Uhrich & Brown Ltd. Part. v. Middle Republican NRD , 315 Neb. 596 ( 2023 )


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    12/15/2023 09:07 AM CST
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    Nebraska Supreme Court Advance Sheets
    315 Nebraska Reports
    UHRICH & BROWN LTD. PART. V. MIDDLE REPUBLICAN NRD
    Cite as 
    315 Neb. 596
    Uhrich & Brown Limited Partnership, appellee,
    v. Middle Republican Natural Resources
    District et al., appellants.
    Merlin Brown, appellee, v. Middle
    Republican Natural Resources
    District et al., appellants.
    ___ N.W.2d ___
    Filed December 15, 2023.   Nos. S-23-169, S-23-174.
    1. Administrative Law: Judgments: Appeal and Error. A judgment or
    final order rendered by a district court in a judicial review pursuant to
    the Administrative Procedure Act may be reversed, vacated, or modified
    by an appellate court for errors appearing on the record.
    2. ____: ____: ____. When reviewing an order of a district court under
    the Administrative Procedure Act for errors appearing on the record, the
    inquiry is whether the decision conforms to the law, is supported by com-
    petent evidence, and is neither arbitrary, capricious, nor unreasonable.
    3. Judgments: Appeal and Error. An appellate court, in reviewing a dis-
    trict court’s judgment for errors appearing on the record, will not substi-
    tute its factual findings for those of the district court where competent
    evidence supports those findings.
    4. Constitutional Law: Due Process. The determination of whether the
    procedures afforded an individual comport with constitutional require-
    ments for procedural due process presents a question of law.
    5. Judgments: Appeal and Error. On a question of law, an appellate court
    is obligated to reach a conclusion independent of the determination
    reached by the court below.
    6. Due Process: Trial. A fair trial in a fair tribunal is a basic requirement
    of due process.
    7. Constitutional Law: Due Process. Not only is a biased decisionmaker
    constitutionally unacceptable, but the U.S. system of law has always
    endeavored to prevent even the probability of unfairness.
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    8. Administrative Law: Due Process. A party appearing in an adjudica-
    tion hearing before an agency or tribunal is entitled to due process
    protections similar to those given litigants in a judicial proceeding;
    this includes the right to a hearing before an impartial, unbiased
    decisionmaker.
    9. Administrative Law: Presumptions. Decisionmakers are accorded a
    presumption of honesty and integrity, and of being qualified, unbi-
    ased, and unprejudiced; administrative adjudicators serve with the same
    presumption.
    10. Administrative Law: Recusal: Presumptions: Proof. A party seeking
    to disqualify an administrative adjudicator on the basis of bias or preju-
    dice bears the heavy burden of overcoming the presumption of honesty
    and integrity.
    11. Constitutional Law: Administrative Law: Presumptions: Proof. To
    overcome the presumption of honesty and integrity of an administrative
    adjudicator, there must be a showing of actual bias or a showing that the
    probability of actual bias is too high to be constitutionally tolerable.
    12. Constitutional Law: Administrative Law: Judges. Rather than inquir-
    ing into whether the judge or adjudicator is actually, subjectively biased,
    the question is whether the average judge in his or her position is likely
    to be neutral, or whether there is an unconstitutional potential for bias.
    13. Administrative Law. Central to whether the average administrative
    decisionmaker in a similar position is likely to be neutral is the extent
    of separation between the investigative, prosecutorial, and adjudicative
    roles in the case.
    14. Criminal Law: Administrative Law: Due Process. In a criminal trial,
    due process requires the strict separation of investigative, prosecutorial,
    and adjudicative functions; in an administrative proceeding, due process
    requires an adequate separation of investigative, prosecutorial, and adju-
    dicative roles.
    15. Administrative Law: Courts. Courts must bear in mind the way par-
    ticular administrative procedures actually work in practice.
    16. Administrative Law: Due Process. The mere fact that investigative,
    prosecutorial, and adjudicative functions are combined within one
    administrative agency does not give rise to a due process violation.
    17. Administrative Law. Adequate separation of administrative functions
    can be accomplished internally at the individual level rather than at the
    institutional level.
    18. ____. To some extent, combinations of investigative, prosecutorial, and
    adjudicative functions in the same administrative agency inhere in the
    very nature of the administrative process.
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    315 Neb. 596
    19. ____. Requiring administrative agencies to maintain a rigid separation
    of functions would deprive agencies of the flexibility needed to conduct
    their complex and varied functions.
    20. Administrative Law: Prosecuting Attorneys: Due Process. It is the
    general rule that a combination of prosecutorial and adjudicative func-
    tions in the same person is incompatible with due process, such as where
    the person prosecuting a case on behalf of a public body is also a mem-
    ber of the decisionmaking body or advisor to it on the same matter.
    21. Administrative Law: Attorneys at Law. Administrative agency coun-
    sel who performs as an advocate in a given case is generally precluded
    from advising a decisionmaking body in the same case.
    22. Administrative Law: Prosecuting Attorneys. An administrative pros-
    ecutor or advocate, by definition, is partisan for a particular client or
    point of view.
    23. Constitutional Law: Prosecuting Attorneys. Generally, the role of
    prosecutor is inconsistent with true objectivity, a constitutionally neces-
    sary characteristic of an adjudicator.
    24. ____: ____. The prosecutor or advocate in an administrative pro-
    ceeding generally will have a will to win—a psychological commit-
    ment to achieving a particular result because of involvement on the
    agency’s team.
    25. Evidence: Words and Phrases. Competent evidence means evidence
    that tends to establish the fact in issue. It is evidence that is admissible
    and relevant on the point in issue.
    26. Administrative Law: Words and Phrases. A decision is arbitrary when
    it is made in disregard of the facts or circumstances and without some
    basis which would lead a reasonable person to the same conclusion.
    27. Words and Phrases. A capricious decision is one guided by fancy
    rather than by judgment or settled purpose.
    28. ____. The term “unreasonable” can be applied to a decision only if the
    evidence presented leaves no room for differences of opinion among
    reasonable minds.
    29. Appeal and Error. To be considered by an appellate court, an alleged
    error must be both specifically assigned and specifically argued in the
    brief of the party assigning the error.
    30. Administrative Law: Evidence: Appeal and Error. The Administrative
    Procedure Act does not authorize a district court’s reviewing the deci-
    sion of an administrative agency to receive additional evidence.
    31. Constitutional Law: Administrative Law: Appeal and Error. When
    the facts and circumstances of administrative proceedings show an
    improper combination of functions such that there exists a risk of bias
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    on the part of the decisionmaker that is too high to be constitutionally
    tolerable, this amounts to structural error requiring reversal.
    32. Trial: Appeal and Error. The right to an impartial adjudicator is so
    basic to a fair trial that its infraction can never be treated as harm-
    less error.
    Appeals from the District Court for Frontier County: James
    E. Doyle IV, Judge. Affirmed.
    Donald G. Blankenau and Kennon G. Meyer, of Blankenau,
    Wilmoth & Jarecke, L.L.P., for appellants.
    Cody E. Siegfried, of Goodwin Siegfried, L.L.P., for appel-
    lee Uhrich & Brown Limited Partnership.
    Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
    Papik, and Freudenberg, JJ.
    Freudenberg, J.
    INTRODUCTION
    Following administrative hearings, the board of directors
    of a natural resources district adopted resolutions finding
    that two landowners violated certain ground water manage-
    ment rules and requiring them to comply with the natural
    resources district’s cease-and-desist order imposing penalties.
    On appeal under the Administrative Procedure Act (APA), 1
    the district court reversed and vacated the board of directors’
    determinations after finding a violation of the landowners’
    due process right to an impartial tribunal because the natural
    resources district’s attorneys were involved in the decision-
    making process of the case after exercising both investigative
    and prosecutorial roles. The natural resources district chal-
    lenges the district court’s order, arguing the record is devoid
    of any facts that would support the district court’s finding that
    1
    See 
    Neb. Rev. Stat. §§ 84-901
     to 84-920 (Reissue 2014 & Cum. Supp.
    2022).
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    UHRICH & BROWN LTD. PART. V. MIDDLE REPUBLICAN NRD
    Cite as 
    315 Neb. 596
    the natural resources district’s attorneys were included in the
    decisionmaking process. Because the district court’s decision
    conforms to the law, is supported by competent evidence, and
    is neither arbitrary, capricious, nor unreasonable, we affirm.
    BACKGROUND
    Prehearing Correspondence
    Merlin Brown and Uhrich & Brown Limited Partnership
    own agricultural land in Red Willow County, Nebraska. Brown
    is the general partner of the limited partnership. Brown and the
    limited partnership (collectively the landowners) leased this
    land to tenants, who farm and operate the land pursuant to a
    lease agreement.
    In August 2020, the Board of Directors (Board) of the
    Middle Republican Natural Resources District (NRD) adopted
    resolutions providing that the landowners had likely violated
    the Nebraska Ground Water Management and Protection Act
    (NGWMPA) and the rules and regulations of the NRD. The
    resolutions authorized the NRD to send the landowners a
    “Notice of Intent to Issue a Cease and Desist Order and to
    Issue Penalties.”
    Shortly thereafter, the NRD sent letters to the landowners
    stating they may have violated the NRD’s rules and regulations
    and the NGWMPA. Both letters stated that if the landowners
    requested hearings before the Board, such hearings would be
    scheduled for September 16, 2020. Both were signed by the
    NRD manager.
    One week later, the NRD sent letters to the landowners with
    practically identical information but specified a different hear-
    ing date if the landowners voluntarily consented to the cease-
    and-desist order. These letters were also signed by the NRD
    manager. The landowners requested formal hearings, along
    with information and documentation related to the NRD’s
    investigation.
    In October 2020, the NRD again sent letters to the landown-
    ers, reiterating much of the same information and specifying
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    UHRICH & BROWN LTD. PART. V. MIDDLE REPUBLICAN NRD
    Cite as 
    315 Neb. 596
    the alleged violations. However, the October letters were
    signed by attorney Nicholas J. Ridgeway and were printed on
    his law firm’s letterhead.
    The letters indicated that should the landowners request
    hearings before the Board, such hearings would take place on
    October 30, 2020, and identified the individual who would
    serve as the hearing officer. In response, the landowners
    again requested formal hearings before the Board, along
    with information and documentation pertaining to the NRD’s
    investigation.
    Days before the scheduled hearing date, Ridgeway sent
    another letter to the landowners’ attorney, notifying him of
    a change in venue for the hearing due to the State’s updated
    COVID-19 health measures.
    Administrative Hearing
    On October 30, 2020, separate hearings were conducted by
    the designated hearing officer before the Board for each of
    the landowners. Ridgeway and Daniel L. Lindstrom, another
    attorney who worked at the same law firm as Ridgeway, rep-
    resented the NRD. The landowners were also represented by
    counsel. At the hearings, counsel for both parties presented
    arguments, called and cross-examined witnesses, and offered
    and objected to evidence.
    The Board adopted resolutions finding there was sufficient
    evidence showing the landowners had violated the NRD’s
    rules and regulations and ordering them to comply with the
    NRD’s cease-and-desist order and order issuing penalties.
    The Board stated in its resolutions that before adopting
    the resolutions, it “consulted with legal counsel, made pre-
    liminary determinations and requested that legal counsel draft
    appropriate documents.” In their briefs, the parties reference
    Ridgeway and Lindstrom as counsel for both the NRD and the
    Board. Ridgeway sent letters notifying the landowners of the
    Board’s decision and included copies of the resolutions and
    the cease-and-desist orders.
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    315 Neb. 596
    Petitions for Review
    As relevant to this appeal, the landowners filed petitions
    for review in the district court pursuant to the APA. They
    argued the proceedings below were improperly conducted,
    denying the landowners equal protection and due process of
    law. Specifically, the landowners claimed the extensive par-
    ticipation by the NRD’s counsel during the various stages of
    the dispute tainted the landowners’ due process right to be
    heard before a neutral, unbiased decisionmaker. The NRD
    responded that there was no indication the NRD’s counsel
    actually influenced the Board’s decision. The NRD did not
    contend that its counsel during the hearing was different from
    its counsel that, according to the Board’s resolution, was con-
    sulted by the Board.
    District Court’s Decision
    Because the landowners requested identical relief and
    alleged identical claims of due process, the district court con-
    sidered and resolved the petitions together in one opinion. The
    court determined the involvement of the NRD’s counsel in
    the decisionmaking process, after acting as investigators and
    prosecutors for the NRD, violated the landowners’ due process
    right to a neutral decisionmaker. The record showed, the court
    reasoned, that the same attorneys involved in the advocacy
    and prosecutorial functions of the dispute “were included in
    the decision-making process of the [NRD] board,” thereby
    “nullif[ying] the presumption of neutrality and impartiality
    accorded the tribunal.”
    While acknowledging that, as a matter of law, adjudicators
    serve with a presumption of honesty and integrity, the district
    court relied on In re 2007 Appropriations of Niobrara River
    Waters 2 for the proposition that “the same persons who con-
    duct the decision-making at and after an enforcement hearing
    2
    In re 2007 Appropriations of Niobrara River Waters, 
    283 Neb. 629
    , 
    820 N.W.2d 44
     (2012).
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    may not involve themselves directly in any of the investiga-
    tion, preparation, or prosecution of an enforcement action.”
    Based on this reasoning, the court reversed and vacated the
    penalties imposed by the NRD’s cease-and-desist order.
    The NRD appeals the district court’s decision. Because the
    appeals involve identical facts, raise identical assignments
    of error, and rely on the same arguments, we consolidated
    the appeals.
    ASSIGNMENTS OF ERROR
    The NRD assigns the district court erred by (1) failing to
    review the Board’s decision de novo on the record; (2) failing
    to find that the landowners violated the rules and regulations
    of the NRD and the NGWMPA, and to approve the NRD’s
    order imposing a penalty; and (3) finding that the opportu-
    nity for a hearing provided by the NRD did not conform to
    due process.
    STANDARD OF REVIEW
    [1-3] A judgment or final order rendered by a district court
    in a judicial review pursuant to the APA may be reversed,
    vacated, or modified by an appellate court for errors appear-
    ing on the record. 3 When reviewing an order of a district court
    under the APA for errors appearing on the record, the inquiry
    is whether the decision conforms to the law, is supported
    by competent evidence, and is neither arbitrary, capricious,
    nor unreasonable. 4 An appellate court, in reviewing a district
    court’s judgment for errors appearing on the record, will not
    substitute its factual findings for those of the district court
    where competent evidence supports those findings. 5
    [4,5] The determination of whether the procedures afforded
    an individual comport with constitutional requirements for
    3
    Medicine Creek v. Middle Republican NRD, 
    296 Neb. 1
    , 
    892 N.W.2d 74
    (2017).
    4
    
    Id.
    5
    Lingenfelter v. Lower Elkhorn NRD, 
    294 Neb. 46
    , 
    881 N.W.2d 892
     (2016).
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    procedural due process presents a question of law. 6 On a
    question of law, an appellate court is obligated to reach a
    conclusion independent of the determination reached by the
    court below. 7
    ANALYSIS
    The NRD argues the district court’s decision is not sup-
    ported by the record, and accordingly, the decision fails to
    comply with the district court’s de novo on the record stan-
    dard of review and is arbitrary, capricious, unreasonable, and
    unsupported by competent evidence. The NRD admits its
    attorneys actively participated and represented the NRD dur-
    ing the hearing. Thus, it does not contest the district court’s
    finding that the NRD’s attorneys prosecuted the case on behalf
    of the NRD during the hearing by making arguments before
    the hearing officer, objecting to evidence, and cross-examining
    the landowners’ witnesses. Instead, the NRD contests the
    district court’s finding that its attorneys were included in the
    adjudicatory process of the Board. It also contests the district
    court’s conclusion that the NRD’s attorneys’ involvement in
    both prosecutorial and adjudicatory functions rebutted the
    presumption of honesty and integrity afforded to the Board
    and demonstrated a probability of actual bias that is too high
    to be constitutionally tolerable. Because there is competent
    evidence that the NRD’s attorneys were improperly included
    in the adjudicatory process, we affirm.
    In discussing the NRD’s due process obligations in this
    case, both parties rely on cases involving administrative
    agencies. Although we have observed that a natural resources
    district is a unit of local government rather than an adminis-
    trative agency, 8 we follow the parties’ lead and assume that
    6
    Fleming v. Civil Serv. Comm. of Douglas Cty., 
    280 Neb. 1014
    , 
    792 N.W.2d 871
     (2011).
    7
    
    Id.
    8
    Lingenfelter v. Lower Elkhorn NRD, supra note 5.
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    the due process standards governing administrative agencies
    apply to the NRD. Further, despite a natural resources dis-
    trict’s status as a unit of local government, the Legislature
    has expressly directed the use of APA procedures in resolving
    challenges to decisions of a natural resources district. 9
    [6,7] A “fair trial in a fair tribunal is a basic requirement of
    due process.” 10 “Not only is a biased decisionmaker constitu-
    tionally unacceptable but our system of law has always endeav-
    ored to prevent even the probability of unfairness.” 11
    [8] A party appearing in an adjudication hearing before
    an agency or tribunal is entitled to due process protections
    similar to those given litigants in a judicial proceeding. 12
    This includes the right to a hearing before an impartial, unbi-
    ased decisionmaker. 13
    [9,10] Decisionmakers are accorded a presumption of hon-
    esty and integrity, and of being qualified, unbiased, and unprej-
    udiced. 14 Administrative adjudicators serve with the same pre-
    sumption. 15 A party seeking to disqualify an administrative
    adjudicator on the basis of bias or prejudice bears the heavy
    burden of overcoming that presumption. 16
    [11,12] To overcome the presumption of honesty and
    integrity of an administrative adjudicator, there must be a
    9
    See 
    Neb. Rev. Stat. § 46-750
     (Reissue 2021).
    10
    Withrow v. Larkin, 
    421 U.S. 35
    , 46, 
    95 S. Ct. 1456
    , 
    43 L. Ed. 2d 712
    (1975) (internal quotation marks omitted).
    11
    
    Id.,
     
    421 U.S. at 47
     (internal quotation marks omitted).
    12
    Prokop v. Lower Loup NRD, 
    302 Neb. 10
    , 
    921 N.W.2d 375
     (2019); Cain
    v. Custer Cty. Bd. of Equal., 
    298 Neb. 834
    , 
    906 N.W.2d 285
     (2018).
    13
    See, Prokop v. Lower Loup NRD, supra note 12; Stenger v. Department of
    Motor Vehicles, 
    274 Neb. 819
    , 
    743 N.W.2d 758
     (2008).
    14
    46 Am. Jur. 2d Judges § 194 (2017). See 32 Charles Alan Wright et al.,
    Federal Practice and Procedure § 8143 (2023).
    15
    In re 2007 Appropriations of Niobrara River Waters, supra note 2. See
    Withrow v. Larkin, 
    supra note 10
    .
    16
    Murray v. Neth, 
    279 Neb. 947
    , 
    783 N.W.2d 424
     (2010). See Withrow v.
    Larkin, 
    supra note 10
    .
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    showing of actual bias or a showing that “‘the probability of
    actual bias . . . is too high to be constitutionally tolerable.’” 17
    Rather than inquiring into whether the judge or adjudicator
    is “actually, subjectively biased,” the question is whether the
    average judge in his or her position is “likely to be neutral,
    or whether there is an unconstitutional potential for bias.” 18
    [13-15] Central to whether the average administrative deci-
    sionmaker in a similar position is likely to be neutral is the
    extent of separation between the investigative, prosecutorial,
    and adjudicative roles in the case. In a criminal trial, due
    process requires the strict separation of investigative, pros-
    ecutorial, and adjudicative functions 19; in an administrative
    proceeding, due process requires an “[a]dequate separation” 20
    of investigative, prosecutorial, and adjudicative roles. As a
    natural consequence of limited resources in local government,
    administrative procedures at the local level have traditionally
    been relaxed. 21 Courts must bear in mind “‘“the way particular
    procedures actually work in practice.”’” 22
    17
    Caperton v. A. T. Massey Coal Co., 
    556 U.S. 868
    , 872, 
    129 S. Ct. 2252
    ,
    
    173 L. Ed. 2d 1208
     (2009) (quoting Withrow v. Larkin, 
    supra note 10
    ).
    See, Murray v. Neth, 
    supra note 16
    ; Davenport Pastures v. Bd. of County
    Com’rs, 
    291 Kan. 132
    , 
    238 P.3d 731
     (2010); 32 Wright et al., 
    supra note 14
    .
    18
    Caperton v. A. T. Massey Coal Co., supra note 17, 556 U.S. at 881
    (internal quotation marks omitted). See 32 Wright et al., 
    supra note 14
    .
    19
    See 16D C.J.S. Constitutional Law § 2021 (2015).
    20
    Jared R. Faerber, Administrative Law Bias in Administrative Proceedings,
    
    1997 Utah L. Rev. 1087
    , 1095 (1997). See, 2 Am. Jur. 2d Administrative
    Law § 303 (2014). See, also, e.g., 16D C.J.S., supra note 19; 73A C.J.S.
    Public Administrative Law and Procedure § 322 (2014); 36 Standard
    Pennsylvania Practice 2d § 166:125 (Nov. 2023 update).
    21
    Kelli Shope, Balancing Administrative Efficiency and Fairness:
    Restrictions on Local Hearing Advisors Post-Nightlife Partners, Ltd. v.
    City of Beverly Hills, 24 J. Nat. Assn. Admin. L. Judiciary 51 (2004).
    22
    In re 2007 Appropriations of Niobrara River Waters, supra note 2, 283
    Neb. at 645, 820 N.W.2d at 59 (quoting Murray v. Neth, 
    supra note 16
    ).
    See Withrow v. Larkin, 
    supra note 10
    .
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    [16-19] Accordingly, we have recognized that the mere
    fact that investigative, prosecutorial, and adjudicative func-
    tions are combined within one administrative agency does not
    give rise to a due process violation. 23 “[A]dequate separation
    of [administrative] functions can be accomplished internally at
    the individual level rather than at the institutional level.” 24 To
    some extent, combinations of investigative, prosecutorial, and
    adjudicative functions in the same administrative agency inhere
    in the very nature of the administrative process. 25 Requiring
    administrative agencies to maintain a rigid separation of func-
    tions would deprive agencies of the flexibility needed to con-
    duct their complex and varied functions. 26
    In Withrow v. Larkin, 27 the U.S. Supreme Court addressed
    investigative and adjudicative functions combined within one
    medical agency and found it did not violate due process.
    After holding several investigative hearings regarding alleged
    criminal behavior by a physician licensed to practice medicine,
    the governing medical board, pursuant to statute, directed its
    secretary to file a complaint with the district attorney to initi-
    ate a contested hearing before the board seeking to revoke
    the physician’s license based on the alleged crimes. 28 The
    district court enjoined the medical board from enforcing the
    statute, reasoning that a statute allowing the medical board
    to “‘suspend [the physician’s] license at [the Board’s] own
    contested hearing on charges evolving from [the Board’s] own
    investigation’” would deny the physician his procedural due
    process rights. 29
    23
    In re 2007 Appropriations of Niobrara River Waters, supra note 2.
    24
    See Faerber, supra note 20, 1997 Utah L. Rev. at 1095. See, also, 16D
    C.J.S., supra note 19; 73A C.J.S., supra note 20.
    25
    See In re 2007 Appropriations of Niobrara River Waters, supra note 2.
    26
    See Faerber, supra note 20.
    27
    Withrow v. Larkin, 
    supra note 10
    .
    28
    
    Id.
    29
    
    Id.,
     
    421 U.S. at 42
    .
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    The U.S. Supreme Court disagreed. It explained, “The con-
    tention that the combination of investigative and adjudicative
    functions necessarily creates an unconstitutional risk of bias
    . . . must overcome a presumption of honesty and integrity
    in those serving as adjudicators . . . .” 30 The Court further
    explained, “[I]t must convince that, under a realistic appraisal
    of psychological tendencies and human weakness, conferring
    investigative and adjudicative powers on the same individuals
    poses such a risk of actual bias or prejudgment that the prac-
    tice must be forbidden if the guarantee of due process is to be
    adequately implemented.” 31
    The Court in Withrow analogized the situation presented
    to a judge who presides over a bench trial after finding prob-
    able cause to issue an arrest warrant or after finding sufficient
    evidence at a preliminary hearing to hold the defendant for
    trial. The medical board, the Court observed, only investigated
    whether proscribed conduct had occurred, and the physician
    and his counsel were present throughout the investigative pro-
    ceeding and knew the facts presented to the medical board.
    That the medical board later would also determine if violations
    had been committed, warranting suspension of the physician’s
    license, did not create an unacceptable risk of bias. The Court
    explained, “The mere exposure to evidence presented in non-
    adversary investigative procedures is insufficient in itself to
    impugn the fairness of the [b]oard members at a later adver-
    sary hearing.” 32
    This is because
    [t]he risk of bias or prejudgment in this sequence of
    functions has not been considered to be intolerably high
    or to raise a sufficiently great possibility that the adju-
    dicators would be so psychologically wedded to their
    30
    
    Id.,
     
    421 U.S. at 47
    .
    31
    
    Id.
    32
    
    Id.,
     
    421 U.S. at 55
    .
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    complaints that they would consciously or uncon-
    sciously avoid the appearance of having erred or changed
    position. 33
    Indeed, “there is no incompatibility between the agency filing
    a complaint based on probable cause and a subsequent deci-
    sion, when all the evidence is in, that there has been no viola-
    tion of the statute.” 34 The Court held that “the combination
    of investigative and adjudicative functions does not, without
    more, constitute a due process violation.” 35 However, that did
    not “preclude a court from determining from the special facts
    and circumstances present in the case before it that the risk of
    unfairness is intolerably high.” 36
    [20,21] The “realistic appraisal of psychological tendencies
    and human weakness” 37 is different when the “same person on
    the same case” 38 participates in adjudicatory functions after
    acting in a prosecutorial role. It has been said that exercising
    both prosecutorial and adjudicatory functions is “‘inherently
    suspect.’” 39 It is
    the general rule that a combination of prosecutorial and
    adjudicative functions in the same person is incompatible
    with due process, such as where the person prosecut-
    ing a case on behalf of a public body is also a member
    of the decision-making body or advisor to it on the
    same matter.” 40
    33
    
    Id.,
     
    421 U.S. at 57
    .
    34
    
    Id.
    35
    
    Id.,
     
    421 U.S. at 58
    .
    36
    
    Id.
    37
    
    Id.,
     
    421 U.S. at 47
    .
    38
    Robert R. Kuehn, Addressing Bias in Administrative Environmental
    Decisions, 37 J. Nat. Assn. Admin. L. Judiciary 693, 748 (2018).
    39
    
    Id.
    40
    Id. at 749.
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    Accordingly, administrative agency counsel who performs as
    an advocate in a given case is generally precluded from advis-
    ing a decisionmaking body in the same case. 41
    [22-24] An administrative prosecutor or advocate, “[b]y
    definition,” is “partisan for a particular client or point of
    view.” 42 Generally, the role of prosecutor “is inconsistent with
    true objectivity, a constitutionally necessary characteristic of
    an adjudicator.” 43 The prosecutor or advocate in an admin-
    istrative proceeding generally will have a “‘will to win’—
    ‘a psychological commitment to achieving a particular result
    because of involvement on the agency’s team.’” 44 And it may
    be “‘difficult for anyone who has worked long and hard to
    prove a proposition . . . to make the kind of dramatic change in
    psychological perspective necessary to assess that proposition
    objectively . . . .’” 45
    Thus, we opined in In re 2007 Appropriations of Niobrara
    River Waters that “[w]hen advocacy and decisionmaking roles
    are combined, true objectivity, a constitutionally necessary
    characteristic of an adjudicator, is compromised.” 46 However,
    we have not had occasion to directly address dual prosecu-
    torial and adjudicatory roles. In In re 2007 Appropriations
    of Niobrara River Waters, 47 we ultimately found the same
    41
    See 2 Am. Jur. 2d, supra note 20.
    42
    Howitt v. Superior Court, 
    3 Cal. App. 4th 1575
    , 1585, 
    5 Cal. Rptr. 2d 196
    ,
    202 (1992).
    43
    
    Id.
    44
    Botsko v. Davenport Civil Rights Com’n, 
    774 N.W.2d 841
    , 849 (Iowa
    2009) (quoting Michael Asimow, When the Curtain Falls: Separation of
    Functions in the Federal Administrative Agencies, 
    81 Colum. L. Rev. 759
    (1981)).
    45
    
    Id.
     (quoting 2 Richard J. Pierce, Jr., Administrative Law Treatise § 9.9 (4th
    ed. 2002)).
    46
    In re 2007 Appropriations of Niobrara River Waters, supra note 2, 283
    Neb. at 644, 820 N.W.2d at 59 (internal quotation marks omitted).
    47
    In re 2007 Appropriations of Niobrara River Waters, supra note 2.
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    person was not involved in both prosecutorial and adjudica-
    tory functions.
    In In re 2007 Appropriations of Niobrara River Waters,
    the Nebraska Department of Natural Resources appeared as
    a party advocate through a designated staff attorney, but it
    appointed an independent attorney as the hearing officer, and
    the director of the department issued the final order in the case
    without participation of the staff attorney. We observed that
    there was no evidence or argument that the director requested
    the staff attorney to gather or present specific evidence or
    that the director and the staff attorney had any communica-
    tion regarding the outcome of the proceedings. We said, “The
    separation of functions within an administrative agency, allot-
    ting the prosecutorial function to a staff of attorneys or other
    personnel who will not participate in the eventual decision, is a
    common and recommended feature of administrative enforce-
    ment activity.” 48
    The Iowa Supreme Court, in Botsko v. Davenport Civil
    Rights Com’n, 49 was presented with an agency representative
    who performed a prosecutorial function and also participated
    in the decisionmaking process in an advisory role. The court
    held that this participation in both advocacy and adjudicatory
    functions violated due process. 50
    Botsko involved proceedings under an employee’s com-
    plaint with a civil rights commission, alleging her employer
    maintained a hostile work environment. During the hearing,
    the director of the commission acted as an advocate for the
    employee, sitting at the table with the employee, engaging
    in off-the-record conferences with the employee’s attorney,
    and failing to object when the presiding officer stated both
    the employee’s attorney and the director bore the burden
    of proof in the case. Then, at the close of the hearing, the
    48
    
    Id.,
     283 Neb. at 645, 820 N.W.2d at 59 (emphasis supplied).
    49
    Botsko v. Davenport Civil Rights Com’n, supra note 44.
    50
    Id.
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    director joined the commission for its closed-door delib-
    erations—apparently participating only to advise the commis-
    sioners if they had questions, to discuss procedures, and to
    record votes. 51
    On appeal from a ruling in favor of the employee, the Iowa
    Supreme Court agreed with the employer that the director’s
    presence during closed-door deliberations violated its due proc­
    ess right to a neutral decisionmaker. The court held that the
    director engaged in advocacy on behalf of the employee dur-
    ing the hearing and that this prosecutorial activity precluded
    the director from later participating in the decisionmaking
    process. 52 Participating in the commission’s deliberations after
    acting as the employee’s advocate created “the appearance of
    fundamental unfairness” and deprived the employer of his right
    to due process. 53
    In so holding, the court in Botsko rejected the commission’s
    argument that the director did nothing more than answer
    questions during the closed session. First, the court reasoned
    that the appearance of fundamental unfairness through the
    combination of advocacy and adjudicative functions created
    a risk of injecting bias in the adjudicatory process such that
    the employer was not required to show actual prejudice. In
    any event, the court found “little comfort” in the evidence
    that the director did nothing more than simply answer ques-
    tions or in the commission members’ averments that they had
    made their findings independently. 54 The court observed that
    a skilled advocate can accomplish a great deal by answering
    questions in a way favorable for his or her client. 55 Holding
    the employer’s due process rights were violated, the court
    51
    
    Id.
    52
    
    Id.
    53
    Id. at 853.
    54
    Id.
    55
    Id.
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    vacated the commission’s decision and remanded the matter
    for further proceedings. 56
    The facts of this case are like those presented in Botsko.
    The district court found that the same attorneys who acted
    as investigators and prosecutors in the case were involved in
    the decisionmaking process of the Board. We disagree with
    the NRD’s assertion that this finding of dual involvement in
    prosecutorial and adjudicatory functions is unsupported by
    competent evidence in the record.
    [25-28] Our inquiry is whether the decision conforms to
    the law, is supported by competent evidence, and is neither
    arbitrary, capricious, nor unreasonable. 57 Competent evidence
    means evidence that tends to establish the fact in issue. 58 It is
    evidence that is admissible and relevant on the point in issue. 59
    A decision is arbitrary when it is made in disregard of the facts
    or circumstances and without some basis which would lead a
    reasonable person to the same conclusion. 60 A capricious deci-
    sion is one guided by fancy rather than by judgment or settled
    purpose. 61 The term “unreasonable” can be applied to a deci-
    sion only if the evidence presented leaves no room for differ-
    ences of opinion among reasonable minds. 62
    The record contains the Board’s resolution that states:
    [T]he Board . . . held a hearing on Friday, October
    30, 2020, a hearing duly called and with a quorum of
    the Board . . . present. The Board consulted with legal
    56
    
    Id.
    57
    Medicine Creek v. Middle Republican NRD, supra note 3.
    58
    Shepherd v. City of Omaha, 
    194 Neb. 813
    , 
    235 N.W.2d 873
     (1975),
    disapproved on other grounds, Caniglia v. City of Omaha, 
    210 Neb. 404
    ,
    
    315 N.W.2d 241
     (1982).
    59
    
    Id.
    60
    Gelco Fleet Trust v. Nebraska Dept. of Rev., 
    312 Neb. 49
    , 
    978 N.W.2d 12
    (2022).
    61
    
    Id.
    62
    
    Id.
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    counsel, made preliminary determinations and requested
    that legal counsel draft appropriate documents. Thereafter,
    on November 10, 2020, at a regular meeting of the Board,
    the Board adopted the following resolution[.]”
    This resolution provides some basis that would lead a reason-
    able person to conclude that after the hearing but before the
    Board issued its decision, the Board consulted with the NRD’s
    legal counsel during an adjudicatory process. The resolution
    tends to establish that the later adoption of the resolutions at
    a subsequent regular meeting merely formalized the decision
    the Board had reached during the decisionmaking process in
    which it “consulted with legal counsel” and had counsel “draft
    appropriate documents.”
    [29] The NRD did not argue to the district court that the
    attorneys whom the Board consulted after the hearing were
    different attorneys than those who prosecuted the case. And
    the NRD did not specifically assign and specifically argue in
    its appellate brief that the district court erred in finding that
    the attorneys consulted by the Board after the hearing were
    the same attorneys who prosecuted the case on behalf of the
    NRD. To be considered by an appellate court, an alleged error
    must be both specifically assigned and specifically argued in
    the brief of the party assigning the error. 63 Regardless, the
    record shows that after the Board formally adopted the reso-
    lutions at its regular meeting, Ridgeway, one of the attorneys
    who represented the NRD at the hearing, sent letters notifying
    the landowners of the Board’s decision, which included cop-
    ies of the resolutions and the cease-and-desist orders. There
    is no indication in the record that the NRD changed its legal
    counsel between the time of the hearing and the commence-
    ment of its decisionmaking process. The record sufficiently
    supports the district court’s finding that the same attorneys
    both prosecuted the case on behalf of the NRD and partici-
    pated in the Board’s decisionmaking.
    63
    Bellino v. McGrath North, 
    274 Neb. 130
    , 
    738 N.W.2d 434
     (2007).
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    [30] While the record does not disclose the precise nature
    of the consultation with legal counsel—in part because the
    APA does not authorize a district court’s reviewing the deci-
    sion of an administrative agency to receive additional evi-
    dence 64—such details are not decisive of the question of due
    process presented. Because the NRD’s attorneys were acting
    as prosecutors, attempting to prove at the hearing that the
    landowners had committed the alleged violations, there was
    too high a probability of actual bias for it to be constitution-
    ally tolerable to permit those same attorneys to be included in
    the decisionmaking process of the Board to determine if those
    violations had been proved. Under such circumstances, the
    NRD no longer enjoyed the presumption of honesty and integ-
    rity. The partisan nature of an advocacy role at the hearing is
    incompatible with the neutrality constitutionally required of
    an adjudicator.
    “As is often the case with respect to procedural due process,
    the question is one of line-drawing and balancing.” 65 While
    administrative agencies are afforded a great deal of flexibility,
    based upon this record, we cannot conclude that the district
    court erred in its finding that the NRD crossed the line by hav-
    ing its attorneys participate in both the prosecution and adjudi-
    catory process of the case.
    [31,32] When the facts and circumstances of administrative
    proceedings show an improper combination of functions such
    that there exists a risk of bias on the part of the decisionmaker
    that is too high to be constitutionally tolerable, this amounts
    to “structural error” requiring reversal. 66 The Supreme Court
    64
    Medicine Creek v. Middle Republican NRD, supra note 3.
    65
    Botsko v. Davenport Civil Rights Com’n, supra note 44, 
    774 N.W.2d at 852
    .
    66
    See Zygmont A. Pines, Mirror, Mirror, On the Wall—Biased Impartiality,
    Appearances, and the Need For Recusal Reform, 
    125 Dick. L. Rev. 69
    ,
    106 (2020). See, also, Williams v. Pennsylvania, 
    579 U.S. 1
    , 
    136 S. Ct. 1899
    , 195 L. Ed. 2d (2016); Greenway v. Schriro, 653 F. 3d. 790 (9th Cir.
    2011).
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    has held that the right to an impartial adjudicator is “‘so
    basic to a fair trial that [its] infraction can never be treated
    as harmless error.’” 67 Therefore, the district court properly
    reversed the Board’s decision after finding the NRD and its
    attorneys violated the landowners’ due process right to a neu-
    tral decisionmaker. We accordingly disagree with the NRD’s
    assignment that the district court erred by failing to find that
    the landowners violated the rules and regulations of the NRD
    and the NGWMPA and by failing to approve the NRD’s order
    imposing a penalty.
    CONCLUSION
    The district court’s order conforms to the law, is supported
    by competent evidence, and is neither arbitrary, capricious,
    nor unreasonable. The problem here could have been avoided
    by the Board consulting with the selected hearing officer dur-
    ing its deliberations and then relaying its ultimate decisions to
    agency counsel, who acted as prosecutors in this matter. We
    affirm the order of the district court.
    Affirmed.
    67
    See, Gray v. Mississippi, 
    481 U.S. 648
    , 668, 
    107 S. Ct. 2045
    , 
    95 L. Ed. 2d 622
     (1987); Arizona v. Fulminante, 
    499 U.S. 279
    , 
    111 S. Ct. 1246
    , 
    113 L. Ed. 2d 302
     (1991). See, also, State v. Abram, 
    284 Neb. 55
    , 
    815 N.W.2d 897
     (2012) (quoting State v. Bjorklund, 
    258 Neb. 432
    , 
    604 N.W.2d 169
    (2000)); R. Collin Mangrum, Mangrum on Nebraska Evidence § 27-103
    (2023).
    

Document Info

Docket Number: S-23-169, S-23-174

Citation Numbers: 315 Neb. 596

Filed Date: 12/15/2023

Precedential Status: Precedential

Modified Date: 12/15/2023