consumer - attorney fee award to defendant - FRCivP 54 not displaced by FDCPA

SUPREME COURT OF THE UNITED STATES

                                                                             Syllabus

MARX v. GENERAL REVENUE CORP.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT

No. 11–1175. Argued November 7, 2012—Decided February 26, 2013

 

Petitioner Marx filed suit, alleging that General Revenue Corporation (GRC) violated the Fair Debt Collection Practices Act (FDCPA) by harassing and falsely threatening her in order to collect on a debt.The District Court ruled against Marx and awarded GRC costs pur­suant to Federal Rule of Civil Procedure (FRCP) 54(d)(1), which gives district courts discretion to award costs to prevailing defendants“[u]nless a federal statute . . . provides otherwise.” Marx sought tovacate the award, arguing that the court’s discretion under Rule54(d)(1) was displaced by 15 U. S. C. §1692k(a)(3), which provides, inpertinent part, that “[o]n a finding by the court that an action underthis section was brought in bad faith and for the purpose of harass­ment, the court may award to the defendant attorney’s fees reasona­ble in relation to the work expended and costs.” The District Court rejected Marx’s argument. The Tenth Circuit affirmed, in pertinentpart, agreeing that costs are allowed under the Rule and concludingthat nothing in the statute’s text, history, or purpose indicates that itwas meant to displace the Rule.

Held: Section §1692k(a)(3) of FDCPA is not contrary to, and, thus, does not dis­place a district court’s discretion to award costs under, Rule 54(d)(1).Pp. 4–16.

(a) Rule 54(d)(1) gives courts discretion to award costs to prevailing parties, but this discretion can be displaced by a federal statute orFRCP that “provides otherwise,” i.e., is “contrary” to Rule 54(d)(1).Contrary to the argument of Marx and the United States, as amicus, language of the original 1937 version of the Rule does not suggest that any “express provision” for costs should displace Rule 54(d)(1),regardless of whether it is contrary to the Rule. Pp. 4–7.

       (b) Section 1692k(a)(3)’s language and context demonstrate that the provision is not contrary to Rule 54(d)(1). Pp. 7–15.

 (1) GRC argues that since §1692k(a)(3) does not address whether costs may be awarded in an FDCPA case brought in good faith, it does not set forth a standard that is contrary to the Rule and there­fore does not displace the presumption that a court has discretion to award costs. Marx and the United States concede that the statute does not expressly limit a court’s discretion to award costs under the Rule, but argue that it does so by negative implication. They claim that unless §1692k(a)(3) sets forth the exclusive basis on which to award costs, the phrase “and costs” would be superfluous with Rule 54(d)(1). And the United States also argues that §1692k(a)(3)’s more specific cost statute displaces Rule 54(d)(1)’s more general rule. Pp. 7–9.

      (2) The argument of Marx and the United States depends criti­cally on whether §1692k(a)(3)’s allowance of costs creates a negative implication that costs are unavailable in any other circumstances. The expressio unius canon that they invoke does not apply “unless it is fair to suppose that Congress considered the unnamed possibility and meant to say no to it,” Barnhart v. Peabody Coal Co., 537 U. S. 149, 168, and can be overcome by “contrary indications that adopting a particular rule or statute was probably not meant to signal any ex­clusion,” United States v. Vonn, 535 U. S. 55, 65. Here, context indi­cates that Congress did not intend §1692k(a)(3) to foreclose courts from awarding costs under the Rule. First, under the American Rule, each litigant generally pays his own attorney’s fees, but the Court has long recognized that federal courts have inherent power to award attorney’s fees in a narrow set of circumstances, e.g., when a party brings an action in bad faith. The statute is thus best read as codify­ing a court’s pre-existing authority to award both attorney’s fees and costs. Next, §1692k(a)(3)’s second sentence must be understood in light of its first, which provides an award of attorney’s fees and costs, but to prevailing plaintiffs. By adding “and costs” to the second sen­tence, Congress foreclosed the argument that defendants can only re­cover attorney’s fees when plaintiffs bring an action in bad faith and removed any doubt that defendants may recover costs as well as at­torney’s fees in such cases. Finally, §1692k(a)(3)’s language sharply contrasts with that of other statutes in which Congress has placed conditions on awarding costs to prevailing defendants. See, e.g., 28 U. S. C. §1928. Pp. 9–12.

(3) Even assuming that their surplusage argument is correct, the canon against surplusage is not absolute. First, the canon “assists only where a competing interpretation gives effect to every clause and word of a statute.” Microsoft Corp. v. i4i Ltd. Partnership, 564 U. S. ___, ___. Here, no interpretation of §1692k(a)(3) gives effect to every word. Second, redundancy is not unusual in statutes address­ing costs. See, e.g., 12 U. S. C. §2607(d)(5). Finally, the canon is strongest when an interpretation would render superfluous another part of the same statutory scheme. Because §1692k(a)(3) is not partof Rule 54(d)(1), the force of this canon is diminished. Pp. 13–14.

(4) Lastly, contrary to the United States’ claim that specific cost­shifting standards displace general ones, the context of the statuteindicates that Congress was simply confirming the background pre­sumption that courts may award to defendants attorney’s fees and costs when the plaintiff brings an action in bad faith. Because Marx did not bring this suit in bad faith, the specific provision is not appli­cable. Pp. 14–15.

 668 F. 3d 1174, affirmed.

THOMAS, J., delivered the opinion of the Court, in which ROBERTS, C. J., and SCALIA, KENNEDY, GINSBURG, BREYER, and ALITO, JJ., joined. SOTOMAYOR, J., filed a dissenting opinion, in which KAGAN, J., joined

contracts - attorney fees - reasonableness

Republic First Bank v. 240/242 Franklin Avenue LLC – ED Pa. – Feb. 25, 2013

http://www.paed.uscourts.gov/documents/opinions/13D0158P.pdf

Pennsylvania law. . . recognizes “the general principle that contractual damages provisions are unenforceable where they act as penalties rather than liquidated damages.” . . . .liquidated damages are allowable, but a penalty clause, which acts primarily as a contract-breach deterrent, is a punishment and unenforceable on public policy grounds). “An attempt to fix a particular sum as attorney’s fees or set a formula for their calculation must meet the same test as a liquidated damages clause.” . . .Pennsylvania law thus “requires that a contractual agreement setting attorney’s fees be ‘reasonable,’ and allows for court modification of unreasonable fee provisions.” Webster Capital Finance, Inc., 2011 WL 2039058 at *10 (finding that 20% attorney’s fee in loan agreements underlying  complaint in confession of judgment was unreasonable and an unenforceable penalty clause).

“As such, courts are encouraged to be alert for excessive attorney fees, and to exercise their inherent equitable power to reduce them where appropriate.” Textron Fin. Corp. v. Vacation Charters, Ltd., No.11-1957, 2012 WL 760602, at *5 (M.D. Pa. Mar. 8, 2012), citing PNC Bank, 655 A.2d at 1000 (finding charge in complaint in confession of judgment of more than $70,000 for attorney’s fees for “what in most cases amounts to filing a single document” was “blatantly unreasonable”); see also Dollar Bank v. Northwood Cheese Co., Inc., 637 A.2d 309, 314 (Pa. Super. Ct. 1994) (court may modify amount of attorney’s fee if excessive); McMullen v. Kutz, 985 A.2d 769, 777 (Pa. 2009) (holding that the state’s trial courts could review attorneys’ fees for reasonableness and reduce them accordingly despite the parties having already contractually agreed the breaching party would pay the attorneys’ fees). “Of course, ‘[w]hat may be reasonable is not necessarily the amount stipulated in the contract.’” Textron Fin. Corp., 2012 WL 760602, at *5, quoting Consumers Time Credit, Inc. v. Remark Corp., 259 F. Supp. 135, 137 (E.D. Pa. 1966) (alterations in original); see also Republic First Bank v. Jemal, No. 10-1009, 2011 WL 4087564, at *8 (E.D. Pa. Sept. 13, 2011) report and recommendation adopted, No. 10-CV-1009, 2011 WL 4344030 (E.D. Pa. Sept. 14, 2011) (finding loan agreement stating plaintiff may confess attorneys’ fees in the amount of 15% of the total indebtedness “unreasonably operate[d] as a penalty, which makes them unenforceable”).1

While the parties in this case entered into a contract which provided for attorneys’ fees in the amount of fifteen percent in the event of default on the loan and expressly agreed that such a fee was reasonable, see e.g., Am. Compl., Ex. J, p. 5, given the guiding principles discussed above I find further inquiry into First Republic’s request for attorneys’ fees to be appropriate

__________________________

 1   However, . . .. no standard exists to measure the reasonableness of an amount.” Ryan v. Butera, Beausang, Cohen & Brennan, 193 F.3d 210, 217 n.13 (3d Cir. 1999) (citations omitted). Nevertheless, “[u]nder Pennsylvania law, what constitutes a reasonable amount of fees and expenses is subject to the court’s equitable control.” Nationwide Energy Corp. v. Kleiser, No. 84-3517, 1987 WL 10655, at *3 (E.D. Pa. May 7, 1987).

In other contexts, in calculating a reasonable attorney’s fee, courts consider:  
(1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the skill requisite to perform the legal service properly; (4) the preclusion of employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the ‘undesirability’ of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases.
Carey v. City of Wilkes-Barre, No. 11-2671, 2012 WL 3608613, at *2 n.3 (3d Cir. Aug. 23, 2012), quoting City of Riverside v. Rivera, 477 U.S. 561, 568 n. 3 (1986).

Similarly, Pennsylvania courts in determining the reasonableness of fees and expenses generally consider:

the amount and character of the services rendered; the labor, time and trouble involved; the character and importance of the litigation; the amount of money or value of property affected; the professional skill and experience called for; the standing of the attorney in his profession; and the pecuniary benefit derived from the success.

Nationwide Energy Corp. v. Kleiser, No. 84-3517, 1987 WL 10655, at *3 (E.D. Pa. May 7, 1987), citing Huffman Estate (No. 3), 36 A.2d 640, 643 (Pa. 1944).  

cy pres- class action settlements - 3d Cir.

In re Baby Products Antitrust Litigation – 3d Cir. – February 19, 2013

http://www.ca3.uscourts.gov/opinarch/121165p.pdf

We address for the first time the use of cy pres distributions in class action settlements.  “The term ‘cy pres’  is derived from the Norman French expression cy pres comme possible, which means ‘as near as possible.’” . . . .When class actions are resolved through settlement, it may be difficult to distribute the entire settlement fund, after paying attorneys’ fees and costs along with fund administration expenses, directly to its intended beneficiaries—the class members. Money may remain unclaimed if class members cannot be located, decline to file claims, have died, or the parties have overestimated the amount projected for distribution for some other reason. It may also be economically or administratively infeasible to distribute funds to class members if, for example, the cost of distributing individually to all class members exceeds the amount to be distributed. In these circumstances, courts have permitted the parties to distribute to a nonparty (or nonparties) the excess settlement funds for their next best use—a charitable purpose reasonably approximating the interests pursued by the class.

The cy pres award in this case was part of a settlement of consolidated antitrust class actions brought by several named plaintiffs (collectively, the “Plaintiffs”) on behalf of consumers against retailers Toys “R” Us, Inc. and Babies “R” Us, Inc. along with several baby product manufacturers (the retailers and manufacturers are collectively referred to as the “Defendants”). Pursuant to that settlement, which was approved by the District Court, all settlement funds remaining after attorneys’ fees and costs are paid, and individual distributions are made to claimants, would go to one or more charitable organizations proposed by the parties and selected by the Court. The Court indicated it would ensure the funds are used for a purpose underlying the interests of the class.

Kevin Young, an unnamed class member who objected to the settlement before the District Court, raises the following three issues relating to the cy pres provision on appeal.3
(1) The District Court erred in approving a settlement that would result in funds being distributed to one or more cypres recipients in lieu of fully compensating class members for their losses.
(2) The Court should have discounted the value of the cy pres distribution for purposes of calculating attorneys’ fees, which were awarded on a percentage-of-recovery basis.
(3) The class notice was deficient because it did not identify the recipients that would receive the cy pres distributions.

Young’s overarching concern, and ours as well, is that the settlement has resulted in a troubling and, according to counsel for the parties, surprising allocation of the settlement fund. Cy pres distributions, while in our view permissible, are inferior to direct distributions to the class because they only imperfectly serve the purpose of the underlying causes of action—to compensate class members. Though the parties contemplated that excess funds would be distributed to charity after the bulk of the settlement fund was distributed to class members through an exhaustive claims process, it appears the actual allocation will be just the opposite. Defendants paid $35,500,000 into a settlement fund. About $14,000,000 will go to class counsel in attorneys’ fees and expenses. Of the remainder, it is expected that roughly $3,000,000 will be distributed to class members, while the rest—approximately $18,500,000 less administrative expenses—will be distributed to one or more cy pres recipients.

We vacate the District Court’s approval of the settlement because the Court was apparently unaware of the amount of the fund that would be distributed to cy pres beneficiaries rather than being distributed directly to the class. On remand, the Court should consider whether this or any alternative settlement provides sufficient direct benefit to the class before giving its approval.

We also vacate the attorneys’ fees award because its approval was based on the terms of a settlement that are no longer in effect and may be altered on remand. Addressing Young’s argument that attorneys’ fees should be reduced, we confirm that courts need to consider the level of direct benefit provided to the class in calculating attorneys’ fees. We leave it to the District Court’s discretion to assess what effect, if any, that consideration should have on any future fee award in this case. As there was no error in the notice provided to the class, we do not reverse on that basis.

custody - Hague Convention - Chafin v. Chafin

http://www.supremecourt.gov/opinions/12pdf/11-1347_m648.pdf

OCTOBER TERM, 2012

                                          SUPREME COURT OF THE UNITED STATES

CHAFIN v. CHAFIN

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT

No. 11–1347. Argued December 5, 2012—Decided February 19, 2013

The Hague Convention on the Civil Aspects of International Child Ab­duction requires the judicial or administrative authority of a Con­tracting State to order a child returned to her country of habitual res­idence if the authority finds that the child has been wrongfullyremoved to or retained in the Contracting State. The International Child Abduction Remedies Act (ICARA) implements the Convention in the United States, granting federal and state courts concurrent ju­risdiction over Convention actions and directing those courts to de­cide cases in accordance with the Convention. ICARA also requires defendants to pay various expenses incurred by plaintiffs associatedwith the return of children. Petitioner Mr. Chafin, a United States citizen and member of the military, married respondent Ms. Chafin, a United Kingdom citizen, in Germany, where they later had a daughter, E. C. When Mr. Chaf­in was deployed to Afghanistan, Ms. Chafin took E. C. to Scotland.Mr. Chafin was later transferred to Huntsville, Alabama, and Ms. Chafin eventually traveled there with E. C. Soon after Ms. Chafin’s arrival, Mr. Chafin filed for divorce and child custody in Alabama.Ms. Chafin was subsequently deported, but E. C. remained in Ala­bama with Mr. Chafin. Several months later, Ms. Chafin filed a peti­tion under the Convention and ICARA, seeking E. C.’s return to Scot­land. The District Court concluded that E. C.’s country of habitualresidence was Scotland and granted the petition for return. Ms. Chafin immediately departed for Scotland with E. C. Ms. Chafin then initiated custody proceedings in Scotland and was granted inter­im custody and a preliminary injunction prohibiting Mr. Chafin fromremoving E. C. from Scotland. Mr. Chafin appealed the DistrictCourt’s order, but the Eleventh Circuit dismissed the appeal as moot, on the ground that once a child has been returned to a foreign coun­try, a U. S. court becomes powerless to grant relief. On remand, the District Court ordered Mr. Chafin to reimburse Ms. Chafin for court costs, attorney’s fees, and travel expenses.

 Held: The return of a child to a foreign country pursuant to a Conven­tion return order does not render an appeal of that order moot. Pp. 5–14.

(a) Article III restricts the power of federal courts to “Cases” and“Controversies,” and this “requirement subsists through all stages of [the] proceedings,” Lewis v. Continental Bank Corp., 494 U. S. 472, 477. No case or controversy exists, and a suit becomes moot, “whenthe issues presented are no longer ‘live’ or the parties lack a legallycognizable interest in the outcome,” Already, LLC v. Nike, Inc., 568 U. S. ___, ___. But a case “becomes moot only when it is impossiblefor a court to grant any effectual relief whatever to the prevailing party,” Knox v. Service Employees, 567 U. S. ___, ___. As “long as theparties have a concrete interest, however small, in the outcome of thelitigation, the case is not moot,” ibid. Pp. 5–6.

     (b) Because the Chafins continue to vigorously contest the questionof where their daughter will be raised, this dispute is very much alive. This case does not address “a hypothetical state of facts,” Lew­is, supra, at 477, and there continues to exist between the parties“that concrete adverseness which sharpens the presentation of is­sues,” Camreta v. Greene, 563 U. S. ___, ___. Pp. 6–11.

                       (1) Mr. Chafin seeks typical appellate relief: reversal of the Dis­trict Court determination that E. C.’s habitual residence was Scot­land and, upon reversal, an order that E. C. be returned to the Unit­ed States. The question is whether such relief would be effectual. In arguing that this case is moot because the District Court has no au­thority to issue a re-return order either under the Convention or pur­suant to its inherent equitable powers, Ms. Chafin confuses mootness with the merits. See, e.g., Powell v. McCormack, 395 U. S. 486, 500. Mr. Chafin’s claim for re-return cannot be dismissed as so implausi­ble that it is insufficient to preserve jurisdiction, and his prospects ofsuccess are therefore not pertinent to the mootness inquiry. As to the effectiveness of any relief, even if Scotland were to ignore a re-return order, this case would not be moot. The U. S. courts continue to have personal jurisdiction over Ms. Chafin and may command her to takeaction under threat of sanctions. She could decide to comply with anorder against her and return E. C. to the United States. Enforcement of the order may be uncertain if Ms. Chafin chooses to defy it, but such uncertainty does not typically render cases moot. Pp. 7–10.

                         (2) Mr. Chafin also seeks, if he prevails, vacatur of the District Court’s expense orders. That too is common relief on appeal, and the mootness inquiry comes down to its effectiveness. In contending that this case is moot due to Mr. Chafin’s failure to pursue an appeal ofthe expense orders, which were entered as separate judgments, Ms. Chafin again confuses mootness with the merits. Because there is authority for the proposition that failure to appeal such judgments separately does not preclude relief, it is for lower courts at later stag­es of the litigation to decide whether Mr. Chafin is in fact entitled tothe relief he seeks. That relief would not be “ ‘fully satisfactory,’ ” but “even the availability of a ‘partial remedy’ is ‘sufficient to prevent [a] case from being moot,’ ” Calderon v. Moore, 518 U. S. 149, 150. Pp. 10–11.

(c) Manipulating constitutional doctrine and holding these cases moot is not necessary to achieve the ends of the Convention and IC-ARA, and may undermine the treaty’s goals and harm the children meant to be protected. If these cases were to become moot upon re­turn, courts would be more likely to grant stays as a matter of course, to prevent the loss of any right to appeal. Such routine stays wouldconflict with the Convention’s mandate of prompt return. Courts should instead apply traditional factors in considering whether to stay a return order, see, e.g., Nken v. Holder, 556 U. S. 418, 434, thus ensuring that each case will receive the individualized treatmentnecessary for appropriate consideration of the child’s best interests.Finally, at both the district and appellate court level, courts should take steps to decide these cases as expeditiously as possible. Pp. 11–14. Vacated and remanded.

 ROBERTS, C. J., delivered the opinion for a unanimous Court. GINSBURG, J., filed a concurring opinion, in which SCALIA and BREYER, JJ., joined.

 

 

disability - drugs and alcohol - SSR 13-2p

http://www.gpo.gov/fdsys/pkg/FR-2013-02-20/html/2013-03751.htm

Federal Register Volume 78, Number 34 (Wednesday, February 20, 2013)]

[Pages 11939-11947]

 

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SOCIAL SECURITY ADMINISTRATION

 

[Docket No. SSA-2012-0006]

 

 

Social Security Ruling, SSR 13-2p.; Titles II and XVI: Evaluating

Cases Involving Drug Addiction and Alcoholism (DAA)

 

AGENCY: Social Security Administration.

 

ACTION: Notice of Social Security Ruling (SSR).

 

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SUMMARY: We are giving notice of SSR 13-2p, in which we explain our

policies for how we consider whether ``drug addiction and alcoholism''

(DAA) is material to our determination of disability in disability

claims and continuing disability reviews. This SSR rescinds and

replaces SSR 82-60, Titles II and XVI: Evaluation of Drug Addiction and

Alcoholism. This SSR obsoletes EM 96-200.

 

DATES: Effective Date: March 22, 2013.

 

 

foreclosure - standing to challenge MERS

Culhane v. Aurora Loan Services – February 2013 – 1^st Circuit

http://www.ca1.uscourts.gov/cgi-bin/getopn.pl?OPINION=12-1285P.01A

SELYA, Circuit Judge. As the millennium dawned, American financial markets soared to new heights. One of the vehicles that propelled this dizzying flight involved the bundling and securitization of residential mortgage loans. But all good things come to an end, cf. Geoffrey Chaucer, Troilus and Criseyde (circa 1374) ("There is an end to everything, to good things as well."), and it was not long before the economy faltered and the housing bubble burst. A rash of residential mortgage foreclosures  followed.

Novel practices had been devised to facilitate the bundling and securitization of residential mortgage loans — and those practices gave rise to hitherto unanswered questions in the foreclosure context. The fact pattern here is emblematic: the mortgagor's note was delivered to one party (the lender) and then transferred; the mortgage itself was granted to a different entity,Mortgage Electronic Registration Systems, Inc., and later assigned to the foreclosing entity. We are asked, as a matter of first impression for this court, to pass upon not only the legality and effect of this arrangement but also the mortgagor's right to challenge it. The substantive law of Massachusetts controls our inquiry.

After careful consideration, we conclude that, in the circumstances of this case, the mortgagor has standing to contest the validity of the mortgage assignment made by MERS to the foreclosing entity. We also conclude, however, that the MERS framework is faithful to the age-old tenets of mortgage law in Massachusetts and that, therefore, the foreclosure here was not unlawful.

____________________

Standing doctrine is meant to  be  a  shield  to  protect  the  court  from  any  role  in  the adjudication of disputes that do not measure up to a minimum set of adversarial  requirements.  There  is  no  principled  basis  for employing standing doctrine as a sword to deprive mortgagors of legal protection conferred upon them under state law.  We hold, therefore,  that  a  mortgagor  has  standing  to  challenge  the assignment  of a mortgage on her  home to the  extent  that such  a challenge is necessary to contest a foreclosing entity's status qua mortgagee.-

admin. law - body that did not hear case CAN decide facts w/o violating due process

Graff v. DPW - Cmwlth. Court - November 21, 2011 - unreported memorandum decision

http://www.pacourts.us/OpPosting/Cwealth/out/176CD11_11-21-11.pdf

Claimant contends that the Secretary lacked authority to alter the ALJ‟s factual finding that she was permanently disabled by her work injury. The Department counters that the Secretary is vested with final fact-finding authority, and, thus, error did not occur.

In Siemon’s Lakeview Manor Estate v. DPW, 703 A.2d 551, 553-554 (Pa. Cmwlth. 1997), the Secretary reversed the factual findings of the Bureau in holding that a nursing facility was not entitled to reimbursement of certain costs associated with nursing care services. The nursing facility appealed to this Court, claiming that the Secretary did not have authority to reverse the Bureau's factual findings.

In deciding this legal issue, we reviewed the applicable statutes and regulations. Section 206 of the Administrative Code of 1929, provides that the Secretary of Public Welfare shall "personally" or through a "duly authorized agent" carry out his duties as agency head. 71 P.S. § 66. The General Rules of Administrative Practice and Procedure, which govern hearings before state agencies, such as the Department, authorize the "agency head" to personally conduct hearings or to appoint a presiding officer to conduct hearings. 1 Pa. Code §§35.123, 35.185. Here, the legislature has expressly made "the Secretary" the "head" of the Department. 71 P.S. §66. Consistent with these principles, we held that even though the Secretary did not view the demeanor of witnesses, this did not preclude the Secretary from exercising final fact-finding authority.

Again, in A.O. v. Department of Public Welfare, 838 A.2d 35 (Pa. Cmwlth. 2003), we reiterated that the Secretary, as the agency head, is vested with fact-finding authority. We further explained as follows:

While a fact finder‟s observation of the demeanor of a witness has traditionally been viewed as an important factor in determining credibility, administrative adjudicators are permitted to determine the credibility of testimony from the reading of a transcript. Administrative agencies often use a system of adjudication where a hearing examiner or presiding officer takes evidence and the ultimate fact finder is a board or commission, which has the power to make findings of fact based solely on a review of the record. See, e.g., Kramer v. Department of Insurance, 654 A.2d 203 (Pa. Cmwlth. 1995) (presiding officer conducted an evidentiary hearing, but the adjudication was issued by the Insurance Commissioner); … An adjudicative method where the ultimate decision in a case is made by an administrative fact finder who did not hear the testimony does not deny a litigant due process of law. Id.
at 38, n.5 (emphasis added) (citation omitted).  

More recently in Duvall v Department of Corrections, 926 A.2d 1220 (Pa. Cmwlth. 2007), we considered whether the Secretary of Corrections could reject a hearing examiner‟s factual findings made in a hearing to determine eligibility for Heart and Lung benefits. The Secretary found that the claimant had fully recovered and was able to return to work. The claimant appealed to this Court, arguing that the Secretary could not make credibility determinations contrary to those of the hearing examiner. We disagreed, explaining that the hearing examiner was merely the designee of the Secretary, who was "the ultimate finder of fact in the instant matter" and able to make different credibility determinations. Id. at 1225.

We reject Claimant's contention that it was impermissible for the Secretary to make new factual findings, including credibility determinations, that differed from those of the administrative law judge appointed to take evidence and make the record for the Secretary. The contrary principle has been well established in legislation, regulations and case law precedent.

The opinion, though not reported, may be cited "for its persuasive value, but not as binding precedent."

210 Pa. Code § 67.55. Citing Judicial Opinions.

Legislation - unlawful delegation of legis. power - due process right to a hearing

MCT Transp. v. Phila. Parking Authority – Cmwlth – 2-14-13 – en banc (39 pp.)

http://www.pacourts.us/assets/opinions/Commonwealth/out/481MD12_2-14-13.pdf

 

Statute establishing process by which licensing fees are established, 53 P.S. 5707(b), held unconstututional, because

      - unconstitutional delegation of legislative power – no legis. standards to guide or restrain setting of licensing fees by administrative body
      - lack of due process, stemming from lack of the opportunity to challenge the licensing fee decision at a hearing.

 Unconstitutional delegation

Article II, Section 1 of the Pennsylvania Constitution vests legislative power in a General Assembly.8 Legislative power is the power to make a law and, thus, the General Assembly “cannot constitutionally delegate the power to make law to any … other body or authority.” . . . . However, it can “make a law to delegate a power to determine some fact or state of things upon which the law makes, or intends to make, its own action depend.” . . . The legislature must make the basic policy choices, but it can “impose upon others the duty to carry out the declared legislative policy in accordance with the general provisions” of the statute.  In that situation, “it is the legislature which has legislated and not the administrative body.”  When conferring power on an agency to decide the facts and apply the law to a particular situation, the legislature must establish the standards for exercising that power.

We hold that Section 5707(b) is unconstitutional. The General Assembly has failed to establish standards directing the Parking Authority’s exercise of discretion in deciding how much to spend each year to regulate common carriers providing taxicab and limousine service in Philadelphia.  Additionally, the General Assembly has given the Parking Authority “no standards to guide or restrain [it] in setting fees” in any fashion whatsoever. . . . .Because Section 5707(b) lacks standards to guide the establishment of an annual budget and fee schedule, it delegates legislative power to the Parking Authority, in violation of separation of powers.

Due Process – right to a hearing
The Taxicab Companies contend that Section 5707(b) unconstitutionally deprives them of due process because it does not provide any procedure for challenging the Parking Authority’s fee schedule, either before or after its adoption. We agree. . . . The Fourteenth Amendment to the United States Constitution and Article I, Section 1 of the Pennsylvania Constitution guarantee due process of law before the state can deprive an individual of a protected life, liberty or property interest. . . . The right to pursue a livelihood or profession is a protected property interest that triggers procedural due process. . . . As our Supreme Court has explained, the “Constitution guarantees to those who invest their property in business enterprises that it will not be taken without due process of law.” . . . . The “essential elements [of due process] are notice and opportunity to be heard and to defend in an orderly proceeding adapted to the nature of the case before a tribunal having jurisdiction of the cause.”

The Court began with the observation that it is a “fixed principle in our law that no man shall be adjudged in person or property without notice and an opportunity to appear and be heard. To condemn without a hearing is repugnant to due process.” . Because due process applies to administrative officials, “there must be a hearing somewhere, at some stage in the proceeding, even if it be after the property itself is parted with,” in order for the agency’s action to comport with due process. Section 5707(b) requires the Taxicab Companies to pay a fee to the Parking Authority if they wish to stay in business. The fee can be excessive and confiscatory, but there is no relief to the utilities subject to such a fee. The Taxicab Companies cannot challenge the fee schedule in a hearing “at any stage in the process,” either before or after the fee schedule becomes effective. . . .  To “condemn without a hearing is repugnant to the due process clause.” . Accordingly, we hold that Section 5707(b) is unconstitutional.