Opposition Brief — Halleen Chevrolet, Inc. v. General Motors Corp.

No. 01-1351

APR1S 2002

IFFICE OF THE C :

IN THE | OF] PTH CLERE |

Supreme Court of the Gnited States

HALLEEN CHEVROLET, INC., et ai.,

Petitioners,

V.

GENERAL MOTORS CORPORATION, et al.,

Respondents.

On a Writ of Certiorari

to the Court of Appeals of Ohio,

Tenth Appellate District

RESPONDENTS’ BRIEF IN OPPOSITION

TO HALLEEN CHEVROLET’S

PETITION FOR WRIT OF CERTIORARI

STEPHEN C. FITCH JEFFREY J. JONES

(Counsel of Record) (Counsel of Record)

17 South High Street DOUGLAS M. MANSFIELD

Suite 900 1900 Huntington Center

Columbus, Ohio 43215 41 South High Street

(614) 334-6120 Columbus, Ohio 43215

Counsel for the Respondent uh taal

Fairchild Chevrolet Counsel for the Respondent

General Motors Corporation

[Additiona! Counsel Listed on Inside Cover]

L. JOSEPH LINES, IIT

(Of Counsel)

GENERAL MOTORS

CORPORATION

Mail Code 482-026-601

400 Renaissance Center

P.O. Box 400

Detroit, MI 48265-4000

Of Counsel for the

Respondent General Motors

Corporation

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QUESTIONS PRESENTED

1. Whether a substitute examiner in an administrative

proceeding can issue a recommendation based on a review of

the record where there are no credibility issues over which the

demeanor of the witnesses is of any importance?

2. Whether an administrative agency can review the record

from an evidentiary hearing before an examiner and adopt the

examiner’s recommendation as its own decision without

holding an entirely new evidentiary hearing?

il

PARTIES TO THE PROCEEDINGS

Respondent General Motors Corporation has no parent

corporation and no publicly held company owns 10 percent or

more of its stock. Respondent Fairchild Chevrolet has no

parent corporation and no publicly held company owns 10

percent or more of its stock.

ili

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED ........................ i

PARTIES TO THE PROCEEDINGS ................ ll

TABLE GP AUTHIORETICS oo. c cc ccnccccsnsccscen iv

STATEMENT OF THE CASE ..... 0. ccc ec ccccccans l

REASONS FOR DENYING THE WRIT ............. 3

A. The Court Of Appeals’ Decision Is Consistent With

This Court’s Precedents .............0.cc000: 3

B. The Prevailing Rule Throughout The Country Is

Consistent With The Court of Appeals’ Decision .. 9

C. Separate And Apart From The Other Defects In The

Petitioners’ “Due Process” Argument, There-Were

No Disputed Issues Below Over Which Demeanor

Was Of Any Importance .................... 16

(ALBAN. 60 s00nd ska as easeee aaa ee 18

iv

TABLE OF AUTHORITIES

Page

Cases

Adams v. Industrial Commission of Arizona, 710 P.2d

SOTSEAGR, USGS 6dcccccccacvdncusewasnnsannss 15

Addison v. Review Board of Ind. Employment Security,

397 N.E.2d 1037 (Ind. App. 1979) .............. 16

Appalachian Power Co. v. Federal Power Commission,

328 F.2d 237 (4th Cir. 1964), cert. denied, 379 US.

SI CIGGED oc 6 cbennenctsée6a00ss42000 ee 13,14

Appeal of Dell, 668 A.2d 1024 (N.H. 1995) ........... 9

Armstrong v. Manzo, 380 U.S. 545 (1965) ............ 4

Art National Manufacturers Distributing Co. v. Federal

Trade Commission, 298 F.2d 476 (2nd Cir. 1962),

cert. denied, 370 U.S. 939 (1962) ............4.4.. 13

Capitol Mortgage Bankers v. Cuomo, 222 F.3d 151

CB CR BOOED oc 00 ntcdesedecéesecesdswsnnesers 5

Chemical Waste Management, Inc. v. EPA, 873 F.2d

1477 GOK. Cae, TORE occccescongussensanessuues 5

Citizens for Rewastico Creek v. Commissioners of

Hebron, 508 A.2d 493 (Md. 1986) ........... 10, 17

Dworkin v. PUCO, 111 N.E.2d 389 (Ohio 1953) ...... 12

FDIC v. Bank of Coushatta, 930 F.2d 1122 (Sth Cir.

1991), cert. denied, 502 U.S. 857 (1991) ........... 5

Foster v. Ripley, 645 F.2d 1142 (D.C. Cir. 1981) ....... 5

Frumkin v. Kent State University, 626 F.2d 19 (6th Cir.

BGG o ccccccdssénussacénseuvasnsseeeeeee 5

Gamble-Skogmo, Inc. v. Federal Trade Commission,

211 F.26 166 GOGRC. SO 6 oscccccsscvastss 14, 15

Goss v. Lopez, 419 U.S. 565 (1975) «0... .. cece ee eee 5

In re Grimm, 635 A.2d 456 (N.H. 1993) ............. 15

Laughlin, et al. vy. PUCO, 216 N.E.2d 60 (Ohio

TSGED ..ccvicectecenssdsanasssaae 6, 11,12

Lewis v. Statewide Grievance Committee, 669 A.2d 1202

* B. Peer rrr eee 9

ee

ee ones eee rene > = =

v

TABLE OF AUTHORITIES

Page

Matthews v. Eldridge, 424 U.S. 319 (1976) ........... 5

Messer v. Snohomish Cty. Board of Adj., 578 P.2d 50

GU ME nop ehunadneteus auwetnencecesuchan 9

Morgan v. United States, 298 U.S. 468 (1936) ..... 6, 7,8

Morgan v. United States, 313 U.S. 409 (1941) ......... 8

Morrisey v. Brewer, 408 U.S. 471 (1972) ............. 4

NLRB v. Mackay Radio & Telegraph Co., 304 U.S. 333

ee 0a'c44babcsedSconbeureaedecsene kee keinks 5

National Labor Relations Board v. Stocker

Manufacturing Co., 185 F.2d 451 (3rd Cir.

GUCa eS dexae nese codes haat bee eeetseudes 13,15

New England Coalition v. Nuclear Regulatory

Commission, 582 F.2d 87 (ist Cir. 1978) .... 12, 13, 17

New Motor Vehicle Board v. Orrin W. Fox Co., 439

See ONO a cus ven ddu ceed ss ibeunneuceounas 3

PBGC v. LTV, 496 U.S. 633 (1990) .. 0. eee eee. 7

Peak v. Unemployment Compensation Board of Review,

OE Pi CO CN WORD oe ciccccoccesscnscsions 9

Pigrenet v. Boland Marine & Manufacturing Co.,

631 F.2d 1190 (Sth Cir. 1980) .................. 14

Pigrenet v. Boland Marine & Manufacturing Co.,

656 F.2d 1091 (Sth Cir. 1981) ...........0...... 14

Quivara Mining Co. v. NRC, 866 F.2d 1246 (10th Cir.

en 6s00ce ceed kpeshaeededanase asset 5

Ritchie Photographic v. Limbach, 644 N.E.2d 312

Ge AE vk 0504 ccancsnedivsieeres les 12

Rosales v. Department of Labor, 40 Wn. App. 712, 715

OD 8 bvs need desenedesscalanseore 9

SBC Communications, Inc. v FCC, 56 F.3d 1484 (D.C.

Gen SE sh vdbuwnned cdeGanendenlrdsl eee 9

Schmidt v. Beeson Plumbing & Heating, 869 P.2d 1170

SL IEE sw ebueecarecceasae eee Y

vi

TABLE OF AUTHORITIES

Page

In re Seacoast Anti-Pollution League, 490 A.2d 1329

DRE cei cckeceapecuackes code aawensenwa 15 ©

State ex rel. Halleen Chevrolet, Inc. v. Larry H. James,

pir go 8 & pe Cerro Tre rrr ey 2

State ex rel. Ohio Building Restoration v. Industrial

Commission of Ohio, 593 N.E.2d 1388 (Ohio 1992) . 11

State ex rel. Ormet Corporation v. Industrial

Commission of Ohio, 561 N.E.2d 920 (Ohio 1990) . 11

Stevens Chevrolet, Inc. v. Commission on Human Rights,

498 A.2d 546 (D.C. Ct. App. 1985) .............. 16

Twin City Milk Producers Ass’n v. McNutt, 122 F.2d 564,

ee MED. Kn bk hank as RRA RDAOERA OOS 15

United States v. Florida East Coast Railway, 410 U.S.

EE neha aa eae kas ae a eka a tke es 4

University Community Hospital v. Department of Health

and Rehab. Services, 555 So.2d 922 (Fla. App. 1990) .9

University of Missouri v. Horowitz, 435 U.S. 78 (1978) ..5

Utica Mutual Insurance Co. v. Vincent, 375 F.2d 129

(2nd Cir.), cert. denied, 389 U.S. 839 (1967) ....... 13

Statutes

PE EE 6 06444004 ceccdetesadasnadecaues 13

Ee cinnsn Ceednen etek cn eendadaincawes 7

Ohio Rev. Code Ann. § 4517.51 (Anderson 2001) ...... ]

Ohio Rev. Code Ann. § 4517.58 (Anderson 2001) . . 3, 7,8

I a ene ee ek eee een 6

Miscellaneous

Davis, K. Administrative Law Treatise § 17.17 (2d ed.

RE Ree Sere eee en 10, 11

Davis, K. Administrative Law Treatise § 9.1, et seq.

tt Mn «ithcchuekdaecdedae SRE ae eens 11

ef

Vii

TABLE OF AUTHORITIES

Koch, C., Administrative Law and Practice (2d ed.

1997)

STATEMENT OF THE CASE

Petitioners seek review of an unpublished Ohio court of

appeals decision, which affirmed the trial court’s decision

upholding an administrative board order finding “good cause”

to allow an existing Chevrolet dealer to relocate its operations.

The court of appeals’ decision, which the Ohio Supreme Court

declined jurisdiction to review, decides no significant legal

questions, but merely reflects a straightforward application of

settled Ohio law. That decision applied an unbroken line of

Ohio Supreme Court cases over five decades to decide that a

substitute hearing examiner could issue a recommendation to

an administrative board after reviewing transcripts of the

hearing when the initial hearing examiner became unavailable

to finish the case. The court of appeals’ decision is consistent

with the prevailing view around the country and this Court’s

decisions over the last 70 years on what process is due in

administrative proceedings. Further review in this Court is

therefore unwarranted.

Petitioners Halleen Chevrolet, Inc., et al. (“Halleen”) filed

an administrative protest over Respondent Fairchild

Chevrolet’s (“Fairchild’s”) plans to relocate its operations

with the Ohio Motor Vehicle Dealer Board (the “Dealer

Board”). A hearing was held before Hearing Examiner Robert

Carter to determine whether Fairchild had “good cause” to

relocate. OHIO REV. CODE ANN. § 4517.51 (Anderson 2001).

The proceedings were transcribed, with 13 witnesses testifying

either live or by way of deposition transcripts. Over 100

exhibits were admitted into the record. The hearing examiner,

however, later stopped communicating with the Dealer Board

and failed to issue any recommended ruling over eight months

after the trial concluded. To comply with Ohio law—which

imposes strict timetables for completing all administrative

proceedings—the Dealer Board reassigned all of Mr. Carter’s

cases to new hearing examiners.

ni aaa

The substitute hearing examiner assigned to this case, Larry

H. James—a distinguished and experienced hearing examiner

for the Dealer Board—reviewed the entire record of the

proceedings, carefully analyzed the exhibits, personally

conducted a day-long inspection of the geographic areas in

Cleveland and dealerships at issue with counsel and all parties

present, and then heard another nearly full day of oral

argument by counsel on all of the evidence presented at the

hearing previously held.

After reviewing settled Ohio law, the substitute hearing

examiner found that he did not need all of the

witnesses—several of whom resided outside of Ohio—to

travel back to Ohio to give the same testimony that they

previously gave. Instead, Mr. James advised the parties that

he would first review the record and then, based on that

review, determine if he needed to hear any additional

testimony to decide any of the questions presented. Halleen

thereafter filed a petition for a writ of prohibition with the

Ohio Supreme Court to compel Hearing Examiner James to

retry the case and rehear all of the same witnesses again

“live.” State ex rel. Halleen Chevrolet, Inc. v. Larry H.

James, 712 N.E.2d 759 (Ohio 1999). In the briefs filed with

the Ohio Supreme Court in that action, the Dealer Board noted

that the evidence presented at the initial hearing consisted

primarily of objective “statistical” data that was easily subject

to review by way of analyzing the transcripts and exhibits.

After briefing on the issues, the Ohio Supreme Court

dismissed Halleen’s petition, authorizing Mr. James to

proceed. /d.

After completing his review of the record, Mr. James

determined that he did not need to hear any additional

testimony to resolve the issues presented. As he found in his

recommendation—which was 29 pages long and contained 93

paragraphs of findings and conclusions—the evidence clearly

established “good cause” for Fairchild’s planned relocation.

After reviewing Halleen’s objections to the hearing

3

examiner’s recommendation, the Dealer Board adopted the

recommendation without modification by operation of law,

OHIO REV. CODE ANN. § 4517.58 (Anderson 2001), and issued

an order to that effect. (Pet. App. 51a.) After reviewing the

record again, the Franklin County, Ohio Court of Common

Pleas affirmed the Dealer Board’s decision. (Pet. App. 24a.)

The Franklin County, Ohio Court of Appeals then reviewed

the record yet again and unanimously affirmed the trial court’s

decision. (Pet. App. la.) The court of appeals further noted

that “Halleen fail[ed] to point to any specific instances in the

record where witness credibility was at issue.” (Pet. App. 8a.)

Halleen thereafter attempted to invoke the Ohio Supreme

Court’s discretionary jurisdiction to review the case, which

was declined. (Pet. App. 49a.) Thus, five different tribunals

have uniformly rejected the same arguments that Halleen

makes here, repeatedly finding after reviewing the record that

Halleen’s arguments are not well taken. Halleen’s petition

should accordingly be denied.'

REASONS FOR DENYING TRE WRIT

A. The Court Of Appeals’ Decision Is Consistent With

This Court’s Precedents.

Petitioners seek review based on their contention that an

administrative board, which decides a case based on a hearing

' Notably, the litigation and multiple appeals filed by Halleen in this matter

have undermined the entire purpose of the statutory timetable governing

this administrative proceeding, which was designed to conclude within 180

days from the initial filing. Fairchild has now been precluded from

completing a simple business relocation for over five years. In New Motor

Vehicle Board v. Orrin W. Fox-Co., 439 U.S. 96 (1978), this Court noted

that the filing of an administrative protest, as here, acted as an injunction

precluding the proposed relocation without any prior showing of any

likelihood of success on the merits. The Court reasoned that this procedure

was acceptable because the statute at issue provided for a “prompt”

resolution of the matter. Respondents respectfully submit that five years

of delay is enough.

4

examiner’s recommendation, may not replace the hearing

examiner after the first examiner becomes unavailable, unless

the subsequent examiner re-hears all the same witnesses again

“live.” In rejecting that contention, the court of appeals did

not deny petitioners any “basic tenet [sic] of American law.”

(Pet. !1.) Rather, the court of appeals adhered to settled Ohio

law, which squarely comports with this Court’s time-tested —

principles concerning what constitutes due process in

administrative proceedings.

It is settled law throughout the country that an

administrative hearing officer need not actually hear or see the

witnesses testify live, so long as the decision-maker (the

agency) considers and appraises the evidence that is taken,

which it may do by relying on subordinates that singly or

collectively assemble the record and render a decision. In

United States v. Florida East Coast Ry., 410 U.S. 224 (1973),

for example, this Court held that a procedure consisting of

notice of the issues presented and an opportunity to present

evidence and arguments in writing was sufficient to satisfy

both the statutory and constitutional requirements that the

agency provide a “hearing” before it took action that imposed

substantial costs on a railroad. The Court explicitly rejected

the argument that any “hearing” conducted to resolve a factual

dispute must include the right to present oral evidence and the

right to confront and cross-examine witnesses, id. at 241-43,

although in this case Halleen was also given all of those rights

as well at the initial hearing.

Petitioners argue that the term “hearing” requires that the

substitute hearing examiner conduct a second trial-type

hearing in the proceedings before the administrative agency,

but that proposition has been consistently rejected by the

Court. The fundamental requirement of due process is the

opportunity to be heard “at a meaningful time and in a

meaningful manner.” Armstrong v. Manzo, 380 U.S. 545, 552

(1965). “(D)ue process is flexible and calls for such

procedural protections as the particular situation demands.”

2

Morrisey v. Brewer, 408 U.S. 471, 481 (1972). Due process

in administrative proceedings does not require that the

testimony be evaluated by an officer who heard and observed

the witnesses “live.” E.g., Matthews v. Eldridge, 424 U.S. 319

(1976) (Social Security Administration procedure used to

determine benefits based principally upon questionnaires with

no opportunity for an oral evidentiary hearing prior to

termination of disability benefits did not violate due process);

see also NLRB v. Mackay Radio & Telegraph Co., 304 U.S.

333 (1938) (due process afforded where trial examiner failed

to issue recommendation to board and board made findings

and issued decision solely on basis of the transcribed record).

This Court, in fact, has repeatedly affirmed that a written

hearing alone comports with due process in many decision-

making contexts. E.g., University of Missouri v. Horowitz,

435 U.S. 78 (1978) (deprivation of education in the form of

expulsion from a university); Goss v. Lopez, 419 U.S. 565

(1975) (deprivation of education in the form of a 10-day

suspension from high school). See also Capitol Mortgage

Bankers v. Cuomo, 222 F.3d 151 (4th Cir. 2000) (deprivation

of right to issue government-insured mortgages); FDIC v.

Bank of Coushatta, 930 F.2d 1122 (5th Cir. 1991), cert.

denied, 502 U.S. 857 (1991) (order requiring bank to increase

capital by $725,000); Chemical Waste Management, Inc. v.

EPA, 873 F.2d 1477 (D.C. Cir. 1989) (deprivation of money

in the form of an order to take corrective actions based on

hazardous waste release); Quivara Mining Co. v. NRC, 866

F.2d 1246 (10th Cir. 1989) (deprivation of property in the

form of imposition of costly regulatory requirement); Foster

v. Ripley, 645 F.2d 1142 (D.C. Cir. 1981) (deprivation of

government job); Frumkin v. Kent State University, 626 F.2d

19 (6th Cir. 1980) (deprivation of government job).

The Federal and Ohio Rules of Civil Procedure also allow

parties to read deposition transcripts to judges and juries under

many different circumstances without calling the witnesses

“live.” In this case, all of the witnesses that testified at the

6

first hearing in this matter resided outside Franklin County,

Ohic, where Hearing Examiner James conducted the

continued proceedings. Under Ohio Rule Civ. P. 32,

therefore, all of the witnesses could have testified by

deposition even in a civil action in a court of law. It would

make no sense to say that administrative agencies—which

follow more informal and expeditious procedures—cannot

review transcripts when judges and juries could have done so

in the circumstances present here. In fact, Halleen’s “due

process” argument that all witnesses must appear “live” would

render the use of deposition transcripts unconstitutional. That

is untenable.

Consistent with this Court’s many rulings, Ohio law

provides that an administrative agency may substitute hearing

examiners to fulfill its obligations and the substitute hearing

examiner may review the record and issue a recommendation

without having to “re-try” the entire case all over again.

Laughlin, et al. v. PUCO, 216 N.E.2d 60, 61 (Ohio 1966)

(“[i]t is not essential that a person who prepares findings and

recommendations in an administrative proceeding hears the

evidence, if he reviews and examines the record of the

proceeding.”). The court of appeals simply followed these

time-tested principles in rejecting petitioners’ contention that

due process required they be given an entirely new trial. The

Dealer Board’s assignment of a substitute hearing examiner

who reviewed the entire record, personally inspected the

relevant geographic areas, heard argument from counsel in a

nearly day-long hearing, and then prepared a detailed and

comprehensive 29-page recommended order to the Dealer

Board, comports with this precedent, as the court of appeals’

decision properly reflects.

Petitioners cite this Court’s decision in Morgan v. United

States, 298 U.S. 468 (1936) (Morgan I), for the proposition

that “(t]he one who decides must hear.” (Pet. 12.) Petitioners

construe that bare quote to mean that a hearing examiner must

hear all the witnesses “live,” but that mischaracterizes the law.

7

Petitioners ignore Morgan I’s progeny and further language in

the decision itself that confirms that petitioners’ proposition

never was the law. This Court never ruled that the one who

decides must hear the witnesses testify “live.” To the

contrary, this Court noted that the “[e]vidence may be taken

by an examiner.” /d. at 481. And this Court never said that

the one who decides must even read the testimony, for it added

that the “[e]vidence thus taken may be sifted and analyzed by

competent subordinates.” Jd. The Court in Morgan I simply

‘Tuled that the one who decides must consider the evidence.

This Court long ago rejected the petitioners’ contention that

due process requires more than what they were afforded, as

the court of appeals below correctly ruled. See also PBGC v.

LTV, 496 U.S. 633, 654 (1990) (an agency need only take

whatever steps are necessary “to provide an explanation that

will enable the court to evaluate the agency’s rationale at the

time of decision.”).

Likewise, the Dealer Board’s adoption of the hearing

examiner’s recommendation without holding an entirely new

hearing comports with these same principles. Halleen

mischaracterizes Chapter 4517 of the Ohio Revised Code

when it claims a “due process violation” because the Dealer

Board “failed to deliberate” on the hearing examiner’s

recommendation. The Dealer Board did review the hearing

examiner’s recommendation, the petitioners’ objections, and

the record, but determined that it “declined to further

deliberate on this matter.” (Pet. App. 53a.) In this

circumstance, the statute-provides that the Dealer Board need

not issue a separate decision if the Dealer Board opts to adopt

the hearing examiner’s recommendation. Section 4517.58 of

the Ohio Revised Code specifically provides that “[i]f the

Board fails to act within 30 days after the Board receives a

proposed decision from the hearing officer . . . the proposed

decision shall be considered approved.” In this case, the

Dealer Board adopted the hearing examiner’s recommendation

8

without modification and issued a separate order approving

the recommendation. (Pet. App. 51a.)

As the court of appeals correctly found, that process is

consistent with due process guarantees. There is no

requirement under the Court’s precedents that the deciding

board must observe the witnesses before making an agency

determination. Even under Morgan I, the agency is expressly

permitted to fulfill its responsibilities through the use of

subordinates. Subordinates may take the evidence and analyze

and sift through it on behalf of the deciding board. Morgan,

298 U.S. at 481. Under the Court’s fourth Morgan decision,

moreover, a deciding board need not obtain personal mastery

of the evidence and facts in order for the agency to render a

just and sound decision. Morgan v. United States, 313 U.S.

409 (1941). A deciding board can, and often must, defer to

trusted subordinates.

As the court of appeals correctly ruled, the Dealer Board’s

statutory adoption of the hearing examiner’s recommendation

comports with due process guarantees because petitioners

were afforded the opportunity for a meaningful hearing and

consideration of their claims. Petitioners were accorded an

initial lengthy “full trial”-type hearing and then a subsequent

day-long hearing by a second hearing examiner during which

the substitute examiner heard counsel’s arguments on all the

evidence presented—far more “due process” than is

customarily provided in administrative proceedings. The

hearing examiner’s recommendation was approved by the

Dealer Board after its review by operation of law. OHIO REV.

CODE ANN. § 4517.58 (Anderson 2001). As this Court’s

precedents reflect, due process does not require that petitioners

be given a second hearing before the Dealer Board. The court

of appeals properly relied on settled precedent in rejecting the

petitioners’ claim to the contrary.

9

B. The Prevailing Rule Throughout The Country Is

Consistent With The Court of Appeals’ Decision.

Petitioners argue that the court of appeals’ decision

contradicts the “vast majority of federal circuit courts and

other highest state courts.” (Pet. at 11.) Petitioners even go so

far as to contend that “[flederal courts in the First, Second,

Third, Fourth, Fifth and Eighth Circuits have explicitly stated

that a single hearing examiner cannot be replaced by a

substitute hearing examiner, who does not observe the

character and demeanor of the witnesses, where material

factual issues are unresolved.” (Pet. at 11.) That statement,

however, misstates those circuit court decisions. In fact,

virtually every decision cited by petitioners supports the court

of appeals’ decision below.

Contrary to petitioners’ arguments, the prevailing view

throughout the country is that the decision-maker in

administrative proceedings need not hear the witnesses first-

hand, so long as the hearing officer or agency reviews and

considers the record. See, e.g., Appeal of Dell, 668 A.2d 1024,

1033-34 (N.H. 1995) (board can issue decision without

hearing witnesses live); Lewis v. Statewide Grievance

Committee, 669 A.2d 1202, 1208-09 (Conn. 1996) (agency

members allowed to review transcript); Rosales v. Department

of Labor, 40 Wn. App. 712, 715 (1985) (upheld substitution of

hearing examiner and dismissed due process claim as

“contrary to the bulk of judicial authority”); Schmidt v. Beeson

Plumbing & Heating, 869 P.2d 1170, 1177-78 (Alaska 1994)

(agency may “hear” evidence by reviewing record); Messer v.

Snohomish Cty. Bd. of Adj., 578 P.2d 50, 59 (Wn. 1978)

(board can review record); Peak v. Unemployment

Compensation Board of Review, 501 A.2d 1383, 1389 (Pa.

1985) (administrative agencies may review record); University

Community Hosp. v. Dept. of Health and Rehab. Services, 555

So.2d 922, 923-24 (Fla. App. 1990) (same); SBC

Communications, Inc. v FCC, 56 F.3d 1484, 1496-97 (D.C.

10

Cir. 1995) (administrative disputes with respect to economic

facts do not require oral hearing).

One of the decisions cited by petitioners actually highlights

the prevailing rule. In Citizens for Rewastico Creek v.

Commissioners of Hebron, 508 A.2d 493 (Md. 1986),

Maryland’s highest court rejected the same line of argument

advanced by petitioners in this case, finding no due process

violation where a substitute examiner declined to re-hear all of

the witnesses “live.” As the court noted, the “general rule is

that in the absence of specific statutory direction to the

contrary the deciding member or members of an

administrative or quasi-judicial agency need not hear the

witnesses testify.” Jd. 499 (citations omitted). As the court

summarized the law, the “general rule” is that “it is enough if

those who decide have considered and appraised the

evidence.” Id.

The prevailing view, moreover, is reflected in multiple

treatises. As Professor Davis noted:

'The employee who presides at the reception of evidence

pursuant to section 556 . . . shall make the recommended

decision or initial decision required by section 557...

unless he becomes unavailable to the agency.’ But even

what is called an “initial” decision is only a

recommendation, because in reviewing it the agency under

§ 557(b) has all the powers which it would have in making

the initial decision except as it may limit the issues on

notice or by rule.” That means that the normal system is

fundamentally one in which the decision is made, even

when demeanor of witnesses is vital, by officers who have

neither seen nor heard the witnesses; the decision is not

made by the officer who has seen and heard the witnesses.

Davis, K. Administrative Law Treatise § 17.17 (2d ed. 1980)

(emphasis added). The current edition of Professor Davis’

treatise likewise notes that courts throughout the country have

acknowledged that administrative agencies can act after

11

reviewing transcribed testimony. Davis, K. Administrative

Law Treatise § 9.1, et seq. (3d ed. 1994). Other treatises on

administrative law have reached the same conclusion. See

also Koch, C., Administrative Law and Practice (2d ed. 1997)

§ 5.23.

Ohio law reflects the general rule that agencies may

substitute hearing examiners if the initial hearing examiner

becomes unavailable and the substitute examiner reviews and

appraises the evidence. The Ohio Supreme Court has

repeatediy rejected the requirement that petitioners

advocate—i.e., requiring every witness to be “live” in every

administrative proceeding. In State ex rel. Ormet Corporation

v. Industrial Commission of Ohio, 561 N.E.2d 920 (Ohio

1990), for example, the Ohio Supreme Court rejected

petitioners’ argument, finding that the law does not require

“personal attendance” at the administrative hearing so long as

the evidence is “considered and appraised.” Jd. at 922-23.

See also State ex rel. Ohio Building Restoration v. Industrial

Commission of Ohio, 593 N.E.2d 1388, 1389 (Ohio 1992)

(agency commissioner need not hear witnesses at hearing so

long as he did in “some meaningful manner, consider evidence

obtained at hearing.”’) (citations omitted).

Likewise, in Laughlin, 216 N.E.2d at 60, the Ohio Supreme

Court directly addressed the issue here. In that case, the

Public Utilities Commission of Ohio assigned a hearing

examiner to hear a protest before the Commission. The initial

hearing examiner (who started the hearing) resigned and

another hearing examiner completed the hearing. The second

hearing examiner made no findings and the transcript and

exhibits were transferred to a third hearing examiner who

issued a recommendation to the Commission. The appellants

in Laughlin contended that they were denied a fair hearing

because the Commission assigned a hearing examiner to

prepare a recommendation who had not presided at the

hearing. Jd. As the Ohio Supreme Court held, however,

“{that] contention is without merit. It is not essential that a

12

person who prepares findings and recommendations in an

administrative proceeding hears the evidence, if he reviews

and examines the record of the proceeding.” /d.

In Ritchie Photographic v. Limbach, 644 N.E.2d 312, 313

(Ohio 1994), the Ohio Supreme Court decided the same issue

and again rejected the argument advanced by petitioners. In

that case, one hearing examiner took testimony and the second

hearing examiner decided the case by examining the record.

The Ohio Supreme Court rejected the appellants’ claims that

the substitution of hearing examiners constituted a denial of

“due process.” See also Dworkin v. PUCO, 111 N.E.2d 389

(Ohio 1953) (no due process violation where agency members

made a decision based solely on transcripts).

The purported “conflict” that Halleen tries to create,

moreover, simply does not exist. The First Circuit’s decision

in New England Coalition v. Nuclear Regulatory Comm'n,

582 F.2d 87 (ist Cir. 1978), does not provide the conflict that

petitioners contend. In that case, the court held that due

process was not violated by the substitution of hearing

examiners even where there were purported credibility issues

involving the expert witnesses. While the court noted the

Administrative Procedure Act’s (“APA’s”) preference for

? Petitioners try to distinguish Laughlin and Ritchie Photographic by

claiming that the underlying issues present in those cases were based

“entirely upon questions of law,” but that is not true. There is no language

in Laughlin or Ritchie suggesting that there were no “credibility” issues

present. The complaining party in Laughlin argued that the hearing

examiner prepared “findings” and resolved factual issues without hearing

and observing the witnesses. Laughlin, 216 N.E.2d at 60. Ritchie

Photographic was likewise not limited to the resolution of a legal issue.

The appellant specifically claimed that the agency “erred in its factual

conclusion” and argued that it was denied due process because “the BTA

replaced the attorney-examiner who had conducted the evidentiary hearing

with another attorney-examiner who worked from a cold record’ to decide

[the case].” 644 N.E.2d at 313. That is the same claim petitioners are

making here.

AO Sts Ci te tead aa i Cee hats Rt Te, vo eyeer

13

hearing decisions made by someone who heard the evidence,

it also expressly recognized, as does the APA itself, that

decisions are sometimes made by substitute hearing examiners

because the initial examiner becomes “unavailable to the

agency.” Id. at 99-100; 5 U.S.C. § 554(d).

The Second Circuit’s decision likewise does not support the

petitioner’s contention of a conflict with the court of appeals’

decision below. In Art National Manufacturers Distributing

Co. v. Federal Trade Commission, 298 F.2d 476, 477 (2nd

Cir. 1962), cert. denied, 370 U.S. 939 (1962), the Second

Circuit ruled that there was no due process violation in

substituting hearing examiners because the Commission made

its findings based on uncontroverted evidence not involving

credibility, just as the court of appeals found below. The

Second Circuit, moreover, five years after its decision in Art

National Manufacturers, expressly ruled that an administrative

hearing examiner need not see the witnesses testify “live,”

even where credibility is an issue. Utica Mutual Insurance

Co. v. Vincent, 375 F.2d 129, 132 (2nd Cir.), cert. denied, 389

U.S. 839 (1967). Current law in the Second Circuit thus

directly contradicts petitioners’ contention.

Likewise, in National Labor Relations Board v. Stocker

Mfg. Co., 185 F.2d 451 (3rd Cir. 1950)—another case cited by

petitioners—the Third Circuit found no due process violation

when the trial examiner died before preparing a report and the

substitute examiner issued his recommendation to the board

based only on a review of the transcripts. As the Court noted:

“The doctrine of these cases clearly permits the Board to make

its findings and predicate its order upon the written record

without hearing the witnesses testify or availing itself of

findings and recommendations prepared by the officer who

heard and observed the witnesses testify.” Id. at 453.

The Fourth Circuit’s decision in Appalachian Power Co. v.

Federal Power Commission, 328 F.2d 237 (4th Cir. 1964),

cert. denied, 379 U.S. 829 (1964), similarly does not support

14

any conflict. In that case, the Fourth Circuit found no due

process violation where hearing examiners were substituted in

an administrative proceeding. While the court did suggest in

dicta that the substitution of trial examiners “might be

improper” where the demeanor of witnesses is an important

factor, id. at 240, it never reached that question because, as

with the court of appeals below, it determined that demeanor

was not an issue in the case. The court of appeals here

likewise ruled that petitioners never identified any issues

below where demeanor was of any importance. (Pet. App.

8a.) Although the Fourth Circuit’s decision reflects a now-

outdated view of accepted practice in administrative

proceedings, it only confirms the propriety of the court of

appeals’ decision below.

Petitioners further claim that the Fifth Circuit’s decision in

Pigrenet v. Boland Marine & Manufacturing Co., 631 F.2d

1190 (Sth Cir. 1980) illustrates a conflict. It does not.

Petitioners fail to tell this Court that an en banc panel of the

Fifth Circuit subsequently reversed its earlier decision in that

case. Pigrenet v. Boland Marine & Manufacturing Co., 656

F.2d 1091 (5th Cir. 1981). The court vacated its earlier

decision that there was a due process violation, finding that the

complainant had waived that argument and the court therefore

did not decide it. Jd. at 1095.

The Eighth Circuit’s older decision from 1954 in Gamble-

Skogmo, Inc. v. Federal Trade Commission, 211 F.2d 106 (8th

Cir. 1954) is the only circuit decision that petitioners cite that

comes anywhere close to supporting their position, but even

it does not do so. In that case, the Eighth Circuit ruled that the

APA generally would not require a substitute hearing

examiner to engage in a de novo hearing unless a credibility

evaluation was necessary. /d. at 114. The court interpreted

the APA to “establish the general practice and policy in the

examiner system of having recommended or initial

administrative decisions made by the trial examiner who had

received the evidence . . . as a measure of ensuring proper

15

credibility evaluation.” Jd. The court recognized, however,

that “a change in personnel occurring during the course of or

at the close of an administrative hearing does not as such give

rise to constitutional repugnance in a decision or order made

by the administrative tribunal on the basis of the previous

hearing.” /d. at 112, citing Twin City Milk Producers Ass’n v.

McNutt, 122 F.2d 564, 569 (8th Cir. 1941); NLRB v. Stocker

Mfg. Co., 185 F.2d 451, 453 (3rd Cir. 1950). The court

squarely recognized that the “unavailability” of the initial

examiner may necessitate the substitution of examiners

without creating any due process violation. The Eighth

Circuit’s decision thus does not evidence the sort of dissension

among the circuits that would warrant this Court’s review.

The state court decisions that petitioners cite likewise do

not reflect any conflict among the courts below. Those cases

nearly all confirm the prevailing rule, and, to the extent they

do not, they are based on particular statutes or issues that

require the fact-finder to resolve credibility issues first-hand.

In re Grimm, 635 A.2d 456 (N.H. 1993), for instance, the New

Hampshire Supreme Court analyzed peculiar procedural issues

relating to that case (there, the issue was whether sexual

contact had occurred), but the Court reaffirmed that “the

general rule in administrative proceedings is that an

administrative officer may act on a written record of testimony

by witnesses whom he has not personally seen or heard.” /d.

at 459 (citations omitted); see also In re Seacoast Anti-

Pollution League, 490 A.2d 1329, 1335 (N.H. 1984) (noting

general rule that an administrative officer may act on a written

record and affirming review of record where experts were in

conflict because review is a function of logical analysis). The

Adams v. industrial Comm’n of Arizona, 710 P.2d 1073 (Ariz.

1985) case, as well, limited its holding to the narrow issue of

whether a substituted ALJ could reverse a prior benefits

award. Even those cases that required “live” testimony did so

only when the honesty of two witnesses was in direct conflict,

generally involving completely contradictory accounts of a

16

single conversation or incident. See, e.g., Addison v. Review

Bd. of Ind. Employment Sec., 397 N.E.2d 1037 (Ind. App.

1979) (conflicting testimony on reason employee was fired);

Stevens Chevrolet, Inc. v. Commission on Human Rights, 498

A.2d 546 (D.C. Ct. App. 1985) (same). Those cases thus do

not support any conflict here.

In short, petitioners fail to identify any legal authority

contradicting the court of appeals’ decision, any legitimate

circuit split on the issues raised, or any other reason to justify

this Court’s review of the disposition of petitioners’ claims.

To the contrary, the court of appeals’ decision simply applied

the prevailing rule throughout the country.

C. Separate And Apart From The Other Defects In The

Petitioners’ “Due Process” Argument, There Were

No Disputed Issues Below Over Which Demeanor

Was Of Any Importance.

Even accepting all of petitioners’ concerns as legitimate

grounds for review, this case would not present the right

vehicle for assessing the questions presented by petitioners.

Petitioners argue that conflicting questions of “demeanor”

were somehow important, but, as the court of appeals correctly

found, there was not a single evidentiary issue of any kind

below over which the hearing examiner had to decide the

“honesty” of a witness or otherwise assess his or her

demeanor. (Pet. App. 8a.) The trial consisted almost

exclusively of differing opinions over undisputed facts and

objective data, which Hearing Examiner James could easily

analyze from the record. “Good cause,” which the statute

required for Fairchild’s planned relocation, existed for the

proposed relocation based on the undisputed facts alone. As

the Dealer Board noted in its papers to the Ohio Supreme

Court in Halleen’s prohibition proceedings, the hearing

consisted largely of objective data and evidence that could be

easily reviewed without regard to demeanor. Halleen, in fact,

17

concedes that the “raw data in this case was largely

unchallenged.” (Pet. at 6.)

Although the experts presented differing theories, which

required an analysis of the information presented by the

parties, the underlying objective data was almost entirely

undisputed. The “credibility” of expert opinions is often

analyzed through a review of exhibits and deposition

transcripts. Numerous decisions—including multiple

decisions cited by the petitioners themselves—have repeatedly

recognized that demeanor is not important in resolving

differing expert opinions. E.g., New England Coalition on

Nuclear Pollution, 582 F.2d at 100 (credibility of experts is “a

function of logical analysis, credentials, data base, and other

factors readily discernible to one who reads the record,” not of

demeanor); see also Citizens for Rewastico Creek, 508 A.2d

at 502 (same).

After reviewing the entire evidentiary record in this case,

Hearing Examiner James correctly determined that he did not

need to hear any additional evidence to resolve any questions

of “demeanor” or “honesty.” Nor did Hearing Examiner

James need to make such determinations to reach a decision in

this matter. Thus, even if Ohio law had not already addressed

the petitioners’ claimed error, that claimed error would have

no application here. To the extent the decisions the petitioners

cite on credibility determinations even reflect a conflict of any

kind, there is no such issue to resolve here.

Notably, although the petitioners now argue that the second

hearing examiner could not review transcripts of testimony,

that entire line of argument contradicts their own conduct

below. During the hearing before the first hearing examiner,

Halleen introduced multiple deposition transcripts into the

record and asked the hearing examiner to review those

transcripts and consider them in reaching a decision. Those

witnesses addressed multiple “factual” issues, but never

testified live before the first hearing examiner.

18

Given the court of appeals’ determination that no credibility

issues were ever at issue below, this case does not even

present an adequate vehicle for review of the questions

presented by petitioners, rejecting any need for review by this

Court.

CONCLUSION

For the foregoing reasons, respondents respectfully request

that this Court deny petitioners’ writ.

Respectfully submitted,

STEPHEN C. FITCH JEFFREY J. JONES

(Counsel of Record) (Counsel of Record)

17 South High Street - DOUGLAS M. MANSFIELD

Suite 900 1900 Huntington Center

Columbus, Ohio 43215 41 South High Street

(614) 334-6120 Columbus, Ohio 43215

Counsel for the Respondent i aii

Fairchild Chevrolet Counsel for the Respondent

General Motors Corporation

L. JOSEPH LINES, III

(Of Counsel)

GENERAL MOTORS

CORPORATION

Mail Code 482-026-601

400 Renaissance Center

P.O. Box 400

Detroit, MI 48265-4000

Of Counsel for the

Respondent General Motors

Corporation