Board of Educ. of Carlsbad Mun. Schools v. Harrell

• Decision Date: 02 September 1994
• Docket Number: No. 20856,20856
• Parties: , 94 Ed. Law Rep. 966, 9 IER Cases 1693 BOARD OF EDUCATION OF CARLSBAD MUNICIPAL SCHOOLS, Applicant-Appellee, v. Roger L. HARRELL, Respondent-Appellant.
• Court: New Mexico Supreme Court

Page 511

882 P.2d 511

118 N.M. 470, 94 Ed. Law Rep. 966, 9

IER Cases 1693

BOARD OF EDUCATION OF CARLSBAD MUNICIPAL SCHOOLS Applicant-Appellee, v. Roger L. HARRELL, Respondent-Appellant.

No. 20856.

Supreme Court of New Mexico.

Sept. 2, 1994.

[118 N.M. 473] W.T. Martin, Jr., P.A., W.T. Martin, Jr., Carlsbad, for appellant.

Simons, Cuddy & Friedman, C. Emery Cuddy, Jr., Charles D. Noland, Santa Fe, for appellee.

OPINION

MONTGOMERY, Chief Justice.

This appeal raises two broad questions: (1) Whether a statute providing for compulsory arbitration of a dispute between an individual and an agency of the state is constitutional; and (2), if it is, whether the same statute's sharp constriction of judicial review of the arbitrator's decision is likewise constitutional.

In the context of this case, the more specific questions presented are (1) whether NMSA 1978, Section 22-10-17.1 (Repl.Pamp.1993), providing for compulsory arbitration of an appeal from a school board's decision to discharge a certified school employee is generally constitutional; and (2) if it is, whether the limitation on judicial review of the arbitrator's decision to issues of "corruption, fraud, deception or collusion" in Subsection 22-10-17.1(M) is also constitutional.

We hold that the overall statutory procedure, calling for compulsory arbitration of these disputes, is constitutional, but that the limitation on judicial review in Subsection 22-10-17.1(M) is not. Because the trial court whose decision is here under review upheld the statute in all respects, we reverse its judgment confirming the arbitration award and remand for further proceedings.

I. FACTS

The Board of Education of the Carlsbad Municipal School District (the Board) hired Roger L. Harrell as the school district superintendent in 1978. Harrell, a certified school administrator, continued his employment with the school district pursuant to successive two-year contracts until March 1990.

By early 1990 the relationship between Harrell and the Board had severely deteriorated. On January 16, 1990, the Board met in executive session and evaluated the superintendent's job performance. During this meeting, a majority of the Board expressed dissatisfaction with Harrell's performance in a number of areas and decided to suspend him with pay pending an investigation. As a result of the investigation, the Board issued a notice of intent to discharge on March 12, 1990. The notice detailed twenty-three separate charges or grounds alleged to constitute "good and just cause" for discharge.¹ The Board scheduled a meeting on March 12 to offer Harrell an opportunity to respond to the allegations. Harrell attended the meeting with counsel but, after objecting to the format of the meeting, departed before presenting his response to the charges. The Board subsequently voted to discharge him and issued a written decision to that effect.

Harrell appealed the Board's decision to an arbitrator in accordance with Section 22-10-17.1.² The arbitrator heard eighteen days of evidence presented by the parties, as well as argument and briefing of legal issues by counsel, and affirmed the Board's action in a seventy-eight page arbitration award consisting of 282 findings of fact and 37 conclusions of law. The arbitrator concluded that the Board had good and just cause to discharge Harrell, based on the following facts (among others): Harrell had failed to keep proper records and to complete required forms for travel authorization and reimbursement; had adopted a standard for his own reimbursement below that expected for all other employees in the school district; and had failed to keep accurate records of his attendance, sick leave, annual leave, and other absences from his job. The arbitrator also found that Harrell had abused his office by using school district personnel and school district facilities to carry on his own personal business affairs, by facilitating and influencing the award of a contract to a firm in which his son was involved, and by failing to make full and complete disclosure of this conflict to the Board. The arbitrator made various other findings, including one of insubordination by openly expressing his defiance of a Board directive.

The Board applied to the district court for confirmation of the award, and Harrell responded by requesting that the court declare Section 22-10-17.1 unconstitutional and the arbitration award void. The court rejected Harrell's arguments and confirmed the award on August 25, 1992.

Harrell appeals from the court's judgment confirming the arbitration award. He argues that compulsory arbitration, as mandated by Section 22-10-17.1, (1) denies due process in that the Rules of Civil Procedure and the Rules of Evidence do not apply to the proceedings, the statute does not require the arbitrator to be an attorney or a judge, and the statute unconstitutionally limits judicial review of the arbitrator's decision; (2) abridges the right to trial by jury; (3) unconstitutionally denies access to the courts; and (4) is an unconstitutional delegation of judicial power. We discuss these issues in this opinion, though grouped somewhat differently and in a somewhat different order.

II. COMPULSORY ARBITRATION OF SCHOOL-EMPLOYMENT DISPUTES

As just indicated, Harrell mounts his due-process challenge to Section 22-10-17.1 on two distinct grounds: that the procedures in the arbitration proceeding itself are deficient, and that the judicial-review provision in the statute improperly limits review. The Board correctly recognizes that this appeal involves the same two basic issues: the constitutionality of compulsory arbitration as the exclusive method by which a certified school employee may obtain review of his or her discharge from employment and the constitutionality of restricting judicial review to issues involving "corruption, fraud, deception or collusion." We discuss the first of these issues in Part III of this opinion and the second in Part IV. Before proceeding with that discussion, we think it helpful to trace briefly the legal history of school-employment disputes in New Mexico and to discuss, in general, the procedure currently provided by New Mexico law for resolving those disputes: compulsory arbitration.

A. History of School-Employment Disputes

School-employment disputes in New Mexico have historically been resolved by the State Board of Education (the State Board). The legislature first defined the extent of the State Board's power to resolve grievances of discharged school teachers in 1925, when it amended a 1923 law to require that no teacher could be discharged without "full hearing and the right of appeal to the state board of education." NMSA 1929, Sec. 120-1105. The State Board was given the power to institute legal proceedings, at which it was required to "explain the true intent and meaning of the law, and [to] decide without expense to the parties concerned, all controversies and disputes that arise under it, and their decision shall be final." NMSA 1929, Sec. 120-101. When a teacher was discharged, he or she had a right to appeal to the State Board, but the State Board's decision was final.

The constitutionality of this statute (then compiled as NMSA 1941, Sec. 55-101) was challenged in McCormick v. Board of Education, 58 N.M. 648, 274 P.2d 299 (1954). The appellants argued in McCormick that the State Board, as a part of the executive branch of government, had been given judicial powers under Section 55-101 in violation of Article III, Section 1, of the Constitution. They further contended that the statute was unconstitutional because it failed to provide for judicial review of the Board's decision.

This Court held that the judicial powers conferred upon the State Board by the legislature "fall clearly within the constitutional authority conferred upon the State Board of Education for 'the control, management and direction of all public schools,' " and that within the area prescribed by Article XII, Section 6, of the Constitution (creating the State Board and defining its powers) "the decisions of the State Board of Education are final and conclusive as between the parties, and not subject to review." McCormick, 58 N.M. at 660-61, 274 P.2d at 307. This holding was qualified, however, by the Court's recognition that the judiciary retained jurisdiction over purely legal questions and that the State Board's action "would be subject to review on the ground that it was wholly arbitrary, unlawful, unreasonable or capricious." Id. at 661, 274 P.2d at 307.

The statutory scheme governing appeals from decisions of local school boards to discharge certified employees evolved from the time of McCormick to provide specifically for review by the New Mexico Court of Appeals of an employee's appeal to the State Board for a determination of whether the State Board had acted arbitrarily, unreasonably, unlawfully, or capriciously. See NMSA 1953, Sec. 77-8-17 (Supp.1973); NMSA 1978, Sec. 22-10-20. This scheme was replaced by N.M. Laws 1986, Chapter 33, Section 25, the current version of which is compiled as Section 22-10-17.1. The hearing on review of a local school board's decision is now held before an independent arbitrator instead of before the State Board, and judicial review of the arbitrator's decision is limited to whether "the decision was procured by corruption, fraud, deception or collusion." See Secs. 22-10-17.1(A), (M).

The questions before us are whether an independent arbitrator (in place of the State Board) may review a local board's decision and issue an arbitration award and whether that award may properly be subjected to the limited review contemplated by Subsection 22-10-17.1(M).

B. Voluntary vs. Compulsory Arbitration

Normally, arbitration is a process in which parties voluntarily contract to select an impartial third person--an arbitrator--to whom they refer their dispute for a decision based on evidence and arguments before the...