LARRY G. BURTON, Complainant
UNITED GOVERNMENT SERVICES LLC, Respondent
An administrative law judge (ALJ) for the Equal Rights Division of the Department of Workforce Development issued a decision in this matter on October 29, 2008. A timely petition for review was filed.
The commission has considered the petition and the positions of the parties. Based on its review, the commission makes the following:
Dated and mailed March 2, 2010
burtola . rpr : 110 :
/s/ James T. Flynn, Chairperson
/s/ Robert Glaser, Commissioner
/s/ Ann L. Crump, Commissioner
History of this case - This case arose out of a complaint of employment discrimination filed by Larry Burton against United Government Services ("UGS"). In May, 2005, the matter was pending before the Equal Rights Decision, awaiting a hearing on the issue of whether there was probable cause to believe the allegations of Burton's complaint. On May 27, 2005, Administrative Law Judge (ALJ) Alice DeLaO issued an Order dismissing Burton's complaint. This Order indicated that the complaint was being dismissed because the parties had entered into a private settlement providing for dismissal of the case. Burton sent the ALJ a letter objecting to the dismissal. That letter was treated as a petition for commission review.
The letter from Burton which was treated as his petition for review, and written arguments subsequently filed by the parties with the commission, included assertions about events occurring in May 2005 leading up to the issuance of ALJ DeLaO's Order of Dismissal. Some of these assertions were inconsistent or in conflict. In addition, there was no evidentiary record on the basis of which findings could be made about what had happened during the period in question, or on the basis of which the conflicting assertions of the parties could be resolved, because there had been no hearing held.
On November 18, 2005 the commission issued an Order that ALJ DeLaO's May 27, 2005 Order of Dismissal be set aside and that the matter be remanded for hearing on the question of whether the complaint was withdrawn or settled and, provisionally, on the underlying questions presented (i.e., the question of whether there was probable cause to believe that discrimination had occurred). The commission's decision explained that it believed the case was too dependent on factual issues which were apparently in dispute and that, for that reason, the matter was being remanded for the ALJ to allow the parties to be heard on the factual issues relevant to the question of whether the complaint was withdrawn or settled. The commission's decision stated that if the parties could agree on a statement of stipulated facts relative to this question, the ALJ could decide the matter on that basis, but that if they could not, then a hearing should be held. Larry G. Burton v. United Government Services LLC (LIRC, Nov. 18, 2005).
After receiving the case back from the commission, ALJ DeLaO took no steps towards either soliciting a statement of stipulated facts from the parties, or scheduling a hearing at which they could be heard on the factual issues relevant to the question of whether the complaint was withdrawn or settled. Instead, she tried to persuade the parties to settle the entire case. At her urging, a number of settlement conferences were held with another ALJ serving as a mediator. These attempts at settlement, which extended through much of 2006, ultimately proved fruitless, and in September, 2006 the mediator abandoned his efforts and returned the matter to ALJ DeLaO. Again, she took no steps towards either soliciting a statement of stipulated facts from the parties, or scheduling a hearing. Eventually, in February, 2007, ALJ DeLaO informed the parties that she had "reviewed the file and believe[d] that [she had] sufficient information to make a decision regarding the issue of whether there was a settlement of this matter and whether the complainant withdrew his complaint." The ALJ stated that she was "willing to allow the parties to supplement the record with additional documents, affidavits or argument concerning these issues if the parties chose to do so". All that was filed in response was 5 pages of written argument from the respondent.
On July 2, 2007, ALJ DeLaO issued a "Decision On Remand From LIRC." This decision included a detailed description of events occurring in May 2005 leading up to the issuance of the ALJ's Order of Dismissal on May 27, 2005. This description was not based on either a statement of stipulated facts agreed to by the parties, or evidence received at a hearing, since, as described above, no statement of stipulated facts had been agreed on and no hearing had been held. The only indication in the decision as to why the ALJ had not either obtained a statement of stipulated facts or held a hearing as had been ordered by the commission, was the ALJ's statement that she "did not believe the essential facts of the matter were in dispute". In her decision, ALJ DeLaO again dismissed Burton's complaint.
Burton filed a petition for commission review of ALJ DeLaO's July 2, 2007 decision. On December 21, 2007, the commission issued an Order that ALJ DeLaO's July 2, 2007 decision be set aside and that the matter be remanded for hearing on the question of whether the complaint was withdrawn or settled and, provisionally, on the underlying questions presented. The commission's decision specifically stated that it was issuing the same mandate as it had in its Order of November 18, 2005, because that mandate had not been complied with. The commission's decision also specifically and repeatedly stated, that ALJ DeLaO's July 2, 2007 decision was being "set aside." Larry G. Burton v. United Government Services LLC (LIRC, Dec. 21, 2007).
On remand to the Equal Rights Division, the matter was assigned to Administrative Law Judge James Schacht. ALJ Schacht held a hearing on July 25, 2008, at which Burton appeared pro se, and UGS appeared by Attorney Thomas W. Scrivner, with whom were Janine Harris and Dawn Matos. The hearing was completed on July 25, 2008. On October 29, 2008, ALJ Schacht issued a "Decision On Remand From Labor And Industry Review Commission," in which he made findings of fact and conclusions of law and issued an order dismissing Burton's complaint with prejudice.
Burton filed a petition for commission review.
The parties' arguments -- In his petition for commission review of ALJ Schacht's October 29, 2008 decision, Burton renewed and restated arguments he had previously raised below, that ALJ Schacht was biased and not impartial and had denied him an opportunity for a fair hearing. (1) Burton also submitted argument with regard to some of Schacht's findings of fact regarding the events of May, 2005, asserting that ALJ DeLaO's dismissal of his complaint had been inappropriate because (he argued) he revoked his agreement to settle his complaint so that the settlement agreement never became final, and his request for withdrawal of his complaint was signed inadvertently and by mistake.
In a brief filed with the commission, UGS argued that at the time at issue in
2005 Burton was competent, that he unconditionally requested withdrawal of his
complaint, and that the dismissal of his complaint was therefore required and
was appropriate. With regard to Burton's assertion that ALJ Schacht was biased
and not impartial and denied him an opportunity for a fair hearing, UGS renewed
and restated arguments it had earlier made in response to Burton's complaints,
that Burton had not overcome the legal presumption of integrity on the part of
the ALJ and had not established bias or lack of impartiality on the part of the
ALJ. (2)
The requirement for due process in administrative hearings -- Proceedings before the Equal Rights Division on complaints under the Wisconsin Fair Employment Act are subject to the provisions of the Administrative Procedure Act, Wis. Stat. Ch. 227, including Wis. Stat. § 227.46(6), which provides that "[t]he functions of persons presiding at a hearing or participating in proposed or final decisions shall be performed in an impartial manner." Judicial review of decisions of the commission in such cases, is subject to Wis. Stat. § 227.57, which provides in relevant part:
(4) The court shall remand the case to the agency for further action if it finds that either the fairness of the proceedings or the correctness of the action has been impaired by a material error in procedure or a failure to follow prescribed procedure.
Wisconsin adopted § 227.57(4) to insure that procedure before administrative agencies meets the requirements of due process. Nu-Roc Nursing Home v. State DHSS, 200 Wis. 2d 405, 415, n.5, 546 N.W.2d 562 (Ct. App. 1996). Courts analyze claims of unfairness under § 227.57(4) as they do procedural due process claims. Due process in administrative proceedings is basically a question of the presence or absence of "fair play" and "fundamental fairness." Bracegirdle v. Bd. of Nursing, 159 Wis. 2d 402, 416, 464 N.W.2d 111 (Ct. App. 1990).
The fundamental fairness necessary to due process, requires that an individual have a meaningful opportunity to present his case. Mathews v. Eldridge, 424 U.S. 319, 349, 47 L. Ed. 2d 18, 96 S. Ct. 893 (1976). An erroneous exercise of discretion resulting in exclusion of evidence at hearing may constitute a material error in procedure which impairs the fairness of the proceedings within the meaning of Wis. Stat. § 227.57(4), requiring a remand. Rutherford v. LIRC and Wackenhut Corp., 2008 WI App 66, �29, 309 Wis. 2d 498, 514, 752 N.W.2d 897, see, e.g., Bowen v. LIRC and Stroh Die Casting, 2007 WI App 45, �� 6, 21, 299 Wis. 2d 800, 806, 818, 730 N.W.2d 164. In addition,
[i]t is, of course, undisputable that a minimal rudiment of due process is a fair and impartial decisionmaker [citing, Goldberg v. Kelly, 397 U.S. 254, 271 (1970)]. If a decisionmaker is not fair or is not impartial, due process is violated.
Guthrie v. WERC, 111 Wis. 2d 447, 454, 331 N.W.2d 331, 335 (1983). There need not be a showing of actual bias by a decisionmaker to show a violation of due process, Id. at 455; "circumstances which lead to a high probability of bias, even though no actual bias is revealed in the record, may be sufficient to give the proceedings an unacceptable constitutional taint." State ex rel. DeLuca v. Common Council, 72 Wis. 2d 672, 684, 242 N.W.2d 689 (1976).
There is a presumption of honesty and integrity on the part of administrative adjudicators. Guthrie, 111 Wis. 2d at 455. However, this presumption is not conclusive; a showing of special facts and circumstances may demonstrate that the risk of unfairness in a particular case is intolerably high. DeLuca, 72 Wis. 2d at 691-92. This may involve showing that the adjudicator had become psychologically wedded to a predetermined disposition of the case. Nu-Roc Nursing Home, supra, 200 Wis. 2d at 420. Determining whether an administrative adjudicator has prejudged a matter requires an examination of the facts of the individual case. A clear statement suggesting that a decision has already been reached, or prejudged, should suffice to invalidate a decision. Marris v. City of Cedarburg, 176 Wis. 2d 14, 26, 498 N.W.2d 842 (1993). While "it may be difficult, several years after the fact, to differentiate a predisposition from an ill-advised choice of words and from a statement showing prejudgment," comments by a decisionmaker may, when viewed in the context of other statements by that person, support a conclusion that they are more than an ill-advised choice of words, and overcome the presumption of honesty and integrity that would ordinarily be applied. Marris, 176 Wis. 2d at 29-30.
For all of the reasons discussed below, the commission agrees that ALJ Schacht did not provide Burton a fair opportunity to be heard at the hearing in this matter. The commission also concludes that there was a definite appearance of lack of impartiality on ALJ Schacht's part. Considering the cumulative effect of all of the problems discussed below, the commission concludes that the ALJ's decision must be set aside and this matter must, again, be remanded for further proceedings according to the commission's original mandate.
Appearance of lack of impartiality related to involvement of Attorney Hynes - Burton argues that ALJ Schacht should not have been involved in this case because of Schacht's personal connection with Attorney Jeffrey Hynes, who had been an attorney for Burton in the case.
A previous decision of the commission, Odya v. Captain Install (LIRC, May 19, 2000), provides background information relevant to this issue.
In Odya, an issue had arisen as to whether ALJ Schacht should have been disqualified in that case because of his personal relationship with Hynes, an attorney whose law firm was representing the complainant. The commission's decision in that case described the relevant factual circumstances this way:
Attorney Hynes had been a roommate of Schacht's in college. Schacht has a friendship with Hynes where he sees Hynes once or twice a year, and maybe calls him once a year. The ALJ recuses himself in cases where Hynes is involved as an attorney or a witness.
Odya, supra (emphasis added). The commission's decision also reflects ALJ Schacht's own views on the question of whether there was either actual partiality, or the appearance of partiality, in his involvement in the case:
The ALJ stated that he understood how in this heated case anything could have the appearance of bias, but because of the combination of the timing of the disqualification request, when it could have been made at the prehearing when the respondent had the same information as it does now, and because to recuse himself before any rulings on the admissibility of evidence would cause the parties time and expenses not otherwise required, he found it inappropriate to recuse himself as the situation then stood. The ALJ stated that the line he draws is if Jeff Hynes is a witness or becomes involved as an attorney in this case. The ALJ then went on to comment that, "And, as a matter of fact, to prevent the situation from happening in the future, just because I don't want any, you know, I don't want this situation to arise in the future, I will not be taking cases with Adelman & Hynes on the cases in the future just so that this appearance does not arise, you know, so that any question does not occur."
Odya, supra (emphasis added). The Odya decision thus reflects both ALJ Schacht's own understanding that there was a risk of the appearance of partiality if he presided in a case in which Hynes was involved, and his commitment that in the future he would not do so.
This background is relevant here, because Attorney Hynes was also involved in this case in a material way. Hynes' firm represented Burton from the point at which he filed his complaint, through the ERD's investigation. Even though he stopped representing Burton at that point, Hynes continued to be involved in the case with regard to his potential interest in attorneys' fees for the services he had performed, if and when the case was settled. It is Hynes' potential interest in attorneys' fees that poses the problem here.
UGS argues that because Hynes was involved as Burton's counsel, Schacht's connection to Hynes would not suggest any risk of bias by Schacht against Burton. It also argues that because it had been several years between the last time at which Hynes had been Burton's counsel, and the time at which the case was before ALJ Schacht, the circumstances would not suggest any risk of bias. These arguments ignore the nature of the interests involved in this case. This case involves questions about whether Burton's complaint was withdrawn or settled. The written settlement dated May 25, 2005 provides for payment of $10,000 in attorneys fees to Attorney Hynes. Burton argues that, because he exercised his right to revoke his agreement to it, that settlement agreement never became effective. A ruling for Burton on this issue, declaring the settlement ineffective, would clearly work against any claim Hynes might have to the $10,000 in fees provided for in that agreement; conversely, a ruling against Burton on the issue, would tend to support or sustain whatever claim Hynes might have to that money. Thus, with respect to the matter of the validity of the settlement agreement and thus the potential validity of a claim by Hynes for $10,000 in attorneys fees pursuant to that settlement, Burton and Hynes both have interests which are still at stake, and which are effectively adverse.
The commission recognizes the possibility that circumstances other than the revocation claim relied on by Burton, may potentially impact the enforceability of any claim Hynes might have to receive the $10,000 in attorneys fees under the settlement. That still does not change the fact, though, that one issue potentially affecting Hynes' right to receive $10,000 in attorneys fees under the settlement is an issue on which Burton's position (that the agreement is ineffective) would, if accepted, defeat Hynes' right to the money. Particularly because even the appearance of lack of impartiality can demonstrate that the risk of unfairness in a particular case is intolerably high, this is significant.
When an ALJ presides over matters in which there is even an appearance that they are not impartial, it can tend to impair public confidence of the system of which that ALJ is a part. As the Wisconsin Supreme Court has noted, "[t]o maintain public confidence in the legal system, the appearance of impartiality is often as important as impartiality itself." In re Disciplinary Proceedings Against Ziegler, 2008 WI 47, � 36, 309 Wis. 2d 253, 750 N.W.2d 710.
With regard to the risk of unfairness created by the appearance of a lack of impartiality, this case presents an unusual situation in that even before it arose, the ALJ had publicly expressed his concern that an appearance of lack of impartiality could be created if he were to preside in a case involving Attorney Hynes. Because of the ALJ's own previous recognition of the potential for an appearance that he lacks impartiality in a case where Attorney Hynes is involved, it is particularly difficult to support a conclusion that the situation here does not pose a problem of the appearance of lack of impartiality.
The commission concludes that the history of and issues presented in this case, including the issue as to the validity of a settlement agreement providing for payment of $10,000 in fees to Attorney Hynes, the past relationship between ALJ Schacht and Attorney Hynes as established in the
Odya case, and ALJ Schacht's own statements in the course of that case regarding the potential for his relationship with Hynes to create an appearance of lack of impartiality in cases in which Hynes is involved, are special facts and circumstances demonstrating that there was an intolerably high risk of unfairness in this particular case.
Appearance of lack of impartiality related to receipt of previous ALJ's decision - At the beginning of the hearing, before any evidence had been offered, indeed even before either party had been allowed to state their position, ALJ Schacht produced, identified, marked and received into evidence ALJ DeLaO's July 2, 2007 "Decision On Remand From LIRC", ruling that "her version" of the events was "relevant factually." When the complainant objected to consideration of ALJ DeLaO's decision on the grounds that it "ha[d] been dealt with already...on appeal", ALJ Schacht responded that nothing in the commission's decision meant that it found that any of the factual matters in ALJ DeLaO's decision were not accurate, and that the commission thus "did not deal with [ALJ DeLaO's decision] other than to say we want testimony." That was incorrect.
The first time the commission remanded this case, it had clearly instructed that further action was to be taken based on either a stipulation of facts between the parties, or on a hearing. ALJ DeLaO eventually issued a decision which was not based on either a stipulation of facts between the parties or on a hearing. Her decision was thus precisely what the commission had not wanted. The second time the commission remanded this case, in its decision of December 21, 2007, it noted this, and it specifically and repeatedly stated that that July 2, 2007 decision by ALJ DeLaO was being "set aside." Thus, there is no basis for concluding that the commission "did not deal with [ALJ DeLaO's decision] other than to say we want testimony." The commission dealt with ALJ DeLaO's decision, by stating that it was set aside. Setting aside a decision has the effect of making that decision a nullity. Nothing in the commission's decision provided any basis to believe that any other effect was intended. (3) Receiving and considering ALJ DeLaO's decision as "factually relevant", notwithstanding the fact that the commission had set it aside, was error.
Standing alone, ALJ Schacht's receipt of ALJ DeLaO's decision as a "factually relevant" exhibit would not prevent the commission from conducting a fair review in this case; were it to reach the merits, the commission could simply disregard the document. What does present a problem, is what ALJ Schacht said in explaining why he was receiving ALJ DeLaO's decision:
And in viewing with - dealing with - the first thing I will deal with the offer because that in fairness to a colleague that - who has stated her version of the events that I think as - this is a pleading - and I'll just mention in the record are already are anything that are called pleadings. That's like starting with the Complaint, any action taken by - certainly by any tribunal, commission are all part of the procedural record of the case as referred to as the pleadings. But that in addition to that, I am marking as Exhibit A, decision and remand from LERC (sic), and because I believe that in this decision the administrative law judge states her version of the course of events, the facts that occurred, and that I believe they're relevant factually. And I think for me not to have that factually in the record would be both - have an incomplete record and be unfair to her.
(T. 12-13) (emphasis added). ALJ DeLaO was, of course, not a party to this case and had no cognizable legal interest in it. The notion that any ruling in regard to the case could be either "fair" or "unfair" to her has no meaning in the conventional context in which the "fairness" of proceedings is analyzed. It appears that the context to which ALJ Schacht's comments related was a different one. The reason that ALJ DeLaO's July 2, 2007 decision was not in effect - or to put it another way, the reason that (without ALJ Schacht's ruling receiving it into the record) it would not be considered as "relevant factually" in the case and would not be "factually in the record" - was that the Labor and Industry Review Commission had set that decision aside.
The question of whether it was fair or unfair that ALJ DeLaO's July 2, 2007 decision had been set aside by the commission, was not a question which was before ALJ Schacht in his official capacity as the presiding administrative law judge in the case. In the posture in which the case was before him, he had neither right nor responsibility to rule on that question. His views as to the fairness or unfairness of ALJ DeLaO's decision not being in effect were thus, in the context of the case, purely personal to him and to his relationship with his colleague.
An ALJ is of course entitled to hold his own personal views, but it is equally certain that he is not free to make decisions in cases affecting the rights of the parties based simply on such personal views. When it comes to exercising their duties, judges must be able to set aside their personal views. In re Judicial Disciplinary Proceedings Against Carver, 192 Wis. 2d 136, 138-39, 531 N.W.2d 62 (1995). That extends to personal feelings a judge may have as to whether they, or a colleague, have been treated "fairly" by an appellate authority which disagreed with them and set aside a decision which that judge worked on and issued.
ALJ Schacht's comments create the appearance that he received and considered as "relevant factually" a decision of ALJ DeLaO's which the commission had expressly set aside, because of his personal opinion that it had been "unfair" to his colleague for the commission to set aside that decision. The impact of such an appearance can hardly be overstated. When a party appeals an adverse decision and obtains an appellate ruling setting it aside and remanding the matter, for them to then be confronted on remand with another judge declaring that they will revive the set-aside decision in order to be "fair" to their colleague judge whose decision had been set aside, makes it appear that the appellate process has been ignored, and that the result in the remand will likely be the same as that reached in the first decision.
The commission concludes that ALJ Schacht's statements at hearing indicating that he was going to receive and consider as "relevant factually" the previous (and previously set aside) decision of ALJ DeLaO, because of his personal feelings that this was required as a matter of "fairness to [his] colleague" and because it would be "unfair to her" not to do so, are special facts and circumstances demonstrating that there was an intolerably high risk of unfairness in this particular case.
ALJ Schacht's rulings excluding evidence - At the very beginning of the hearing, even before he had received into evidence ALJ DeLaO's July 2, 2007 "Decision On Remand From LIRC," ALJ Schacht ruled on his own initiative that "anything that occurred after the submission of the withdrawal is not relevant, and I will not go into anything subsequent to that." T. 5. Burton expressed his disagreement with this. ALJ Schacht then spoke about and reiterated this ruling at some length. In the course of his ruminations, ALJ Schacht expressed the view that nothing that occurred after the filing of a withdrawal could be relevant because the ERD's administrative rule, Wis. Admin. Code § DWD 218.03(7) required the dismissal of a complaint when a withdrawal was filed. He also repeatedly expressed the opinion that the commission had no legal authority to come to any other conclusion about the effect of a withdrawal. See, T. 9, 20. After some extended explication of his views, the ALJ also ruled that he would not allow Burton to go into his beliefs or state of mind or understanding about the consequences of the withdrawal or what he could do after it. T. 11. This apparently would apply to beliefs Burton held at any time, i.e., even before he submitted the complaint withdrawal request. (4)
The commission concludes that the ALJ's rulings, that he would exclude any evidence about events occurring after the May 25, 2005 cut-off point he established based on lack of relevance, and that he would allow no evidence about events occurring before that time which might have had an impact on Burton's understanding of the effect of settlement or withdrawal, were erroneous and created a significant appearance of unfairness which was so high as to be intolerable.
One reason the commission reaches this conclusion is its disagreement with the ALJ on the relevance issue itself. Evidence is relevant if it has any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence. Wis. Stat. § 904.01. It appears that the facts of the case include the fact that on May 25, 2005 the parties entered into and signed a written settlement agreement which included, inter alia, a provision stating that "Burton may revoke this Agreement for a seven (7) day period following the date of his signature, and this Agreement shall not become effective or enforceable until the seven (7) day revocation period has expired," and the fact that on May 25, 2005, subsequent to the signing of the settlement agreement, Burton filed a document with the ERD stating that agreement had been reached and that Burton wished to close his case. It is clear that Burton was contending (and attempting to offer evidence) that after filing that document, a number of events occurred, including his timely exercise of his right to revoke his agreement to the settlement. The question is not whether such facts would in and of themselves have been conclusive on the question of whether Burton's complaint should or should not be dismissed; it is whether the evidence would have been relevant enough to the issues presented to justify allowing Burton to present it. In the circumstances of this case, the commission does not need to reach, and does not reach, the former question, in order to answer the latter question: whether or not Burton exercised his right to revoke the settlement agreement was clearly something which was potentially relevant to the issues presented, as to which the commission wanted a record, and as to which evidence should have been allowed. Similarly, the questions of what Burton might have believed about the effect of settlement or withdrawal and of what may have caused such beliefs, may not ultimately be conclusive but are surely of sufficient potential relevance that preemptively excluding them in this kind of categorical fashion is unreasonable. The ALJ's rulings were the type of "excessively restrictive" and "heavy hand[ed]" ones against which the commission has previously cautioned, see, Fauteck v. Sinai Samaritan Medical Center and Allen (LIRC, November 9, 2000), Roberge v. Dept. of Ag., Trade and Consumer Protection (LIRC, May 31, 2005).
The principal reason for the commission's conclusion that the ALJ's rulings created a significant appearance of unfairness, however, has to do with the context in which the rulings were made.
It is not possible for a judge to make informed and non-arbitrary rulings about what evidence may or may not be relevant in a case, unless and until the judge has at least some idea about what the facts of the case are or are claimed to be. At the beginning of the hearing in this matter, when ALJ Schacht made his ruling that he would exclude any evidence of anything that occurred after the submission of the withdrawal, he had no basis to know or believe anything about the facts of the case, much less the detail that such a withdrawal had been submitted, or when. The parties had not stipulated to any facts. They had not stipulated to any exhibits. They had not been asked to state, and they had not stated, anything regarding their positions or understandings about the facts. No testimony had been taken, and no witnesses had been sworn. No hearing had ever previously been held in the case. There was no previous decision by any ALJ which had not been set aside. Given this, the mandate of the commission's most recent remand, and the posture which the case was thus in, the parties would reasonably have expected that they would be starting "from scratch," before an ALJ for whom the case was a blank slate.
The fact that ALJ Schacht started the hearing by making sweeping rulings about what evidence was "relevant" to the case, makes it clear that as far as he was concerned the slate was not blank, and that instead he had brought to the hearing a well-formed and pre-determined idea about what the facts of the case were. Particularly in light of ALJ Schacht's subsequent
sua sponte receipt of ALJ DeLaO's July 2, 2007 decision and his comments about that decision, the appearance was created that the pre-determined ideas about the facts of the case which ALJ Schacht brought to the hearing were traceable, at least to some extent, to ALJ DeLaO. The commission believes this is a definite problem. It is enough of a problem when the ALJ brings to the hearing a predisposition acquired from their office colleagues,
see, Phillips v. Milwaukee County Medical Complex
(LIRC, Sept. 27, 1989). (5) It is certainly a problem, then, when the office colleague from whom the ALJ acquired the predisposition was the ALJ who had issued a previous decision in the case which one of the parties had then managed to get set aside on appeal. The appearance created in such a situation, is that the current judge has already made up their mind that about the case, in a manner consistent with that of the previous judge.
ALJ Schacht's offer of proof procedure - In its brief to the commission, UGS argues that Burton waived any objections he had as to any rulings by ALJ Schacht excluding evidence, by failing to file an offer of proof. For the following reasons, the commission disagrees.
The ALJ stated that he would allow Burton to submit an offer of proof about events occurring after the May 25, 2005 cut-off point established by the ALJ's ruling, but he stated that he would only allow this to be done in written form, and that it could only be done after the hearing. T. 11-12. The ALJ also stated, that even if Burton submitted such an offer of proof, he (the ALJ) would not consider it, but would decide the case based solely on the evidence which he allowed to be presented on the day of the hearing. T. 79. The ALJ thus effectively committed himself to his rulings excluding certain evidence based on relevance, without knowing what that excluded evidence might be. Extending an opportunity to file an offer of proof after the hearing was cold comfort considering the clear message that it would not matter to him what might be in such an offer of proof.
The commission concludes that the ALJ's ruling, that he would only allow an offer of proof concerning events occurring after the May 25, 2005 cut-off point he established to be submitted in written form after the hearing, and that he himself would in any event not consider any such offer of proof, was plainly improper and also created a significant appearance of unfairness.
The commission has previously had occasion to comment on the "excessively restrictive" approach taken by ALJ Schacht to the question of relevance of evidence at hearings, Fauteck, supra, and his "heavy hand" in controlling and limiting the evidence presented, Roberge, supra. It has pointed out that a risk of an overly stringent approach to questions of relevance is that in the event of an appeal of the ALJ's decision to the commission, evidence which the commission might find relevant and might wish to consider will have been excluded from the record, impairing the commission's ability to carry out its role as a de novo decisionmaker. Fauteck. It has pointed out that, while this problem can be compensated for by "following the proper procedure to allow parties to submit offers of proof as to evidence which the ALJ concludes is inadmissible," the procedure followed by ALJ Schacht of insisting that offers of proof be made by submission in writing after the hearing, is not proper:
As Fauteck points out in her brief, the generally-accepted practice for making offers of proof is that counsel should be allowed to either make them in question-and-answer form (by asking the witness the questions and getting the answers), or by describing in summary form, also on the record, what the testimony would be. See, State ex rel. Schlehlein v. Duris, 54 Wis. 2d 34, 39, 194 N.W.2d 613 (1972).
Allowing submission of an offer of proof in the form of questions and answers to the witness is probably preferable, in most cases, in that it provides the most accurate reflection of what the testimony would be. Alternatively, where counsel can succinctly summarize what they contend a witness would testify to and this will take less time than going through the questioning, this procedure may be better. Whichever procedure is followed, though, an offer of proof should be placed on the record at the time the ruling excluding the evidence is made and there is a request to make an offer of proof.
Fauteck, emphasis in original. The commission noted that one reason for this, is that knowing what the substance of the offered evidence is gives the judge a more adequate basis for a ruling that the evidence should not be allowed. It also noted:
[w]hen the substance of offered testimony has been ruled irrelevant before it is fully developed on the record, and the judge then declines to even hear an offer of proof as to the substance of that testimony, an unfortunate appearance of arbitrariness can be created.
Id. The reason for the concern about the judge having an adequate basis for a ruling that the evidence should not be allowed, is that a judge should actually have a basis for concluding that evidence should not be allowed, and that if they do not know what the evidence is, it can appear that they do not have any such basis. The reason that an unfortunate appearance of arbitrariness can be created when a judge declines to consider an offer of proof, is that if the judge does not know what the evidence is, it will appear that they do not have any basis for the ruling - that is, that the ruling is arbitrary.
In Fauteck the commission found this ALJ's post-hearing offer of proof procedure to be inadequate. It does so again here. The commission will not find Burton to have waived his objection to the ALJ's exclusion of his evidence. A party should have the opportunity to put an offer of proof on the record at the time the ruling excluding the evidence is made. Burton was not given that opportunity. The ALJ's insistence that even if an offer of proof was filed pursuant to the procedure he was requiring he would not consider it, created an appearance of arbitrariness.
Conclusion - As it did in Fauteck, supra, the commission found "the whole tenor and flavor" of the proceedings here to be problematic. Many of the same observations made by the commission in Roberge, supra, about the manner in which the hearing was handled in that case, could be made here. In addition, the commission was also troubled by the ALJ's occasional lapses into sarcasm towards Burton, T. 43-44, 60-61, and by his unnecessary questioning of Burton about his mental health, intellectual competence and drug use, a line of questioning which bordered on offensiveness. (6)
In this regard, the commission can only repeat what it said in Roberge:
The complainant should be given an opportunity to tell her story ... Although an administrative law judge may reasonably act to rein in a witness who has strayed too far off topic, the administrative law judge should avoid controlling the hearing with such a heavy hand that the complainant leaves the hearing room feeling, as the complainant did in this case, that she was not afforded her day in court.
The most significant problems presented in this case are the ones which were described and discussed above:
1. Given ALJ Schacht's personal relationship with Attorney Hynes, as described in the Odya decision, and also given ALJ Schacht's express commitment reflected in that decision that in order to avoid the appearance of lack of impartiality he would not preside over cases in which Hynes was involved, and given that the issues in this case included the validity vel non of a settlement agreement providing for payment of $10,000 in attorney's fees to Attorney Hynes, there was an appearance of lack of impartiality in Schacht presiding over the matter.
2. ALJ Schacht's ruling that he would receive as an exhibit and treat as "relevant factually" the previous decision by ALJ DeLaO, was erroneous because that decision had been expressly set aside by the commission. ALJ Schacht's statements that the reason he made that ruling was his concerns for "fairness to a colleague" and because he believed it would be "unfair to her" if her decision was not considered, indicated that his ruling was based on personal considerations regarding a colleague, and there was for that reason at very least an appearance of lack of impartiality in Schacht presiding over the matter.
3. ALJ Schacht's conduct in issuing a sua sponte ruling that certain facts would not be relevant, before any evidence about what any of the facts were had even come into the record, was not only in error, but also at very least created an appearance that ALJ Schacht had come to the hearing with a pre-determined set of beliefs about what the facts of the case were, a set of beliefs traceable at least in part to the previous ALJ whose dismissal of his complaint Burton had successfully appealed, and this created an appearance of a lack of impartiality in Schacht presiding over the matter.
4. ALJ Schacht's insistence on a procedure for submitting offers of proof by which such offers could not be made at hearing but only after the hearing, with ALJ Schacht expressly indicating that he himself would not actually consider any such offers of proof, was in error, and also created an appearance of arbitrariness.
Considering the cumulative effect of all of these problems, the commission concludes that they establish circumstances leading to a high probability of bias sufficient to give the proceedings an unacceptable constitutional taint, and that they demonstrate that there was a deprivation of "fair play" and "fundamental fairness." The commission therefore sets aside the decision of the ALJ and again remands this matter for further proceedings as originally provided for in the commission's November 18, 2005 decision in this matter.
NOTE: The commission respectfully suggests that, as this case has twice been decided by administrative law judges working out of the Milwaukee office of the Equal Rights Division, assigning the re-hearing ordered herein to an administrative law judge working out of the Madison office of the ERD might best serve the purpose of providing a "fresh start" affected as little as possible by the previous proceedings.
cc: Attorney Thomas W. Scrivner
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