95 2297 La.App. 1 Cir. 6/28/96, Dyer, In re

• Decision Date: 28 June 1996
• Citation: 677 So.2d 1075
• Parties: 95 2297 La.App. 1 Cir
• Court: Court of Appeal of Louisiana — District of US

Page 1075

677 So.2d 1075

95 2297 La.App. 1 Cir. 6/28/96

In re George DYER and Fire Apparatus Specialist, Inc.

No. 95 CA 2297.

Court of Appeal of Louisiana First Circuit.

June 28, 1996.

Writ Denied Oct. 11, 1996.

Elizabeth A. Alston, New Orleans, for Appellants George Dyer and Fire Apparatus Specialist.

R. Gray Sexton, Maris LeBlanc McCrory, Patricia H. Douglas, Baton Rouge, for Appellee Commission on Ethics for Public Employees.

Before WATKINS, FOIL and TANNER, ^* JJ.

[95 2297 La.App. 1 Cir. 2] FOIL, Judge.

This case is on appeal from a decision of the Commission on Ethics for Public Employees (Commission), holding that George Dyer and Fire Apparatus Specialist, Inc. (FAS) violated certain provisions of the Code of Governmental Ethics. After a thorough review of the record, we affirm.

FACTS

The Third District Volunteer Fire Department (TDVFD) originated in 1951. It is governed by its articles of incorporation and by-laws, with governing authority vested in the Board of Directors. On July 16, 1987, the TDVFD entered into a contract with the Fire Protection District No. 3 for the Parish of Jefferson (Parish), to be the sole provider of fire protection services.

Mr. Dyer has been involved with the TDVFD for over thirty years, serving as Assistant Fire Chief since June, 1992. In addition to his involvement with the volunteer fire department, he owns 40% of FAS, and his wife owns another 20%. Mr. Dyer serves as President of FAS and is on its Board of Directors. He receives a bi-weekly salary from the company. FAS sells new fire trucks and equipment, and repairs old fire trucks and equipment. Between 1989 and 1993, the TDVFD paid FAS $198,230 for sales and services rendered.

After conducting a formal investigation, the Commission issued charges against Mr. Dyer and FAS on June 22, 1994. A public hearing was held, after which the Commission concluded that both Dyer and FAS violated the Code in the following respects:

1) Dyer violated La.R.S. 42:1111C(2)(d) by rendering services for compensation to FAS when FAS had a business or financial relationship with his agency, the TDVFD;

2) Dyer violated La.R.S. 42:1112B(2) and (3) by participating, as the Assistant Fire chief of the TDVFD, in certain transactions in which FAS had a substantial economic interest when he owned a substantial economic interest in and was an officer and employee of FAS;

[95 2297 La.App. 1 Cir. 3] 3) FAS violated La.R.S. 42:1113A by entering into transactions that are under the supervision or jurisdiction of the agency (the TDVFD) of the public servant, Dyer, who owned a controlling interest in FAS; and

4) FAS violated La.R.S. 42:1117 by paying compensation to Dyer at a time when he was prohibited from receiving it under Section 1111C(2)(d).

The Commission fined Mr. Dyer $1,000.00 for each of his two code violations, and fined FAS $1,000.00 for each of its two code violations. The Commission further ordered that Mr. Dyer and FAS cease doing business with the TDVFD as long as Mr. Dyer continues his involvement as a volunteer fire fighter and for one year from the date he ceases his relationship with the TDVFD. Mr. Dyer and FAS filed the instant appeal.

STANDARD OF REVIEW

Generally, administrative agency adjudication is subject to judicial review under Section 964 of the Louisiana Administrative Procedure Act. La.R.S. 49:964. Under Subsection G, a reviewing court may affirm the decision of the agency, remand the case for further proceedings, or it may reverse or modify the decision if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are: (1) in violation of constitutional or statutory provisions; (2) in excess of the agency's statutory authority; (3) made upon unlawful procedure; (4) affected by other error of law; (5) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion; or (6) manifestly erroneous in view of the reliable, probative, and substantial evidence on the whole record. Accordingly, the manifest error test is used in reviewing the facts as found by the agency, as opposed to the arbitrariness test used in reviewing conclusions and exercises of agency discretion. Save Ourselves, Inc. v. Louisiana Environmental Control Commission, 452 So.2d 1152, 1159 (La.1984).

[95 2297 La.App. 1 Cir. 4] DUE PROCESS

Due process requires that a person be informed of the charges against him; be given the opportunity to present evidence; be represented by counsel; be allowed to cross-examine witnesses against him; and be given the right to appeal. U.S. Const. amends. V, XIV; La. Const. art. I, § 2. To be accorded relief for a violation of due process rights, the person must show on review that he was prejudiced by the violation. La.R.S. 49:964G.

First, appellants contend that the Commission's procedural rules fail to provide fundamental due process protections. Specifically, they contend there is inadequate notice of the methods and procedures available to defend claims.

The procedural rules governing the Commission are contained in the Ethics Code at La.R.S. 42:1141. Also, the Code states that, except as otherwise provided, all proceedings conducted before the Commission shall be subject to and in accordance with the Louisiana Administrative Procedure Act, La.R.S. 49:950, et seq. We find that the instant proceeding was conducted in accordance with that Act, which has been determined not to violate due process. Cox v. Louisiana Department of Agriculture and Forestry, 93-0420 (La.App. 1 Cir. 3/11/94), 636 So.2d 950, 954, writ denied, 94-1597 (La. 9/30/94), 642 So.2d 875.

Appellants further contend that the Commission has not adopted rules which comply with the requirements of the Administrative Procedure Act. More particularly, they note that the ethics rules fail to address and prohibit the impermissible mingling of prosecutorial and adjudicative functions of the Commission. They complain that the same attorney is both counsel to and prosecutor for the Commission. Appellants argue that, by allowing counsel to serve in this dual capacity, they cannot be afforded a fair and impartial hearing.

This argument has been raised in several prior cases dealing with the Commission and has been rejected. See, e.g., Tebbe v. Commission on Ethics for Public Employees, 526 So.2d 1354, 1362 (La.App. 1st Cir.1988), rev'd on other grounds, 540 So.2d [95 2297 La.App. 1 Cir. 5] 270 (La.1989); In re Beychok, 484 So.2d 912, 928 (La.App. 1st Cir.), rev'd on other grounds, 495 So.2d 1278 (La.1986). Following the jurisprudence, we also reject appellants' contention.

Appellants also assert that the Commission erred by prohibiting them from taking depositions of the members. They claim the testimony sought was critical to the determination of procedural and substantive due process issues and was not sought for the purpose of recusal.

This issue was one of several raised in a writ application filed by appellants with this court. The writ was denied in that respect on February 23, 1996 in docket no. 95 CW 2434. As such, we shall not address it in this appeal.

PREJUDGMENT OF FACTS

Appellants argue that the Commission relied on prejudged issues of fact and law in rendering its decision, namely, the IT and Wilcox, cases. ¹ They contend the Commission erroneously relied on evidence from those cases to determine the outcome of the instant case. The Commission, on the other hand, notes that appellants fail to point out which facts it allegedly prejudged. It argues it did not rely on evidence from those cases, but rather relied on the legal analyses applied therein, as it had every right to do. We agree with the Commission and find this argument to be without merit.

PUBLIC INTEREST

Appellants contend that the Commission's decision does not serve the public interest and "creates unnecessary barriers to public service." First, they assert that there was no conflict of interest in this case in that Dyer's private interest in FAS did not conflict with his voluntary, non-compensated duties as Assistant Fire Chief with the TDVFD. Further, they argue that the Commission's prohibition on the TDVFD's purchase of goods and services from FAS will have a significant impact on the fire department. For example, it will have to travel long distances to [95 2297 La.App. 1 Cir. 6] find another fire department specialist who deals with fire department equipment.

On the contrary, the Commission notes that it is bound by the Code to protect the public's interest, part of which includes disallowing involvement in volunteer organizations which results in private financial gain. FAS was paid almost $200,000 by Dyer's volunteer fire department. Such an obvious conflict goes against the purpose of the Code. Again, we agree with the Commission that this case involves the precise conflict situation that the Code prohibits. Appellant's argument in this regard has no merit.

APPLICATION OF THE CODE

The central issue in this case is whether the TDVFD is engaged in the performance of a governmental function so as to subject its members to application of the Code. Appellants argue they are not within the jurisdiction of the Code because Dyer is not a "public employee." They assert that the TDVFD is a private non-profit organization and not a public or governmental entity.

Mr. Dyer also argues that, regardless of whether the rest of the Code applies to him, he falls under an exception that states participation in a bona fide organized public volunteer fire department is not precluded "when no compensation is received." La.R.S. 42:1123(1).

The Commission found as fact that Mr. Dyer is a "public employee" for purposes of application of the Code. It also found that, in his capacity as Assistant Fire Chief of the TDVFD, Mr. Dyer is engaged in the performance of a governmental function and is therefore subject to the provisions of the Code. The Commission...