Hitchings v. Commonwealth

CRAIG, Judge. Petitioner Thomas W. Hitchings appeals from an order of the Pennsylvania State Ethics Commission which held that the petitioner had violated various sections of the Act of October 4, 1978, P.L. 883, 65 P.S. § 401 et seq. (Ethics Act). The decision of this court is to remand for a hearing. According to an investigation for the commission, the petitioner is employed by the City of Pittsburgh Fire Department as a fire captain. During the time in question, the petitioner was assigned as an arson investigator with the Arson Strike Team. In connection with the duties of his employment, the petitioner investigated a fire at the Arcade Theater in Pittsburgh, which occurred on February 5, 1984. — 471 — The petitioner filed a detailed written report of his investigation of the Arcade Theater fire, which concluded that the fire was deliberately set. After the fire, the building owners filed two federal civil actions, one seeking recovery of fire insurance proceeds, and the second seeking damages for an alleged defamatory news broadcast by KDKA-TV, in which the owners were allegedly implicated in the arson burning of the Arcade Theater. In the fire insurance case, the petitioner testified on behalf of the insurance company, and received the standard witness fee. In the defamation case, the petitioner testified on behalf of KDKA-TV and received a fee of $650.00. On September 28, 1988, after the investigation, the commission issued Order No. 679, the order here appealed, which declared that the petitioner had violated section 3 of the Ethics Act, 65 P.S. § 403, by using confidential information obtained through his public position for private gain, and section 4 of the Ethics Act, 65 P.S. § 404, by failing to file a statement of financial interest. The pertinent issues raised by the petitioner are: (1) whether the order is illegal because it violates the Administrative Agency Law, 2 Pa.C.S. § 504; and (2) whether the order is void because it violates the due process and equal protection provisions of the United States and Pennsylvania Constitutions. The commission argues that the petitioner failed to exhaust the available administrative remedies. However, because the commission here has issued a purported decision against the petitioner without having held a hearing to obtain evidence and without extending any opportunity for a hearing after the issuance of that decision, the commission’s decision was not a valid adjudication, the commission’s order must be vacated, and this case must be remanded to the commission with a direction that it conduct an administrative hearing in accordance with 51 Pa.Code §§ 2.34-2.38. — 472 — The Administrative Agency Law, 2 Pa.C.S. § 504, establishes the fundamental requisites for a valid adjudication as follows: No adjudication of a Commonwealth agency shall be valid as to any party unless he shall have been afforded reasonable notice of a hearing and an opportunity to be heard. All testimony shall be stenographically recorded and a full and complete record shall be kept of the proceedings. (Emphasis added.) The Pennsylvania Supreme Court, in Callahan v. Pennsylvania State Police, 494 Pa. 461, 465, 431 A.2d 946, 948 (1981), clearly held that an agency’s adjudication was not valid where it “failed to comply with the statutory requirements of notice of a hearing and an opportunity to be heard.” In that situation, the courts must vacate and remand with a direction that the agency conduct a hearing. The record here shows that the commission operated contrary to its own regulations in reaching its so-called decision condemning the petitioner. The order in this matter contained the following language: [T]his Order is final and will be made available as a public document 15 days after service (defined as mailing) unless you file documentation with the Commission which justifies reconsideration and/or challenges pertinent factual findings. See 51 Pa.Code § 2.38. In that order, the commission made no mention of a hearing; it offered only “reconsideration,” not a hearing, and the commission demanded “documentation”—not merely a request—in order to obtain such “reconsideration.” This court cannot hold that the petitioner failed to exhaust his administrative remedies when the only available remedy was “reconsideration” upon the condition of supplying documentation. In parlance commonly understood, “reconsideration” refers to a tribunal’s act of giving additional thought to its decision, ordinarily without any further reception of evidence. For example, when this court grants — 473 — “reconsideration” of a decision, it reviews its order without reargument. Moreover, the commission’s order did not explain whether the “documentation” requirement meant merely that petitioner had to file some sort of pleading in order to persuade the commission to reconsider, or whether the order required the presentation of documentary evidence. If the latter meaning were intended, the commission certainly could not condition a hearing solely upon the availability of documentary evidence, as distinguished from testimonial evidence, because there is no legal basis for giving documentary evidence precedence over testimonial evidence in these cases. When the regulation cited by the commission as relating to finality and reconsideration, 51 Pa.Code § 2.38, is examined in the context of all of the commission regulations, the unavoidable conclusion is that it refers to permissive reconsideration of an order issued after evidence has been obtained at a hearing held before reaching that order. That regulation does not deal with an opportunity for obtaining an initial hearing; in § 2.38(c) it expressly refers to the possibility that the commission could grant “rehearing.” Thus, in context, it indicates that it contemplates only further proceedings as to an order already based upon a hearing. This point becomes evident if the entire scheme of the commission regulations is examined from beginning to end. Starting with investigations, the pertinent sections of 51 Pa.Code are as follows: § 2.31 Investigation; general power § 2.32 Commencement of investigations § 2.33 Conduct and disposition of investigations. At this juncture, the commission staff may close the case (in various ways), refer the matter to a law enforcement officer for prosecution, issue an order warning of prosecution or, as stated at 51 Pa.Code § 2.33(d)(4)(iii), “conduct a fact-find — 474 — ing hearing in accordance with the provisions of section 2.34 (relating to general).” Thus the commission’s own regulations do not contemplate the use of an order to show cause being issued at the end of investigation, to precede an initial hearing. Thereafter, the regulations in 51 Pa.Code continue as follows: § 2.34 General [governing before whom the factfinding hearing shall be conducted] § 2.35 Hearing officer: powers/duties § 2.36 Conduct of hearing § 2.37 Briefs, exceptions to proposed report, oral argument § 2.38 Finality, reconsideration. Hence the order of proceedings, as spelled out by the commission’s own regulations, clearly calls for reconsideration only after the commission has reached an order pursuant to the conduct of a hearing. In this case, the commission skipped over its commitment in § 2.33(d)(4)(iii) to conduct a factfinding hearing where it has neither closed the matter or referred it for prosecution. It reached findings of fact on a basis which disregarded due process. Finally, the commission order in this case never extended a hearing opportunity. As quoted above, the order only offered opportunity for “reconsideration” or for challenging findings, by filing “documentation.” At that juncture, the commission’s decision was in the same posture as the letter determination in Callahan, which the Supreme Court held to be an invalid adjudication, warranting a remand. The reconsideration provision cited by the commission in its order, 51 Pa. Code § 2.38, speaks only in terms appropriate to having a factfinder reconsider a determination reached after a previous hearing, rather than in terms of providing an opportunity for an initial hearing. Section 2.38(b) reads as follows: — 475 — (b) Any party may ask the Commission to reconsider an order within 15 days of service to [sic] the order. The person requesting reconsideration should present a detailed explanation setting forth the reason why the order should be reconsidered. Reconsideration may be granted at the discretion of the Commission only where any of the following occur: (1) A material error of law has been made. (2) A material error of fact has been made. (3) New facts or evidence are provided which would lead to reversal or modification of the order and where these could not be or were not discovered previously by the exercise of due diligence. Nor can the commission’s order be relabeled as an “Order to Show Cause” demanding an answer, as governed by 1 Pa.Code § 35.37. Because the commission did not entitle its decision as an “Order to Show Cause” or use any such language within it, there is no basis for invoking 1 Pa.Code § 35.37, the “show-cause” provision, against the petitioner, without informing the petitioner that failure to ask for “reconsideration” would constitute an acquiescence in the investigative report and an admission of the order’s validity. In accordance with Callahan, the commission’s adjudication must be deemed to be invalid and incomplete under the Administrative Agency Law, 2 Pa.C.S. § 504, which unconditionally requires “reasonable notice of a hearing and an opportunity to be heard” in order to have a valid adjudication. The case must be remanded for the conduct of such a hearing in accordance with 51 Pa.Code §§ 2.34-2.38.