Kentucky State Police v. Terry Scott

RENDERED: AUGUST 24, 2017
TO BE PUBLISHED
~upr:etu:e 2010 WL 881907 (E.D. Ky., Mar. 5, 2010). Following remand,
Scott and Fleming amended their complaint two times to add an allegation of
violation of the Kentucky Civil Rights Act, KRS Chapter 344 and to name
individual defendants.
Ultimately, the trial court dismissed most of Scott's and Fleming's
claims. In a 2012 Order, the trial court held that KSP and four individuals
named in official capacities were all entitled to governmental immunity. Yanero
v. Davis, 65 S.W.3d 510, 519 (Ky. 2001). Subsequently, and as to the KRS
Chapter 18A claims, the trial court recognized that its jurisdiction with respect
to administrative proceedings was limited to matters appealed under KRS
i8A.100 and Chapter l3B. The court, similarly, dismissed the KRS Chapter
344 claims, holding that "[p)olitical affiliation is not a protected class.under the
Civil Rights Act." As to the claims for violation of the Kentucky Constitution,
the trial court recognized that no tort cause of action exists in Kentucky to
provide money damages for constitutional violations. See St. Luke's Hosp., Inc.
v. Straub, 354 S.W.3d 529, 537 (Ky. 2011) (declining to create judicially a new_
constitutional tort for a private right of action for state constitutional
violations). Despite the foregoing, the trial court, nevertheless, permitted the
case to go forward, stating
The Court interprets [Straub) to mean that Plaintiff[s1 claims
based directly on the Kentucky Constitution for monetary damages
are foreclosed, but not that Plaintiff[s are) barred from bringing any
and all claims directly under the Kentucky Constitution. If the
plaintiffs demonstrate a constitutional violation in the form of
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political discrimination that violates the right to freedom of
association and the right of equal protection, they should have a
remedy. The remedies available to the Plaintiffs may be limited to
equitable relief, such as injunctive relief, but it would be premature
to dismiss their claims. If Plaintiffs prove a violation of their right
to equal protection under the state constitution, they may be
entitled to injunctive relief in the form of reinstatement, backpay,
restoration of retirement benefits, or some other actions necessary
to make them whole[.] See e.g., 200 KAR 12:030. Courts are
afforded "broad equitable discretion to fashion back pay awards."
Dauid u. Caterpillar, Inc., 324 F.3d 851, 865 (7th Cir. 2003).
The trial court held a bench trial in October 2013, following which it
entered an Opinion & Order adjudicating the sole issue of "whether Plaintiffs'
constitutional right to equal protection was violated when [KSP] hired Mark
Boaz as an Arson Investigator II, at a substantially higher rate of pay." In its
Findings of Fact, the court made extensive findings with respect to Boaz's,
Scott's and Fleming's employee class, pay and history, and what it
characterized as a number of irregularities in the hiring process for Boaz.
The trial court concluded that KSP committed "flagrant violations of the
hiring procedures required in KRS Chapter 18A[,]" but noted the administrative
violations are not before the court by Scott's and Fleming's failure to exhaust
admirative remedies. The court, however, held that Scott and Fleming had met
their burden of showing a prima facie case of an equal protection violation,
specifically grossly unequal treatment between themselves and Boaz, for which
KSP had failed to prove any rational or reasonable justification, entitling them
to equitable relief. In its judgment, the court stated:
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Plaintiffs right to equal protection under the Kentucky
Constitution Section [2]151 was violated by Defendant. KSP failed
to prove any rational or reasonable justification for the grossly
unequal treatment of Mr. Boaz as compared to the Plaintiffs. By
reason of this violation of their right to equal protection under the
state constitution, Plaintiffs are entitled to injunctive relief in the
form of reinstatement to a position with the same grade and pay as
Mr. Boaz, back pay, restoration of retirement benefits, and any
other actions necessary to make them whole. See e.g., 200 KAR
12:030. Courts are afforded "broad equitable discretion to fashion
back pay awards." David v. Caterpillar. Inc., 324 F.3d 851, 865
(7th Cir. 2003). Accordingly, IT IS ORDERED AND ADJUDGED:
1. That the Plaintiffs shall be paid back pay and benefits
at the same rate KSP paid Mark Boaz for all wages and benefits for
the entire period of employment in which each plaintiff was
employed by KSP starting with the date of the original employment
of Mr. Boaz, with said wages and benefits to be calculated and
credited to the Plaintiffs consistent with 200 KAR 12:030;
2. The Plaintiffs are entitled to the following injunctive and
equitable relief against Defendant in order to be made whole:
a. Kentucky State Police shall reimburse Plaintiff Terry
Scott an amount of back pay as if he were employed at the same
rate as Mark Boaz from the date of the hire of Terry Scott, April 1,
2002 until present, similar to Mark C. Boaz who was employed at
the following monthly rates of pay for the time period: (1)
$3,173.58 per month from November 16, 2004 until December 07,
2004; (2) $3,205.32 per month from January 12, 2005 until
December 1, 2005; (3) $3,365.60 per month until July 17, 2006;
(4) $3,469.78 per month until December 11, 2006; (5) $3,569.78
per month until July 11, 2007; (6) $3,882.28 per month until
December 10, 2007; (7) $3,982.29 per month until December 12,
2008; and, (8) $4,062.36 per month until April 23, 2010. Further,
Kentucky State Police shall restore his retirement benefits in an
amount commensurate with his rate of pay being equal to that of
Mark C. Boaz as detailed above;
b. Kentucky State Police shall reimburse Plaintiff Damon
Fleming an amount of back pay as if he were employed at the same
rate as Mark Boaz from the date of the hire of Terry Scott,
5In this final section of its Opinion & Order, the trial court referred to Section 3
of the Kentucky Constitution. Earlier portions of the Opinion, however, make clear
that the court intended to refer to Section 2.
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November 1, 2002 until July 10, 2009, similar to Mark C. Boaz
who was employed at the following monthly rates of pay for the
time period: (1) $3,173.58 per month from November 16, 2004
until December 07, 2004; (2) $3,205.32 per month from January
12, 2005 until December 1, 2005; (3) $3,365.60 per month until
July 17, 2006; (4) $3,469.78 per month until December 11, 2006;
(5) $3,569.78 per month until July 11, 2007; (6) $3,882.28 per
month until December 10 , 2007; (7) $3,982.29 per month until
December 12, 2008; and, (8) $4,062.36 per month until April 23,
2010. Further, Kentucky State Police shall restore his retirement
benefits in an amount commensurate with his rate of pay being
equal to that of Mark C. Boaz as detailed above;
The trial court's order was made final and appealable. CR6 54.02(1).
KSP appealed to the Court of Appeals. In a split opinion, that court
affirmed the trial court judgment. KSP argued that Scott and Fleming had
failed to exhaust their administrative remedies. The Court of Appeals majority
opinion rejected this argument on the basis that such exhaustion is not
required when attacking the validity of a statute or regulation as void on its
face because an administrative agency cannot decide constitutional issues,
citing Commonwealth v. DLX, Inc., 42 S,W.3d 624, 626 (Ky. 2001). In contrast,
the Court _of Appeals dissent noted the exception to exhaustion set out in DLX
was inapplicable because Scott and Fleming did not attack the constitutional
validity of a statute or regulation either on its face or as applied. In other
words, Scott and Fleming's direct action was precluded by their failure to
exhaust their administrative remedies. The dissent further urged that Scott
and Fleming's direct action for b~ck pay was counter to this Court's decision in.
Straub, 354 S.W.3d at 537-38.
6 Kentucky Rules of Civil Procedure.
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KSP filed a motion for discretionary review, which we granted.
II. Standard of Review.
In this case, the trial court held a bench trial. Thus, to the extent that
any factual issues are germane to our review, we, of course, defer to the fact
finder, in this instance the trial court, and "[f]indings of fact, shall not be set
aside unless clearly erroneous, and due regard shall be given to the
opportunity of the trial court to judge the credibility of the witnesses." CR
52.01. That said, the issues in this case seems to involve pure questions oflaw,
and are therefore subject to de novo review by this Court. Louisville &
Jefferson Cnty. Metro. Sewer Dist. v. Bischoff, 248 S.W.3d 533, 535 (Ky. 2007)
(citing Bob Hook Chevrolet Isuzu, Inc. v. Commonwealth Transp. Cabinet, 983
S.W.2d 488,490 (Ky.1998)).
III. . Issue on Appeal.
As in both lower courts, KSP argues that Scott's and Fleming's failure to
exhaust administrative remedies bars their direct action in the Franklin Circuit
Court. We agree.
As noted, exhaustion of administrative remedies is required prior to
resort to the courts. DU(, 42 S.W.3d at 625 (citing Goodwin v. City of
Louisville, 309 Ky. 11,215 S.W.2d 557,559 (1948)). Three exceptions exist to
this rule oflaw: (1) a party demonstrates the futility of continuing the
administrative process, (2) a statute authorizes direct judicial relief, and (3) a
party challenges the constitutionality of a particular regulation or statute on its
face. Popplewell's Alligator Dock No. 1, Inc. v. Revenue Cabinet, 133 S.W.3d
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456, 471 (Ky. 2004). If none of these exceptions apply, then the court is
deprived of subject matter jurisdiction.
In DLX, a mining company aggrieved by the Natural Resources and
Environmental Protection Cabinet ("Cabinet") alleged taking of its property
without compensation in violation of Section 242 of the Kentucky Constitution
filed a direct action in Franklin Circuit Court. In holding that exhaustion of
administrative remedies was required, we held
Exhaustion of administrative remedies is not necessary
when attacking the constitutionality of a statute or a regulation as
void on its face. Goodwin[, 309 Ky. 11, 215 S.W.2d at 559]. This
is because an administrative agency cannot decide constitutional
issues. Id. Thus, to raise the facial constitutional validity of a
statute or regulation at the administrative level would be an
exercise in futility. This exception does not apply in the case at
bar, however, because DLX has not challenged the facial validity of
the surface mining statutes and regulations. Rather, as its
complaint shows, DLX's argument is that the Cabinet's application
of the statutes and regulations resulted in an unconstitutional
taking of its property.
When an administrative agency applies a statute
unconstitutionally, it acts beyond the bounds of the constitution,
rather than passing on a constitutional question. In other words,
until a statute has been applied, there can be no unconstitutional
application. This is the basis for the rule that one must first show
injury as the result of a statutory application, before that
application may be attacked as unconstitutional. See, e.g., Stein v.
Kentucky State Tax Commission, 266 Ky. 469, 99 S.W.2d 443, 445
(1936). Thus, exhaustion of administrative remedies is not futile to
an as-applied challenge to a statute. Quite the contrary, it is the
administrative action which determines the extent, if any, of the
constitutional injury.
DLX, 42 S.W.3d at 626; see also Kentucky Exec. Branch Ethics Comm'n v.
Atkinson, 339 S.W.3d 472, 476 (Ky. App. 2010) (holding that property valuation
administrators were required, notwithstanding claim of agency's arbitrary
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exercise of power, to exhaust administrative remedies before seeking judicial
relief).
Similar to DLX, Scott and Fleming have not challenged the facial validity
of any statutes or regulations. Instead, they have challenged KSP's application
of hiring statutes and regulations in its hiring of Boaz which, they claim, has
injured them. Under KRS 18A.095, administrative jurisdiction over
penalization is vested in the Personnel Board. Irrespective of whether the
Personnel Board's 2007 decision regarding Scott's and Fleming's claim was
correct, their obligation was to appeal timely that decision to the Franklin
Circuit Court. KRS 13B.140, 18A.100. That determination is long since final,
and operates as res judicata of any matters arising from the facts as alleged by
Scott and Fleming. See Godbey v. Univ. Hosp. of Albert B. Chandler Med. Ctr.,
Inc., 975 S.W.2d 104, 105 (Ky. App. 1998) ("Kentucky has for many years
followed the rule that the decisions of administrative agencies acting in a
judicial capacity are entitled to the same res judicata effect as judgments of a
court.").
Becaus~ we decide this case on the basis of Scott's and Fleming's failure
to exhaust their administrative remedies, we do not reach the other primary
issue raised: whether the trial court effectively awarded Scott and Fleming
monetary damages contrary to our decisions in Yan~ro v. Davis, 65 S.W.3d
510; and St. Luke's lfosp., Inc. v. Straub, 354 S.W.3d 529.
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IV. Conclusion.
Based on the foregoing, we reverse the Opinion of the Court of Appeals.
All sitting. All concur.
COUNSEL FOR APPELLANT:
Shawna Virgin Kincer
Kentucky State Police
COUNSEL FOR APPELLEE:
David F. Broderick
Brandon T. Murley
Broderick & Davenport, PLLC
COUNSEL FOR AMICUS CURIAE
KENTUCKY PERSONNEL CABINET:
Rosemary Holbrook
Office of Legal Services
Kentucky Personnel Cabinet.
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