The opinion
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Cynthia DeLuca and DeLuca's Auto :
Repair and Towing, Inc. :
Appellants :
: No. 2401 C.D. 2015
v. : Argued: June 6, 2016
:
Hazleton Police Department and :
Chief of Police Frank V. DeAndrea, Jr. :
BEFORE: HONORABLE ROBERT SIMPSON, Judge
HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE BONNIE BRIGANCE LEADBETTER, Senior Judge
OPINION
BY JUDGE SIMPSON FILED: July 28, 2016
The key issue in this case is whether suspension from a municipality’s
emergency service towing rotation is an “adjudication” under our Local Agency
Law,1 requiring a hearing and the right of appeal. A towing business was
suspended from the towing rotation in Hazleton amid accusations of misconduct,
including dishonesty or corruption affecting the health, safety and welfare of
others, but it was denied a hearing before the local agency and a trial court. The
towing business appeals.
More particularly, DeLuca’s Auto Repair and Towing, Inc., and its
owner, Cynthia DeLuca (collectively, DeLuca) appeal from an order of the Court
of Common Pleas of Luzerne County (trial court) dismissing their local agency
appeal. DeLuca appealed from a letter of the Hazleton Police Department
1
2 Pa. C.S. §§551-555, 751-754.
(Department) and Chief of Police Frank V. DeAndrea, Jr. (Police Chief)
suspending DeLuca from being placed on the Department’s emergency service
towing rotation list for a period of three years. In granting the Department’s
motion to dismiss, the trial court determined DeLuca demonstrated no
constitutionally protected rights or interests in the Department’s towing rotation
warranting a right to appeal the Department’s suspension letter. For the reasons
that follow, we reverse and remand for further proceedings.
I. Background
DeLuca is a Pennsylvania corporation located in the City of Hazleton.
It is in the business of towing vehicles. Prior to June 9, 2015, DeLuca received
towing assignments on a rotating basis with other approved towers. On June 9,
2015, the Department faxed DeLuca a notification of suspension of towing
services for three years under Section 1.06 of the Department’s Towing
Requirements Policy (Towing Policy) for repeated conduct by a towing service
employee that tends to demean the public image of the Department. See
Reproduced Record (R.R.) at 7a. The Department described Ms. DeLuca’s
offending conduct as follows:
Facebook posting under your personal account have [sic]
accused the Mayor of the City of Hazleton with being [a]
criminal and accepting bribes. This by means of the
relationship [DeLuca] has with the City of Hazleton and
the [Department], tends to demean the public image of
the Department.
Id. The Department’s notice of suspension also provided:
Your suspension shall be for three years. It shall
commence immediately and shall end June 10, 2018.
2
Prior to your towing service becoming eligible to receive
service calls at the end of this suspension you must take
appropriate remedial action. Your towing services
recourse to this suspension is through civil litigation.
Id. (emphasis added). Thereafter, news articles about DeLuca’s suspension
appeared on-line and in the local newspaper. See R.R. at 31a-36a.
In response to the notice of suspension, DeLuca, through counsel,
requested either a rescission of the suspension or a hearing on the suspension in the
nature of an appeal. R.R. at 8a-9a. On June 17, 2015, the Department issued a
revised notice of suspension, which provided (with emphasis added):
The suspension is pursuant to Section 1.06(C)(3)
of the [Towing Policy]: ‘The commission of any act by
an owner or manager of a towing service involving
dishonesty or corruption, when the act directly or
indirectly affects the health, welfare, or safety of others.’
The Facebook posting under ‘Hazleton Corrupts’ created
under your name and Facebook account has accused the
[Department], the Mayor, Frank Vito and [Police Chief]
of being corrupt, accepting bribes, and improperly
discriminating against your towing company (which is
untrue). I enclose a copy of the policy for your
convenience. I note that you were given a copy of same
when you were originally placed on the list, which you
consented to.
Your suspension shall be for three years. It shall
become effective June 9, 2015, and it shall end on June
10, 2018. Prior to your towing service becoming eligible
to receive service calls at the end of this suspension you
must take appropriate legal action. Your towing services
recourse to this suspension is through civil litigation, per
Section 1.06(F) of the Policy.
I am copying your Attorney … with this Notice.
The Hazleton City Solicitor … advises [your attorney]
3
that no appeal hearing will be provided in this matter, his
recourse is via suit, per Section 1.06(F) of the policy.
Additionally, any suit claiming constitutional protection
of free speech and association for this activity will be met
with a counterclaim for defamation and attorneys’ fees.
R.R. at 10a.
In July 2015, DeLuca filed a local agency appeal from the
Department’s first notice of suspension asserting the suspension of DeLuca’s
towing privileges constituted an adjudication imposed without a hearing in
violation of DeLuca’s due process rights. See R.R. at 4a-6a. In its appeal, DeLuca
averred:
5. The purported suspension was without prior notice or
hearing and is without basis in fact.
6. The purported suspension is in violation of both the
United States and Pennsylvania Constitutions in that it
was done without due process and in contravention of
[DeLuca’s] rights of political speech, activity and
affiliation.
7. [DeLuca’s] constitutional property and liberty interests
have been impaired by the purported suspension.
DeLuca’s Appeal at ¶¶5-7; R.R. at 5a.
In August 2015, the Department responded with a motion to dismiss
the appeal. R.R. at 16a-23a. The Department argued that a local agency appeal is
permitted only where an agency issues an adjudication adversely affecting the
personal or property rights or interests of an individual or business. Here, the
Department asserted, DeLuca had no statutory or contractual entitlement to remain
4
in the towing service rotation. Therefore, the Department argued, DeLuca had no
personal or property rights at stake and thus had no right to an appeal.
Thereafter, the trial court held oral argument on the Department’s
motion. R.R. at 26a-29a. Before the trial court, DeLuca asserted it suffered both a
business loss and a reputational loss. The suspension cost DeLuca two rotations in
just six weeks, and the business it would have received. See Notes of Testimony
(N.T.), 8/17/15, at 3-4; R.R. at 27a. DeLuca further asserted it lost additional
business from other customers who thought DeLuca went out of business or could
no longer work in Hazleton. Id. Therefore, in addition to a financial loss, DeLuca
claimed it suffered a reputational loss as a result of the suspension. Id.
In response, the Department asserted DeLuca had neither a contract
with the Department nor a statutory right to be on the Department’s towing rotation
list. N.T. at 6-7; R.R. at 28a. To that end, the Department argued its Towing
Policy did not create a contractual relationship between the Department and
DeLuca. N.T. at 8; R.R. at 28a. Absent a right to a local agency appeal, the
Department asserted DeLuca’s claim for loss of reputation or stigma must be
brought in a proper forum, such as a state or federal court. Id.
Following oral argument, the trial court also set up a briefing schedule
for the parties and concluded the hearing. On October 1, 2015, the trial court
entered an order granting the motion to dismiss the appeal.
5
Thereafter, in an opinion in support of its order, the trial court, citing
our decision in Wilco Mechanical Services, Inc. v. Department of General
Services, 33 A.3d 654 (Pa. Cmwlth. 2011), recognized a letter may constitute an
adjudication if it is a final determination of an agency impacting a party’s personal
or property rights, privileges, immunities, duties or obligations. See Tr. Ct., Slip
Op., 12/30/15, at 7. Further, the court reasoned, to have a constitutionally
protected property interest, a party must have more than a unilateral expectation, it
must possess a legitimate and enforceable claim under the law. Id. at 7-8. In
addition, an agency’s general statement of policy is neither a rulemaking nor an
adjudication. Id. at 9. Reviewing additional cases cited by the Department, the
trial court reasoned:
We have reviewed the authority submitted by the
[Department] defining and delimiting the nature of the
purported rights and interests asserted in the instant
context. These include: [In re J.B., 107 A.3d 1 (Pa.
2014)]; [Pipkin v. Pennsylvania State Police, 693 A.2d
190 (Pa. 1997)]; [Stumpp v. Stroudsburg Municipal
Authority, 658 A.2d 333 (Pa. Cmwlth. 1995)]; Wilco;
[Scott v. City of Pittsburgh, 903 A.2d 110 (Pa. Cmwlth.
2006)]; [Nitterhouse v. Department of Public Services,
706 A.2d 381 (Pa. Cmwlth. 2006)]; and [Nearhood v.
City of Altoona, 705 A.2d 1363 (Pa. Cmwlth. 1998)].
Both the holdings and tenor of the referenced
decisions require, in our judgment, an interpretation of an
asserted right or interest which is consistent with the
language employed by the legislature. Indeed, these
decisions do not seek to judicially expand or create
interests or privileges not contemplated by the
legislation.
Tr. Ct., Slip. Op., at 8 (citation omitted).
6
Ultimately, the trial court determined, “[i]t is not the court’s
prerogative to interfere with the operation of municipal government or the
decisions made by municipal officials absent some legally cognizable and
necessary reason to do so.” Tr. Ct., Slip. Op., at 10 (emphasis in original).
With respect to DeLuca’s claim of injury to its reputation, the trial
court rejected DeLuca’s argument that the Supreme Court’s decision in J.B.
dictates that an injury to a party’s reputational interest permits an agency appeal
and hearing. In J.B., the Supreme Court reviewed a trial court’s determination that
lifetime registration provision in the state’s Sex Offender Registration and
Notification Act (SORNA), 42 Pa. C.S. §§9799.10-9799.41, as applied to
juveniles, violated their due process rights. In J.B., the Supreme Court recognized
the juveniles had an interest in their reputation protected by Article I, Section 1 of
the Pennsylvania Constitution, which provides (with emphasis added):
All men are born equally free and independent and have
certain inherent and indefeasible rights, among which are
those of enjoying and defending life and liberty, of
acquiring, possessing and protecting property and
reputation, and of pursuing their own happiness.
PA CONST. art. 1, §1. In addition, Article I, Section 11 of the Pennsylvania
Constitution provides (with emphasis added):
All courts shall be open; and every man for an injury
done him in his lands, goods, person, or reputation shall
have remedy by due course of law, and right and justice
administered without sale, denial or delay. Suits may be
brought against the Commonwealth in such manner, in
such courts and in such cases as the Legislature may by
law direct.
7
PA CONST. art. 1, §11.
Ultimately, the Supreme Court determined the irrebuttable
presumption of recidivism in 42 Pa. C.S. §9799.11(a)(4), which states sexual
offenders “pose a high risk of committing additional sexual offenses,” violated the
juveniles’ procedural due process right to protect their reputation by denying them
an opportunity to be heard on the issue of the likelihood that they will commit
additional sexual offenses. In particular, the Court observed, the studies credited
by the trial court indicated that unlike adult sexual offenders, juvenile sexual
offenders exhibit low levels of recidivism. In short, “the vast majority of juvenile
offenders are unlikely to recidivate.” J.B., 107 A.3d at 18. Consequently, the
Supreme Court upheld the trial court’s determination that SORNA’s lifetime
registration requirement, based on an irrebuttable presumption of recidivism, was
unconstitutional as applied to juvenile offenders. J.B.
In the present case, however, the trial court reasoned the Supreme
Court’s decision in J.B. did not create a right of appeal under the Local Agency
Law, 2 Pa. C.S. §§551-555, 751-754, for the deprivation of a party’s right to
reputation without due process. To that end, the trial court stated:
We fail to discern how the reputational interest
recognized in J.B. requires a hearing presently. The
correspondence which removes DeLuca from the towing
rotation specifically advises her that recourse is through
civil litigation. No one suggests, and we have certainly
not determined, that DeLuca does not possess a
reputational interest or that the reputational interest was
not adversely affected. Today’s decision does not
deprive DeLuca from pursuing any appropriate cause of
action against [Police Chief] or the [Department.]
8
Our conclusion, informed by the referenced
appellate decisions, is simply that Local Agency Law
does not provide the forum or context within which to
address the alleged wrong.
The Pennsylvania legislature could certainly
expand the scope of these provisions to include the type
of interest presently asserted. This, in our judgment, is
certainly a legislative prerogative not a judicial one. It
involves a policy determination with which a court
should not meddle or interfere. In the context
considered, it is our view that the judiciary should not
thrust itself into each and every decision made by a
validly constituted municipal government. The perils of
doing so, aside from failing to recognize its place in our
constitutional scheme, should be obvious. It is not the
court’s prerogative to interfere with the operation of
municipal government or the decisions made by
municipal officials absent some legally cognizable and
necessary reason to do so.
Tr. Ct., Slip Op., at 9-10 (emphasis in original). DeLuca appeals.2
II. Issues
DeLuca presents three issues for our review. DeLuca first contends
the trial court erred in failing to find the Department’s June 9, 2015 suspension
letter constituted an adjudication under the Local Agency Law. DeLuca further
asserts the trial court erred in failing to find that DeLuca was entitled to a de novo
hearing on its appeal from the Department’s suspension letter. In addition, DeLuca
argues, in light of J.B., the trial court erred in failing to find that DeLuca’s right to
2
Our review of the trial court’s order dismissing DeLuca’s appeal is limited to
determining whether the trial court erred as a matter of law or abused its discretion. Bray v.
McKeesport Hous. Auth., 114 A.3d 442 (Pa. Cmwlth. 2015).
9
its reputation is a personal right protected by the Pennsylvania Constitution and a
right which cannot be impaired by a local agency adjudication without due process.
III. Discussion
A. Local Agency Law
1. Argument
DeLuca first contends the trial court’s determination that a contractual
or statutory entitlement is a prerequisite to the right to a hearing under the Local
Agency Law is contrary to applicable statutory law and case law. To the contrary,
DeLuca asserts, the Department’s suspension of its towing privileges satisfies the
following definition of “adjudication” in 2 Pa. C.S. §101 (with emphasis added):
Any final order, decree, decision, determination or ruling
by an agency affecting personal or property rights,
privileges, immunities, duties, liabilities or obligations of
any or all of the parties to the proceeding in which the
adjudication is made. The term does not include any
order based upon a proceeding before a court or which
involves the seizure or forfeiture of property, paroles,
pardons or releases from mental institutions.
Further, “[n]o adjudication of a local 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.” 2 Pa. C.S. §553. “In the event a full and complete
record of the proceedings before the local agency was not made, the court may
hear the appeal de novo, or may remand the proceedings to the agency for the
purpose of making a full and complete record ….” 2 Pa. C.S. §754(a).
10
DeLuca asserts it is beyond dispute that the Department’s suspension
of its towing privileges constituted a final order. Therefore, DeLuca argues, the
primary issue is whether the Department’s suspension adversely affected its
property rights, privileges, immunities or obligations. Citing Guthrie v. Borough
of Wilkinsburg, 478 A.2d 1279 (Pa. 1984), DeLuca argues the Department’s
suspension constituted a concrete alteration of its legal status. DeLuca also asserts
the sole purpose of the Department’s suspension was to punish it for the Facebook
posting.
If so, DeLuca posits, it is entitled to a remand for an agency hearing or
a de novo hearing before the trial court. 2 Pa. C.S. §754(a). On remand, either the
agency or the trial court must make a full and complete record of the proceeding.
Id.
DeLuca maintains the Department’s notices of suspension, which
received wide publicity in the Hazleton area, plainly and clearly stated DeLuca
engaged in “dishonesty or corruption [which] directly or indirectly affects the
health, welfare or safety of others.” See R.R. at 10a. The Department based the
suspension on a finding that DeLuca violated Section 1.06(C) of the Towing
Policy, relating to “Suspension of Towing Service(s)”, which provides (with
emphasis added):
C. The following are considered to be valid reasons for
the suspension of a towing service and the amount of
time for the suspension:
1. Three instances of inability to respond or failure
to respond in an appropriate time period due to
11
circumstances within their control during any six-month
period. (1 year suspension)
2. Failure to maintain the standards for towing
services set forth in this regulation. (First Offense 1 year
suspension; Second and subsequent offenses 3 year
suspension)
3. The commission of an act by an owner or
manager of a towing service involving dishonesty or
corruption, when the act directly or indirectly affects the
health, welfare or safety of others. If the act constitutes a
crime, conviction thereof in a criminal proceeding is not
a necessary condition precedent to the suspension. (3
year suspension up to and including lifetime revocation
of privileges)
4. Furnishing false information on the Application
to Provide Emergency Towing Services (Appendage A)
(lifetime revocation of privileges)
5. Overcharging for services rendered, as
determined in conjunction with the Fee Schedule filed
with the Application to Provide Emergency Towing
Services or the institution of fees not listed on the Fee
Schedule. (3 year suspension up to and including
lifetime revocation of privileges)
6. Repeated conduct by any employee of the
towing service of a nature which, by means of the
relationship the service has with the Department, tends to
demean the public image of the Department. (3 year
suspension up to and including lifetime revocation of
privileges)
Towing Policy at 1.06(C)1-6; R.R. at 14a-15a.
The Department’s first notice of suspension identifies Section
1.06(C)(6) of the Towing Policy (repeated conduct tending to demean the public
12
image of the Department by means of a Facebook posting accusing the mayor of
accepting bribes) as the reason for the suspension. See R.R. at 7a.
The Department’s revised notice of suspension identifies Section
1.06(C)(3) of the Towing Policy (acts by owner or manager involving dishonesty
or corruption affecting the health, welfare or safety of others) as the reason for the
suspension. See R.R. at 10a.
DeLuca contends the Department’s suspension notices resulted in a
business loss because of DeLuca’s absence from the rotation and the belief by
others that it was no longer in business or that it could no longer operate in
Hazleton. As such, DeLuca asserts the Department’s suspension constituted an
appealable adjudication because it adversely affected DeLuca’s personal or
property rights, interests or privileges.
In addition to the business loss resulting from removal from the
towing rotation, DeLuca asserts the false accusations in the Department’s
suspension notices damaged its reputation as a Hazleton towing company. In its
brief submitted to the trial court, DeLuca attached a June 10, 2015 newspaper
article from the Hazleton Standard-Speaker quoting Cynthia DeLuca’s statement
that someone hacked her Facebook account and created the posting at issue. See
R.R. at 31a. In the article, Ms. DeLuca claimed she reported the incident to
Facebook. Id.
13
DeLuca argues its reputation is a personal right protected by the
Pennsylvania Constitution. J.B. Therefore, it cannot be impaired by a government
agency adjudication without procedural due process. Id. DeLuca contends the
cases cited by the Department and relied upon by the trial court to support its
determination, that the Department’s suspension of DeLuca’s towing privileges did
not implicate a constitutionally protected personal or property interest, predated the
Supreme Court’s 2014 decision in J.B.
2. Analysis
a. Generally
“Whether a hearing and notice is required under the Local Agency
Law depends on whether a local agency’s actions constitute an adjudication.”
Guthrie, 478 A.2d at 1281. For a letter to qualify as an adjudication under 2 Pa.
C.S. §101, a two-pronged test must be met: (1) the letter must be an agency’s final
order, decree, decision or ruling; and, (2) it must impact on a person’s personal or
property rights, privileges, immunities, duties, liabilities or obligations. Guthrie.
To be entitled to procedural due process protection for injury to a personal or
property interest, the injury flowing from the agency action must be concrete, not
abstract. Id. Neither due process nor the Local Agency Law can be viewed as
protecting remote, future, indirect or speculative rights. Id. For example, in an
employment situation, a written warning, as opposed to a discharge, demotion or
suspension, would not constitute an adjudication. Id.
In addition, apart from a property interest, in some instances
government action seriously criticizing an individual may implicate a liberty
14
interest triggering due process protection. Guthrie. However, to justify the
invocation of the Local Agency Law’s due process safeguards, the government
criticism must be combined with a concrete alteration of the person’s legal status.
Id. (citing Paul v. Davis, 424 U.S. 693 (1976)).
For these reasons, DeLuca requests a remand either for a local agency
appeal before the Department or a de novo hearing before the trial court on the
Department’s notice of suspension.
In the present case, the Towing Policy includes the following
provisions (with emphasis added):
1.01 PURPOSE
The purpose of this regulation is to establish policy and
procedures governing the provision of assistance to
individuals on the roadway, and the criteria for and
selection of towing services when for any legal reason
the [Department] needs to remove a vehicle from its
location to a location of safety or safekeeping ….
1.02 POLICY
It is the policy of [the Department] to provide necessary
assistance to individuals in need in a timely, efficient and
safe manner. It is also the policy of [the Department] not
to recommend a towing service.… It shall be the policy
of [the Department] to first use businesses that are
located within the limits of the City of Hazleton. Only in
emergency, or unforeseen/extenuating circumstances will
[the Department] contract for or solicit service from an
Emergency Towing Service whose established place of
business is outside of the geographic limits of the City.
****
15
1.04 PROCEDURES
A. The Chief of Police shall review the applications of
any Towing Service that desires to handle emergency
towing calls for the City of Hazleton.
B. The Chief of Police shall provide the names of all
qualified Towing Services to Luzerne County 911 to be
placed on the Hazleton Emergency Towing Service
Rotation and contacted in turn when the need arises for
emergency towing. The [T]owing Service Rotation shall
address the distribution of service calls within [the
Department’s] geographic area of responsibility.
****
1.05 APPLICATION PROCEDURE FOR TOWING
SERVICE
A. Towing services interested in receiving service calls
from [the Department] must make application to [the
Department]. The application, and Fee Schedule, can be
found in Appendage A.
B. Towing services must have an established place of
business, a secure storage facility and a secure storage
lot, as defined in this regulation.
C. Towing services shall indicate on the application all
services it intends to provide: Heavy Duty, Medium
Duty, Light Duty, or Recovery Service. The service shall
be equipped for the service it intends to provide, as
described in this regulation.
D. Towing services shall advise [the Department] of its
[sic] fees in accordance with the Fee Schedule,
Appendage A. Prior to fees being changed, the towing
service shall submit a new fee schedule to [the
Department].
1.06 SUSPENSION OF TOWING SERVICE(S)
16
A. The Chief of Police shall be authorized to suspend a
towing service from contact by [the Department]. Any
such suspension shall follow the schedule set forth
below.
B. Notice of the suspension shall be sent to the
established place of business of the towing service and to
all members of [the Department] and the appropriate
dispatch personnel likely to be affected.
****
D. A towing service that has been suspended must take
appropriate remedial action before it will become eligible
to receive service calls at the end of its suspension.
****
F. Towing services recourse to suspension is through
civil litigation.
Towing Policy at 1.01-1.06; R.R. at 11a-15a.
As discussed above, the Police Chief, on behalf of the Department,
first suspended DeLuca for a three-year period for a violation of Section 1.06(C)(6)
of the Towing Policy for conduct by an employee tending to demean the public
image of the Department. R.R. at 7a. The notice alleged a Facebook posting
accusing the Mayor of “being criminal and accepting bribes.” Id.
In response, DeLuca attempted to appeal or rescind the suspension.
R.R. at 8a-9a. DeLuca asserted the suspension violated its constitutional rights to
due process, free speech and association. Id. DeLuca further asserted it sustained
serious harm. Id.
17
Thereafter, Police Chief issued a revised notice suspending DeLuca
for a three-year period for a violation of Section 1.06(C)(3) of the Towing Policy
for the commission of an act by an owner or manager of a towing service involving
dishonesty or corruption and directly or indirectly affecting the health, welfare or
safety of others. R.R. at 10a. The notice described the offensive conduct as a
Facebook posting accusing the Department, Police Chief and others as being
corrupt, accepting bribes and engaging in discrimination against DeLuca. Id.
In determining whether the Department’s notice of suspension
constituted an adjudication under 2 Pa. C.S. §101, we must first determine whether
the notice constituted a final order. Guthrie. Here, as indicated by the plain
language of the notices, the Department and Police Chief intended the notice to
announce their final decision to suspend DeLuca’s towing privileges for three
years beginning June 9, 2015, based on DeLuca’s allegedly demeaning Facebook
posting regarding the Mayor, Department and Police Chief. Id. Thus, the
Department’s notice of suspension is a final order. Id.
The crucial inquiry, however, is whether the Department’s suspension
affected DeLuca’s personal or property rights or privileges, immunities, duties,
liabilities or obligations. 2 Pa. C.S. §101; Guthrie. In order to have a
constitutionally protected property interest, a party must have a legitimate and
enforceable claim under the law. Wilco. Such a claim may be guaranteed by
statute or contract. Guthrie. It may also be quasi-contractual in nature. Id.
18
In Caba v. Weaknecht, 64 A.3d 39 (Pa. Cmwlth. 2013), we
recognized that property interests entitled to due process protection may take many
forms. Citing Board of Regents of State Colleges v. Roth, 408 U.S. 564 (1972),
we recognized that the U.S. Supreme Court fully rejected the “wooden distinction
between ‘rights’ and ‘privileges’ that once seemed to govern the applicability of
procedural due process rights.” Caba, 64 A.3d at 56, n.12 (quoting Roth, 408 U.S.
at 571)).
b. “Stigma-Plus”
Roth, the United States Supreme Court case we cited in Caba,
involved an asserted “liberty” interest. The rationale is instructive here. In Roth, a
state university hired David Roth as a political science professor for a period of
one year. At the end of the year, the university informed Roth that he would not be
rehired. The university offered no reason for its decision and provided no right of
appeal. Thereafter, Roth brought an action in federal court asserting the
university’s decision, which failed to provide any reasons for not rehiring him,
deprived him of a liberty interest without due process of law. Ultimately, the
Supreme Court determined the university did not deprive Roth of a protected
liberty interest under the particular circumstances of the case. Nonetheless, the
Supreme Court reasoned (with emphasis added):
There might be cases in which a State refused to
re-employ a person under such circumstances that
interests in liberty would be implicated. But this is not
such a case.
The State, in declining to rehire [Roth], did not
make any charge against him that might seriously
damage his standing and associations in his community.
19
It did not base the nonrenewal of his contract on a
charge, for example, that he has been guilty of
dishonesty, or immorality. Had it done so, this would be
a different case. For ‘[w]here a person’s good name,
reputation, honor or integrity is at stake because of what
the government is doing to him, notice and an
opportunity to be heard are essential.’ … In such a case,
due process would accord an opportunity to refute the
charge before University officials. In the present case,
however, there is no suggestion whatever that [Roth’s]
‘good name, reputation, honor or integrity’ is at stake.
Similarly, there is no suggestion that the State, in
declining to re-employ [Roth], imposed upon him a
stigma or other disability that foreclosed his freedom to
take advantage of other employment opportunities. The
State, for example, did not invoke any regulations to bar
[Roth] from all other public employment in state
universities. Had it done so, this, again, would be a
different case. For ‘[t]o be deprived not only of present
government employment but of future opportunity for it
certainly is no small injury ….”
Roth, 408 U.S. at 573-74 (citations omitted).
The quoted language in Roth can be applied to the present case. As in
Roth, DeLuca did not have a contractual or statutory right to remain on the towing
rotation list. However, DeLuca’s suspension was imposed upon it with a stigma
that allegedly affected its ability to take advantage of other employment
possibilities. In particular, DeLuca argued before the trial court and in its briefs
here that its business suffered a financial loss from lost business due to removal
from the rotations, and an additional loss of business from potential customers who
thought DeLuca went out of business or could no longer provide towing service in
Hazleton. See N.T. at 3-4; R.R. at 27a. If anything, the stigma attached to DeLuca
here is more significant under Pennsylvania law than federal law in Roth, because
20
Pennsylvania’s state constitution specifically recognizes a protected interest in
reputation.
In Guthrie, a 1984 Pennsylvania Supreme Court decision citing Roth
and other cases, the Court recognized that government action seriously criticizing a
person could implicate a liberty interest and trigger due process rights where the
government combined allegations of misconduct or criminal activity with a
concrete alteration of the person’s legal status, such as a suspension of
employment. Guthrie, 478 A.2d at 1283.
In the present case, DeLuca meets the criteria described in Guthrie.
To participate in the Department’s towing service rotation, a towing service must
be located in Hazleton, apply for approval, and demonstrate certain qualifications.
Once approved, a participant may be suspended for: (1) three instances of inability
to respond within an appropriate time, due to circumstances within its control, in a
six-month period (§1.06(C)(1)); (2) failing to maintain the Towing Policy’s service
standards (§1.06(C)(2)); or (3) for one of the types of misconduct listed in
§§1.06(C)(3)-(6). Thus, DeLuca, a Hazleton towing service, had an ongoing
towing relationship with the Department, and interruption of that relationship was
constrained by the Towing Policy.
In Caba this Court determined that it is not the existence of discretion
that precludes recognition of a property interest, but whether that discretion is
unfettered and thus unassailable. By its Towing Policy, the Department limited its
discretion to suspend an approved Hazleton towing service from the towing
21
rotation. This limitation of discretion to suspend is the interest which DeLuca
seeks to enforce. Stated differently, DeLuca had a legitimate expectation, as an
approved Hazleton towing service, that its towing rotation privileges would not be
arbitrarily suspended under Section 1.06(C) of the Towing Policy based on
unproven allegations of misconduct. See Roth (to have a property interest in a
benefit or privilege that is protected by procedural due process, one must have a
legitimate claim of entitlement to it); Caba (same).
Moreover, there can be no question that the Department’s suspension
of DeLuca was a concrete alteration of DeLuca’s ongoing relationship with the
Department. Guthrie.
Further, there is no doubt that the Department’s suspension of DeLuca
involved allegations of misconduct or criminal activity. In the initial suspension
notice, the offending conduct was described as tending to demean the public image
of the Department. R.R. at 7a. The revised suspension notice referenced “[t]he
commission of any act … of a towing service involving dishonesty or corruption
when the act directly or indirectly affects the health, welfare or safety of others.”
R.R. at 10a.
In sum, by applying the Pennsylvania Supreme Court’s language in
Guthrie, and the U.S. Supreme Court’s language in Roth, we conclude that a
“stigma-plus” situation has been averred which, if proved, would qualify as a type
of privilege referenced in the definition of “adjudication” in the Local Agency
22
Law. 2 Pa. C.S. §101. Under the terms of the Local Agency Law, DeLuca is
entitled to a hearing and to an appeal. 2 Pa. C.S. §§553, 554, 752-754.
c. Protected Interest in Conformance with Policy
Our conclusion is supported by our recent decision in Bray v.
McKeesport Housing Authority, 114 A.3d 442 (Pa. Cmwlth. 2015). In Bray we
determined that a housing authority decision not to accept an application for public
housing is an “adjudication” subject to appeal under the Local Agency Law. We
held that even if an applicant does not have a property interest in the housing itself,
an applicant has a right to have her eligibility determined in accordance with the
law.
Similarly, here DeLuca has an interest in the Department’s written
Towing Policy limiting the reasons for suspension of a Hazleton towing service
from the towing rotation. Indeed, because DeLuca already has an established,
ongoing relationship with the Department by virtue of its approved application to
be added to the towing rotation list, DeLuca has an arguably stronger case that the
unapproved applicant for housing in Bray.
d. Remedy
As can be seen from the portions of the Towing Policy quoted above,
the Policy provides for neither a hearing nor an appeal. The only “recourse to
suspension is through civil litigation.” Section 1.06(F) of the Towing Policy, R.R.
at 15a.
23
However, Article V, Section 9 of the Pennsylvania Constitution
provides (with emphasis added):
There shall be a right of appeal in all cases to a
court of record from a court not of record; and there shall
also be a right of appeal from a court of record or from an
administrative agency to a court of record or to an
appellate court, the selection of such court to be as
provided by law; and there shall be such other rights of
appeal as may be provided by law.
Although this provision is not self-executing, the Local Agency Law was enacted
to implement the appeal rights from local agencies set forth in the State
Constitution. Bray.
We are mindful that the right of appeal sought to be implemented by
the Local Agency Law is of a constitutional dimension. Having determined that
the Department’s two notices of suspension from the towing rotation are
“adjudications” of a local agency pursuant to the Local Agency Law, DeLuca is
entitled to a hearing on the record and to an appeal. We reverse the trial court’s
order and remand to the trial court, which shall remand to the Department for an
initial hearing.
B. Reputational Interest
DeLuca also contends in J.B. the Supreme Court mandated that the
right to reputation is a personal right protected by the Pennsylvania Constitution
and one which cannot be impaired by a government adjudication without due
process.
24
Although J.B. recognized that an individual’s right to reputation is
protected by the Pennsylvania Constitution and entitled to due process protection
in light of the circumstances in that case, the Court did not address whether a
reputational interest alone is sufficient to invoke the statutory due process
protections of the Local Agency Law, as DeLuca asserts. In view of our holding
that the Local Agency Law applies to the facts here, we need not reach that issue
now.
For the above reasons, we reverse the order of the trial court and
remand for further proceedings consistent with this opinion.
ROBERT SIMPSON, Judge
25
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Cynthia DeLuca and DeLuca's Auto :
Repair and Towing, Inc. :
Appellants :
: No. 2401 C.D. 2015
v. :
:
Hazleton Police Department and :
Chief of Police Frank V. DeAndrea, Jr. :
ORDER
AND NOW, this 28th day of July, 2016, the order of the Court of
Common Pleas of Luzerne County is REVERSED and this case is REMANDED
for further proceedings consistent with the foregoing opinion. Jurisdiction is
relinquished.
ROBERT SIMPSON, Judge