Tuesday, September 30, 2014

SC Administrative Law Court Decisions

CAPTION:
SCDMV vs. Serge Lajuenesse

AGENCY:
South Carolina Department of Motor Vehicles

PARTIES:
Appellant:
South Carolina Department of Motor Vehicles

Respondents:
Serge Lajuenesse
 
DOCKET NUMBER:
06-ALJ-21-0270-AP

APPEARANCES:
n/a
 

ORDERS:

ORDER

STATEMENT OF THE CASE

This matter is an appeal by the South Carolina Department of Motor Vehicles (“Department”) from a Final Order and Decision of the South Carolina Division of Motor Vehicle Hearings (“DMVH”) issued May 17, 2007. The DMVH’s Final Order and Decision was issued following an administrative hearing held pursuant to S.C. Code Ann. § 56-1-1090(c) (Supp. 2007). The Department contends that the DMVH Hearing Officer erroneously determined that Lajuenesse had made a showing of “good cause” under S.C. Code Ann. § 56-1-1090. The Administrative Law Court (“ALC”) has jurisdiction to hear this matter pursuant to S.C. Code Ann. § 1-23-660 (Supp. 2007). Upon consideration of the briefs, the DMVH’s Final Order and Decision is reversed.

background

In 2003, Respondent Serge Lajuenesse was found to be a “habitual offender” pursuant to S.C. Code Ann. § 56-1-1020 (2006). In accordance with S.C. Code Ann. § 56-1-1090(a) (Supp. 2007), his driver’s license was suspended for a five-year period beginning December 17, 2003, and ending December 17, 2008. On April 18, 2005—more than a year after his habitual offender suspension had commenced—Lajuenesse was charged with a violation of S.C. Code Ann. § 56-1-460 (2006) (Driving Under Suspension). He was convicted of this violation on May 19, 2005.

In late 2005, the Department issued Department Policy VS-001, which laid out specific conditions required to obtain a reduction in a habitual offender’s suspension. VS-001 provides that a reduction in the five-year suspension for habitual offenders will be granted if the following conditions have been met:

a.       The applicant must have served at least twenty-four months of the habitual offender suspension before submitting the application for reduction. Applications submitted sooner than twenty-four months will be returned.

b.      The applicant must not have been considered at any previous time for a reduction of habitual offender status.

c.       The applicant must not have driven a motor vehicle since the beginning date of the habitual offender suspension. NOTE: The applicant will have stated under oath that he/she has not driven at all during the habitual offender suspension. If a review of the driving record shows that s/he drove (e.g., a traffic ticket or accident report), the applicant will not be eligible for a reduction.

d.      The applicant must not have any other mandatory suspensions that have not yet reached their end dates, as recorded on the applicant’s driving record. (If the applicant remains suspended because of reinstatement fees or for manual suspensions that can be cleared at any time, those will not necessarily bar a reduction.)

e.       The applicant must never have had a prior habitual offender suspension.

f.        The applicant must have completed any ADSAP or other required alcohol or drug treatment program.

g.       The applicant must not have been charged with (and certainly not convicted of) any alcohol or drug violations during the habitual offender suspension period.

On March 30, 2007, pursuant to S.C. Code Ann. § 56-1-1090(c), Lajuenesse filed a petition with the DMVH for a reduction of his habitual offender suspension. Along with his petition, Lajuenesse submitted to the DMVH a copy of his ten-year driving record, which revealed that Lajuenesse had not been convicted of a motor vehicle violation since May 19, 2005, the date on which he was convicted of his April 18, 2005 violation.

An administrative hearing regarding Lajuenesse’s petition was held on May 7, 2007. On May 17, 2007, the DMVH Hearing Officer issued a Final Order and Decision in which she ordered that Lajuenesse’s driver’s license be reinstated. Specifically, the DMVH Hearing Officer stated:

Petitioner has shown good cause why the suspension of his driver’s license or driving privilege should be reduced. Petitioner did receive a driving under suspension violation after he was declared a habitual offender, however two years and two months [sic] have pas[sed] since he received the violation and he has not driven since that date. . . . [Petitioner] has corrected the problems that led him to be declared a[] habitual offender . . . .

The Department now appeals.

ISSUE ON APPEAL

Did the DMVH Hearing Officer err in granting Lajuenesse a reduction in his five-year habitual offender suspension pursuant to S.C. Code Ann. § 56-1-1090, which requires the motorist to demonstrate “good cause”?

STANDARD OF REVIEW

The DMVH is authorized by law to determine contested cases arising from the Department. See S.C. Code Ann. § 1-23-660 (Supp. 2007). Therefore, the DMVH is an “agency” under the Administrative Procedures Act (“APA”). See S.C. Code Ann. § 1-23-310(2) (2005). As such, the APA’s standard of review governs appeals from decisions of the DMVH. See S.C. Code Ann. § 1-23-380(A) (Supp. 2007); see also Byerly Hosp. v. S.C. State Health & Human Servs. Fin. Comm’n, 319 S.C. 225, 229, 460 S.E.2d 383, 385 (1995). The standard used by appellate bodies—including the ALC—to review agency decisions is provided by S.C. Code Ann. §1-23-380(A)(5) (Supp. 2007). See S.C. Code Ann. § 1-23-380(B) (Supp. 2007) (directing administrative law judges to conduct appellate review in the same manner prescribed in § 1-23-380(A)). This section provides:

The court may not substitute its judgment for the judgment of the agency as to the weight of the evidence on questions of fact. The court may affirm the decision of the agency or remand the case for further proceedings. The court may reverse or modify the decision [of the agency] if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions are:

(a) in violation of constitutional or statutory provisions;

(b) in excess of the statutory authority of the agency;

(c) made upon unlawful procedure;

(d) affected by other error of law;

(e) clearly erroneous in view of the reliable, probative, and substantial

evidence on the whole record; or

(f) arbitrary or capricious or characterized by abuse of discretion or clearly

unwarranted exercise of discretion.

S.C. Code Ann. § 1-23-380(A)(5).

The DMVH Hearing Officer has the discretion to reduce the suspension of a habitual offender for good cause. See S.C. Code Ann. § 56-1-1090(c) (Supp. 2007) (stating that the hearing officer “may” restore driving privileges for good cause shown). However, this discretion must be exercised within the confines of § 1-23-380(A)(5)(f). An abuse of discretion occurs when a decision is based upon an error of law, such as application of the wrong legal principle; or, when based upon factual conclusions, the ruling is without evidentiary support; or when the judge is vested with discretion, but the ruling reveals no discretion was exercised; or when the ruling does not fall within the range of permissible decisions applicable in a particular case. Ex Parte Capital U-Drive-It, Inc., 369 S.C. 1, 5, 630 S.E.2d 464, 467 (2006). A decision is arbitrary or capricious when no rational basis for the conclusion exists, when it is based on one’s will and not upon any course of reasoning and exercise of judgment. Converse Power Corp. v. S.C. Dep’t of Health and Envtl. Control, 350 S.C. 39, 564 S.E.2d 341 (Ct. App. 2002); Deese v. S.C. State Bd. of Dentistry, 286 S.C. 182, 184-85, 332 S.E.2d 539, 541 (Ct. App. 1985). A decision may be arbitrary or capricious when it is made at one’s pleasure without adequate determining principles, or is governed by no fixed rules or principles. Deese, 286 S.C. at 184-85, 332 S.E.2d at 341. Non-uniform, inconsistent, or selective application of authority can indicate arbitrariness. See Mungo v. Smith, 289 S.C. 560, 571, 347 S.E.2d 514, 521 (Ct. App. 1986).

DISCUSSION

S.C. Code Ann. § 56-1-1090(c) states in pertinent part:

[U]pon petition to the Division of Motor Vehicle Hearings and for good cause shown, the hearing officer may restore to the person the privilege to operate a motor vehicle in this State upon terms and conditions as the department may prescribe, subject to other provisions of law relating to the issuance of drivers’ licenses. The petition permitted by this item may be filed after two years have expired from the date of the decision of the department finding the person to be a[] habitual offender. At this time and after hearing, the hearing officer may reduce the five-year period of item (a) to a two-year period for good cause shown.

S.C. Code Ann. § 56-1-1090(c) (Supp. 2007). The Department argues that, based on Lajuenesse’s April 18, 2005 violation, the DMVH Hearing Officer’s reduction of Lajuenesse’s habitual offender suspension was contrary to Section III(B)(4)(c) of Department Policy VS-001 and therefore constituted error. In other words, according to the Department, Lajuenesse failed to show “good cause” for a reduction because he did not meet the conditions of VS-001.

The Department concedes that the ALC has issued an en banc order specifically addressing Department Policy VS-001. In S.C. Department of Motor Vehicles v. Cain, 06-ALJ-21-0790-AP (S.C. Admin. Law Ct., March 23, 2007), the ALC held that

because the Department has not promulgated Department Policy VS-001 as a regulation, DMVH hearing officers are not required to treat it as anything more than a non-binding guideline. Therefore, a DMVH hearing officer’s failure to follow any of the conditions set forth in Department Policy VS-001 does not per se constitute reversible error.

However, the Department argues that VS-001 should be followed in appropriate cases. In essence, the Department contends that a DMVH Hearing Officer should accord VS-001 deference in making a determination of what constitutes “good cause.”

Agency Deference

It is clear from Cain that DMVH Hearing Officers are not bound by VS-001. The question thus raised by the Department in this appeal is: what degree of deference, if any, is the DMVH Hearing Officer required to accord the Department’s policy? The question raises an interesting point of administrative law.

The level of deference that should be accorded an agency’s interpretation of a statute often depends on its form—for example, whether the interpretation is a binding norm or a general statement of policy.[1] When the agency’s interpretation is validly promulgated as a regulation, it has the force and effect of law. See S.C. Code Ann. § 1-23-10(4); Gadson v. Mikasa Corp., 368 S.C. 214, 628 S.E.2d 262 (Ct. App. 2002); Ryder Truck Lines, Inc. v. United States, 716 F.2d 1369 (11th Cir. 1983), cited in Home Health Serv., Inc. v. S.C. Tax Comm’n, 312 S.C. 324, 440 S.E.2d 375 (1994). “[W]hether an agency’s action or statement amounts to a rule—which must be formally enacted as a regulation—or a general policy statement—which does not have to be enacted as a regulation—depends on whether the action or statement establishes a ‘binding norm.’” Sloan v. S.C. Bd. of Physical Therapy Exam’rs, 370 S.C. 452, 475-76, 636 S.E.2d 598, 610 (2006). When the agency’s interpretation “so fills out the statutory scheme that upon application one need only determine whether a given case is within the rule’s criterion,” then it is a binding norm. Sloan, 370 S.C. at 475-76, 636 S.E.2d at 610. However, “if the agency remains free to follow or not follow the policy in an individual case, the agency has not established a binding norm,” but rather a general policy statement. Sloan, 370 S.C. at 475-76, 636 S.E.2d at 610. Here, Department Policy VS-001 unquestionably attempts to establish a binding norm, as it purports to set forth specific conditions, all of which are required to be met, before a reduction may be granted by DMVH. Under the language of VS-001, the DMVH is not free to follow or not follow the policy in an individual case; the conditions are not factors or balancing guidelines from which a Hearing Officer may depart in its discretion when confronted with appropriate facts. Thus, as the ALC has held, to have binding effect and preclude the use of discretion by the DMVH, VS-001 must be properly promulgated as a regulation. Cain, 06-ALJ-21-0790-AP (S.C. Admin. Law Ct., March 23, 2007).

When an agency’s interpretation is not a binding norm, but simply a general policy statement, it is less clear what deference, if any, it should be given. Our appellate courts have repeatedly held that the interpretation of a statute by the agency charged with its administration will be accorded “the most respectful consideration” and should not be rejected absent compelling reasons. See, e.g., Vulcan Materials Co. v. Greenville County Bd. of Zoning Appeals, 342 S.C. 480, 496, 536 S.E.2d 892, 900 (Ct. App. 2000) (“The construction of a statute by the agency charged with its administration should be accorded great deference and will not be overruled without a compelling reason.”); Dorman v. Dep’t of Health and Envtl. Control, 350 S.C. 159, 167, 565 S.E.2d 119, 123 (Ct. App. 2002). Thus, although an agency’s interpretation of a state statute is not binding or controlling on the court, the court gives deference to the opinion of a state agency charged with the duty and responsibility of enforcing the statute. Georgia-Carolina Bail Bonds, Inc. v. County of Aiken, 354 S.C. 18, 579 S.E.2d 334 (Ct. App. 2003).

The Supreme Court has also noted that “where the construction of a statute has been uniform for many years in administrative practice, and has been acquiesced in by the General Assembly for a long period of time, such construction is entitled to weight, and should not be overruled without cogent reasons.” Etiwan Fertilizer Co. v. S.C. Tax Comm’n, 217 S.C. 354, 60 S.E.2d 682, 684 (1950). Furthermore, courts have tended to defer more to an agency’s non-binding policy when the issue at bar involved an ambiguous definition or the agency’s expertise. See Byerly Hosp., 319 S.C. 225, 460 S.E.2d 383 (deferring to agency interpretation of statute because of agency’s expertise); Bunch v. Cobb, 273 S.C. 445, 452, 257 S.E.2d 225, 228 (1979) (consistent application of a statute by responsible governing agency “has been given considerable judicial deference in the construction of ambiguous statutes”); United Seniors Ass’n, Inc. v. Soc. Sec. Admin., 423 F.3d 397, 403-04 (4th Cir. 2005) (giving deference to agency’s interpretation of ambiguous term in federal statute, based on agency’s expertise); Equal Employment Opportunity Comm’n v. Seafarers Int’l Union, 394 F.3d 197, 201 (4th Cir. 2005) (deferring to agency where issue at bar fell “squarely within the agency’s special competence”).

The United States Supreme Court has addressed the issue of deference to an administrative agency in a situation similar to the one at bar. In Martin v. Occupational Safety & Health Review Committee, 499 U.S. 144 (1991), the Supreme Court was faced with conflicting interpretations of a labor regulation. Like the statutory relationship of the Department and the DMVH that the court faces in the case at bar, the U.S. Supreme Court encountered the situation where the Secretary of Labor (“Secretary”) was charged with setting and enforcing workplace health and safety standards, while the Occupational Safety and Health Review Commission (“Commission”) was assigned to carry out adjudicatory functions.[2] Faced with this division of function between two different administrative agencies, the U.S. Supreme Court determined that it was the Secretary—who was charged with enforcement of the statute—whose interpretation was entitled to deference, rather than the adjudicatory Commission’s construction.

Similarly, recent amendments by the South Carolina General Assembly have created a separation in the enforcement and adjudicatory aspects of public highway safety, with the Department charged with administrative enforcement and the DMVH with adjudication. See 2005 S.C. Act No. 128 (codified at S.C. Code Ann. § 1-23-660); 2006 S.C. Act No. 381 (codified at S.C. Code Ann. Title 56). As the agency charged with enforcement, it is the Department’s interpretation and application of § 56-1-1090(c), and not that of the DMVH, that is entitled to deference. Cf. Martin, 499 U.S. at 154-55. The DMVH, as the adjudicative body (as well as the ALC, on appeal) should therefore accord the Department’s interpretation and application of § 56-1-1090(c) respectful consideration and should not deviate from its interpretative policy absent compelling reasons. Dunton v. S.C. Bd. Of Exam’rs in Optometry, 291 S.C. 221, 353 S.E.2d 132, 133 (1987); cf. Martin, 499 U.S. at 154-55 (“Under this conception of adjudication, the Commission is authorized to review the Secretary’s interpretations only for consistency with the regulatory language and for reasonableness.”).

Thus, while the Department’s interpretation of the laws which it is charged with enforcing is generally entitled to respectful consideration, such deference is warranted only if the policy is in the nature of a flexible guideline as opposed to a binding norm and if it merely elaborates on the regulatory scheme and does not alter or conflict with the statute. Bearing that in mind, the court turns to the question of whether the Department’s interpretation of the statutory term “good cause” complies with those requirements.

Interpretations of “Good Cause”

S.C. Code Ann. § 56-1-1090(c) provides that the privilege to drive may be restored by the DMVH Hearing Officer “upon terms and conditions as the department may prescribe” if a motorist demonstrates good cause. “Good cause” is not defined in § 56-1-1090 or in case law applying that section. The term is subjective and implies broad discretion.

Words in a statute are given their ordinary meaning unless the legislature clearly intends otherwise. Etiwan, 217 S.C. 354, 60 S.E.2d at 684. Moreover, the agency’s interpretation cannot expand or contract the language of a statute or conflict with legislative intent. Comm’rs of Pub. Works v. S.C. Dep’t of Health and Envtl. Control, 372 S.C. 351, 641 S.E.2d 763 (Ct. App. 2007) (citing Brown v. S.C. Dep’t of Health and Envtl. Control, 348 S.C. 507, 515, 560 S.E.2d 410, 415 (2002)).

“Good cause” has been defined as “[a] legally sufficient ground or reason.” Black’s Law Dictionary 692 (6th ed. 1990). It is a “substantial reason amounting in law to a legal excuse for failing to perform an act required by law.” Id. The term is “relative and highly abstract,” and its meaning must be determined not only by the verbal context of the statute in which the term is used but also by the context of the action and procedures involved in type of case presented. Id.

In various contexts, courts have found that “good cause” requires more than personal circumstances or facts that are common to the population in general. See, e.g., Faile v. S.C. Employment Sec. Comm’n, 267 S.C. 536, 541-42, 230 S.E.2d 219, 222-23 (1976); S.C. Dep’t of Motor Vehicles v. Watts, 07-ALJ-21-0134-AP, at 5 (S.C. Admin. Law Ct., Jan. 24, 2008). A determination of whether good cause exists may require a balancing of the needs of the parties and public policy. See, e.g., Doe v. Ward Law Firm, 353 S.C. 509, 514-15, 579 S.E.2d 303, 305 (2003) (finding good cause to examine the medical records of the biological parents based upon the compelling needs of the adopted child and balancing the privacy rights of the parties against the best interest of the child). Good cause must be determined on a case-by-case basis. See Watts, 07-ALJ-21-0134-AP, at 6; Black’s Law Dictionary 692 (6th ed. 1990).

The cardinal rule of statutory construction is to give effect to the intent of legislature. Comm’rs of Pub. Works, 372 S.C. 351, 641 S.E.2d 763. The legislature stated its intent in enacting the habitual offender statutes as follows:

(a)    To provide maximum safety for all persons who use the public highways of this State; and

(b)   To deny the privilege of operating motor vehicles on such highways to persons who by their conduct and record have demonstrated their indifference to the safety and welfare of others and their disrespect for the laws of this State; and

(c)    To discourage repetition of unlawful acts by individuals against the peace and dignity of this State and her political subdivisions and to impose additional penalties upon habitual offenders who have been convicted repeatedly of violations of the traffic laws of this State.

S.C. Code Ann. § 56-1-1090; State ex rel. McLeod v. Goff, 277 S.C. 511, 290 S.E.2d 238 (1982).

Even if the court were to find that VS-001 were entitled to respectful consideration, the Department’s policy as written is inconsistent with the plain language of § 56-1-1090(c) in that it improperly narrows the statutory language permitting a reduction for “good cause.” Comm’rs of Pub. Works, 372 S.C. 351, 641 S.E.2d 763 (regulation cannot expand or contract statutory language or conflict with legislative intent). VS-001’s restrictive and inflexible requirements cannot be reconciled with § 56-1-1090(c)’s use of the expansive and discretionary term “good cause” as used in its ordinary sense. See Brown v. Bi-Lo, 354 S.C. 436, 440, 581 S.E.2d 836, 838 (2003) (rejecting and agency interpretation when it is contrary to the plain language of the statute). By interpreting “good cause” in absolute terms, the Department has impermissibly stripped from DMVH the statutory discretion conveyed to it by the General Assembly.

Neither, however, can the court accept the DMVH Hearing Officer’s overly broad application and interpretation of “good cause.” Here, Lajuenesse offered no reason for a reduction of his suspension beyond that which is generally common to all drivers. His circumstances do not rise beyond the general inconvenience of being without a driver’s license—the very penalty that the General Assembly imposed for habitual bad driving—and therefore cannot constitute a legally sufficient reason for reducing his suspension when balanced against the public policy that underpins the habitual offender statute of removing dangerous drivers from the state’s public roads. However relative and abstract the term “good cause” may be, it certainly means more than “any cause.” An interpretation of “good cause” that does not require justification for reducing the term of suspension that the General Assembly chose to impose generally for habitual offenders would read the word “good” out of the statute and permit a reduction simply for the asking. Such a construction flies in the face of the legislative intent behind the statute. See Comm’rs of Pub. Works, 372 S.C. 351, 641 S.E.2d 763.

CONCLUSION

The Department’s policy is contrary to the plain language of the statute because it is too restrictive; the Hearing Officer’s conclusion is similarly erroneous because it is too broad. The DMVH Hearing Officer was not bound to follow or defer to VS-001 because it is a binding norm that has not been properly promulgated as a regulation and, even if it were merely interpretive guidance, it conflicts with the plain language of the statute. Nevertheless, the DMVH Hearing Officer erred in reducing Lajuenesse’s suspension in the absence of legally sufficient reason beyond the mere inconvenience that is shared by all habitual offenders. Accordingly, the DMVH’s Final Order and Decision must be reversed.

For the foregoing reasons, it is

ORDERED that the DMVH’s Final Order and Decision is REVERSED and Lajuenesse’s suspension is reinstated.

IT IS SO ORDERED.

______________________________

Paige J. Gossett

Administrative Law Judge

March 4, 2008

Columbia, South Carolina



[1] Taking the analysis one step further, courts have also differentiated between the form of the general policy statement when considering the issue of deference. Compare Siegfried v. S.C. Dep’t of Revenue, 03-ALJ-17-0176-CC (S.C. Admin. Law Ct., May 30, 2003) (giving deference to Department of Revenue’s interpretation of what constitutes a “timely filed” protest because the Department’s written Revenue Ruling was a reasonable interpretation of the statute) with Clarendon County Mem. Hosp. v. S.C. Dep’t of Health & Envtl. Control, 05-ALJ-07-0173-CC (S.C. Admin. Law Ct., May 3, 2006) (finding that an internal, staff memorandum was not a department policy that should be accorded deference).

[2] The policy behind the separation of the enforcement and adjudicatory functions in the federal Department of Labor was “to achieve a greater separation of functions than exists within the traditional ‘unitary’ agency, which under the Administrative Procedure Act (APA) generally must divide enforcement and adjudication between separate personnel.” Martin, 499 U.S. at 151 (citing 5 U.S.C. § 554(d); Johnson, The Split-Enforcement Model: Some Conclusions from the OSHA and MSHA Experiences, 39 Admin. L. Rev. 315, 317-19 (1987)).


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