Georgia Gulf Corp. v. Board of Ethics for Public Employees

• Citation: 694 So.2d 173
• Parties: 96-1907 La
• Decision Date: 09 May 1997
• Court: Supreme Court of Louisiana

Page 173

694 So.2d 173

96-1907 La. 5/9/97

In re GEORGIA GULF CORPORATION and Robert Harrison, and Kenneth E. Samaha and Sales Tax, Inc. v. BOARD OF ETHICS FOR PUBLIC EMPLOYEES.

No. 96-C-1907.

Supreme Court of Louisiana.

May 9, 1997.

R. Gray Sexton, Patricia Hammonds Douglas, Maris LeBlanc McCrory, Baton Rouge, for Applicant.

Murphy James Foster, III, Steven Bernard Loeb, Breazeale, Sachse & Wilson, Baton Rouge; Bradley Michael Grissom, Baton Riuge, for Respondent.

[96-1907 La. 1] KNOLL, Justice. ^*

This case arises out of a petition for judicial review of the administrative decision of the Commission on Ethics for Public Employees (Ethics Commission). The Ethics Commission filed charges against a former senior agent for the Louisiana Department of Revenue and Taxation, as well as a wholly owned corporation that the former agent created, and the corporation that hired the former revenue agent to determine tax overpayments it made to the state of Louisiana. After conducting an evidentiary hearing, the Ethics Commission concluded that ethical violations occurred and imposed fines.

The Court of Appeal, First Circuit, reversed the determination of the Ethics Commission, finding that the alleged ethical violators were not afforded a fair tribunal which comported with the requirements of due process. ¹ We granted [96-1907 La. 2] certiorari ² to consider the due process questions raised in the appellate court, particularly those dealing with the involvement of the Ethics Commission prosecutor in the adjudicatory process and the appellate court's interpretation of Allen v. State Board of Dentistry, 543 So.2d 908 (La.1989). For reasons which follow, we affirm the decision of the First Circuit.

FACTS

The Louisiana Department of Revenue and Taxation (Department) employed Kenneth Samaha from February 1982 until June 12, 1992. In the last year of his employment, Samaha served as a revenue senior agent and had the duty of supervising agency audits. On May 12, 1992, the Department began an audit of Georgia Gulf Corporation (Georgia Gulf). As a senior revenue agent, Samaha was tasked with supervising the Department's audit of Georgia Gulf.

On May 21, 1992, Samaha informed the Department that he would resign, effective June 12, 1992. After his resignation, Samaha, through his newly formed corporation, Sales Tax, Inc., contracted on June 22, 1992, with Georgia Gulf to conduct an independent audit to identify overpayments of state and parish taxes that Georgia Gulf had made. Robert Harrison, an in-house tax specialist for Georgia Gulf, negotiated the contract between Georgia Gulf and Samaha/Sales Tax, Inc.

When Samaha's involvement with Georgia Gulf was brought to the attention of the Department, R. Gray Sexton, the executive secretary appointed by the Ethics Commission, investigated the complaints. Subsequently, ethical charges were [96-1907 La. 3] brought against Samaha, ³ Sales Tax, ⁴ and Georgia Gulf ⁵. The Ethics Commission then conducted a public hearing on the charges. During the course of the hearing which spanned intermittently over six days, Sexton served both as prosecutor and counsel to the Ethics Commission. At its meeting on January 12, 1995, the Ethics Commission ⁶ concluded that Samaha, Sales Tax, Georgia Gulf, and Harrison were in violation of the Code of Governmental Ethics, and instructed Sexton's staff to prepare a proposed opinion for the Ethics Commission to consider.

By letter dated January 26, 1995, Sexton notified Samaha, Sales Tax, and Georgia Gulf that the Ethics Commission had reached a decision and that he would send them a draft of the proposed opinion. At that time, Sexton also told them that Samaha and Sales Tax were fined $10,000.00 and Samaha was prohibited from assisting a client for compensation before the Department. Georgia Gulf was fined $10,000.00, and Harrison ⁷ was prohibited from entering into a transaction on behalf of Georgia Gulf with the Department for a period of five years. Sexton further advised that they could make editorial and substantive changes to his staff's proposed opinion and they could submit their own proposed opinion for the Ethics Commission's consideration.

[96-1907 La. 4] On March 10, 1995, Sexton circulated his proposed opinion and invited the input of Samaha, Sales Tax, and Georgia Gulf. He further advised them that the Ethics Commission would consider the proposed opinion at its meeting on March 30-31, 1995, and that they could appear at the meeting to present their suggestions. The parties were later notified that the hearing was continued to April 28.

In the meantime, Samaha and Sales Tax hand-delivered a letter to Sexton on April 6, 1995, detailing changes to the proposed opinion of the Ethics Commission. Although Georgia Gulf formally objected to the proposed opinion in a pleading dated April 10, 1995, neither Georgia Gulf nor Harrison submitted any changes.

In accordance with the notice provided the parties, the Ethics Commission issued its opinion on April 28, 1995. With minor changes ⁸, the Ethics Commission adopted Sexton's proposed opinion.

ACTION OF THE COURT OF APPEAL

The appellate court pretermitted the assignments of error raised by Samaha, Sales Tax, Georgia Gulf and Harrison. Using its discretionary right to review issues in the interest of justice, the court reversed the Ethics Commission on the issue of due process.

Relying on our earlier decision in Allen, 543 So.2d 908, the appellate court focused on the intermingling of Sexton's prosecutorial role and his role as the formulator of the findings of fact and conclusions which constituted the opinion of the Ethics Commission. The appellate court held that Allen prohibited the Ethics Commission from utilizing Sexton to draft its findings of fact and opinion. In [96-1907 La. 5] reaching this determination, it further held that Allen had de facto reversed that portion of In re Beychok, 484 So.2d 912 (La.App. 1 Cir.1986), ⁹ which had found no impropriety in the use of the counsel for the Ethics Commission to prepare the commission's opinion.

DUE PROCESS UNDER ALLEN

The Ethics Commission contends that the appellate court misconstrued Allen and further erred in finding that Allen reversed part of In re Beychok, 484 So.2d 912. It further contends that the appellate court decision conflicts with our holding in Gulf States Utilities v. PSC, 578 So.2d 71 (La.1991), and another First Circuit decision, In re Dyer, 95-2297 (La.App. 1 Cir. 6/28/96); 677 So.2d 1075; writ denied, 96-1967 (La.10/11/96); 680 So.2d 641, which sanctioned the procedure at issue herein.

From the outset, the Ethics Commission asserts that the due process issues were not raised in the administrative proceedings, were not assigned as error on the appellate level, and are not properly before us. We disagree.

La.Code Civ.P. art. 2129 provides that an assignment of errors is not necessary in any appeal. Code of Practice of 1870, Art. 896, one of the source provisions for La.Code Civ.P. art 2129, provided that if the trial court record was not certified by the clerk of court of the lower court as containing all of the testimony, the supreme court would only judge the case on a statement of the facts. Code of Practice of 1870, Art. 897, another source provision for La.Code Civ.P. art. 2129, provided that an appellant who did not rely wholly or in part on a statement of facts, an exception to the judge's opinion, or a special verdict, but on an error of law appearing on the face [96-1907 La. 6] of the record, would be allowed ten-days after the lodging of the record to file a statement alleging any errors. The Official Revision Comments under La.Code Civ.P. art. 2129 records that the jurisprudence under the old Code of Practice articles construed them to mean that where there was a certified transcript containing all of the testimony and the grounds for reversal were apparent from the face of the record, no assignment of errors was required. La.Code Civ.P. art. 2129 simply codified this jurisprudence.

Moreover, La.Code Civ.P. art. 2164 provides that an appellate court "shall render any judgment which is just, legal, and proper upon the record on appeal." As noted in the Official Revision Comments under Art. 2164, the appellate court has "complete freedom to do justice on the record irrespective of whether a particular legal point or theory was made, argued, or passed on by the court below." In a similar vein, Uniform Rules of Louisiana Court of Appeal, Rule 1-3 provides that even in the absence of an assignment of errors, the appellate court can review such issues if the "interest of justice clearly requires....".

Under the codal authorities cited herein above, it is clear that the appellate court had the right to consider the issue of due process even though there was no assignment of error in that regard. Accordingly, we find that the due process issue is also properly before us.

Having addressed this preliminary matter, we now proceed to the question of the First Circuit's application of Allen, 543 So.2d 908, to the facts of the present case.

In Allen, we held that there was an impermissible commingling of prosecutorial and adjudicative roles. Not only was the prosecutor the advocate before the administrative board, he was also the one who drafted the findings of fact and conclusions for the administrative board. We observed that the accused party was [96-1907 La. 7] denied due process because he was denied the right to a neutral adjudicator. Thus, we stated:

In short, we find the commingling of prosecutorial and adjudicative functions [of Wootan] violates both the letter of the Louisiana Administrative Procedure Act and the due process goals it is designed to further ... The idea of the same person serving as judge and prosecutor is anathema under our notions of due process. Such a scenario is devoid of the appearance of fairness.

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The Court of Appeal erred ... in concluding Wootan's ex parte...