Impey v. Mo. Ethics Comm'n

• Decision Date: 24 June 2014
• Docket Number: No. SC 93698.,SC 93698.
• Court: Missouri Supreme Court
• Parties: John T. IMPEY, Appellant, v. MISSOURI ETHICS COMMISSION, et al., Respondents.

442 S.W.3d 42

John T. IMPEY, Appellant

v.MISSOURI ETHICS COMMISSION, et al., Respondents.

No. SC 93698.

Supreme Court of Missouri, En Banc.

June 24, 2014.

R. Todd Wilhelmus, Caskey, Hopkins & Wilhelmus LLC, Butler, for Appellant.

Matthew J. Laudano, Attorney General's Office, Jefferson City, for Respondents.

Opinion

ZEL M. FISCHER, Judge.

John Impey appeals the circuit court's dismissal of his petition for review of a decision by the Missouri Ethics Commission (“MEC”). Impey alleges that the circuit court erroneously determined that he failed to exhaust his administrative remedies. Impey argues that § 105.961, RSMo 2000,¹ violates article V, section 18 of the Missouri Constitution because it provides for review by the Administrative Hearing Commission (“AHC”) before seeking judicial review of the MEC's determination. This Court holds that § 105.961 does not violate the Missouri Constitution and that Impey failed to exhaust all administrative remedies. The judgment is affirmed.

Factual and Procedural Background

In August 2011, John Impey prepared and circulated, by hand and by mail, a number of pamphlets voicing his opposition to a ballot measure in Houston County. Shortly thereafter, the MEC received a complaint against Impey, alleging that Impey had violated the law by failing to place “Paid for by John Impey” on the pamphlets. Pursuant to § 105.961, the MEC assigned the complaint to an investigator, who investigated the complaint and filed a report. Based on this report, the MEC found that there were reasonable grounds to believe that Impey had violated the law, and the MEC scheduled a probable cause hearing.

Following the probable cause hearing, the MEC made a determination that probable cause existed to believe that Impey had violated § 130.031.8² in circulating his pamphlets. Upon this determination, the MEC issued findings of fact, conclusions of law, and an order. The first sentence of the MEC's findings stated, “This is a final decision and order of the Missouri Ethics Commission....” The order contained two paragraphs. The first stated that the MEC found probable cause that Impey violated the law. The second stated, “The Missouri Ethics Commission orders a fee be imposed against Respondent Impey in the amount of $100....” Along with the findings of fact, conclusions of law, and the order, the MEC sent a notice to Impey stating:

Pursuant to Section 105.961 RSMo, this action of the Missouri Ethics Commission may be appealed to the Administrative Hearing Commission. Such appeal shall be filed no later than fourteen days following receipt of actual notice of the commission's actions.

Rather than file his appeal with the AHC, Impey filed a petition for review in the circuit court. The MEC filed a motion to dismiss Impey's petition, alleging that Impey failed to exhaust his administrative remedies. Impey responded by alleging that the procedures outlined in § 105.961 were constitutionally invalid under article V, section 18 of the Missouri Constitution, which provides for direct judicial review of final administrative decisions. The circuit court granted the MEC's motion to dismiss, finding that Impey was not aggrieved by the MEC's probable cause determination and ruling that, to the extent Impey was entitled to any review, he had failed to exhaust his administrative remedies by failing to seek review by the AHC.

Impey appealed the circuit court's judgment to this Court, arguing that § 105.961 violates article V, section 18 of the Missouri Constitution.³ This Court has exclusive appellate jurisdiction over cases involving the validity of a statute. Mo. Const. art. V, sec. 3.

Standard of Review

Whether a statute is constitutional is an issue of law that this Court reviews de novo. State v. Honeycutt, 421 S.W.3d 410, 414 (Mo. banc 2013). “Statutes are presumed constitutional and will be found unconstitutional only if they clearly contravene a constitutional provision.”Id. “The person challenging the validity of the statute has the burden of proving the act clearly and undoubtedly violates the constitutional limitations.” Id.

Analysis

The MEC is an administrative body established by the General Assembly to administer and enforce a number of ethics-related laws, including those relating to lobbyists, public officials, and campaign finance disclosure. Section 105.955. To aid the agency in its enforcement of these laws, the MEC is authorized to receive complaints alleging that any law under its supervision has been violated. Section 105.957.

Section 105.961 sets out the procedure through which the MEC utilizes these complaints. First, upon receipt of the complaint, the MEC assigns the complaint to a special investigator. Section 105.961.1. The special investigator will then conduct an investigation and, within 180 days, file a report with the MEC. Id. The MEC reviews that report and makes one of three determinations: 1) that there are reasonable grounds for belief that a violation has occurred; 2) that no such reasonable grounds exist; or 3) that additional time is necessary to investigate. Id.

If the MEC has determined that reasonable grounds exist to believe a violation of law has occurred, then it takes one of two routes. First, if the MEC believes that there are reasonable grounds that a violation of a criminal law has occurred, the MEC may refer the report to the appropriate prosecutor upon a vote of four members of the commission. Section 105.961.2. Second, if the MEC determines that there are reasonable grounds to believe that a violation of the law has occurred that is not a violation of criminal law, then the MEC will conduct a closed hearing to determine whether there exists probable cause that a violation has occurred. Section 105.961.3.

After the hearing, if the MEC determines by a vote of at least four commissioners that probable cause exists, then the MEC may take a number of actions. Pursuant to subsection 3 of § 105.961, if the commission determines that probable cause exists, “it may refer its findings to the appropriate disciplinary authority over the person who is the subject of the report.” This provision applies almost exclusively to individuals who already hold elective or appointive office.⁴

Pursuant to subsection 4, if the MEC determines, by a vote of four or more commissioners, that referral for criminal prosecution or for action by a disciplinary authority is not appropriate, then the commission shall take any one or more of the following actions:

(1) Notify the person to cease and desist violation of any provision of law which the report concludes was violated and that the commission may seek judicial enforcement of its decision pursuant to subsection 5 of this section;

(2) Notify the person of the requirement to file, amend or correct any report, statement, or other document or information required by [the law], and that the commission may seek judicial enforcement of its decision pursuant to subsection 5 of this section; and

(3) File the report with the executive director to be maintained as a public document; or

(4) Issue a letter of concern or letter of reprimand to the person, which would be maintained as a public document; or

(5) Issue a letter that no further action shall be taken, which would be maintained as a public document; or

(6) Through reconciliation agreements or civil action, the power to seek fees for violations in an amount not greater than one thousand dollars or double the amount involved in the violation.

Section 105.961.4.

Subsection 5 of 105.961 gives the MEC the power to petition the courts to enforce its actions. Pursuant to subsection 5, the MEC may initiate formal judicial proceedings seeking to obtain an order requiring the subject of the complaint to: 1) cease and desist violation of the law; 2) pay any civil penalties authorized by law; 3) file any reports, statements, or other documents required by law; or 4) pay restitution for any unjust enrichment resulting from any violation of a criminal statute.

Subsection 5 of 105.961 also states that the subject of the complaint “may appeal any action of the Missouri ethics commission, other than a referral for criminal prosecution, to the administrative hearing commission.” Subsection 5 requires the MEC to give “actual notice to the subject of the complaint of the proposed action as set out in this section.” The subject of the complaint may then file an appeal to the AHC within 14 days of receiving notice. Such appeal stays the action of the MEC.

More succinctly, pursuant to § 105.961, the MEC serves to determine whether a particular complaint is worth pursuing. If the MEC finds probable cause to believe the law has been violated, it can refer the case to the appropriate disciplinary authority, which may then conduct its own proceedings. When no such disciplinary authority exists, the MEC may take action on its own by notifying the alleged violator of its proposed action and then pursuing that action in the circuit court. If the alleged violator disputes the MEC's findings, he or she may appeal to the AHC.

It is § 105.961's provision for appeal to the AHC with which Impey takes issue. Impey alleges that the MEC's decision is a final decision and that subsection 5's requirement that Impey seek review by the AHC violates article V, section 18 of the Missouri Constitution. Article V, section 18 provides:

All final decisions, findings, rules and orders on any administrative body existing under the constitution or by law, which are judicial or quasi-judicial and affect private rights, shall be subject to direct review by the courts as provided by law.

The constitution does not define “direct review,” but this Court has held that direct review means that a final decision of an administrative agency must be “immediately reviewable” by the appropriate court “without an intervening level of review.” Asbury v. Lombardi, 846 S.W.2d 196, 201 (Mo. banc 1993).

Impey argues that by imposing AHC review prior to seeking review in the circuit court, §...