State, Department of Transportation & Public Facilities & Operations, Division of Airport Leasing v. Neal , 1984 Alas. LEXIS 371 ( 1984 )

COMPTON, Justice,

dissenting.

Although I agree that Neal was entitled to a hearing under 17 AAC 40.382, I disagree with the court’s conclusion that he received such a hearing on May 26, 1981. In my view, the trial court was correct in holding that Neal was improperly deprived of a hearing. I believe that it erred in ordering him reinstated to his right to operate a porter service, however, and I would therefore remand for determination of an appropriate remedy.

Neal received a hearing on May 26, 1981, as part of the state’s aggrieved bidder procedure under 2 AAC 15.100.¹ This hearing was not held pursuant to 17 AAC 40.382,² nor did it purport to be. Indeed, the issues that could have been adjudicated in hearings before separate agencies were entirely different: the hearing under 2 AAC 15.100 concerned only matters relating directly to the bidding process, while a hearing under 17 AAC 40.382 would have determined whether the termination of Neal’s permit— which occurred before the bidding process began — was proper.³ Neal’s suggestion in his May 11, 1981, Notice of Appeal that his permit was terminated because of collusion between the airlines and the state would have been relevant to the aggrieved bidder hearing only if such collusion contaminated the bidding process itself. Neal, however, does not allege any collusion between other bidders and the state.⁴

Although Neal argued at the May 26 hearing that his permit was improperly terminated, he addressed his comments to a forum that was powerless to respond to his complaints. The Department of Administration hearing officer was no more authorized to address the propriety of the termination of Neal’s permit (as distinguished from the subsequent rejection of his bid) than if he had sat on behalf of the Commercial Fisheries Entry Commission or the Alcohol Beverage Control Board. If 17 AAC 40.382 has any meaning at all, it surely requires that a hearing be held before an officer who is empowered to consider evidence that a lease or permit was improperly terminated and to recommend an appropriate remedy. The hearing officer at the May 26 hearing had no such authority.⁵ I therefore conclude that Neal’s May 26 hearing did not satisfy the requirements of 17 AAC 40.382.

Although Neal was entitled to a hearing, and, in my view, did not receive one, I do not believe that he was entitled to reinstatement to his right to operate a porter service.⁶ The trial court’s order of reinstatement, had it been carried out, would have seriously prejudiced the rights of the successful high bidder for the porter service concession, who had been operating the concession since June 1, 1981. . The court apparently was not apprised of the existence of this innocent third party until after it had ordered Neal reinstated, when the state moved for a stay. Once informed that a third party was involved, however, the court should have vacated that part of its decision that ordered reinstatement.⁷ It could then have proceeded to consider the propriety of damages to compensate Neal for the loss of his permit.

I would therefore affirm the trial court’s holding that Neal was improperly deprived of a hearing, reverse its order that he was entitled to reinstatement pending a hearing, and remand for a determination of damages.

1 . 2 [Administration] AAC 15 [Purchasing]. 100 [Aggrieved Bidder] (Eff. 2/24/72; am. 8/31/75) provides:

(a) An aggrieved bidder may, within five days after award of a contract, appeal to the department [of Administration] for hearing.

(b) A bidder requesting hearing shall

(1) submit his appeal in writing within five days of the award;

(2) explain in detail all of the reasons for the appeal;

(3) send a copy of his appeal to all interested parties, including all other bidders.

(c) The appeal for hearing will be reviewed by the commissioner and the aggrieved bidder will be advised within 15 days whether his appeal was accepted or rejected and, if rejected, the reasons for that action.

(d) When appeal for hearing is accepted, it will

(1) be scheduled as soon as practicable, but not later than 20 days after acceptance;

(2) be held in the town where the sealed bid was publicly opened;

(3) be made known to all interested parties at least five calendar days prior to the hour of hearing;

(4) be recorded in its entirety.

(e) All interested parties wishing to be heard at the hearing should submit a written brief of their statement to the hearing officer no later than 24 hours prior to hour of hearing.

2 . 17 [Transportation and Public Facilities] AAC 40 [Aviation]. 382 [Termination of Lease] (Eff. 4/27/79) provides:

Before the termination or cancellation of a lease or other interest granted under this chapter, the department [of Transportation and Public Facilities] will provide the lessee with notice and an opportunity to be heard.

3 . In note 5 of the court's opinion, it is stated that termination of the right to operate a porter service and failure to award Neal the new contract are interrelated. This is correct only with respect to Neal's remedy, not the merits of his underlying claim.

4 . The court notes that the hearing officer for the May 26 hearing made no findings concerning bad faith or discrimination, but did "note that an appropriate notice of termination” was given Neal. 693 P.2d at 825. The only "appropriateness” found was that the letter of nonobjection required a 10-day notice, and Neal was given a 69-day notice.

Neal appealed the decision of the Department of Public Transportation and Facilities, which had accepted the hearing officer’s recommendation, to the superior court. In that proceeding, Nathaniel Neal, d/b/a International Porter Company v. Department of Transportation, 3AN 81-4485 Civil, the Department’s bidding procedure was sustained. The Final Decision on Appeal, dated August 16, 1982, concluded that

(1) The only issue properly before this court in the instant appeal is whether appellee, Department of Transportation, abused its discretion by failing to consider, in its competitive bidding procedure, appellant’s experience, history and length of service as a porter at the airport.... It is this issue, and only this issue, which was identified in appellant's April 30, 1981 and May 11, 1981 Notices of Appeal [to the Department of Transportation] herein. Further, it was this issue which was the subject of the hearing before appellee’s hearing officer on May 26, 1981, from which appellant presently appeals.

That court expressly declined to consider issues relating to the permit and storage lease, since they were not properly raised and were the subject of an independent action filed by Neal then pending in superior court, which eventually gave rise to this appeal.

Neal did not appeal from that decision.

5 .It is remarkable to suggest that evidence presented to a tribunal to adjudicate a claim over which the tribunal has no jurisdiction is not substantial evidence on the whole record, thereby not only excusing the failure of the tribunal to address the claim, but also presumably foreclosing the erring litigant from raising the claim before a tribunal which does have jurisdiction.

6 . Neal did not request reinstatement in his motion for summary judgment; he asked only for a determination that he had been deprived of a hearing and was entitled to damages.

7 . DOT/PF’s failure to present evidence that another company had been providing porter services may have resulted from its surprise at the trial court's choice of remedy. The state could nevertheless have requested that the court vacate the remedy, or have moved for reconsideration under Civil Rule 77(m). Had it done so, the court would have had the opportunity to reconsider its ruling in light of evidence that the rights of a third party were affected.