Saturday, October 29, 2005

admin. law - collateral estoppel/issue preclusion - capricious disregard of competent evidence

The Frog, Switch & Mfg. Co. v. Pa. Human Relations Commn. - Cmwlth. Court - Oct. 27, 2005

This is an employment law case, but it has implications in all administrative law cases, hence the cross posting. The Petitioner/Employer appealed from a ruling of the PHRC that it had unlawfully retaliated against a former employee because of his union activities. The employee had also gone through arbitration, resulting in a contrary decision, i.e., that the employer had just cause for disciplining him (but that termination was an excessive punishment).

collateral estoppel/issue preclusion -- In the administrative proceeding before the PHRC, the employer contended that the facts found by the arbitrator were conclusive and binding on the Commission. After an extended (and unnecessary?) discussion about whether collateral estoppel (aka, issue preclusion) was applicable, the court held that the Supreme Court's decision in Bortz v.WCAB, 683 A.2d 259 (Pa. 1996), was controlling. There the court held that a decision of the UCBR did not have preclusive effect in a worker's comp. case, "because every administrative charged with enforcing its own acts which have different purposes; therefore, one agency's hands would be tied by the findings and conclusions of another without being allowed to make independent findings and conclusions and applying its own expertise to the facts."

The court said that "[because labor arbitrations are akin to 'private administrative agencies' and the Commission is charged...with adjudicating claims under the PHRA...., the General Assembly did not intend any arbitration award to have preclusive effect on claims of discrimination brought pursuant to the PHRA."

capricious disregard -- The court remanded the case back to the Commission, because it had "capriciously disregarded overwhelming critical evidence that could have compelled a different conclusion.," citing Wintermeyer v. WCAB, 812 A.2d 478 (Pa. 2002), and its 8-17-05 decision in Hinkle v. City of Philadelphia,
In the latter case, the court said that the capricious disregard standard is a "shorthand way of addressing various statutory and constitutional requirements that agency to give reasons for its decision, and when an agency ignored critical overwhelming evidence that constituted an abuse of discretion requiring the decision to be vacated" so that the agency can "explain its action and arrive at a new decision if it so desired. Because an agency has so much discretion when enforcing its statute, capricious disregard, like abuse of discretion, will only be applied in rare instances when the agency palpably has failed to give a proper explanation of overwhelming critical evidence. This is one of the extremely rare cases where the threshold has been reached, because in each and every key finding of causation, it ignored evidence that would have compelled a different conclusion."

Donald Marritz
MidPenn Legal Services