University Hosp., Inc. v. Massachusetts Com'n Against Discrimination

• Decision Date: 16 January 1986
• Citation: 396 Mass. 533,487 N.E.2d 506
• Parties: , 40 Fair Empl.Prac.Cas. (BNA) 225, 43 Empl. Prac. Dec. P 37,050 UNIVERSITY HOSPITAL, INC. v. MASSACHUSETTS COMMISSION AGAINST DISCRIMINATION.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 506

487 N.E.2d 506

396 Mass. 533, 40 Fair Empl.Prac.Cas. (BNA) 225,

43 Empl. Prac. Dec. P 37,050

UNIVERSITY HOSPITAL, INC. v. MASSACHUSETTS COMMISSION AGAINST DISCRIMINATION.

Supreme Judicial Court of Massachusetts,

Suffolk.

Argued Sept. 12, 1985.

Decided Jan. 16, 1986.

Kevin G. Powers, Lynn, for plaintiff.

Barbara B. Dickey for defendant.

Before HENNESSEY, C.J., and WILKINS, ABRAMS and O'CONNOR, JJ.

ABRAMS, Justice.

The sole issue in this action is whether the Massachusetts Commission Against Discrimination (commission) may issue interrogatories and apply default sanctions pursuant to rule 11 of its procedural rules. The plaintiff, University Hospital, Inc., appeals from a judgment of the Superior Court declaring that rule 11 is a valid exercise of the commission's rule making authority under G.L. c. 151B (1984 ed.). We affirm.

The stipulated facts may be summarized as follows. On April 2, 1977, a former employee of the plaintiff filed a complaint with the commission alleging that he had been unlawfully terminated from his job because of his race, in violation of G.L. c. 151B, § 4. On April 25, 1977, the commission began its investigation of this charge by serving a set of interrogatories ¹ on the plaintiff. The plaintiff did not respond. On November 18, 1977, the investigating commissioner ordered the plaintiff to respond within ten days. The order was sent to the plaintiff together with a notice of the commission's default procedure and the potential sanctions for failure to answer. The plaintiff then filed a motion requesting an extension of time. The extension was granted. On December 21, the plaintiff sent a letter notifying the commission of its refusal to answer any of the interrogatories because it believed that the rule exceeded the commission's statutory authority. As a result of the letter, an order of default was entered on March 9, 1978. On August 27, 1980, the plaintiff filed a motion to remove the default which the investigating commissioner denied on September 9, 1980. On November 3, 1980, the commissioner issued a probable cause finding and certification of the complaint for public hearing after default. On March 16, 1982, the case was placed on the hearing list, and the parties filed a prehearing conference memorandum on April 15, 1982. On May 3, 1982, the commission imposed sanctions on the plaintiff pursuant to rule 11.02(c), consisting of (1) an admission that the interrogatories, if answered, would have established facts in accordance with the complainant's claim; (2) a waiver of the plaintiff's right to have the commission conduct further investigation; and (3) a waiver of the plaintiff's right to present defenses. On or about the same day, the plaintiff filed the action for declaratory and injunctive relief in Superior Court pursuant to G.L. c. 30A, § 7 (1984 ed.), and G.L. c. 231A, § 2 (1984 ed.).

1. Scope of authority. The plaintiff argues that rule 11 is beyond the commission's power because the power to issue interrogatories is neither explicitly nor implicitly authorized by G.L. c. 151B, §§ 3 (6) or (7). The plaintiff asserts that the commission, as a statutory creature, "has only those powers, duties and obligations conferred upon it by statute and those reasonably necessary for its proper functioning." Massachusetts Comm'n Against Discrimination v. Liberty Mut. Ins. Co., 371 Mass. 186, 189, 356 N.E.2d 236 (1976). The plaintiff contends that the omission of any specific reference to interrogatories in either § 3(6) or § 3(7) leaves the commission without any authority to issue them. It urges us to distinguish between interrogatories and subpoenas on the basis that the subpoena power specifically is mentioned in G.L. c. 151B, § 3(7). It further contends that the Legislature, by specifying the investigative means available to the commission in G.L. c. 151B, § 3(7), without including the use of interrogatories, evinced its intent to limit the investigative tools available to the commission. We do not agree.

The Legislature granted the commission broad authority to "receive, investigate and pass on" complaints of discrimination. The commission is required to make "prompt investigation" of all complaints under G.L. c. 151B, § 5, and to establish rules of practice to "expedite" as well as to "govern" and "effectuate" its procedures and actions thereunder. Finally, the commission is granted the power to issue subpoenas in both the investigative and adjudicative stages of the administrative proceedings. Massachusetts Comm'n Against Discrimination v. Liberty Mut. Ins. Co., supra.

In keeping with its statutorily delegated authority, the commission used its rule making authority to provide itself with the flexible tools it needs to investigate and to determine complaints concerning discrimination. One such tool is the use of interrogatories. See 804 Code Mass.Regs. 1.11.

Rule 11 is applied only after determination by the investigating commissioner that answers to interrogatories in a particular case "are likely to expedite the resolution of the complaint." 804 Code Mass.Regs. 1.11(1). Interrogatories are "exploratory devices intended to uncover facts." See 4 B.J. Mezines, J.A. Stein & J. Gruff, Administrative Law § 23.03 n. 78 (1984). They are a simple, efficient mechanism to gather preliminary information, see generally J.W. Smith & H.B. Zobel, Rules Practice § 33.2, at 317-318 (1975); 8 C.A. Wright & A.R. Miller, Federal Practice and Procedure § 2163 (1970 & Supp.1985), and have long been "a familiar and convenient practice." Beauregard v. Capitol Amusement Co., 301 Mass. 142, 145, 16 N.E.2d 672 (1938). "Unless the commission has the power to obtain necessary information during the course of its investigations, the broad remedial purposes of the legislation cannot be effectuated, and the commission will be unable to function effectively." Massachusetts Comm'n Against Discrimination v. Liberty Mut. Ins. Co., supra, 371 Mass. at 192, 356 N.E.2d 236. If, as the plaintiff suggests, the commission were limited to issuing subpoenas and seeking court enforcement on noncompliance, its investigative function would be encumbered unnecessarily with trial-like procedures. See Hannah v. Larche 363 U.S. 420, 448, 80 S.Ct. 1502, 1518, 4 L.Ed.2d 1307 (1960). Such procedures also would delay the prompt disposition of complaints. The plaintiff's contention that the opportunity for judicial review is "circumvented" by the use of interrogatories is unpersuasive. There is no statutory or constitutional requirement for judicial intervention at a preliminary stage of the proceedings. We decline to impose such a requirement.

2. Sanctions. The plaintiff argues that even if the commission has the power to issue interrogatories, it does not have the power to impose sanctions on a party for failure to answer them. The plaintiff attacks the sanctions imposed under rule 11 as excessive and therefore not reasonably related to the statutory goal. It also attacks the sanctions on constitutional grounds.

Where a legislative body "has entrusted an administrative agency with the responsibility of selecting the means of achieving [a] statutory policy 'the relation of remedy to policy is peculiarly a matter for administrative competence.' " Kulkin v. Bergland, 626 F.2d 181, 184 (1st Cir.1980). Butz v. Glover Livestock Comm'n Co., 411 U.S. 182, 185, 93 S.Ct. 1455, 1457, 36 L.Ed.2d 142 (1973). A sanction is valid as long as it is not arbitrary, capricious, or unwarranted in law. Kulkin v. Bergland, supra. See Borden, Inc. v. Commissioner of Pub. Health, 388 Mass. 707, 722-724, 448 N.E.2d 367, cert. denied sub nom. Formaldehyde Inst., Inc. v. Frechette, 464 U.S. 936, 104 S.Ct. 345, 78 L.Ed.2d 312 (1983). The sanctions involved here--namely, the preclusion of evidence at the hearing (804 Code Mass.Regs. 1.11[c], [h] ) and the application of the adverse inference rule (804 Code Mass.Regs. 1.11[a] )--have their counterpart in both the Massachusetts and Federal Rules of CIVIL PROCEDURE. RULE 11² specifically incorporates by reference Mass.R.Civ.P. 37(b) and empowers the commission to impose appropriate sanctions "following that Rule 37(b)." 804 Code Mass.Regs. 1.11(2)(c). Thus, the commission has as reference a body of existing law upon which to draw in determining what is appropriate relief in a given case. ³ The commission may also relax any rule in the interest of justice. 804 Code Mass.Regs. 1.01 (1978). See generally 8 C.A. Wright & A.R. Miller, supra at § 2284.

Rule 11 also provides a respondent with several opportunities to avoid default. A respondent is entitled to object to any question and the investigating commissioner must rule on the objection. 804 Code Mass.Regs. 1.11(2)(b). The plaintiff did not object or claim that the interrogatories were irrelevant, overbroad, or unreasonable in scope. We do not agree with the plaintiff that this opportunity for review is meaningless because the issuer of the interrogatories is also the reviewer. Notions of administrative autonomy and judicial economy "require that the agency be given a chance to discover and correct its own errors." McKart v. United States, 395 U.S. 185, 195, 89 S.Ct. 1657, 1663, 23 L.Ed.2d 194 (1969). See Assuncao's Case, 372 Mass. 6, 8-10, 359 N.E.2d 1304 (1977). Moreover, the plaintiff misperceives rule 11. The investigating commissioner's authority is limited to defaulting a party. The investigating commissioner cannot impose sanctions, only the commission itself may. 804 Code Mass.Regs. 1.11(2)(c). This is an independent determination made at the adjudicative stage which is a "clearly separate" proceeding. East Chop Tennis Club v. Massachusetts Comm'n Against Discrimination, 364 Mass. 444, 452, 305 N.E.2d 507 (1973).

In considering what sanctions were appropriate, the commission could view the long delay caused by the plaintiff's failure to answer the interrogatories, to object to specific interrogatories, or to use other...