Johnson v. Elkin

¶1concurring specially-

¶2A clue to the agony which this Court goes through when confronted by an appeal under the Administrative Agencies (Uniform) Practice Act (Chapter 28-32, NDCC) is hidden in three simple words found in Benson v. N. D. Workmen’s Comp. Bureau, 250 N.W.2d 249, 250 (N.D.1977): “after many conferences.” The comprehensive opinion in Reserve Mining Co. v. Herbst, 256 N.W.2d 808 (Minn.1977), indicates that we haven’t been alone in our agony. As long as we permit it, the Legislature, the administrative agencies, the lawyers representing administrative agencies, and the lawyers who represent clients in proceedings before administrative agencies, all will have to continue to grope for solutions. Normally we blame the Legislature, or the administrators, or the lawyers for such things but, in this ease, I believe the Court cannot escape responsibility for some of the confusion.

¶3Even though I recognize the compelling argument in the dissent, I now must concur with the conclusions reached by Justice Vogel because I deem it necessary that we make the first move to get our ducks in a row so that others who are concerned can know what they can do if they would like to eliminate some of the mass confusion. As a former administrative agency legal advisor for twenty-one years, this is not my first contact with the problem and, as the author of the opinion in Benson, supra,I feel an obligation to help get us off dead center.

¶4This “uniform” Act was enacted by the Twenty-Seventh Legislative Assembly (Ch. 240, S.L.1941). It contained provisions for hearings before administrators; recording testimony; findings of fact, conclusions, and decision of agency; appeals to the district court; the preparation of specifications of error; and scope of and procedure on appeal (to the district court). It further provided that “the judgment of the district court . . . may be reviewed in the Supreme Court on appeal in the same manner as any case tried to the court without a jury may be reviewed . . ..”

¶5In 1941, when this language was used, appeals of cases tried to the court without a jury meant that § 7846 of the Supplement to the Compiled Laws of 1913, as amended by Chapter 208, S.L.1933 (the so-called Newman Law), applied. (Until repealed by Ch. 311, S.L.1971, it was found at § 28-27-32, NDCC.) There was no hint that the Supreme Court review was of anything other than the “judgment of the district court.” There was at least an implication, because of the common practices at the time, that the judgment had to be supported by the district court’s findings of fact, conclusions of law, and order for judgment.

¶6The real complication was hidden in § 19, Ch. 240, S.L.1941 (now § 28-32-19, NDCC), wherein it is stated that “the court [meaning the district court] shall affirm the decision of the agency unless it shall find that such decision or determination is not in accordance with law, or that it is in violation of the constitutional rights of the appellant, or that any of the provisions of this act have not been complied with in the proceedings before the agency, or that the rules or procedure of the agency have not afforded the appellant a fair hearing, or that the findings of fact made by the agency are not supported by the evidence, or that the conclusions and decision of the agency are not supported by its findings of fact.” (This provision was not changed until the amendment made by Chapter 287, S.L.1977.)

¶7This nice sounding language described neither beast nor fowl, but some kind of hybrid. It imposed an appellate function upon a trial court, but restricted it in such a way that neither a trial nor an appellate posture resulted. The consequences were that it had to be mostly ignored, not only by *132administrators, lawyers, and trial judges but by the Supreme Court, because of the requirement in the original § 21 that the review here, also, be “in the same manner as any case tried to the court without a jury.” See, for example, Morel v. Thompson, 225 N.W.2d 584 (N.D.1975), where we said that “it is the findings of fact of the Bureau that we must sustain if supported by substantial evidence,” but then said, “we have reviewed the findings of the trial court and conclude that they are supported by substantial evidence.”1

¶8Ultimately, this Court faced a part of the problem when it decided Geo. E. Haggart, Inc. v. North Dakota Work. Comp. Bur., 171 N.W.2d 104 (N.D.1969). The Court was not unanimous — -the present Chief Justice Er-ickstad authoring a four-to-one majority opinion, and the then Chief Justice Teigen dissenting. Many times since, Haggart has been followed and relied upon, sometimes applied when the factual situation didn’t warrant it.

¶9The 1975-1977 Interim Committee on Judiciary “C” of the North Dakota Legislative Council studied administrative law and proposed the amendment of § 28-32-21. The Legislative Council Report to the Forty-fifth Legislative Assembly, 1977, at pages 150-151, states as follows:

“Section 28-32-21 presently states that the judgment of the district court in an appeal from a decision of an administrative agency may be reviewed in the Supreme Court on appeal in the same manner as any case tried to the court without a jury may be reviewed. The Supreme Court has said its review is the same as in district court where the evidence considered is confined to the record filed with the court after which the decision of the agency is affirmed unless the court finds that: (1) the decision is not in accordance with law, (2) the decision is in violation of constitutional rights, (3) any of the provisions of Chapter 28-32 have not been complied with, (4) the rules of procedure have not afforded the appellant a fair hearing, (5) the findings of fact are not supported by the evidence, or (6) the conclusions and decision of the agency are not supported by its findings of fact. Section 28-32-21 would provide that Supreme Court review be coextensive with that done in district court.”

¶10To say that the judgment of the district court is to be reviewed in the Supreme Court in the same manner as provided in § 28-32-19 is a latent ambiguity. Section 28-32-19 does not provide a manner of review of the judgment of the district court — it provides a manner of review of the determination of the administrative agency. The dissent in this case would have us adopt a view that would leave us with other problems because of some significant language in § 28-32-19. That section more nearly suggests to me that the Legislature intended that (1) constitutional questions cannot and need not be raised before an administrative agency [the Legislature might decide otherwise after reading The Authority of Administrative Agencies to Consider the Constitutionality of Statutes, 90 Harv.L.Rev. 1682 (1977)], (2) laws which authorize an agency to violate a citizen’s constitutional rights may be challenged when there is an unconstitutional decision, and (3) constitutional questions (whether relating to a law or a decision) can be raised for the first time on appeal to the district court. Then, because § 28-32-21 indicates that the review on appeal to the Supreme Court is in the same manner, it has to mean that we not only determine whether the district court made a proper decision on questions first raised before it, but, when necessary, we also redetermine whether the administrator made the correct decision. For an analogous circumstance, consider the two-appeal court situation discussed in Graver Tank & Mfg. Co. v. Linde Air Prod. Co., 336 U.S. 271, 275, 69 S.Ct. 535, 93 L.Ed. 672 (1949), and 5A Moore’s Federal Practice, ¶ 52.12, Two-Court Rule.

¶11*133We avoided the real question in Benson, supra,and the real question does not appear to have been considered at all in Snyder’s Drug Stores v. North Dakota St. Bd. of Ph., 202 N.W.2d 140 (N.D.1972). From my research, I conclude that Bensonand Snyder’s Drug Storeshave been the only cases before this Court where that clause in § 28-32-19, relating to raising constitutional issues, was clearly applicable. Neither case handled the issue.

¶12Cases which appear to have reiterated the general rule that one who seeks a benefit under a statute thereby waives the privilege of challenging its constitutionality, or the general rule that issues cannot be raised for the first time on appeal, fly in the face of § 28-32-19. See, for example, Family Center Drug v. North Dakota St. Bd. of Pharm., 181 N.W.2d 738 (N.D.1970); City of Fargo v. Annexation Review Commission, 123 N.W.2d 281 (N.D.1963); International Printing Pressmen & Assist. U. v. Meier, 115 N.W.2d 18 (N.D.1962); Hazelton-Moffit Special School Dist. No. 6 v. Ward, 107 N.W.2d 636 (N.D.1961); Petition of Village Board of Wheatland, 77 N.D. 194, 42 N.W.2d 321 (1950); Ethen v. North Dakota Workmen’s Compensation Bureau, 62 N.D. 394, 244 N.W. 32 (1932); State v. Mundy, 53 N.D. 249, 205 N.W. 684 (1925); Cofman v. Ousterhous, 40 N.D. 390, 168 N.W. 826, 18 A.L.R. 219 (1918); and Minneapolis, St. P. & Ste. M. Ry. Co. v. Nester, 3 N.D. 480, 57 N.W. 510 (1893). Each of the cases can be distinguished in that there was no statutory provision like § 28-32-19 involved.

¶13Even though, generally, a party may not present, in a reviewing court, a wholly new issue, there are cases in which, in order to avoid a miscarriage of justice, appellate courts have considered questions of law neither raised nor passed upon at the trial. See Helvering v. Wood, 309 U.S. 344, 60 S.Ct. 551, 84 L.Ed. 796 (1940), and Hormel v. Helvering, 312 U.S. 552, 61 S.Ct. 719, 85 L.Ed. 1037 (1941).

¶14In the interest of justice, even while expressing our concern about the problem of scope of review on the double appeal provided for in Chapter 28-32, we should not hide behind the confusion and keep ducking the real questions which are presented to us. I accordingly concur in Justice Vogel’s conclusion that we should consider the constitutional question in this case.

¶15I also concur in the conclusion that the judgment of the district court voiding the PSC determination should be reversed, but only because the presumption of validity of the statute has not been overcome. I would not foreclose a further attempt by Johnson, or anyone else, from bringing up some “heavy artillery”2 to challenge the constitutionality of the statute.

¶18(dissenting).

¶19I dissent from the opinion of Justice Vo-gel.

¶20The proposed opinion either fails to give full credit to § 28-32-21, North Dakota Century Code, “Review in Supreme Court,” which incorporates § 28-32-19, or seemingly misconstrues its provisions.

¶21The appeal to the Supreme Court is on the same issues as those appealed to the district court. The decision of the district court does not change the scope of review on appeal to the Supreme Court. An appeal to the Supreme Court of an administrative agency’s decision, which was first appealed to the district court, can be compared to a change of venue. The issues and the records remain the same except the review is conducted by another judicial body.

¶22The issues raised on appeal to the district court must be limited to the record made before the administrative agency and as presented to the district court [additional evidence by stipulation notwithstanding]. The issues presented to the district court are the same issues which will be reviewed by the Supreme Court on appeal. It naturally follows that the decision of the district court does not give rise to new issues. See the well-reasoned decision in Reserve Mining Co. v. Herbst, 256 N.W.2d 808 (Minn.1977), where the appeal is governed by a statute substantially the same as ours. The district court does not try the case de novo, *134but rather on the record, and therefore the Supreme Court, on appeal, is not governed by the district court’s decision. No deference to the trial court’s decision and reasoning other than that given to another appellate court is appropriate. Under the proposed opinion the decision of the trial court would determine the issues before the Supreme Court on appeal, which is not in accordance with § 28-32-19, NDCC.

¶23We are well aware of the criticism that it is not proper to change the rules in the middle of the game. Likewise, it is improper to change issues after the hearing has been held before the administrative agency.

¶24Out of fairness to the administrative agency, the constitutional question should be raised at that level so as to give all parties the opportunity to present evidence which would be material to the ultimate decision of the constitutional question.

¶25The fact that neither party on appeal to the district court questioned or challenged the propriety of raising the issue of the constitutionality of a statute which was not raised or disclosed in the record of the administrative hearing should not be controlling. Jurisdiction cannot be conferred by consent or agreement. Neither can jurisdiction be acquired through silence. Similarly, the constitutionality of a statute is not properly before the court merely because the parties may have agreed to submit the constitutionality of the statute on appeal. A challenge of the constitutionality of a basic statute should not be permitted on appeal unless it was actually raised at the hearing before the administrative agency. Alternative pleadings, and even inconsistent alternative pleadings, have been permitted and are recognized. Consequently, this should not be a problem at the administrative hearing level.

¶26The opinion made reference to Family Center Drug v. North Dakota State Board of Pharmacy, 181 N.W.2d 738 (N.D.1970), wherein the court said:

“It is our view in support of that conclusion that if this constitutional issue is to be considered, it should be considered only after it has been adequately and properly briefed by both sides and after it has been submitted in the first instance to the trial court for its determination.” 181 N.W.2d at 746. [Emphasis added.]

¶27The reference to “the trial court” obviously must have meant “trial level,” or the administrative agency, otherwise it would not fit the situation under discussion because the court had under consideration an appeal from an administrative agency. The same result was reached in Benson, infra.

¶28On the scope of and procedure on appeal from determination of an administrative agency, which apply to both the district court and this court, § 28-32-19, NDCC, in part provides as follows:

“After such hearing, the court shall affirm the decision of the agency unless it shall find that any of the following are present:

1. The decision or determination is not in accordance with the law.

2. The decision is in violation of the constitutional rights of the appellant.”

¶29Neither of these provisions, without straining, are broad enough to cover the constitutionality of a basic statute. The term, “not in accordance with law,” obviously must refer to the law administered by the agency and does not imply a constitutional question. Subsection (2) refers to the decision and not to the basic statute which is being administered by the administrative agency. I construe this subsection to have reference to proceedings leading up to the decision or to contents of the decision which violate the constitutional rights of the appellant, as distinguished from the constitutionality of a basic statute which is administered by the administrative agency.

¶30In Benson v. North Dakota Workmen’s Compensation Bureau, 250 N.W.2d 249, 250-251 (N.D.1977), we said:

“. . . while Section 65-10-01, NDCC, of the Workmen’s Compensation Act provides for appeals to the district court from the Bureau’s decision, the ap-pealable issues under the Act do not include the constitutionality of the Act itself. . . . The issue of the constitutionality of the agricultural exclusion was not raised before the Workmen’s Compensation Bureau, and therefore it cannot *135be a part of that agency’s record filed with the district court on appeal.”

¶31Allowing a challenge on the constitutionality of a basic statute for the first time on appeal from an administrative agency’s decision as proposed by the majority opinion would in effect give a greater standing and recognition to administrative agencies’ procedures than to procedures in the district court from which an appeal is taken to this court. The court has repeatedly held that constitutional questions not heard in the trial court will not be heard on appeal. In Odegaard v. Craig, 171 N.W.2d 133 (N.D.1969), this Court said the rule is elementary.

¶32If the constitutionality of a statute should be allowed to be raised for the first time on appeal, then the Legislature should so provide by amending § 28-32-19, NDCC, or in the alternative the Legislature should authorize and direct the administrative agencies to consider a constitutional question and render a decision thereon.

¶33For the foregoing reasons, I respectfully dissent from the majority opinion.