Erdahl v. Groff, 20027

• Decision Date: 06 May 1998
• Docket Number: No. 20027,20027
• Citation: 576 N.W.2d 15,1998 SD 28
• Parties: Kristine ERDAHL, Charging Party and Appellee, v. Dennis A. GROFF, Appellant.
• Court: South Dakota Supreme Court

Page 15

576 N.W.2d 15

1998 SD 28

Kristine ERDAHL, Charging Party and Appellee, v. Dennis A. GROFF, Appellant.

No. 20027.

Supreme Court of South Dakota.

Argued Dec. 4, 1997.

Decided March 18, 1998.

Rehearing Denied May 6, 1998.

Michael P. Reynolds, Gregory A. Eiesland of Quinn, Eiesland, Day & Barker, Rapid City, for charging party and appellee.

Donald P. Knudsen, James S. Nelson of Gunderson, Palmer, Goodsell & Nelson, Rapid City, for appellant.

STEELE, Circuit Judge.

¶1 This discretionary appeal is from an order issued by the circuit court reversing a decision of the South Dakota Department of Commerce, Division of Human Rights, and remanding the case to the Division for further proceedings. We affirm.

FACTS AND PROCEDURAL HISTORY

¶2 Kristine Erdahl (Erdahl) alleges sexual harassment by Dennis Groff (Groff) when she worked as an intern and paralegal in the Pennington County State's Attorney's office from October 1993 to May 20, 1994. During most of this period, she worked primarily with Groff, who was the Pennington County State's Attorney.

¶3 In July 1994, Erdahl filed a charge of discrimination with the Division of Human Rights, pursuant to SDCL 20-13-10, ¹ alleging that Groff engaged in unwelcome sexual conduct which was used as a basis for employment decisions (quid pro quo) and which altered the conditions of her employment (hostile work environment).

¶4 Division investigated Erdahl's complaint in accordance with SDCL 20-13-28. ² The investigator reviewed approximately sixteen transcripts of interviews submitted by Groff's attorney and seven unsigned statements and conducted thirty interviews. There was no adversarial hearing at this stage of the proceedings, and witnesses were not cross-examined. The record was reviewed under the standard set forth in SDCL 20-13-28.1, which, at the time of the investigation, provided:

If the Division of Human Rights determines there is no probable cause to support the allegations of a charge after an investigation of the charge in accordance with § 20-13-28, the division shall issue an order dismissing the charge. This shall be considered a final agency action for purposes of appeal under chapter 1-26.

¶5 Division investigator analyzed Erdahl's claim in light of the elements a complainant must show in a sexual harassment case:

1. That the complainant belongs to a protected group;

2. That the complainant was subject to unwelcome sexual harassment;

3. That the harassment was based on sex;

4. That the harassment affects a "term, condition, or privilege" of employment; and

5. That the employer knew or should have known of the harassment in question and failed to take proper remedial action.

Huck v. McCain Foods, 479 N.W.2d 167 (S.D.1991); Hall v. Gus Constr. Co., Inc., 842 F.2d 1010 (8thCir.1988); Meritor Savings Bank FSB v. Vinson, 477 U.S. 57, 106 S.Ct. 2399, 91 L.Ed.2d 49 (1986).

¶6 The investigator concluded there was a sexual relationship between Groff and Erdahl, but that it was voluntary, and that "[a] preponderance of the evidence indicates that Erdahl welcomed Groff's behavior towards her and was not offended." (emphasis original).

¶7 Erdahl also claimed she terminated the sexual relationship some time at the end of April 1994, and that Groff retaliated by taking work away from her, ignoring her, and moving her desk. She argued such conduct constituted conditional sexual harassment (quid pro quo). The investigator concluded her claims in this regard were "shallow at best." Division adopted the investigator's report and Erdahl's complaint was dismissed. She appealed to the circuit court.

¶8 The circuit judge held the Division erred as a matter of law in applying a "preponderance of the evidence" standard, reasoning that a probable cause determination under SDCL 20-13-28.1 dictated a lower threshold of proof requirement. The court adopted the definition of "probable cause" in a civil context from Black's Law Dictionary and held the correct standard for a probable cause determination in a civil case is:

An apparent state of facts found to exist upon reasonable inquiry which would induce a reasonable, intelligent, and prudent person to believe, in civil cases, that a cause of action existed.

Black's Law Dictionary 1365 (4thed. 1968).

¶9 The case was remanded to the Division for a redetermination. On remand, Division incorporated its original investigative findings and concluded that even under the circuit court's definition of "probable cause," Erdahl failed to establish a claim. It issued its determination of no probable cause on April 6, 1995.

¶10 Erdahl appealed to the circuit court again, claiming the Division merely paid lip service to the circuit court's direction, and still failed to apply the appropriate standard of proof. During the pendency of the appeals process, the legislature enacted SDCL 20-13-1.1, which defined the term "probable cause:"

For purposes of findings under this chapter, probable cause is defined as a determination that it is more likely than not that the charging party and members of a class, or both, were discriminated against based on a violation of this chapter. The likelihood that discrimination occurred is assessed based upon evidence that establishes a prima facie case, and if the respondent has provided a viable defense, whether there is evidence of pretext. ³

¶11 Groff argued on appeal SDCL 20-13-1.1 established a "preponderance of the evidence" standard and the statute should be applied retroactively in this case.

¶12 The circuit court held the Division still did not apply the appropriate standard; SDCL 20-13-1.1 should not be applied retroactively; and even if it was so applied, there was still evidence in the record to support a finding of probable cause. The circuit court issued its own finding of probable cause, and remanded the case to the Division for further proceedings. ⁴

¶13 Groff then requested an intermediate appeal from the circuit court's determination, which we granted.

ISSUE

¶14 Whether the circuit court erred in determining there is probable cause to support a claim of sexual harassment.

STANDARD OF REVIEW

¶15 The question presented in this case concerns the circuit court's definition and finding of "probable cause." In reviewing the question, we must be mindful the Supreme Court makes the same review of the administrative agency's decision as did the circuit court, unaided by any presumption the circuit court's decision was correct. SDCL 1-26-37; Piper v. Neighborhood Youth Corps, 90 S.D. 443, 241 N.W.2d 868 (1976); In Re Templeton, 403 N.W.2d 398 (S.D.1987). The Court must give great weight to findings made and inferences drawn by the agency on question of fact. Kennedy v. Hubbard Milling Co., 465 N.W.2d 792 (S.D.1991); Spitzack v. Berg Corp., 532 N.W.2d 72 (S.D.1995). Conclusions of law and mixed questions of law and fact are fully reviewable. Id.; Permann v. Dep't of Labor, 411 N.W.2d 113 (S.D.1987); Tieszen v. John Morrell & Co., 528 N.W.2d 401 (S.D.1995). Where an ultimate conclusion can be arrived at only by applying a rule of law, the result is a "conclusion of law." Hartpence v. Youth Forestry Camp, 325 N.W.2d 292 (S.D.1982).

ANALYSIS

¶16 The definition of "probable cause" employed by the court is a question of law and as such is fully reviewable with no presumption attaching to the determination of the circuit court. State v. Zachodni, 466 N.W.2d 624 (S.D.1991); see also State v. Byrd, 398 N.W.2d 747 (S.D.1986). The first question is whether the circuit court properly defined the standard of "probable cause." We hold that it did.

Retroactivity of SDCL 20-13-1.1

¶17 Groff argues SDCL 20-13-1.1 establishes the "probable cause" standard of proof as "preponderance of the evidence," and the statute should be applied retroactively to this case. We disagree with the latter assertion.

¶18 First, there is nothing in SDCL 20-13-1.1 which directs retroactive application. SDCL 2-14-21 states: "No part of the code of laws enacted by § 2-16-13 shall be construed as retroactive unless such intention plainly appears." We have consistently upheld the directive of the statute. See State of Minn. ex rel. Hove v. Doese, 501 N.W.2d 366 (S.D.1993); West v. John Morrell & Co., 460 N.W.2d 745, 747 (S.D.1990); Schmaltz v. Nissen, 431 N.W.2d 657, 663 (S.D.1988).

¶19 Groff argues SDCL 20-13-1.1 is procedural and therefore falls under the exception that statutes which affect remedy or procedure as opposed to those affecting substantive rights are to be given retroactive effect. Lyons v. Lederle Laboratories, 440 N.W.2d 769, 770 (S.D.1989). We believe statutes delineating standards of proof, because they affect the substantive rights of litigants in general, are substantive in nature, and therefore should not be applied retroactively. Parke-Davis & Co. v. Stromsodt, 411 F.2d 1390 (8thCir.1969); Fitzsimons v. Frey, 153 Neb. 124, 43 N.W.2d 531 (1950).

¶20 Groff further contends the test set forth in Brown v. John Morrell & Co., 511 N.W.2d 277 (S.D.1994) should be applied. That test is:

First, the decision to be applied nonretroactively must establish a new principal of law, either by overruling clear past precedent on which litigants may have relied or by deciding an issue of first impression whose resolution was not clearly foreshadowed....

Id. at 278 (quoting Fisher v. Sears, Roebuck & Co., 88 S.D. 1, 214 N.W.2d 85 (1974)).

¶21 The Brown test applies when the question whether a new rule or principle of law resulting from a Supreme Court interpretation of a statute should be applied retroactively. Because we are not interpreting SDCL 20-13-1.1, in this case, the Brown test does not apply. We conclude SDCL 20-13-1.1 should not be applied retroactively.

Definition of "Probable Cause"

¶22 The term "probable cause" as used in SDCL 20-13-28.1 denotes a standard of proof--a threshold that a claimant must meet in supporting the allegations of a charge. The circuit court defined that standard as of...