Municipal Services Corp. v. State By and Through North Dakota Dept. of Health and Consol. Laboratories

• Decision Date: 31 March 1992
• Docket Number: No. 910208,910208
• Citation: 483 N.W.2d 560
• Parties: MUNICIPAL SERVICES CORPORATION, Appellee, v. The STATE of North Dakota, acting By and Through the NORTH DAKOTA DEPARTMENT OF HEALTH AND CONSOLIDATED LABORATORIES, Appellant. Civ.
• Court: North Dakota Supreme Court

Page 560

483 N.W.2d 560

MUNICIPAL SERVICES CORPORATION, Appellee, v. The STATE of North Dakota, acting By and Through the NORTH DAKOTA DEPARTMENT OF HEALTH AND CONSOLIDATED LABORATORIES, Appellant.

Civ. No. 910208.

Supreme Court of North Dakota.

March 31, 1992.

Raymond T. Reott (argued) of Jenner & Block, Chicago, Ill., Kelsch, Kelsch, Ruff & Austin, Mandan, and Pringle & Herigstad, P.C., Minot, for appellee. Appearances by Gretchen M. Livingston, Thomas F. Kelsch, and David J. Hogue.

Nicholas J. Spaeth (argued), Atty. Gen., William J. Delmore and Gregory B. Gullickson, Asst. Attys. Gen., Atty. General's Office, Bismarck, for appellant. Appearances by William J. Delmore and Gregory B. Gullickson.

LEVINE, Justice.

The State appeals from a district court judgment vacating the North Dakota Department of Health and Consolidated Laboratories' [Department] order denying Municipal Services Corporation's [MSC] application to modify its Sawyer facility permit to allow it to dispose of municipal waste combuster ash. We conclude that the Department's procedure did not afford MSC a fair hearing and we, therefore, affirm the judgment as hereafter modified.

MSC owns a landfill site in Ward County for disposal of nonhazardous industrial solid waste. MSC petitioned the Department for modification of its landfill permit to include changes in the construction, operation, closure and postclosure maintenance of the site, and for permission to dispose of municipal waste combuster (incinerator) ash in the modified landfill.

The Department maintained a public comment period on the application from November 3 through December 10, 1990. The Department held a public hearing on the application in Sawyer on November 28 and 29, 1990. Dr. Robert M. Wentz, State Health Officer, presided as the Department's hearing officer. Approximately 85 witnesses testified and approximately 270 exhibits were received in evidence. On December 20, 1990, Dr. Wentz issued findings of fact, conclusions of law and an order denying MSC's application for modification of its permit.

MSC petitioned for rehearing and also petitioned to disqualify Dr. Wentz as the hearing officer, based upon a November 19, 1990, letter from Dr. Wentz to Governor George A. Sinner. The Department denied MSC's petitions and MSC appealed to the district court.

On appeal, the district court ordered that the Department's decision be vacated, stating:

"8. All things considered, in reviewing this record on appeal I discern:

-- Intolerably high probability of bias by the adjudicator.

-- Clear appearance of prejudgment before the Hearing.

-- Failure to perform in a way that would lend credibility to the ultimate decision or that might earn deference to it.

"In sum, the November 19 letter speaks for itself as does resulting conduct.

"9. On remand the agency may proceed under its normal flexible and discretionary rules and regulations to the end that it Affirm or Reverse or Amend or otherwise Modify the Opinion dated 20 December."

Judgment was entered accordingly and the Department appealed.

MSC moved to dismiss the appeal for lack of appellate jurisdiction. The Department appealed pursuant to Sec. 28-32-21, N.D.C.C., which allows an administrative agency to appeal from the final judgment of the district court. MSC contends that "[t]here can be no dispute that the district court's order is not a final judgment" and argues that "[a]n order that merely vacates a prior decision leaves the action pending below." We disagree. The district court did not retain jurisdiction and remand a matter to the administrative agency for the receipt and consideration of additional evidence under Sec. 28-32-18, N.D.C.C., before deciding the appeal. Here, the district court decided the appeal, vacated the Department's decision, and remanded the matter to the Department to affirm, reverse, amend or modify its decision. The district court had nothing more to do in the case. A judgment was entered and it was final and appealable under Sec. 28-32-21, N.D.C.C. To adopt MSC's argument would render many district court decisions on legal questions "effectively unreviewable" [Coopers & Lybrand v. Livesay, 437 U.S. 463, 468, 98 S.Ct. 2454, 2458, 57 L.Ed.2d 351, 358 (1978) ].

On appeal, the Department asserts that Dr. Wentz's letter to Governor Sinner did not constitute legal bias. In his November 19, 1990, letter to Governor Sinner, Dr. Wentz stated:

"While I am still in the process of reviewing information particularly in terms of risk assessment methods and data, I feel I must let you know that in my opinion the potential health and environmental risks of the proposed landfill outweigh any potential benefits to North Dakota. I am firmly opposed to permitting the landfill and, in fact, my preference would be to approach the public hearing with an announced intent to deny the permit.

"My primary areas of concern are as follows:

"1. While there is debate regarding appropriate extraction and analytical procedures for municipal solid waste ash, it is clear that this ash does contain what I consider to be substantial amounts of heavy metals including lead, mercury and cadmium.

"2. If one just focuses on the issue of lead in the ash, the health risks, in my opinion, are substantial. Lead is highly toxic to humans. ... Lead is so highly toxic that no threshold level is believed to exist for toxic effects, especially in children.

"3. There is some continuing uncertainty and disagreement regarding the hydrogeologic appropriateness of the proposed site.

"4. While Municipal Services Corporation has indicated a willingness to incorporate 'state-of-the-art' technology ... I believe there is reasonable concern regarding the long term adequacy of this technology. Given the toxicity of some of the constituents of the ash, I believe we have to think in terms of 'geologic time' in addressing the issue of protection of public health and the environment....

"I recognize that my position on this issue differs from that of many of the staff within our Environmental Health Section who have been involved in reviewing the permit application.... As the one who will ultimately be held responsible for the decision of whether or not the proposed landfill poses a threat to human health or the environment, I must conclude that there is a threat which in my opinion is of sufficient magnitude to justify denial of the permit application."

In Withrow v. Larkin, 421 U.S. 35, 46-47, 95 S.Ct. 1456, 1464, 43 L.Ed.2d 712, 723 (1975), the United States Supreme Court addressed the issue of when an adjudicator's bias or prejudice would constitute a denial of procedural due process:

"Concededly, a 'fair trial in a fair tribunal is a basic requirement of due process.' In re Murchison, 349 U.S. 133, 136, 75 S.Ct. 623, 625, 99 L.Ed. 942 (1955). This applies to administrative agencies which adjudicate as well as to courts. Gibson v. Berryhill, 411 U.S. 564, 579, 93 S.Ct. 1689, 1698, 36 L.Ed.2d 488 (1973). Not only is a biased decisionmaker constitutionally unacceptable but 'our system of law has always endeavored to prevent even the probability of unfairness.' In re Murchison, supra, 349 U.S., at 136, 75 S.Ct., at 625; cf. Tumey v. Ohio, 273 U.S. 510, 532, 47 S.Ct. 437, 444, 71 L.Ed. 749 (1927). In pursuit of this end, various situations have been identified in which experience teaches that the probability of actual bias on the part of the judge or decisionmaker is too high to be constitutionally tolerable. Among these cases are those in which the adjudicator has a pecuniary interest in the outcome and in which he has been the target of personal abuse or criticism from the party before him."

See also Domek v. North Dakota State Personnel Bd., 430 N.W.2d 339 (N.D.1988); Mattheis v. City of Hazen, 421 N.W.2d 476 (N.D.1988). " 'Fairness of course requires an absence of actual bias in the trial of cases.... But to perform its high function in the best way, "justice must satisfy the appearance of justice." Offutt v. United States, 348 U.S. 11, 14, 75 S.Ct. 11, 13 [ (1954) ].' " Baier v. Hampton, 440 N.W.2d 712, 715 (N.D.1989), quoting In re Murchison, 349 U.S. 133, 136, 75 S.Ct. 623, 625, 99 L.Ed. 942, 946 (1955). "To satisfy due process requirements, administrative proceedings must be conducted by an impartial trier of the facts. When bias taints an administrative proceeding, no judgment based on that proceeding will be allowed to stand." 4 J. Stein, G. Mitchell, and B. Mezines, Administrative Law Sec. 35.03 (1991). Under Sec. 28-32-19(4), N.D.C.C., a court may overturn an administrative agency decision, if the agency's rules or procedure do not afford the appellant a fair hearing. Judicial review provides the ultimate due process protection to those aggrieved by agency decisions. Sletten v. Briggs, 448 N.W.2d 607 (N.D.1989), cert. denied, 493 U.S. 1080, 110 S.Ct. 1135, 107 L.Ed.2d 1041 (1990).

Dr. Wentz's integrity has not been challenged. No one has alleged that Dr. Wentz "has a pecuniary interest in the outcome," that "he has been the target of personal abuse or criticism from the party before him" (Withrow v. Larkin, supra ), or that he had any "personal animosity" (Mattheis v. City of Hazen, supra, 421 N.W.2d at 480). Thus, rather than an issue of actual bias, we are faced with an issue about prejudgment, "[a]n area closely akin to bias." 4 Stein, Mitchell, and Mezines, supra, Sec. 35.03.

MSC relies on a number of decisions involving adjudicative facts in support of its assertion that Dr. Wentz impermissibly prejudged the relevant facts and law: In re Murchison, supra; Baier v. Hampton, supra; Antoniu v. S.E.C., 877 F.2d 721 (8th Cir.1989), cert. denied, 494 U.S. 1004, 110 S.Ct. 1296, 108 L.Ed.2d 473 (1990); Cinderella Career and Finishing Schools, Inc. v. F.T.C., 425 F.2d 583 (D.C.Cir.1970); New York State Inspection, Security and Law Enforcement Employees v. New York State Public Employment Relations Board, 629 F.Supp. 33 (N.D.N.Y...