Cherokee Nation Entertainment LLC v. McInerney, (2011)

• Decision Date: 05 April 2011
• Docket Number: SC-2010-10
• Parties: CHEROKEE NATION ENTERTAINMENT LLC, APPELLANT v. LISA MCINERNEY, APPELLEE
• Court: Judicial App Tribunal Court Cherokee Nation

CHEROKEE NATION ENTERTAINMENT LLC, APPELLANT v. LISA MCINERNEY, APPELLEE

No. SC-2010-10

Supreme Court of the Cherokee Nation

April 5, 2011

Appeal from the District Court of the Cherokee Nation Honorable John Cripps, District Judge

For the Appellant: Andrew C. Wilcoxen, Wilcoxen & Wilcoxen; For the Appellee: Terry Bigby

Before: Kyle B. Haskins, Justice (Justice Haskins wishes to acknowledge the assistance of Tricia Low, Attorney at Law Minnesota Bar Association, for her assistance and research regarding this opinion.

AFFIRMED FOR THE REASONS SET FORTH HEREIN

The Court has reviewed the findings and conclusions of the District Court in light of the record from the Employee Administrative Review Panel(EARP) hearing and briefs of counsel.We find that Cherokee Nation Entertainment Corporate Employee Services Policy & Procedure, No. CR-ES941 impermissibly placed the burden of proof upon Lisa McInerney, a terminated CNE employee, who has been an employee for at least one (1) year at the time of her discharge, to establish that her termination was not for cause.The Court also finds that the EARP Hearing Officer erred as a matter of law when he concluded that the Business Record Exception to the prohibition against hearsay evidence under Rule 803(6) of the Federal Rules of Evidence applied.

FACTUAL AND PROCEDURAL HISTORY

On July 30, 2006, Lisa McInerney(hereafter "Appellee"), while on duty as a Black Jack Dealer of the Cherokee Nation Enterprises(CNE) Casino located in Sallisaw, Oklahoma, was observed sweating profusely, displaying a rapid rate of speech that was sometimes slurred, and uncontrollable body movements.When confronted by supervisors regarding possible drug use, Appellee agreed to submit to an oral swab drug test.CNE employee drug testing is provided for and governed by Cherokee Nation Enterprises Corporate Human Resources Policy and Procedure, Substance Abuse and Drug Testing, No. CR-HR410.

Appellee's oral swab sample was collected and mailed to Global Lab Solutions and Clinical Reference laboratory, a third-party testing facility, for gas chromatic spectrometer testing.Following the receipt of positive drug test results, specifically methamphetamine, Appellee was afforded a pre-termination hearing.Appellee was thereafter formally terminated from her employment on August 25, 2006.It is undisputed that Appellee had been an employee of CNE in excess of one (1) year at the time of her termination.

I.APPEAL TO THE EMPLOYEE ADMINSTRATIVE REVIEW PANEL

In compliance with Cherokee Nation Entertainment Corporate Employee Services Policy & Procedure, No. CR-ES941(CR-ES941), Appellee challenged her termination to the Employee Administrative Appeal Review Panel of Cherokee Nation Entertainment.The matter was heard by Administrative Hearing Officer Stephen P. Gray(hereafter, The "Hearing Officer") on October 20, 2006.The Hearing Officer, pursuant to the Hearing Procedures contained in CR-ES941, placed the burden upon the Appellee to show that her termination was not for good cause.

During the EARP hearing, the Hearing Officer permitted admission of the test results of Appellee's saliva swab drug test, over Appellee's objection.The Hearing Officer found that the Business Record Exception to the prohibition against hearsay evidence under Rule 803(6) of the Federal Rules of Evidence applied.Thereafter, the Hearing Officer entered judgment on February 2, 2007, sustaining termination of Appellee's employment.

II.APPEAL TO THE DISTRICT COURT

Appellee timely appealed the Hearing Officer's findings to the Cherokee Nation District Court("District Court").Appellee claimed that the Hearing Officer erred in several matters of law and fact and that she was terminated without cause in violation of Article XII of the Cherokee Nation Constitution.Appellee specifically asserted that she was not terminated for cause because the drug test results were erroneous and were admitted into evidence without proper foundation and in violation of CNE's own drug testing policies.

The District Court(the Honorable John Cripps), applying appellate de novo review, found that the drug test results were improperly admitted into evidence by the Hearing Officer under the Business Record Exception.The District Court also found that the remaining evidence was insufficient to justify the termination of Appellee.The District Court's February 1, 2010, Order, reinstated the employment of the Appellee.

III.APPEAL TO THE SUPREME COURT

Appellant, CNE, seeks review of the findings and conclusions of the District Court, with REVERSED the decision of the EARP Hearing Officer.Appellant urges that the District Court's exclusion of Appellee's drug test result was a misapplication of the rule against hearsay and that the District Court's ruling did not recognize CNE policy that an EARP Hearing Officer is not bound by the formal rules of evidence.Appellant asserts upon appeal that the District Court committed two reversible errors of law: (1) In excluding Appellee's drug test results, and (2) In imposing a different standard for evidence than that followed by the EARP Hearing Officer.

REVIEW

These issues are properly before this Court pursuant to Article VIII, Section 4 of the Constitution of the Cherokee Nation and Title 51 Cherokee Nation Code Annotated ("CNCA")§1025.

I.DUE PROCESS.The Cherokee people, through adoption of their Constitutions, have a sound history of extending to employees of the Cherokee Nation a system of protections affording Due Process rights.These rights include policies and procedures of discipline, termination, a right of hearing before the EARP, a right to appeal to the District Court of the Cherokee Nation, and a Constitutional right of appeal to this Court.Constitution of the Cherokee Nation (1999), Article XII;Cherokee Nation Human Resource Policy, Title 51 CNCA §1001 et seq.;In re: The Termination of William Bush, JAT 2000-05D;Watkins v. Cherokee Nation, etal., JAT 2002-01;Cantrell v. Cherokee Nation, JAT 1997-01;Looney v. Cherokee Nation Bingo Outpost, JAT 1996-05;Standingwater v. Cherokee Nation Bingo Outpost, JAT 1995-12.

The Tribal Council of the Cherokee Nation has the Constitutional authority and the duty to adopt rules and procedures for an employee's right of appeal before this Court.The Council further has the general poser to enact laws for the good of the Nation.Cherokee Nation Constitution 1999, Article V. Section 7.

II.TERMINATION FOR CAUSE.This Court in McCoy v. Cherokee Nation of Oklahoma, JAT 2000-06, when interpreting Article XII of the 1975 Constitution of the Cherokee Nation, determined that an employee of the Cherokee Nation who has served in a position at least one (1) year acquires a property right which "guarantees the continued employment of employees except for cause".Appellee, as a member of the Cherokee Nation is afforded the protections of Article XII of the Cherokee Nation's 1999Constitution, and as an employee of the Cherokee Nation who served in an employment position for more than one (1) year has a protected property right, and cannot be terminated except for cause.McCoy, id.;In re: The Termination of William Bush, JAT 2001-09.

III.BURDEN OF PROOF.The Bush Court's 2000 opinion appears in conflict with CR-ES941, which was promulgated in 2008.The conflict is as to which party has the burden of proof at the EARP administrative hearing.The Bush Court, in reviewing the applicable burden of proof applicable to an Employee Appeals Board Hearing, found: "In the EAB hearing procedure, the Nation was required to first show that the termination of Mr. Bush was for cause."In Re: Bush, at page 5.The Hearing Procedures contained within CR-ES941, at page 4, provides, in part: "In employee appeals hearings, the former employee shall present its evidence to show that the termination was not for cause, CNE may then present evidence that the termination was for cause, and the former employee shall have an opportunity to present rebuttal evidence. à".

IV.SCOPE OF REVIEW.Review by this Court is limited to the record made before the EARP Hearing Officer.Title 51 CNCA, Chapter 10 §1027;Carter v. the Cherokee Nation Gaming Commission, JAT 2003-14(record on appeal limited in scope to record made and considered by the Gaming Commission).The Carter Court found:

The scope of review by this Court in Gaming cases is limited.Our review is restricted to the record made and considered by the Gaming Commission and we must give deference to the administrative expertise of the Commission.We may not set aside or reverse a decision of the Commission unless it is arbitrary and capricious, unsupported by substantial evidence or contrary to law.(citingTitle 4 CNCA 1994 §19(c))

The applicable section of the EARP is modeled after the Oklahoma Administrative Procedures Act, Title 75 O.S. §321.Under interpretive case law, this Court does not re-weigh the evidence, but is constrained to examine the record made before the Hearing Officer for the EARP, and determine whether there is any competent evidence to support his decision.If such evidence exists, the Hearing Officer's...