 44 F.3d 758 (9th Cir. 994) (Klamath tribe failed to demonstrate that theirs was a situation “in which experience teaches that the probability of actual bias on the part of the judge or decisionmaker is too high to be constitutionally tolerable,” where it was claimed that Oregon judges hearing a water rights claim would defer to Oregon officials of the Oregon Water Resources Board and their advisers (the Oregon Department of Justice), who had litigated against the tribe’s prior water rights claims.)

Kenneally v. Lungren, 967 F.2d 329 (9th Cir.1992) (Evidence of prior statements regarding the case made by Medical Board members who were not part of the medical quality division, of the division’s refusal to settle the case, and refusal to grant an evidentiary hearing, were insufficient evidence of bias to overcome the presumption of honesty in license revocation hearing by medical quality division of Medical Board.)

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Silver v. United States Postal Service, 951 F.2d 1033 (9th Cir.1991) (No due process violation was found in the structure of Postal Service claims where one employee was responsible for investigating and prosecuting claims and another was responsible for making adjudicative decisions even though both employees “serve at the pleasure of the Postmaster General.” The court also noted in dictum at page1041 that even where the adjudicative and prosecutorial functions are combined in the same person, the plaintiff is still burdened with overcoming the presumption of honesty.)

Grolier, Inc. v. Federal Trade Com., 699 F.2d 983 (9th Cir 1983) (Petitioner failed to overcome the presumption of integrity when he claimed that the ALJ had acted as legal advisor to the Federal Trade Commissioner during a meeting between petitioner and the commissioner because the ALJ had issued an affidavit that he was not privy to any ex parte information arising out of that meeting.)

Vanelli v. Reynolds School Dist., 667 F.2d 773 (9th Cir.1982) (Petitioner’s review hearing before school board whose members participated in the decision to terminate him was not sufficient to overcome the presumption of honesty because he could point to no “conflict of interest” or “personal stake” held by any of the board members.)

Spokane County Legal Services, Inc. v. Legal Services Corp., 614 F.2d 662 (9th Cir. 1980) (Decision by Legal Services Corporation to suspend funding for local nonprofit providers of legal services was not procedurally infirm despite the fact that the hearing examiner was employed by the agency that had originally made the decision to suspend funding, because they could not show any personal bias or animosity or any pecuniary interest in the proceedings.)

Ash Grove Cement Co. v. FTC, 577 F.2d 1368 (9th Cir.1978) (No violation of due process found where FTC staff both investigated and, subsequent to the findings of that investigation, adjudicated a proceeding against petitioner where commissioner’s “tentative conclusions” were mirrored in the FTC’s formal complaint against the petitioner because, in part, the presumption of honesty favored the commission. The court only discussed that it was “staff” that investigated the petitioner, the commissioner who was responsible for issuing the “tentative conclusions,” and the Commission that sat in final judgment.)

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Swank v. Ingle, 1997 U.S. Dist. LEXIS 14243 (N.D. Cal. May 20, 1997) (No showing of impermissible bias on the part of a trial judge who worked in the same building with and knew, as an acquaintance, the mother of defendant’s victim because defendant had failed to show any “substantial, personal, or direct influence” on the judge.)

Root v. Schenk, 953 F. Supp. 1115 (1996) (The court noted that Withrow had held that “situations in which the probability of a decisionmaker's bias is too high to be constitutionally tolerable include cases in which the decisionmaker "has been the target of personal abuse or criticism from the party before him,” but found that judges were used to criticism and that merely criticizing the judge in a federal complaint did rise to the level of “personal embroilment” required to indicate “intolerable bias.”)

San Francisco Police Comm'n v. Police Comm'n, 1996 U.S. Dist. LEXIS 6837 (N.D. Cal. May 9, 1996) (Plaintiff could not make out a claim of undue bias on the mere fact that the police commission was both responsible for initiating the investigation against them and for adjudicating their hearing because they could point to no special facts tending to indicate bias.)

Los Angeles Memorial Coliseum Com. v. National Football League, 89 F.R.D. 497 (1981) (No due process violation under Withrow where jurors were said to be residents of a municipality that would receive direct financial benefit from one resolution of the case before them (whether or not to move a professional football team to that municipality.)

b) Bias Found

Stivers v. Pierce, 71 F.3d 732 (1995) (Due process violation found where plaintiff was denied a private investigator’s license by the Nevada Private Investigator’s Licensing Board where board member owned a business that competed with plaintiff’s, creating an impermissible pecuniary interest, and where there was substantial evidence of personal animus between plaintiff and this board member.)

Walker v. City of Berkeley, 951 F.2d 182 (9th Cir. 1991) (Due process was violated where the same attorney both advised the city manager in plaintiff’s termination hearing and represented the city in the plaintiff’s

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wrongful termination suit in federal court where plaintiff had prematurely filed suit while post termination hearing was pending. The facts were unique because the jury found that the attorney was actually the decision maker.)

Melashenko v. Bowen, 1990 U.S. Dist. LEXIS 11427 (E.D. Cal. June 19, 1990) (There was no indication of impermissible bias in the mere fact that the same Office of the Inspector General employee investigated and prosecuted the petitioner and adjudicated his hearing before the OIG. There was, however, impermissible bias found in the merit pay system that gave that employee a pecuniary interest in imposing more sanctions.)

Thus, two out of the three ninth circuit cases finding bias (Stivers and Melashenko) did so based on evidence proving that the decision maker had a pecuniary interest in the outcome of the adjudication. Further, though most involved some separation of investigative or prosecutory function and decisionmaking functions as between different employees within the agency, three cases found no impermissible bias on the basis of combination of functions even though the same official was responsible for more than one function (Grollier, Vanelli, and Melashenko,) The court in Melashenko specifically found that there was no bias as a result of combination of functions but because the hearing officer had a pecuniary interest in the result of his decision.2

3. California Cases – Impartial Adjudicator

Until two recent appellate cases decided, last year, California cases have also rejected claims that a decisionmaker was biased in the absence of pecuniary bias or where the same official or law office was involved in both an adjudicatory and prosecutorial function without walling off one from the other.

a) California Supreme Court

In Haas v. County of San Bernardino, 27 Cal. 4th 1017 (2002) the claimed improper combination of prosecutorial and adjudicatory functions was not specifically at issue. Nonetheless, the Court cited Withrow v. Larkin reiterating that, absent pecuniary bias, decisionmakers are entitled to a presumption of honesty and integrity. It found, however, that due process

2 Attached to this paper is a list of federal cases from other circuits on this issue.

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was violated by the institutional practice in that case of the County retaining hearing officers on an ad hoc basis to adjudicate claims because the hearing officer had a pecuniary bias in ruling in favor of the County in order to secure future business.

By contrast, where there was no pecuniary bias, the California Supreme Court has rejected the claim that decisionmakers were biased. In Dodds v. Commission on Judicial Performance, 12 Cal. 4th 163 (1995) the California Supreme Court found that a commission that had censured a judge was impartial despite claims that the commissioners were biased against him because of collateral litigation against the commission brought by the judge in order to keep the hearing confidential. The court held that “absent persuasive evidence of actual bias, there is no reason to believe that these decision makers [lost] their objectivity.”

Similarly, in Kloepfer v. Commission on Judicial Performance, 49 Cal. 3d 826 (1989) the court found no bias where a judge subjected to disciplinary measures by a commission challenged its determination on the grounds that the commission was carrying on investigations parallel to those being carried out by the Attorney General’s office, and that the director and chief counsel to the commission participated in that investigation. Because there was no evidence of actual bias to overcome the presumption of honesty in the mere existence of a combination of investigative and adjudicative functions and because there appeared to be ample procedural safeguards, there was no impermissible bias shown. Kloepfer appears to be the leading case in California Supreme Court case interpreting Withrow.

b) California Courts of Appeal

In the Courts of Appeal the mere fact that an agency combined prosecutorial and adjudicatory functions has not been deemed sufficient to constitute bias. See e.g. CMPB Friends, Inc. v. Alcoholic Beverage Control Appeals Bd., 100 Cal.App.4th 1250 (2002) (administrative law judge appointed by the Department of Alcoholic Beverage Control (“ABC”) cannot be presumed to be biased towards the ABC prosecutorial function merely because the ABC appoints the ALJ); McIntyre v. Santa Barbara County Employees' Retirement System, 91 Cal.App.4th 730 (2001) (no due process violation because retirement board unilaterally appointed and compensated hearing officers or because of the combination within the board generally of the investigative and adjudicative functions- bias in the

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hearing officers may not be presumed, but must be proven by the person claiming bias.) Love v. City of Monterey, 37 Cal.App.4th 562 (1995) (no due process violation where initial investigation of contested parking tickets is conducted by the same agency that issued the ticket, though the court took particular note of the fact that in this case it was not the same employee); Binkley v. City of Long Beach, 16 Cal. App.4th 1795 (1993) (no bias shown where police chief who was terminated by city manager was afforded a hearing on his termination before a private “professional hearing officer” appointed by the city manager because no evidence that the hearing officer “had a personal or financial stake in the matter3, or that he harbored any animosity toward respondent.”); Blinder, Robinson & Co. v. Tom, 181 Cal.App.3d 283 (1986) (Govt. Code § 11511, part of the APA, is not a violation of due process since there was no showing of actual bias in the fact that the prosecuting agency had discretion as to whether or not to compel the appearance of out of state witnesses sought by the defendant.)

Two California cases found unconstitutional bias based on actual facts showing that the tribunal had a demonstrated personal prejudice towards a class of litigants before it or had a pecuniary bias because the decisionmaking tribunal was composed of competitors of the party who appeared before it. In Bullock v. City and County of San Francisco, 221 Cal. App. 3d 1072 (1990), allegations in plaintiff’s complaint that a tribunal was actually biased against plaintiff and landlords, coupled with proof of bias in the administrative record and a prior appellate finding of such bias was sufficient to state a cause of action for a due process violation in the administration of an ordinance prohibiting conversion of residential hotels to tourist hotels. In American Motors Sales Corp. v. New Motor Vehicle Bd., 69 Cal. App. 3d 983 (1977), he court found due process inadequacies in the procedure afforded automobile dealers whose dealer licenses had been revoked. The review board was (and was required to be) partially made up of automotive dealers. Because the court found that each dealer member of the board had a pecuniary interest in each license termination as a result of being in a competitive posture with the dealer whose license was being revoked, the procedure was found to violate due process.

Bias has also been found where the same individuals were involved in performing both the prosecutorial and adjudicatory functions. For example in Golden Day Schools, Inc. v. State Dept. of Education, 83 Cal. App. 4th

3 Of course, the outcome might have been different had the case been litigated after Haas v. County of San Bernardino, supra, 27 Cal.4th 1017, was decided.

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695 (2000), a private contractor with the state department of education challenged the department’s refusal to renew the plaintiff’s contract. The plaintiff requested review by the department, but objected to the fact that one of the members of the review panel had been primarily responsible for the initial determination not to renew the contract. The court ruled for the plaintiff, observing that “The claim that the combination of investigatory and adjudicatory functions creates an unconstitutional risk of bias has been difficult to sustain, but in federal practice it has been addressed by the rule that no employee involved in investigating or prosecuting a case may participate as an adjudicator.” Because the challenged member of the panel was not removed, the review hearing was a violation of plaintiff’s due process rights.

Similarly, in Applebaum v. Board of Directors, 104 Cal. App. 3d 648 (1980), a physician challenged the suspension of his obstetric privileges, claiming a violation of due process. The appellate court agreed, holding that where the investigative, accusatory, and adjudicatory functions were carried out by the same physician committee members who also provided testimony, created a “difficult position” for that committee.

The court stated:

In the case before us, of course, there was no administrative law judge or other third party involved in the factual determinations which resulted in revocation of plaintiff's obstetrical privileges. The investigation was not conducted by state employees insulated from the adjudicatory body by layers of public bureaucracy; it was done by a group which included the instigator of the charges, had overlapping membership in the body (executive committee) which reviewed both the initial and final decisions and to which the majority of the formal adjudicators later belonged. As a practical matter and without in any way impugning their good faith, the general practitioner and pediatric specialist members of the ad hoc committee were in an extremely difficult position. The charges were brought by one of the two specialists on whom they were accustomed and, indeed, required to rely for obstetrical expertise and with whom they were in frequent and intimate professional contact. His associate supported the charges and the committee was thus

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presented with a solid front of the only special expertise available to it. To presume impartiality of the ad hoc committee in such circumstances goes beyond what can reasonably be expected of human beings in this professional setting. In this situation a realistic appraisal of psychological tendencies and human weakness compels the conclusion that the risk of prejudgment or bias was too high to maintain the guarantee of fair procedure.

104 Cal. App. 3d 648, 659.

The absence of such involvement by the decisionmaking tribunal in a different case involving a physician resulted in the court’s rejection of that claim of bias. See Rhee v. El Camino Hospital Dist., 201 Cal. App. 3d 477 (1988).

Interestingly, in the land use context, a claim of bias was rejected even where a Council member appealed a land use decision to the Council and then decided the appeal as part of the decisionmaking body. BreakZone Billiards v. City of Torrance, 81 Cal. App. 4th 1205 (2000). This case was decided under the California Constitution applying federal due process cases involving the claimed improper combination of adjudicatory and prosecutorial functions. A prior case, Cohan v. City of Thousand Oaks, supra, 30 Cal.App.4th at 555-56 had held that a hearing process was biased where a city council purported to appeal a planning commission decision to itself in the absence of any authority under ordinance to do so. The Court in BreakZone Billiards v. City of Torrance, distinguished Cohan since the Councilmember in the City of Torrance exercised powers granted by local law. 81 Cal. App. 4th at 1240.

The Court in BreakZone Billiards v. City of Torrance spent considerable time discussing the claim that the combination of prosecutorial and adjudicatory functions was evidence of bias.

Thus, it appears that the highest court of this state construes the state Constitution's due process guaranty of a fair and impartial administrative decisionmaker in the same manner as the federal courts have interpreted parallel provisions in the federal Constitution. In other words, mere involvement in ongoing disciplinary proceedings does not, per se, violate due

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process principles. [Conversely, t]hose principles are violated . . . if the official or officials who take part in the proceedings are demonstrably biased or if, in the least, circumstances such as personal or financial interest strongly suggest a lack of impartiality.

The court gave illustrations of cases both which failed to find specific facts demonstrating bias and those which did find bias. Compare Binkley v. City of Long Beach , 16 Cal.App.4th 1795 (1993) (procedure by which a police chief had been discharged and his appeal heard were not fundamentally unfair because the chief of police held his position at the pleasure of the city manager who was free to discharge him without just cause so long as the chief was given the opportunity to convince the employing authority to reverse its decision.) with Mening v. City Council, 86 Cal.App.3d 341 (1978) where the city council was found to be so personally embroiled in the discharge of the police chief that it violated due process when it enhanced the discipline meted out to the police chief by the civil service commission.

Howitt v. Superior Court, 3 Cal. App. 4th 1575 (1992) is the first California case to apply Withrow v. Larkin, supra, 421 U.S. 35 to a context in which the county counsel’s office both represented the department terminating a city employee and advised the decisionmaking tribunal. After reviewing both Withrow and the leading California Supreme Court decision interpreting it, Kloepfer v. Commission on Judicial Performance, supra, 49 Cal. 3d 826 the court observed:

The mere fact that the decision maker or its staff is a more active participant in the factfinding process—similar to the judge in European civil law systems—will not render an administrative procedure unconstitutional.

A more difficult question is presented where the administrative agency chooses to utilize the adversary model in large part but modifies it in a way which raises questions about the fairness of the resulting procedure. Here, for instance, we assume the county constitutionally could have allowed the sheriff or the board of supervisors to review personnel complaints by employees in the sheriff's department. Instead, it created an independent and

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disinterested administrative board to adjudicate disputes between the county and its employees. The board of employment appeals cannot be overruled by another county agency or even by the board of supervisors. The Board does not have its own investigative arm but instead relies on adversary presentations by the employee and affected county agency to illuminate the facts and relevant legal authority. Each party is entitled to be represented by counsel at a formal hearing.

Howitt v. Superior Court, supra, 3 Cal.App.4th at 1582. The court noted that Midstate Theatres, Inc. v. County of Stanislaus, 55 Cal.App. 3d 864, 874 (1976) held that, under due process, the same lawyer could not represent the county assessor and advise the county board of equalization in the same proceeding.

The Court recognized that while flexibility must be present in an administrative proceeding and fact finding and adjudication are not mutually exclusive:

A different issue is presented, however, where advocacy and decisionmaking roles are combined. By definition, an advocate is a partisan for a particular client or point of view. The role is inconsistent with true objectivity, a constitutionally necessary characteristic of an adjudicator.

Howitt v. Superior Court, supra, 3 Cal.App.4th at 1585. The court went on to hold that: “Performance of both roles by the same law office is appropriate only if there are assurances that the adviser for the decision maker is screened from any inappropriate contact with the advocate.” Id at 1586. The agency has the burden of proving that there were sufficient safeguards against employees involved in the prosecution becoming in any way involved in the decision making process. The creation of functionally separate offices is not necessary to establish adequate screening. Id at 1587, n. 4.

After this decision, some city attorneys were of the opinion that the case established a bright line test. Under this view, only a public lawyer who appeared as an advocate in the adjudicatory hearing would play a prosecutorial role. Other city attorneys were more cautious and feared that

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any involvement at the prosecutorial end would disqualify assumption of an advisory role to the adjudicator. A subsequent case has made it clear that the latter view has more currency in the courts. There, the due process limitation on a lawyer or office (without adequate screening) assuming dual prosecutorial and adjudicatory roles was extended even to advice to the prosecutorial arm.

In Nightlife Partners, Ltd. v. City of Beverly Hills, 108 Cal. App.4th 81 (2003) adult entertainment operators were denied renewal of their use permit. They challenged the City’s procedures on the grounds that the attorney who advised the city against granting the renewal in the first place also acted as the adviser to the decisionmaker on appeal from the determination that the application for the renewal was incomplete. Drawing on analogies from the California Administrative Procedure Act, Government Code section 11425.10 (a)(4) and Howitt v. Superior Court, the court found this combination of functions unconstitutional. The court specifically rejected the city’s reliance on cases such as Kloepfer on the grounds that those cases did not involve a combination of functions in the same person, whereas in this case, “dual functions were not held by different sections of a single office, but by a single individual.”

It is worth noting that, while the court in Nightlife Partners, Ltd. v. City of Beverly Hills concluded that the City combined prosecutorial and adjudicatory functions, it never explained why it considered legal advice to a lower level City official about the completeness of a zoning application to be a “prosecutorial” function or the lawyer’s role that of an advocate. Professor Asimow, in his remarks at the 2003 Hastings College of the Law Municipal Law Institute Symposium on due process noted that a prosecutorial role is one in which the person may be said to have a “will to win”.

Also troubling is the court’s observation that while the California Administrative Procedure Act, is not applicable to cities, it may be an appropriate reference point in determining whether a hearing is fair. “[T]o the extent citizens generally are entitled to due process in the form of a fair trial before a fair tribunal, the provisions of the APA are helpful as indicating what the Legislature believes are the elements of a fair and carefully thought out system of procedure for use in administrative hearings.” Nightlife Partners, Ltd. v. City of Beverly Hills 108 Cal.App.4th at 92.

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The blurring of distinctions between investigative and prosecutorial roles and the seeming judicial deference to the APA as the due process gold standard have profound implications. A lawyer’s involvement at the lowest level of a city’s proceedings may render him or her ineligible to provide advice at any other stage of the proceedings, since the APA requires the segregation of adjudicative functions from investigative, prosecutorial or advocacy functions. See Government Code § 114425.10 (a)(4). It also prohibits ex parte contacts, which are common in most cities. See Government Code § 114425.10 (a)(8).

The most recent case on the subject of whether a decisionmaker is biased because of the role played by the city’s lawyer is Quintero v. City of Santa Ana 114 Cal.App.4th 10, (2003). While Howitt and Nightlife Partners held that there is a violation of due process when a single lawyer acts both in a prosecutorial capacity (as an advocate) and as the adviser to the decision maker/adjudicator, in the same matter, Quintero v. City of Santa Ana held that due process is violated where a lawyer who regularly advises the personnel board on other matters appears as an advocate before the board on an unrelated matter, even though the board was advised by a separate lawyer as to that matter. The court reasoned that the ongoing relationship of the lawyer as adviser to the Board is likely to make the Board defer to the position asserted by the lawyer in his advocacy role in the new matter, notwithstanding the fact that the Board had a separate legal adviser as to that matter.

Quintero v. City of Santa Ana goes far beyond any of the reported cases invalidating administrative procedures on due process grounds. It invites due process challenges to the structure of local government institutions and creates a need for a veritable army of lawyers. The court did not even discuss the presumption of honesty and integrity and simply concluded that there was a likelihood of actual bias on the part of the board towards the lawyer acting as the advocate in the proceeding because that lawyer in other circumstances acted as the board’s adviser. Santa Ana’s petition for review has been denied even though the League filed a letter in support of review or in the alternative urged depublication of the case. Local Governments will have to make significant adjustments in their administrative procedures, in order to comply with the limitations imposed by Quintero v. City of Santa Ana.

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IV. Lessons Learned from Due Process Cases Regarding Impartial Decision Makers

Several guidelines emerge from these cases:

• Apply due process principles about the necessity of an impartial decisionmaker to all adjudicatory hearings, since Code of Civil. Procedure Section 1094.5, in effect, imposes due process safeguards, and due process under the California constitution applies to all adjudicatory action.

• The principle that a adjudicator must be impartial applies under both statutory fair hearing and constitutional due process requirements under the United States and California Constitutions.

• The improper combination of functions limitations applies with equal force to any official combining functions, not just lawyers, although the unstated assumption ( for example in Walker v. City of Berkeley, supra, 951 F2d 182 ) is that lawyers are more likely to be perceived as advocates and thus may be more suspect as biased advisers when they play any role, especially in related litigation that could be perceived to taint their impartiality.

• It is improper for the same lawyer (or other official) to be involved in advising the prosecutorial arm and in advising the adjudicatory official or body as to the same matter.

• Two different lawyers from the same law firm or office can be involved as long the individuals engaged in advisory and prosecutorial function are screened from one other i.e. neither knows about or affects anything the other is doing as to the matter. Two separate law offices need not be set up for this purpose.

• It is probably best not to use a lawyer who has advised on an investigatory function for advice to the adjudicator on the same matter, in light of the broad way in which “prosecutorial” functions were defined in Nightlife Partners, Ltd. v. City of Beverly Hills, supra,108 Cal. App.4th 81 and

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the fact that the APA prohibits the combination of adjudicative and investigative functions.

• Do not switch lawyers regularly assigned to advisory functions to a prosecutorial function before the board they advise in order to avoid the problem in Quintero v. City of Santa Ana 114 Cal.App.4th 10.

• No case has yet required that different levels of adjudicators, for example the Planning Commission and Council be advised by different lawyers. Yet there is troubling language in Howitt v. Superior Court, supra, 3 Cal. App. 4th 1575, 1582, which suggests that once an adversary model is used, for example by providing a higher independent level of review, it may be inappropriate to have the lawyer who advised the lower tribunal advise the higher one.4

• It is unclear whether the pecuniary bias problems present when the decision maker, himself is an outside consultant apply when outside counsel is retained solely to advise the decisionmaking body.

Smaller local governments who are faced with a seeming fair hearing mandate that they segregate officials engaged in prosecutorial or investigative function and the lawyers who advise them from other adjudicative level officials and boards and the lawyers who advise them have certain choices to make which are discussed in the next section.

4 One of my astute colleagues observed that the plethora of prosecutors on the California bench may have resulted in a judiciary more prone to perceive administrative due process through a lens distorted by the highly adversarial nature of the criminal justice system. My own observation is that lawyers from the private sector also tend to lean towards a view of due process that more neatly divides functions, since they are usually retained on a transactional basis. Those of us who labor within local government institutional trenches, especially in smaller cities, are painfully aware that local government structures are simply not amenable to being harnessed to the adversarial judicial model. We can, however, take comfort from the admonition in the leading US Supreme Court cases that a great deal of flexibility is permitted in administrative structures and that they must be evaluated in a pragmatic manner weighing several factors. It is up to local government lawyers to educate the judiciary about the flexibility of due process mandates and the impracticability of the adversarial model so that our administrative structures are not savaged on an ad hoc basis without a full appreciation of the budgetary and institutional consequence of the increasingly onerous due process mandate which emerges from each case.

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V. Remedies – Problems-Practice Tip

A. Assign staff to separate prosecutorial or investigative units on the one hand and adjudicative units, which are segregated from one another.

There are some problems with this approach which include whether enough staff exist to assign to the different functions and the fact that the City Attorney is unable to ensure consistency of legal advice if the lawyer assigned to the lowest prosecutorial level cannot be supervised by the more senior lawyer or city attorney herself/himself assigned to the adjudicative level.

B. Withholding Individualized Legal Advice to Prosecutors and Investigators -Providing It Only to Adjudicators.

Cities with limited legal staffs can avoid the improper combination of functions by not providing advice at the lowest prosecutorial or investigative level, on an individualized basis. Thus, for example, while the city attorneys could provide generalized advice about principles and procedures applicable to nuisance abatement or revocation of land use entitlements or renewal of temporary uses and the like, they could wait to provide legal advice regarding the application of the general principles to a particular set of facts until the matter is before the adjudicatory body. With this approach, any legal problems could be reviewed and corrected at the adjudicative level. The disadvantage of this approach is that the absence of legal advice at the lowest level of city involvement may result in inadequate prosecutorial level work, making it impossible to proceed with enforcement of important city laws.

C. Outside Counsel, City Attorney Pooling Arrangement To Advise Adjudicators; Haas Problems of Pecuniary Bias?

If the city believes that legal advice at the prosecutorial or investigative level is critically important, the city attorney could provide that advice and then retain outside counsel for the adjudicatory phase. A question arises as to whether the proscription in Hass v. County of San Bernardino, against

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retaining hearing officers on an ad hoc basis, applies with equal force to a legal adviser to a decisionmaker. This problem can be avoided by entering into a pooling arrangement with other cities to function as advisers for each other’s clients when due process problem arises. The solution is not very satisfactory because outside counsel who have little familiarity with the city’s procedures and ordinances and their enforcement and implementation history will be advising the governing body or other high level adjudicatory body.

In conclusion, the recent cases imposing limitations on the combinations of adjudicative and prosecutorial or investigative functions can be addressed by a careful approach to advising different levels and functions. Unfortunately, our clients may suffer as we withdraw to ivory towers to advise only decisionmakers or propose, what may seem like gargantuan budgets for outside counsel.

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APPENDIX TO DUE PROCESS PAPER ON COMBINING FUNCTIONCIRCUIT COURT CASES OTHER THAN NINTH CIRCUIT

Most cases from federal circuits other than the Ninth Circuit typically failed to find bias.

First Circuit

• Pathak v. Dep't of Veterans Affairs, 274 F.3d 28 (2002) There was no violation of due process where doctor sought review of his seven day suspension and where the director of the center for whom the doctor worked both investigated allegations of sexual harassment and imposed the final sanctions on the basis of his findings and on the basis of the recommendations of an independent review board. “Parties advancing due process arguments based on a combination of investigative and adjudicative functions, and the decision maker's bias allegedly resulting therefrom have a very difficult burden of persuasion to carry. Withrow, 421 U.S. at 47; O'Brien, 544 F.2d at 547. Pathak has not met this burden.” They stated that the mere combination of investigatory and adjudicative functions alone did not amount to a violation of due process.

• Doyle v. Secretary of Health & Human Services, 848 F.2d 296 (1988). A doctor challenged a determination by a peer review organization to suspend his eligibility as a medicare provider, in part, because the organization was charged with both the prosecutorial and adjudicative function. The court, relying on Withrow, rejected this contention saying that that was insufficient to demonstrate bias in the proceeding.

• Gorman v. University of Rhode Island, 837 F.2d 7 (1988). Student of state university challenged a disciplinary hearing on the grounds that it violated his due process rights. Par t of his challenge rested on the facts that the hearing committee was advised by the director of student life who had no voting privileges on the board who later appeared to rebut the plaintiff’s challenges to the committee’s determination. The court held that without more, this mere combination of functions was insufficient to overcome the presumption of impartiality.

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Second Circuit

• Cousin v. Office of Thrift Supervision, 73 F.3d 1242 (1996). After the Office of Thrift Supervision imposed a ban on petitioner’s right to participate in any banking functions at an institution regulated by the office, because of allegations of bribery and aiding and abetting bribery, petitioner sought challenged that determination on the grounds that the acting director of the office had supervisory authority over the investigative, prosecutorial, and final decision making processes. Without discussing whether these functions were actually carried out by other employees, the court rules that under Withrow, the mere combination of functions is not a violation of due process.

• Greenberg v. Board of Governors of Fed. Reserve Sys., 968 F.2d 164 (1992). Where petitioners were barred from the banking industry subject to the findings of an ALJ in the Federal Reserve System, petitioners charged that their hearing violated due process because the ALJ’s former law clerk had worked for the Office of the Comptroller of Currency in the investigation of petitioners, this same agency was the prosecutorial agency that sought to bar petitioners from the business. The court found that there were no circumstances to suggest that this biased the ALJ in any way.

Third Circuit

• Seidman v. Office of Thrift Supervision, Dep't of the Treasury, 37 F.3d 91 (1993). Petitioner, barred from participating in the banking industry by the Office of Thrift Supervision, challenged the determination of the office on the grounds that the director had the authority to authorize the investigation of charges, determine whether charges should be brought, issue notice of charges, and make final determinations about the charges as to both law and fact. “His argument implies that bias is inherent in such a process because it permits a single person to act as prosecutor, investigator and adjudicator as to the severe sanctions of section 1818(e). We think Withrow implies the contrary and actual bias or a likelihood of bias must appear if an otherwise valid administrative sanction is to be overturned because of a denial of due process. Though in Withrow a board, not a single person, combined the functions which the Director of OTS possesses under section 1818(e)(1), we do not think

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that distinction is controlling.” They went on to say, “Any interest the Director might have in sustaining his own charges is no different than the board had in Withrow.” Therefore, the petitioner failed to overcome the presumption of honesty.

Fourth Circuit

• Doolin Sec. Sav. Bank, F.S.B. v. FDIC, 53 F.3d 1395 (1995). Bank’s FDIC coverage was removed when it refused to pay the premiums set by the agency. He challenged the determination of his “risk assessment” on which his premium was based and refused to pay the increased premium. Petitioner challenged an administrative hearing to determine the validity of the removal of his coverage because, he said, the FDIC had a pecuniary interest in the outcome of the determination in that it would receive higher premiums if the ALJ found the risk assessment correct. Such institutional bias cannot impugn the presumption of honesty of the ALJ.

• Morris v. Danville, 744 F.2d 1041 (1984). Police chief, dismissed for alleged misconduct, was granted a review hearing, but the final decision lay with the City Manager who had also instituted the investigation. Without a showing of “bias stemming from an extrajudicial source,” the city manager was entitled to the presumption of honesty and integrity and his decision did not violate the petitioner’s due process rights.

Fifth Circuit

• Ford Motor Co. v. Tex. DOT, 264 F.3d 493 (1993). Ford challenged a statute in Texas that prohibited the manufacturer from selling its own preowned cars online and the hearing before the Texas Department of Transportation enforcing that law against them. It was alleged that due process was violated because the same employee, the director of the department “administers” both the employee who brought the enforcement action and the employee who acted as an ALJ in the hearing. The court stated that absent a showing of pecuniary interest by the judge or that the judge had been the target of personal abuse by the petitioner, the allegation of bias had to overcome both the presumption of honesty and integrity and the presumption that those making decisions affecting the public are doing so in the public interest, which Ford failed to do.

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• Valley v. Rapides Parish Sch. Bd., 118 F.3d 1047 (1997) (Leading Case). “The problem of a procedural defect arises when the decision makers have prejudged the facts to such an extent that their minds are "irrevocably closed" before actual adjudication. Id. at 446. Nevertheless, bias by an adjudicator is not lightly established. The movant must overcome two strong presumptions: (1) the presumption of honesty and integrity of the adjudicators; and (2) the presumption that those making decisions affecting the public are doing so in the public interest. Yet, both the Fifth Circuit and the Supreme Court have recognized that a movant challenging the two presumptions may convince a court that "under a realistic appraisal of psychological tendencies and human weaknesses, conferring investigative and adjudicative powers on the same individuals poses such a risk of actual bias or prejudgment that the practice must be forbidden if the guarantee of due process is to be adequately implemented.” Petitioner, the superintendent of the school district, met this burden by proving that four of the school board members who both instigated the termination action against her and adjudicated her hearing had publicly acknowledged a prior grudge against her.

• Marine Shale Processors v. United States EPA, 81 F.3d 1371 (1996). Petitioners challenged the refusal of the EPA to grant them a permit. On review of the initial denial of the permit and during the prosecution by the EPA of an action against the petitioners for violation of permit requirements, two individuals gave rise to due process concerns. One, Dr. Davis, had a role that placed him as supervisor of both the enforcement action and the permitting process. This was found to be unremarkable. Second, Ms. Sykes, an attorney for the EPA both drafted the final determinations of fact (made by Davis’ permitting investigation team) and conclusions of law based on those findings that served as the EPA’s statement for denial of the permit. She had also been involved in the enforcement action both during pre-trial and early in the trial itself. The court held that Ms. Sykes was entitled to the normal presumption of honesty and stated, “MSP's burden is to persuade us that the use of Ms. Sykes posed "such a risk of actual bias or prejudgment that the practice must be forbidden if the guarantee of due process is to be adequately implemented." Withrow, 421 U.S. at 47. In this case, Ms. Sykes' made no decision at all. She had no power to decide whether to grant MSP its permit, nor did she have power over those making

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that decision. Her role consisted entirely of articulating the thoughts and decisions of others.”

Sixth Circuit

• Benko v. Judges' Retirement Sys., 1998 U.S. App. LEXIS 7602 (6th Cir. Mich. Apr. 15, 1998). Judge challenged determination of Judge Retirement System’s determination of benefits on various grounds. The court ruled that JRS had not violated the judge’s procedural due process rights merely because the office of the attorney general both sat on the decision making board and advised JRS as an advocate opposing the judge’s action. The court ruled that, following Withrow, there was no Due Process violation in the combination of roles in a single agency. Further, they noted that no one attorney in the AG’s office carried a dual role, one sitting on the decision board while others advised JRS

• Navistar Int'l Transp. Corp. v. United States EPA, 941 F.2d 1339 (1991). Petitioner challenged a denial by the EPA of a variance regarding certain paint coating lines in its factory. The EPA had denied the variance while at the same time prosecuting sanctions against the company for violations of the regulations from which the variance was sought. The court ruled that the mere fact that the agency was both prosecuting the company and determining the legitimacy of a variance request, was insufficient to meet the petitioner’s burden of proof in claiming bias and a denial of due process.

• Cobb v. Yeutter, 889 F.2d 724 (1989). No due process violation was found where a judicial officer, charged with reviewing the decisions of ALJs in administrative actions brought by the department of agriculture, effectively becomes the determination of the secretary of agriculture, who was, in effect the party who brought the charges in the first place. The judicial officer is specifically kept insulated from both the ALJ and the secretary and makes his decisions on an objective basis.” Finally, as the JO notes, "it has become fairly routine in these types of cases for those respondents lacking a meritorious defense to assail the administrative process, to claim denial of due process, and to cite the judicial officer for bias." In re Danny Cobb and Crockett Livestock Sales Co., P. & S. Docket No. 6587, slip op. at 74 (Feb. 13, 1989). These due process challenges

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have been consistently rejected by most courts; in fact, this court has recently rejected arguments as to JO bias similar to those made by Cobb.”

• Kessel Food Markets, Inc. v. NLRB, 868 F.2d 881 (1989). Employer challenged a determination by the National Labor Relations Board on the grounds that the board was responsible for both pursuing injunctions against employers who violate federal labor laws and for deciding, through its own hearing process, whether such a violation has, in fact occurred. The court held that Withrow was dispositive of the issue of combination of functions generally and without showing “special facts or circumstances which make the risk of unfairness intolerably high,” the mere combination of functions did not amount to a due process violation.

• Utica Packing Co. v. Block, 781 F.2d 71 (1986) (Leading Case). USDA brought a regulatory action against petitioner. The appointed judicial officer who decided the case found against the USDA who then removed the judge, appointed a replacement and sought a rehearing on the issue. Though the court acknowledged that a party who claims bias in an administrative hearing on the basis of a combination of functions necessarily has a heavy burden to carry, the fact that the agency had replaced a judge following an adverse ruling and then sought a rehearing before a hand-picked replacement was sufficient evidence of an intolerable risk of bias.

Seventh Circuit

• Gradeless v. Vannatta, 15 Fed. Appx. 346 (2001). Due process challenge to procedure by which petitioner was disciplined by Conduct Adjustment Board of the prison authority. The same member of the board, as petitioner’s “employer” (petitioner was a “law advocate” under the supervision of one of the board members) had initiated an investigation into petitioner’s alleged violation of certain prison rules and then made the decision to “fire” him from his position as lay advocate. While Whitford v. Boglino requires that a decision maker be disqualified if she was “substantially involved in the investigation of charges against an inmate,” the petitioner still had to do more than merely allege bias under Withrow, and so the case was remanded to give the petitioner a chance to offer evidence of bias.

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• Staples v. City of Milwaukee, 142 F.3d 383 (1998). There was no due process violation where the same employee both participated in the investigation of a city employee’s fight with another employee and the adjudication of the pre-termination hearing. The court specifically noted however that this was a pre-termination hearing and not a full adjudicatory hearing, implying that this combination might have been unacceptable, for example, at a post-termination review hearing.

• Panozzo v. Rhoads, 905 F.2d 135 (1990) (Leading Case). There was no violation of terminated police officer’s due process rights in the mere fact that the police chief both made the initial determination that disciplinary action was needed and presided over the hearing for cause. The court reasoned that the petitioner had to overcome the presumption that the decision maker was “a person of conscience and intellectual discipline, capable of judging a particular controversy fairly on the basis of its own circumstances,” and that petitioner had failed to do that.

Eighth Circuit

• Gordon v. Hansen, 168 F.3d 1109 (1999). There was no violation of due process where the director of the Nebraska Department of Banking was vested with the final decision as to a determination by the department that petitioner was not a licensed executive and, as a result, his employer bank had to fire him in his capacity as CEO, charges the department had been partially involved in investigating in the first. The court ruled that this mere combination of functions was insufficient to overcome the presumption of honesty vested in the director.

Tenth Circuit

• Messina v. City of Fed. Heights, 2000 Colo. J.C.A.R. 4799 (2000). Plaintiff sued the city, his employer, following his demotion and suspension because of allegations of sexual harassment. The same city official both investigated the charges against him and presided at the disciplinary hearing, but that was insufficient to overcome the presumption of honesty.

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Eleventh Circuit

• Holley v. Seminole County School Dist., 755 F.2d 1492 (1985). A teacher challenged her dismissal on the grounds that the hearing officer assigned to run the teacher’s review hearing was an attorney regularly employed by the school board as an attorney as well as some evidence that he, the attorney, had helped “prepare the case” for the board. The court noted that “the case law generally allows for an administrative tribunal on which sit actors who have played both an investigative and adjudicatory role.” They then held that because “Holley has not shown any actual bias on the part of Hornsby, we hold that the fact that Hornsby sat as hearing examiner at Holley's hearing does not violate due process.”

D.C. Circuit

• Wildberger v. AFGE, 318 U.S. App. D.C. 194 (1994). There was no violation of due process where disciplinary action against local union president was investigated by the national union president who also appointed a hearing board to review the charges and was vested with the final decision to remove the local president. Absent “special facts” indicating bias, the mere combination of investigative, prosecutorial, and decision making power vested in the union president by the union’s constitution did not violate due process. The court specifically noted that the hearing in question was not criminal in nature and that such a combination of function in a criminal hearing would be a due process violation.

• Chemical Waste Management, Inc. v. U.S. Environmental Protection Agency, 873 F.2d 1477 (1989). A company challenged procedure for administrative hearings concerning corrective actions taken by the agency. They challenged the procedure on the grounds that agency attorneys were employed as hearing officers “provided only that they have "had no prior connection with the case, including the performance of any investigative or prosecuting functions.” (EPA internal regulatory standard). The court said, “The Supreme Court has held that even the combination, in a single administrative decision maker, of investigative and adjudicative functions--which the EPA regulations plainly forbid--"does not, without more, constitute a due process violation", rather, "the special facts and

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circumstances of the case . . . [must indicate] that the risk of unfairness is intolerably high." Withrow v. Larkin, 421 U.S. 35, 58, 43 L. Ed. 2d 712, 95 S. Ct. 1456 (1975) Moreover, in challenging a particular adjudication on this ground, the complaint must "overcome the presumption of honesty and integrity in those serving as adjudicators" by showing "a risk of actual bias or prejudgment." Id. at 47. In light of Withrow's stringent standard for an "as applied" attack on procedures that allow the combination of investigative and adjudicative functions, we find no basis for petitioners' broad facial challenge, which by its nature deprives us of the particularized information necessary to evaluate a claim of probable bias.”

• Porter County Chapter of Izaak Walton League, Inc. v. Nuclear Regulatory Com., 606 F.2d 1363 (1979). Petitioners challenged the constitutionality of NRC’s decision not to have a hearing to overturn the decision of a regulatory director who refused to initiate a proceeding to revoke a permit as requested by petitioners. They claimed that the NRC was acting as a judge in its own case by deciding the issue of the propriety of the decision of one of its own employees. The court stated, “Even as to adjudications, the combination in one administrative body of adjudicative with other functions violates constitutional guarantees only when the combination "poses such a risk of actual bias or prejudgment that the practice must be forbidden if the guarantee of due process is to be adequately implemented." Withrow v. Larkin, 421 U.S. 35, 47, 95 S. Ct. 1456, 1464, 43 L. Ed. 2d 712 (1975). See also Hortonville Joint School District No. 1 v. Hortonville Education Ass'n, 426 U.S. 482, 96 S.Ct. 2308, 49 L. Ed. 2d 1 (1976); FTC v. Cement Institute, 333 U.S. 683, 700-03, 68 S.Ct. 793, 92 L.Ed. 1010 (1947). Any claim of inherent bias must "overcome a presumption of honesty and integrity in those serving as adjudicators." Withrow v. Larkin, 421 U.S. at 47, 95 S.Ct. at 1464.” No due process violation was found.

Summary

In the twenty five cases cited here comprising the majority of cases following Withrow v. Larkin on the issue of combination of powers, only two found actual bias. In the Valley case, actual bias was proven by public statements by decision making individuals indicating a personal bias against the petitioner. The second, Utica Packing Co. involved a prosecuting agency that, following a ruling by an ALJ that was adverse to

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the agency, fired the ALJ and appointed a new judge and sought a rehearing of the issue. Further, in seven of the cases, (none of them finding impermissible bias) the court was dealing with a single employee who was at least partially involved in multiple roles (Pathak, Greenberg, Seidman (which dealt with the question explicitly), Marine Shale Processors, Staples, Panozzo, and Messina. It is worth in particular noting that no bias was found the Holley case from the Eleventh Circuit, in which an attorney often hired to represent the school board was the presiding officer over a hearing instituted by the board, but in which the attorney had had no role prior to adjudicating it.

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