Teaching Our Posterity Success, Inc. v. Indiana Department of Education and Indiana State Board of Education , 20 N.E.3d 149 ( 2014 )

ATTORNEY FOR APPELLANT ATTORNEYS FOR APPELLEE
David E. Dearing Gregory F. Zoeller
Indianapolis, Indiana Attorney General of Indiana
Thomas M. Fisher
Solicitor General
David L. Steiner
Deputy Attorney General
Heather Hagan McVeigh
Deputy Attorney General
Indianapolis, Indiana
______________________________________________________________________________
In the
Indiana Supreme Court Nov 13 2014, 10:33 am
_________________________________
No. 49S05-1411-PL-700
TEACHING OUR POSTERITY SUCCESS, INC.,
Appellant (Petitioner below),
v.
INDIANA DEPARTMENT OF EDUCATION
AND INDIANA STATE BOARD OF EDUCATION,
Appellees (Respondents below).
_________________________________
Appeal from the Marion Superior Court, Civil Division 4
No. 49D04-1212-PL-047002
The Honorable Cynthia J. Ayers, Judge
_________________________________
On Petition To Transfer from the Indiana Court of Appeals, No. 49A05-1308-PL-386
_________________________________
November 13, 2014
Rucker, Justice.
Resolving a long-standing lack of consensus on the subject, today we hold that a
petitioner seeking judicial review of an agency action must file with the trial court the agency
record as defined by the Administrative Orders and Procedures Act. Failure to do so results in
dismissal of the petition.
Facts and Procedural History
In 2011 the Indiana Department of Education and the Indiana State Board of Education
(collectively “DOE”) approved Teaching Our Posterity Success, Inc. (“TOPS”), as a
Supplemental Educational Services (“SES”) provider.1 The following year DOE removed TOPS
from its list of approved providers, and TOPS sought administrative review of that removal.
DOE appointed a panel of staff members to perform the review and on November 7, 2012 sent
TOPS a letter on DOE stationery declaring in pertinent part:
Pursuant to your appeal of the decision to remove [TOPS] from
Indiana’s list of approved SES providers, Indiana Department of
Education staff members were appointed to review the appeal.
The panel reviewed the request for appeal and all applicable
documentation. Based on its review, the panel determined that
TOPS failed to submit sufficient evidence to overturn the initial
removal decision. As such, TOPS will remain removed from
Indiana’s SES Provider List.
App. at 14.
TOPS timely filed a petition for judicial review in the Marion Superior Court. In support
of its petition TOPS included a copy of the November 7 letter. However, TOPS neither filed an
official agency record nor requested an extension of time to do so. TOPS subsequently moved
for summary judgment arguing in part that DOE’s letter removing it from Indiana’s SES
provider list was a final agency order that lacked necessary findings of fact. In response DOE
1
Provisions for Supplemental Educational Services are established by the federal Elementary and
Secondary Education Act of 1965 as reauthorized by the No Child Left Behind Act of 2001. See 20
U.S.C. § 6316(e) (2012). In relevant part the Acts provide a mechanism for children of low-income
families attending underperforming schools to receive the benefit of free extra academic assistance, such
as tutoring or remedial help in subjects such as reading, language arts and math. See 20 U.S.C. § 6316(b),
(e) (2012).
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filed a motion to dismiss the petition on grounds of TOPS’ failure to file with the trial court a
timely and complete agency record. After a hearing the trial court agreed with DOE, dismissed
TOPS’ petition, and denied its motion for summary judgment. TOPS appealed and the Court of
Appeals reversed the dismissal and remanded the case with instructions directing the trial court
to remand the matter to DOE for entry of statutorily-mandated findings and conclusions to
accompany its final order. See Teaching Our Posterity Success, Inc. v. Ind. Dept. of Educ., 3
N.E.3d 1042 (Ind. Ct. App. 2014). In so doing the court determined that a timely filed agency
record was not necessary in this case because the November 7 letter—which DOE did not
contest is a final agency order—was facially defective. DOE seeks transfer which we now grant
to address the question of whether an official agency record is required to adjudicate a petition
for review under Indiana’s Administrative Orders and Procedures Act. In all other respects we
summarily affirm the Court of Appeals opinion. Additional facts are set forth below as
necessary.
Standard of Review
The standard of appellate review for motions to dismiss under Rule 12(B) depends on
whether the trial court resolved disputed facts, and if so, whether there was an evidentiary
hearing. See Wayne Cnty. Prop. Tax Assessment Bd. of Appeals v. United Ancient Order of
Druids-Grove # 29, 847 N.E.2d 924, 926 (Ind. 2006). We review de novo a court’s ruling on
motions to dismiss for failure to timely file necessary agency records where the court ruled on a
paper record. See id.
Discussion
The Administrative Orders and Procedures Act (“AOPA”) governs administrative
proceedings and judicial review of decisions of DOE and certain other State agencies. See Ind.
Code §§ 4-21.5-2-0.1 to 6. For the agencies to which it applies, AOPA includes extensive
procedural requirements for adjudications under the Act. See, e.g., I.C. § 4-21.5-3-1 (governing
notice of agency action); I.C. § 4-21.5-3-13 (governing qualifications of adjudicators); I.C. § 4-
21.5-3-18 (governing notice and conduct of prehearing conferences); I.C. § 4-21.5-3-22
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(governing conduct of discovery); I.C. § 4-21.5-3-25 (governing conduct of hearings); I.C. § 4-
21.5-3-26 (governing presentation of evidence); I.C. § 4-21.5-3-27 (governing contents of
orders); I.C. § 4-21.5-3-33 (governing maintenance of records of proceedings).
In addition to these procedural requirements for agency actions, AOPA includes its own
provisions for judicial review of agency actions. See I.C. §§ 4-21.5-5-1 to 16. A person
aggrieved by an agency action may file a petition for review in the appropriate trial court, and
can show the agency action was invalid by demonstrating the party was prejudiced by an agency
action that was:
(1) arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law;
(2) contrary to constitutional right, power, privilege, or immunity;
(3) in excess of statutory jurisdiction, authority, or limitations, or
short of statutory right;
(4) without observance of procedure required by law; or
(5) unsupported by substantial evidence.
I.C. § 4-21.5-5-14. This section also requires that the reviewing court “shall make findings of
fact on each material issue on which the court’s decision is based.” Id. The court’s review of
disputed issues of fact “must be confined to the agency record for the agency action . . . . The
court may not try the cause de novo or substitute its judgment for that of the agency.” I.C. § 4-
21.5-5-11.
Particularly relevant in the case before us are certain AOPA provisions regarding the
record of proceedings in the agency and the role of that record in facilitating judicial review.
AOPA provides that each “agency shall maintain an official record of each proceeding under this
chapter.” I.C. § 4-21.5-3-33. “Upon a written request by the petitioner, the agency taking the
action being reviewed shall prepare the agency record for the petitioner.” I.C. § 4-21.5-5-13(c).
Within thirty days after an aggrieved party files its petition for judicial review “or within further
time allowed by the court or by other law, the petitioner shall transmit to the court the original
or a certified copy of the agency record for judicial review of the agency action . . . .” I.C. § 4-
21.5-5-13(a) (emphasis added). A petitioner’s “[f]ailure to file the record within the time
permitted by this subsection, including any extension period ordered by the court, is cause for
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dismissal of the petition for review by the court, on its own motion, or on petition of any party of
record to the proceeding.” I.C. § 4-21.5-5-13(b) (emphasis added).
AOPA more specifically provides that “the original or a certified copy of the agency
record for judicial review . . . consist[s] of”:
(1) any agency documents expressing the agency action;
(2) other documents identified by the agency as having
been considered by it before its action and used as a basis
for its action; and
(3) any other material described in this article as the
agency record for the type of agency action at issue, subject
to this section.
I.C. § 4-21.5-5-13(a) (emphasis added). Elsewhere in Article 21.5 is the following description:
The agency record of the proceeding consists only of the
following:
(1) Notices of all proceedings.
(2) Any prehearing order.
(3) Any motions, pleadings, briefs, petitions, requests, and
intermediate rulings.
(4) Evidence received or considered.
(5) A statement of matters officially noticed.
(6) Proffers of proof and objections and rulings on them.
(7) Proposed findings, requested orders, and exceptions.
(8) The record prepared for the administrative law judge or
for the ultimate authority or its designee under sections 28
through 31 of this chapter, at a hearing, and any transcript
of the record considered before final disposition of the
proceeding.
(9) Any final order, nonfinal order, or order on rehearing.
(10) Staff memoranda or data submitted to the
administrative law judge or a person presiding in a
proceeding under sections 28 through 31 of this chapter.
(11) Matters placed on the record after an ex parte
communication.
I.C. § 4-21.5-3-33(b). And with certain exceptions not relevant here, “the agency record
described by subsection (b) constitutes the exclusive basis for agency action in proceedings
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under this chapter and for judicial review of a proceeding under this chapter.” I.C. § 4-21.5-3-
33(c).
In support of their respective positions for the need vel non of a complete agency record
both parties rely on this Court’s evenly divided2 decision in Indiana Family and Social Services
Administration v. Meyer, 927 N.E.2d 367 (Ind. 2010).3 Meyer involved a Medicaid claimant’s
appeal of the Family and Social Services Administration’s (“FSSA”) decision to deny her
benefits. Meyer appealed the decision, contending the agency’s final order was erroneous in part
because it was based on a clerical error in the valuation of Meyer’s assets. Meyer attached to her
petition for judicial review copies of several agency documents including the final action and the
ALJ’s decision. Although Meyer had been granted an extension of time in which to file the
agency record as permitted by statute, she failed to file the record within the extended time
period. Id. at 369. After time to file the record had expired, FSSA answered Meyer’s petition
and admitted the valuation error. Id. Four weeks after filing its answer, FSSA moved to dismiss
the petition on the grounds that Meyer had failed to file the agency record timely. The trial court
then granted Meyer’s petition to extend retroactively the time period for filing the record, and
Meyer thereafter filed the agency record. FSSA appealed and in a divided opinion the Court of
Appeals affirmed the judgment of the trial court. See Ind. Family & Soc. Svcs. Admin. v.
Meyer, 900 N.E.2d 74, 80 (Ind. Ct. App. 2009).
On transfer this Court was unanimous in holding that the relevant provisions of AOPA do
not permit untimely filing of the agency record or nunc pro tunc extensions of the filing
deadline. See Meyer, 927 N.E.2d at 370, 372. Reviewing the statutory language “[f]ailure to file
the record within the time permitted by this subsection . . . is cause for dismissal . . .” the Court
found that “the statute is clear” in placing the responsibility on the petitioner to file the agency
record timely, and that any request for an extension of time must be made within the statutory
time period. Id. at 370, 371.
2
Justice Sullivan did not participate in this decision.
3
The claimant, Mrs. Meyer, died during the pendency of the agency proceedings, and her trust pursued
judicial review. Meyer, 927 N.E.2d at 368-69. For simplicity we refer to the petitioner as “Meyer.”
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But with respect to AOPA’s requirement in section 4-21.5-5-13(a) that “the petitioner
shall transmit to the court the original or a certified copy of the agency record,” Justice Boehm
(joined by Justice Rucker) opined that “imperfect compliance . . . is not always fatal” and “[a]
petition for review may be accepted if the materials submitted provide the trial court with ‘all
that is necessary . . . to accurately assess the challenged agency action.’” Id. at 371 (quoting
Izaak Walton League of Am., Inc. v. DeKalb Cnty. Surveyor’s Office, 850 N.E.2d 957, 965 (Ind.
Ct. App. 2006), trans. denied). Chief Justice Shepard (joined by Justice Dickson) disagreed “that
a petitioner can obtain judicial review under AOPA without filing a certified record at all.” Id. at
372. In their view the statutory language presented a procedural “prerequisite to the pursuit of a
petition for judicial review.” Id. Because this Court was evenly divided, the opinion of the
Court of Appeals affirming the trial court was reinstated. See Ind. Appellate Rule 58(C).
Two important facts distinguish Meyer from the case before us and from most AOPA
appeals. First, the contested issue was the existence of what was essentially an arithmetic error
in the agency decision, albeit one that affected the outcome. Second, and most importantly, the
State conceded its error on the contested issue before it moved to dismiss for lack of a record.
So to the extent Meyer represents the possibility of an exception to the filing requirement, thus
triggering the permissive “cause for dismissal” language in Indiana Code section 4-21.5-5-13(b),
any such exception is extremely narrow.
In any event our case authority both before and after Meyer has generated uncertainty on
the question of how the statutory mandate for the filing of an agency record should be applied.
Compare, e.g., Izaak Walton League, 850 N.E.2d at 965 (finding the purposes of the AOPA
statutes governing the agency record on judicial review “are clear” and determining limited
documentation submitted as agency record was sufficient to decide the appeal), and Lebamoff
Enter., Inc. v. Ind. Alcohol & Tobacco Comm’n, 987 N.E.2d 525, 531 (Ind. Ct. App. 2013)
(concluding that materials submitted with petition for review were sufficient to permit judicial
review), with Lebamoff Enter., Inc., 987 N.E.2d at 531 (Kirsch, J., dissenting) (observing that
“the mandates of the [AOPA] are clear” and opining that the trial court properly dismissed the
review petition for failure to file agency record), and Ind. State Bd. of Educ. v. Brownsburg
Cmty. Sch. Corp., 813 N.E.2d 330, 334-35 (Ind. Ct. App. 2004) (concluding exhibits attached to
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petition for judicial review did not constitute an agency record as contemplated by statute and
trial court lacked jurisdiction to consider the petition where petitioning party failed to file the
agency record timely). Indeed, as the Court of Appeals recently observed: “[T]here is no
consensus on either the Indiana Supreme Court or [the] Court [of Appeals] regarding what
should happen when a petitioner fails to submit the agency record timely but the documents filed
with the petition for review may be sufficient for the trial court to adjudicate the claims raised in
the petition.” Brown v. Ind. Dept. of Child Svcs., 993 N.E.2d 194, 196 (Ind. Ct. App. 2013),
trans. denied.
For the most part, our existing case authority can best be summarized as follows: if the
trial court cannot decide the issue based on the documents before it, then “cause for dismissal” is
read to mean the appeal “shall be dismissed.” But where the documents before the trial court
provide enough information for the court to decide the issue—even if not prepared by the agency
as anticipated by Indiana Code section 4-21.5-5-13(c) or not “the original or a certified copy” as
anticipated by Indiana Code section 4-21.5-5-13(a)—then the lack of an official record simply
permits dismissal but does not mandate it.
At first blush concerns of judicial economy seem to weigh in favor of the foregoing view.
After all, why should the parties expend the time and resources necessary to compile an agency
record where the relevant facts are all contained in a few documents? And though the parties
may contest which records are relevant, the trial court is presumably in the best position to
determine what it needs to decide any given issue. Also, we have long recognized a judicial
preference to decide cases on their merits. See, e.g., Costlett v. Weddle Bros. Const. Co., 798
N.E.2d 859, 861 (Ind. 2003); Phend v. Milk Control Bd. of Ind., 12 N.E.2d 114, 115 (Ind. 1938).
On the other hand whether the documents before the trial court provide enough
information enabling the court to decide an issue in a given case will likely be contested by the
parties. See Meyer, 927 N.E.2d at 374 (Shepard, C.J., joined by Dickson, J.) (“Whether under
some theory a judicial review might proceed with a minimalist record, such a concept is plainly a
slippery slope, setting in motion regular satellite litigation . . . in which private citizens and the
taxpayers will spend time and money contesting whether a record is ‘complete enough.’”). The
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trial court is thus put in the unenviable position of not only deciding the merits of an
administrative appeal but also determining just exactly what is relevant to its decision, without
having access to the entire record to make that determination. The judicial economy argument
thus swings in the other direction. It appears to the Court that submitting the record up front
diminishes the potential for time and resource-consuming satellite litigation such as we have in
this case. It further obviates the necessity for the trial court to ascertain blindly whether the
documents before it are enough or whether other documents in the official record—to which it
does not have access—are relevant to the issues on review. Further, AOPA explicitly provides a
mechanism by which the parties may condense the record by agreement potentially saving both
sides time and expense. See I.C. § 4-21.5-5-13(e) (“By stipulation of all parties to the review
proceedings, the record may be shortened, summarized, or organized.”). And an unreasonable
refusal to so stipulate can result in the costs of record preparation being taxed to the refusing
party. See I.C. § 4-21.5-5-13(f).
All four justices in Meyer agreed that the trial court lacked authority to extend the filing
deadline for an agency record that was not filed within the required statutory period or an
authorized extension thereof. We reasoned:
The purpose of AOPA section 13 is to ensure that the review of
agency action proceeds in an efficient and speedy manner, and that
the reviewing trial court has access to the record before rendering
its decision. . . . The filing requirement also ensures that no
relevant evidence or materials are hidden, and no “new” or
“secret” evidence is introduced to either contradict or support an
agency decision.
Meyer, 927 N.E.2d at 370 (internal quotation and citation omitted). This reasoning applies with
equal force to a requirement that the official agency record must be filed with the trial court in
order for judicial review to proceed. In sum we hold a petitioner for review cannot receive
consideration of its petition where the statutorily-defined agency record4 has not been filed. In
our view this bright-line approach best serves the goals of accuracy, efficiency, and judicial
4
We recognize that the documents constituting the agency record as listed in section 4-21.5-3-33(b) and
4-21.5-5-13 will not necessarily be present in every single agency record, and the parties may stipulate
that certain documents are not relevant to the agency action appealed in a particular case.
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economy. Here because TOPS did not file the agency record as anticipated by AOPA, the trial
court properly dismissed its petition for judicial review.
Conclusion
We affirm the judgment of the trial court.
Rush, C.J. and Dickson, David and Massa, JJ., concur.
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