Request By:
Mr. R. Hughes Walker
General Counsel
Cabinet for Human Resources
East Main Street
Frankfort, Kentucky 40601
Opinion
Opinion By: David L. Armstrong, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
This is in response to your request for an opinion as to whether or not a provision in the 1982 State Budget, which provides for agency payment of administrative and court costs occasioned by the agency's employees obtaining merit hearings before the Personnel Board and later court action, is constitutional.
In Chaper 398 (H.B. 295), Part I (General Fund), Section 10 (Finance and Administration Cabinet) e. (Department of Personnel), we find this language:
"Relative to merit hearings before the Personnel Board, the particular agency of which the complainant is or was an employee shall bear all of the administrative costs thereof whenever the Personnel Board rules in favor of the complainant, such as for example, but not limited to, the fees of court reporters, the printing or other reproduction expenses related to hearing transcripts, and other related matters. Relative to all appeals resulting from merit hearings of the Personnel Board, including appeals to the Circuit Court, Court of Appeals, or the Supreme Court, the particular agency of which the complainant in said hearing is or was an employee shall bear all of the costs thereof whenever the courts rule in favor of the complainant, chargeable to the Personnel Board, such as for example, but not limited to, legal fees and court costs and fees."
From the express and literal wording of the above budget language, it is our view that it requires, where the employee-complainant prevails, the agency of which the complainant is or was an employee to bear all administrative costs of merit hearings before the Personnel Board and all court costs involving appeals from Personnel Board action. Here, considering the literalism and plainness of the language of the Act, there is no room for construction and the language must be accepted as it is written. Thompson v. Piasta, Ky.App., 662 S.W.2d 223 (1983) 226. Further, the administrative and court costs are as described, plus any other related costs not specifically enumerated, but which are of a similar nature or category. The rule of ejusdem generis is that where, in a statute, general words follow a designation of particular subjects or classes of persons, the meaning of the general words will ordinarily be presumed to be restricted by the particular designation, and to include only things or persons of the same kind, class or nature as those specifically enumerated, unless there is a clear manifestation of a contrary purpose. Jefferson County Fiscal Court v. Jefferson County, 278 Ky. 68, 128 S.W.2d 230 (1939) 232, 233. Here the language in the budget bill covers expressly "administrative costs", fees of court reporters, the printing or other reproduction expenses related to hearing transcripts, "and other related matters", as concerns merit hearings before the board. (Emphasis added). On the court appeal level, the budget language refers to "all the costs thereof", including, but not limited to, legal fees and court costs and fees. Of course, the budget language conditions the employing agency's liability for payment only where the affected employee prevails. We construe "prevailing" as including prevailing on every substantive issue raised in the board hearing or on court appeal. Thus it appears that costs are broad enough to include hearing officer costs as well as administrative costs, generally.
Since the state, through the Personnel Board, has an obvious official interest in such hearings and court appeals, and since the payment of such cost by the state agency is conditioned on the employee's prevailing in such matters, it is our opinion that such payment is constitutional. We are speaking of the employee's prevailing in respect to all substantive issues raised. Thus we believe the General Assembly can validly require the state to pay for such administrative costs where the employee prevails in his or her complaint against the employing agency. Where the employee prevails, that is an indication that the employee acted in good faith in the discharge of the employee's duties, free from any negligence, infraction of a statute or rule, or any wrongdoing of any kind. Here the matter of disciplinary action or layoff of an agency's employee under the merit system is of direct interest to the state and State Personnel Board. See Roberts v. City of St. Louis, Mo., 242 S.W.2d 293 (1951); and Board of Commissioners v. Casper Nat. Bank, Wyo., 105 P.2d 578 (1940).
Such payment of costs would in reality be made in consideration of the public services of the employee-complainant, as is envisioned by § 3 of the Kentucky Constitution. Talbott v. Thomas, 286 Ky. 786, 151 S.W.2d 1 (1941). In addition, the expenditure of state money would involve a public purpose, as required by § 171, Kentucky Constitution. Lexington v. Hager, Ky., 337 S.W.2d 27 (1960). We conclude that the legislative language is constitutional, in considering those constitutional principles.
The Cabinet for Human Resources takes the position that if any substantive part of an agency's disciplinary action is sustained by the Board, the agency has shown cause and thus the employee is not the prevailing party. We agree, where the employee has not prevailed on all substantive issues raised before the Personnel Board. Thus where the employee has not prevailed, under the explicit wording of the 1982 Budget language, the employing agency is not liable for the payment of such administrative costs arising out of the Board action.
In addition, you raise a specific constitutional question. The Cabinet for Human Resources contends that an apparent conflict could arise in favor of the Board's ruling for an employee, since the Board's administrative costs would be paid by the employing agency.
Dutch Hatterick, Executive Secretary for the Board, in his letter to you of March 1, 1984, pointed out that for a number of years the Department of Personnel and the Personnel Board have been interaccounting agencies for expenses incurred when agencies have not prevailed before the Board. He wrote that the Board, having a limited budget, utilizes such interaccounted receipts in meeting its day-to-day operational expenses. He said that "Due to our limited allocation and caseload, the funds which your agency owes is crucial to meeting our daily expenses."
It is your belief that no matter how fair the Board tries to be in its deliberations, it has a direct financial interest in the cases before it. Thus, you conclude that this interest in itself is sufficient to disqualify the Board as a decision maker in personnel cases. You cite Callahan v. Sanders (U.S. Dist. Ct., Ala - 1971) 339 F.2d 814, reflecting the Supreme Court decision that Alabama justices of the peace could not constitutionally try traffic cases because a state statutory scheme provided the justices fees upon a conviction; and thus the justices had a direct pecuniary interest in such traffic violation convictions. The Alabama statutes specifically provided a fee for services of justices of the peace; however, such fees and other costs could only be collected if the defendant were convicted. Thus the federal courts held that justices of the peace could not constitutionally try traffic cases, since they had a personal financial stake, by way of their own fees, in such cases. See Bennett v. Cottingham, 290 F.Supp. 759 (N.D. Ala, 1968); and Bennett v. Cottingham, 393 U.S. 317, 89 S. Ct. 554, 21 L. Ed. 2d 513 (1969), in which the United State Supreme Court affirmed the Cottingham decision. In the earlier case of Tumey v. Ohio, 273 U.S. 510, 47 S. Ct. 437, 71 L. Ed. 749 (1927), the court pointed out that it is settled law that one is denied due process when he is subjected to the scrutiny of a judge who has a direct pecuniary interest in his conviction. The court wrote "That officers acting in a judicial or quasi-judicial capacity are disqualified by their interest in the controversy to be decided is of course the general rule." The court added: "But it certainly violates the Fourteenth Amendment and deprives a defendant in a criminal case of due process of law to subject his liberty or property to the judgment of a court, the judge of which has a direct, personal, substantial pecuniary interest in reaching a conclusion against him in his case."
In Bernard Schwartz's Administrative Law, (Little Brown & Co., 1976), § 106, it is written that "Due process requires an impartial tribunal: A fair trial by an unbiased and non-partisan trier of facts is of the essence of the adjudicatory process as well when the judging is done in an administrative proceeding by an administrative functionary as when it is done in a court by a judge." See Jordan v. Massachusetts, 225 U.S. 167, 176 (1912); NLRB v. Phelps, 136 F.2d 562, 563 (5th Circ. 1943); and Withrow v. Larkin, 421 U.S. 35, 46 (1975).
The Executive Director of the Personnel Board has written that the cost of the hearing officer must be interaccounted where the employee prevails, and that such interaccounting is crucial to the payment of such expenses.
CONCLUSION
(1) The 1982 Budget language of KRS Chapter 398 (H.B. 295) Part I, Section 10E requires a state agency (appointing authority) to pay administrative costs, including fees of court reporters, printing of hearing trascripts, and hearing officer costs (including compensation) where state employees appeal to the Personnel Board (under KRS 18A.075 and 18A.095) and where such employees prevail in respect to all substantive issues.
(2) The payment of such administrative costs by the state is constitutional, where the employee-complainant prevails, since the employee would be deemed to have acted in good faith, without any wrongdoing or negligence, and such cases are of direct interest to the state government, pursuant to §§ 3 and 171, Kentucky Constitution.
(3) Under KRS 18A.095(1), an appeal to the Board may be heard by individual members of the Board, by its Executive Director, or by a hearing officer of the Board. Any appeal heard by less than the full Board shall be subject to review by the full Board upon petition for such review by either party to the appeal. We assume that the compensation of the members of the Board and the Executive Director are not funded through this interaccounting procedure. Where a hearing is conducted by a hearing examiner, he must make dispositive recommendations to the Board, which is not mandated to accept his recommendations. 101 KAR 1:130, Section 8.
It is our view that the Fourteenth Amendment, Constitution of the United States, due process clause, protects only the rights of "persons" and does not embrace the state. See State v. Taira, 78 N.M. 276, 430 F.2d 773 (1967) 778; and Com. of Pa. v. Porter, (U.S.C.A. -3, 1981) 659 F.2d 306, 314. The court in Com. of Pa. v. Porter wrote that the Fourteenth Amendment is a limitation upon the states in the interest of individuals. Here, while the hearing officer is under the cloud of self interest (according to Dutch Hatterick his compensation is conditioned on the interaccounting principle established in the 1982 Budget) , no employee is adversely affected, only the employing agency. Thus this practice cannot be said to violate the Fourteenth Amendment of the federal constitution. In addition, the court held, in Guthrie v. Curlin, Ky., 263 S.W.2d 240 (1953), that § 2 of the Kentucky Constitution (embraces due process) has to do only with the exercise of arbitrary power over the lives, liberty and property of individuals, and not with the handling of state property or funds.
In any event, we are unable to find any personal monetary interest in such cases on the part of the Personnel Board and Executive Director. The practical point here is that these various costs are being borne by state government, one agency or another, regardless of whether or not the hearing officer may be personally interested in recommending in favor of the employee.