Janssen v. Denver Career Service Bd., 98CA0100.

• Decision Date: 01 April 1999
• Docket Number: No. 98CA0100.,98CA0100.
• Citation: 998 P.2d 9
• Parties: Troy D. JANSSEN, Plaintiff-Appellant, v. DENVER CAREER SERVICE BOARD and Denver Department of Aviation, Defendants-Appellees.
• Court: Colorado Court of Appeals

998 P.2d 9

Troy D. JANSSEN, Plaintiff-Appellant, v. DENVER CAREER SERVICE BOARD and Denver Department of Aviation, Defendants-Appellees.

No. 98CA0100.

Colorado Court of Appeals, Div. I.

April 1, 1999.

Rehearing Denied May 27, 1999.¹

Barry D. Roseman, Denver, Colorado, for Plaintiff-Appellant.

Daniel E. Muse, City Attorney, Ashley R. Kilroy, Assistant City Attorney, Denver, Colorado, for Defendants-Appellees.

Opinion by Judge CASEBOLT.

Plaintiff, Troy D. Janssen, appeals the district court judgment affirming the decision of a hearing officer for the Denver Career Service Board (Board) who had upheld the termination of plaintiff's employment by the City and County of Denver Department of Aviation (Department). Because we conclude that plaintiff has failed to exhaust his administrative remedies, we affirm.

The Department employed plaintiff as a specialty clerk. It received reports that the odor of marijuana had been detected on plaintiff and in the city vehicle that he had driven while on duty, and that his face was flushed, his eyes were dilated, and his behavior was unusual. The Department then required him to submit to a urine test pursuant to City and County of Denver Executive Order No. 94 (Order). After receiving the test results indicating that plaintiff's urine had tested positive for the presence of marijuana, the Department terminated his employment.

Plaintiff appealed that decision to a hearing officer. After a hearing, that officer found no abuse of discretion by the Department and denied plaintiff's appeal. Plaintiff did not request the Board to reopen or to reconsider the hearing officer's decision. Rather, he sought review in the district court, filing a complaint under C.R.C.P. 106(a)(4).

Contending that plaintiff had failed to exhaust his administrative remedies, defendants filed a motion to dismiss. Although it initially denied the motion, ultimately the trial court agreed with defendant's contention. Nevertheless, it also considered the merits of plaintiff's complaint and affirmed the hearing officer's decision. This appeal followed.

I.

Plaintiff contends the court erred in concluding that he had failed to exhaust his administrative remedies. We disagree.

The doctrine of exhaustion of administrative remedies serves as a threshold to judicial review. It requires parties in a civil action to pursue available administrative remedies before seeking judicial review. If the parties fail to satisfy the exhaustion requirement, a court is without subject matter jurisdiction to hear the action. State v. Golden's Concrete Co., 962 P.2d 919 (Colo.1998).

A principal objective of the exhaustion doctrine is to prevent piecemeal application of judicial relief and to conserve judicial resources. The doctrine also enables the agency to make initial determinations on matters within its expertise and to compile a record that is adequate for judicial review. It affords an agency the opportunity to correct its own errors, thus minimizing the risk of judicial intervention in the administrative process and preserving the agency's autonomy. See State v. Golden's Concrete Co., supra. Agency review of a challenged action is also desirable because it provides a court with the benefit of the agency's considered interpretation of statutes or ordinances applicable to it. See Kendal v. Cason, 791 P.2d 1227 (Colo.App.1990).

When administrative remedies are provided by statute or ordinance, the statutory procedure must be followed if the matter complained of is within the jurisdiction of the administrative authority. Horrell v. Department of Administration, 861 P.2d 1194 (Colo. 1993).

The Denver City Charter § C5.25 established the Board and sets forth the Board's duties. The provision states, in pertinent part, that:

The Career Service Board shall:

. . . .

4. Appoint one or more hearings officers to hear and decide appeals by employees... from the administrative actions of officers and employees relating to personnel matters, in accordance with personnel rules adopted or to be adopted by the Career Service Board, and, at such hearings, receive evidence, determine the facts de novo, and issue a decision which shall be a final order, subject to the decision being stayed or reconsidered by the Career Service Board.

5. Reopen and reconsider, in accordance with personnel rules adopted or to be adopted by the Career Service Board, a decision of a hearings officer when the party requesting reopening and reconsideration submits written argument or evidence which establishes that (a) new and material evidence is available that was not available when the appeal was heard by the hearings officer, or (b) the decision of the hearings officer involves an erroneous interpretation of the personnel rules of the Career Service Board, or (c) the decision of the hearings officer is of a precedential nature involving policy considerations that may have effect beyond the case at hand. The Career Service Board shall have the authority to stay the decision of a hearings officer.

(emphasis added)

Plaintiff argues that, because Denver City Charter § C5.25(4) expressly states that the hearing officer's decision "shall be a final order," he was not required to request reopening or reconsideration from the Board before seeking judicial review. We disagree.

We note initially that the doctrine of finality is conceptually distinct from the doctrine of exhaustion of administrative remedies. See Darby v. Cisneros, 509 U.S. 137, 113 S.Ct. 2539, 125 L.Ed.2d 113 (1993) (finality requirement is concerned with whether the initial decision-maker has arrived at a definitive position on the issue that inflicts an actual injury; exhaustion refers to procedures by which an injured party may seek review). A "final decision" in this context means one that marks the consummation of the agency's decision-making process; it must not be one that is tentative or interlocutory in nature. See Bennett v. Spear, 520 U.S. 154, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997).

However, to the extent that finality plays a role here, Charter § C5.25(4) also makes a hearing officer's decision expressly subject to stay and reconsideration by the Board when the circumstances set forth in Denver City Charter § C5.25(5) are present. Indeed, the entire provision, when read in context, states that the Board "shall ... reopen and reconsider... when ..." one of the three circumstances is present. The use of the word "shall" is presumed to connote a mandatory meaning. Burns v. Board of Assessment Appeals, 820 P.2d 1175 (Colo.App.1991).

Plaintiff's "finality" argument is also defeated by Denver Career Service Rule § 19-50, which states that: "If the Career Service Board has reopened a decision of the Hearings Officer for reconsideration, the appellate decision rendered by the Board shall constitute the final decision for purposes of requesting judicial review." Hence, in those situations in which one or more of the three grounds for review noted in the Charter are applicable, the Board's decision, not that of the hearing officer, will be the order subject to judicial review. It follows, therefore, that a reopening by the Board means that the hearing officer's decision is not a "final" order that is subject to judicial review until the Board renders its decision.

Concerning the exhaustion issue, we interpret the Charter to require Board review when one or more of the three grounds contained in Charter § C5.25(5) is asserted by the party seeking review. See Brooke v. Restaurant Services, Inc., 906 P.2d 66 (Colo. 1995) (claimant required to exhaust administrative remedies for claims asserted when such are covered by anti-discrimination act; exhaustion not required for common law claims not covered); Horrell v. Department of Administration, supra (when administrative remedies are provided by statute, the statutory procedure must be followed if the matter complained of is within the jurisdiction of the administrative authority).

Our interpretation is supported by the nature of the circumstances described in Charter § C5.25(5). Each represents a particular instance in which further agency review is highly desirable before submitting the matter to judicial scrutiny. For example, when new material and evidence that were not considered by the hearing officer become available, the agency cannot be said to have considered the issue fully, nor can it be said with certainty that a complete record will exist which fully presents the issue for judicial review.

When a hearing officer's interpretation of a personnel rule is alleged to be erroneous, the Board upon review applies its expertise to interpret its own organic ordinances and rules. And, when a decision has a precedential nature or impact involving policy considerations that may have effect beyond the case at hand, requiring review by the Board will allow it to consider potential ramifications within its own agency structure or purview about which a reviewing court may have little, if any, knowledge.

To construe "exhaustion" in these three situations to be optional would negate the ability of the Board to interpret, in the first instance, its own applicable rules, orders, regulations, and enabling provisions. It would also prevent the Board from correcting the errors of its own hearing officer. A different construction would not only prevent the Board from employing and applying its expertise but it would also trigger a premature exercise of judicial review in a piecemeal fashion before an issue has been fully explored within the agency's own decision-making framework.

Nor are we persuaded that Denver Career Service Rule 19-31 dictates a contrary conclusion. That provision states, in pertinent part:

According to paragraph C5.25 of the Denver City Charter, number 4, a party may request the Career Service Board to reopen and reconsider a decision by the Hearings Officer only on the following grounds ...

Plaintiff points to the...