# SUPREME COURT OF MISSOURI en banc
JOHN T. IMPEY, ) ) Appellant, ) ) v. ) No. SC93698 ) MISSOURI ETHICS COMMISSION, et al., ) ) R espondents. )

APPEAL FROM THE CIRCUIT COURT OF COLE COUNTY The Honorable Jon E. Beetem, Circuit Judge Opinion issued June 24, 2014 John Impey appeals the ci rcuit court's dismissal of his petition for review of a decision by the Missouri Ethics Commission (" MEC"). Impey alleges that the circuit court erroneously determined that he faile d to exhaust his administrative remedies. Impey argues that § 105.961, RSMo 2000, 1 violates article V, se ction 18 of the Missouri Constitution because it provides for review by the Administrative Hearing Commission ("AHC") before seeking judicial review of the MEC's determination. This Court holds

1 Section 105.961 was amended in 2010 by Senate Bill 844. This Court declared that amendment unconstitutional in Legends Bank v. State , 361 S.W.3d 383 (Mo. banc 2012), as a violation of the original purpose provision of arti cle III, section 21 of the Missouri Constitution. Both versions of the statute a ppear in the 2013 supplement to the revised statutes of Missouri. All references in this opinion are to RSMo 2000, which reflects the language of the statute that went back into effect following this Court's decision in Legends Bank

. See Section 3.066, RSMo Supp. 2013.that § 105.961 does no t violate the Missouri Constitution an d that Impey fa iled to exhaust all administrative remedies. The judgment is affirmed. Factual and Procedural Background In August 2011, John Impey prepared and circulated, by hand and by mail, a number of pamphlets voicing his opposition to a ballot measure in Houston County. Shortly thereafter, the MEC rece ived a complaint against Impey, alleging that Impey had violated the law by failing to place "Paid for by John Impey" on the pamphlets. Pursuant to § 105.961, the MEC assigned the complaint to an investigator, who investigated the complaint and filed a report. Based on this report, the MEC found that there were reasonable grounds to believe that Impey had violated the law, and the MEC scheduled a probable cause hearing. Following the probable cause hearing, the MEC made a determination that probable cause existed to believe th at Impey had viol ated § 130.031.8 2 in circulating his pamphlets. Upon this determination, the ME C issued findings of fact, conclusions of law, and an order. The first sentence of the MEC's findings stated, "This is a final decision and order of the Missouri Ethics Commission ...." The order contained two paragraphs. The first stated that the MEC found pr obable cause that Impey violated the

2 Section 130.031.8 provides, in relevant part: Any person publishing, circulating, or dist ributing any printed matter relative to any candidate for public office or any ba llot measure shall on the face of the printed matter identify in a clear and c onspicuous manner the person who paid for the printed matter with the words "Paid for by" followed by the proper identification of the sponsor pursuant to this section. Section 130.031 was revised by the same senate bill that revise d § 105.961. Like § 105.961, when this Court held in Legends Bank that the bill was enacted in violation of the original purpose rule, the prior version of § 130.031 went back into effect. The current version of § 130.031 appears in RSMo 2000.law. The second stated, "The Missouri Et hics Com mission orders a fee be imposed against Respondent Impey in th e amount of $100 ...." Along with the findings of fact, conclusions of law, and the order, the MEC sent a notice to Impey stating: Pursuant to Section 105.961 RSMo, this action of the Missouri Ethics Commission may be appealed to the Ad ministrative Hearing Commission. Such appeal shall be filed no later than fourteen days following receipt of actual notice of the commission's actions. Rather than file his appeal with the AH C, Impey filed a petition for review in the circuit court. The MEC file d a motion to dismiss Impey's petition, alleging that Impey failed to exhaust his administrative remedi es. Impey responded by alleging that the procedures outlined in § 105.961 were constituti onally invalid under ar ticle V, section 18 of the Missouri Constitution, which provides for direct judicial review of final administrative decisions. The circuit cour t granted the MEC's moti on to dismiss, finding that Impey was not aggrieved by the MEC's probable cause determination and ruling that, to the extent Impey was entitled to any review, he had failed to exhaus t his administrative remedies by failing to seek review by the AHC. Impey appealed the circuit court's judgment to this Court, arguing that § 105.961 violates article V, section 18 of the Missouri Constitution. 3 This Court has exclusive appellate jurisdiction over cases involving the validity of a stat ute. Mo. Const. art. V, sec. 3.

3 Impey also argues that § 130.031.8 violates his ri ght to free speech under the United States and Missouri constitutions and that the MEC lacked statutory authority to impose a $100 fee. Because this Court holds the circ uit court correctly dismissed Im pey's petition, it is unnecessary to address these arguments.

3Stand ard of Review Whether a statute is constitutional is an issue of law that this Court reviews de

novo . State v. Honeycutt , 421 S.W.3d 410, 414 (Mo. banc 2013). "Statutes are presumed constitutional and will be found unconstitutiona l only if they clearly contravene a constitutional provision." Id. "The person challenging the va lidity of the statute has the burden of provi ng the act clearly and undoubtedly viol ates the constitutional limitations." Id. Analysis The MEC is an administrative body es tablished by the Ge neral Assembly to administer and enforce a number of ethics -related laws, including those relating to lobbyists, public officials, and campaign finan ce disclosure. Section 105.955. To aid the agency in its enforcem ent of these laws, the MEC is au thorized to receive complaints alleging that any law under its supervision has been violated. Section 105.957. Section 105.961 sets out the procedur e through which the MEC utilizes these complaints. First, upon rece ipt of the complain t, the MEC assigns the complaint to a special investigator. Section 105.961.1. The special inves tigator will then conduct an investigation and, within 180 days , file a report with the MEC. Id. The MEC reviews that report and makes one of three determina tions: 1) that there are reasonable grounds for belief that a violation has occurred; 2) th at no such reasonable grounds exist; or 3) that additional time is nece ssary to investigate. Id. If the MEC has determined that reasonable grounds exist to believe a violation of law has occurred, then it takes one of two routes . First, if the MEC believes that there are

4reasonable grounds that a viol ation of a criminal law has occurred, the MEC may refer the report to the appropriate prosecutor upon a vote of four m embers of the commission. Section 105.961.2. Seco nd, if the MEC determines that there are reasonable grounds to believe that a violation of the law has occurred th at is not a violation of criminal law, then the MEC will conduct a closed hearing to determine whether there exists probable cause that a violation has occurre d. Section 105.961.3. After the hearing, if the MEC determines by a vote of at least four commissioners that probable cause exists, th en the MEC may take a number of actions. Pursuant to subsection 3 of § 105.961, if the commission determines that probable cause exists, "it may refer its findings to the appropriate disc iplinary authority over the person who is the subject of the report." This provision ap plies almost exclusively to individuals who already hold elective or appointive office. 4 Pursuant to subsection 4, if the MEC determines, by a vote of four or more commissioners, that referral for criminal prosecution or for action by a disciplinary authority is not appropriate, then the commi ssion shall take any one or more of the following actions: (1) Notify the person to cease and desist violation of any provision of law which the report concludes was violat ed and that the commission may seek judicial enforcement of its decision purs uant to subsection 5 of this section; (2) Notify the person of the requirement to file, amend or correct any report, statement, or other document or information required by [the law], and that the commission may seek judi cial enforcement of its decision pursuant to subsection 5 of this section; and

4 The "appropriate disciplinary authority" for a part icular individual is list ed in subsection 7 of 105.961 and applies to members of the general assembly, judges, and st atewide elected officials.

5(3) File the report with th e executive director to be maintained as a public doc ument; or (4) Issue a letter of concern or lette r of reprimand to the person, which would be maintained as a public document; or (5) Issue a letter that no further acti on shall be taken, which would be maintained as a public document; or (6) Through reconciliation agreements or civil action, the power to seek fees for violations in an amount not greater than one thousand dollars or double the amount involved in the violation. Section 105.961.4. Subsection 5 of 105.961 gi ves the MEC the power to pe tition the courts to enforce its actions. Pursuant to subsection 5, the ME C may initiate formal judicial proceedings seeking to obtain an order requiring the subjec t of the complaint to: 1) cease and desist violation of the law; 2) pay any civil penaltie s authorized by law; 3) file any reports, statements, or other documents require d by law; or 4) pay restituti on for any unjust enrichment resulting from any viola tion of a criminal statute. Subsection 5 of 105.96 1 also states that the subject of the complaint "may appeal any action of the Missouri ethics commissi on, other than a re ferral for criminal prosecution, to the administrative hearing commission." Subsection 5 requires the MEC to give "actual notice to the subject of the co mplaint of the proposed action as set out in this section." The subject of the complaint ma y then file an appeal to the AHC within 14 days of receiving notice. Such appe al stays the action of the MEC. More succinctly, pursuant to § 105.961, the MEC serves to determine whether a particular complaint is wort h pursuing. If the MEC finds probable cause to believe the law has been violated, it can re fer the case to the appropriate disciplinary authority, which may then conduct its own proceedings. When no such disciplinary authority exists, the

6MEC m ay take action on its own by notifying the alleged vi olator of its proposed action and then pursuing that action in the circuit court. If the alleged violator disputes the MEC's findings, he or she may appeal to the AHC. It is § 105.961's provision for appeal to the AHC with which Impey takes issue. Impey alleges that the MEC's decision is a final decision and that subsection 5's requirement that Impey seek review by the AHC violates article V, section 18 of the Missouri Constitution. Article V, section 18 provides: All final decisions, findings, rules and orders on any administrative body existing under the constitution or by la w, which are judicial or quasijudicial and affect private rights, sha ll be subject to direct review by the courts as provided by law. The constitution does not define "direct review ," but this Court has held that direct review means that a final d ecision of an administrative agency must be "immediately reviewable" by the appropriate court "wit hout an intervening level of review." Asbury v. Lombardi , 846 S.W.2d 196, 201 (Mo. banc 1993). Impey argues that by imposing AHC review prior to seeking review in the circuit court, § 105.961 denies direct review of the MEC's final decision. To support this argument, Impey cites Asbury v. Lombardi , which involved a corre ctions officer who had been terminated from his job. Id. at 198. The officer appeal ed the termination to the Personnel Advisory Board ("PAB"), which reinstated him. Id. The department of corrections then appealed to the AHC pur suant to statute, which reversed the reinstatement and remanded to the PAB. Id. After a second decision by both the PAB and the AHC, the officer petitioned the circu it court for a writ of prohibition, and the

7circuit court declared the statute providing for review by the AHC unconstitutional. Id. At the time, the statute at issu e, § 36. 390.9, RSMo 1986, prov ided that "[d]ecisions of the personnel advisory board shall be final and bi nding subject to appeal by either party [to] ... the administrative hearing commission or by the circuit court ... but not both." This Court found that § 36.390.9 violated article V, section 18's requirement that final agency proceedings be subjec t to direct judicial review. Id. at 202. In arriving at this conclusion, this Court held that the decision of the PAB was final for purposes of appellate review. Id. In so doing, the Court specifically pointed to the statute's use of the words "final and binding" to describe the PAB's decision. Id. The Court stated that the use of such words does not "indicate tentativ e, provisional, or con tingent decisions that are subject to reconsideration." Id. The Court specifically not ed that "[h]ad these words not been used, one might attempt to deem th e PAB decision as an intermediary agency decision, being final only after AHC review." Id. The Court also stated that the option to appeal directly to the circu it court also indicated that the PAB's decision was final. Id. The Court then held that, because § 36.390. 9 permitted an appeal of a final agency decision to the AHC, it violated article V, se ction 18's requirement of direct judicial review by imposing the potential for an "intervening" step. Id. Impey argues that, like the PAB's decision in Asbury , the MEC's decision was final and, therefore, review by the AHC imposes an unconstitutiona l intervening step between the final agency decision and judici al review. However, a review of § 105.961 demonstrates that, unlike in Asbury , the MEC's decision was no t "final and binding" for the purposes of appeal.

8Quite to the contrary, the language of § 105.961 indicates that the legislature intended for the MEC's decision to be a tentativ e, contingent decision subject to further agency review. Notably, un like the statute at issue in Asbury , § 105.961 does not expressly state that the MEC's decision is final and binding. This express designation was important to this Court's holding in Asbury , particularly because the Court noted that, absent such express designation, one might in timate that the agency decision was final "only after AHC review." Asbury , 846 S.W.2d at 202. Such is the case with § 105.961. Section 105.961 ex pressly provides for review of the MEC decision by the AHC. The provision for such revi ew indicates that the MEC's decision is subject to reconsideration and, therefore, not final. Moreover, unlike the statute in Asbury , § 105.961 does not expressly permit the MEC's decision to be appealed directly to the circuit court. Instead, § 105 .961.5 specifically st ates that Impey "may appeal the action of the Missouri ethics commission ... to the administrative hearing commission." Despite Impey's arguments to the contrary , the provision in § 105.961 for appeal of the probable cause determin ation to the AHC actually i ndicates that the legislature intended for the AHC to render the agency's decisi on in the event that the subject of a complaint disagreed with the MEC's probable cause determination. The AHC exercises independent and impartial decision-making au thority in disputes between agencies and those persons affected by their actions. J.C. Nichols Co. v. Dir. of Revenue , 796 S.W.2d 16, 20 (Mo. banc 1990). In that role, the AHC functions as a hearing officer and fulfils the same functions as any administrative hearing officer authorized to hear contested

9cases within an agency. Id. The AH C "simply determines , on evidence heard, the administrative decision of the agency involved." Id. And here, that is precisely what the statute intends. Subsection 5 of § 105.961 permit s the subject of any complaint received by the MEC to have the MEC's proposed action reviewed by the AHC, indicating that, if the AHC's jurisdiction is invoked, the MEC' s decision does not become final until after AHC review. Impey's argument that the MEC's decision is final does not rely on the language of the statute. Instead, Impey argues that the MEC's decision was a final decision for purposes of review because the first line of th e order issued by the MEC after the hearing stated it was the "final decision and order of the Missouri Ethics Commission." Impey says the finality of the order is further ev idenced by the order's imposition of a $100 fee against Impey. While potentially misleading, neither of these statements demonstrates that the MEC's decision after Im pey's hearing is final for purpo ses of judicial review. To determine whether the MEC's deci sion is the final agency deci sion, this Court is guided by the intent of the legislature. As noted, the language of § 105.961 demonstrates that the legislature intended for the AHC to make the final determination when a dispute arises between the MEC and the subject of a complain t. Any statement in the MEC's order to the contrary does not control this Court's decision. Having concluded that the legislature in tended for the AHC's decision to be the final decision of the agency in a disputed § 105.961 proceeding, this Court also concludes that § 105.961's provision for appeal to the AHC does not conflict with article V, section 18. AHC review is not an "intervening step " between a final agency decision and judicial

10review; rather, it is the final step in the ag e ncy's probable cause determination. Nothing in Missouri's constitution requires judicial review at ever y single step of an agency's decision-making process. That is not to say that the MEC's probab le cause determinati on is meaningless. Section 105.961.5 provides that an appeal must be "filed no later than fourteen days after the subject of the commission's actions receives actual notice of the commission's actions." If no appeal is take n within that time period, the probable cause determination of the MEC becomes binding. But that does not mean that the subject of a complaint who fails to file an appeal with the AHC may petition the circuit court fo r review as soon as the MEC's decision becomes binding. Pursuant to § 536.100—the statute that implements the procedures for compliance with article V, section 18—in order for a party to a contested case to seek judicial review, the party must have exhausted all administrative remedies. 5 Under the

5 Impey and the MEC dispute whether the proceeding conducted pursuant to § 105.961 is actually a "contested case." A "contested case" is defined as "a proceeding before an agency in which legal rights, duties or privileges of specific parties ar e required by law to be determined after hearing." Section 536.010(4), RSMo Sup p. 2013. Neither party argues that the MEC's proceedings provide insufficient formalities to constitute a contested case. Section 105.961.3 specifically states that the same procedures that govern many contested cases apply to the MEC's probable cause hearing, including notice, the opportunity to file responsive pleadings, and the presentation of witnesses. Instead the argum ents focus on whether the MEC determined any "legal rights, duties, or privileg es." Impey argues that the proceed ing clearly is a contested case because the MEC holds a hearing and determines the rights, duties, or privileges of a person against whom a complaint has been filed. The ME C argues it is not a contested case in part because the decision is not final and because it only sets out the proposed action of the MEC and does not decide any rights, duties, or privileges of the subject of the complaint. For the purposes of this opinion, the Court assumes that the proceedings under § 105.961 constitute a "contested case." As noted, however, even assuming that th e proceedings were a contested case, the MEC's decision was not a final decisi on and Impey failed to exhaust his administrative remedies. Furthermore, section 536.150, RSMo Supp. 2013, which governs judicial review in non11proce dures of § 105.961, applying for revi ew by the AHC is an administrative remedy that must be exhausted before seeking judici al review. If the subject of the agency's actions—Impey in this case—does not apply for review with the AHC, he forfeits the right to challenge the agency's initial decision in any manner, including through judicial review. Because Impey did not appeal the MEC's probable cause determination to the AHC, he failed to exhaust his administrative remedies and, pursuant to § 536.100, may not seek judicial review of the determination. Lastly, it is important to note what exactly the MEC determined. Following a hearing, the MEC determined that there was probable cause to believe that Impey violated one of the campaign finance disclo sure laws. The MEC did not determine, however, that Impey actually viol ated the law. While the ME C stated that Impey owed a fee of $100, the MEC's only mech anism for enforcement of that fee is to file a civil action with the circuit court. Section 105.961.4 & .5. While Impey no longer may challenge the MEC's probable cause determination, nothing prevents him from asserting, as a defense to an MEC enforcement ac tion brought in the circuit court, that he did not actually violate the law or that the MEC do es not have the authority to impose a fee pursuant to § 105.961.4. Furthermore, not hing would prevent Impey from raising any additional claims that § 130.0 31.8 is constitutionally invalid as a defense to such a civil action filed in the circuit court by the MEC. Going forward, Impey is prevented only from disputing the MEC's probable cause determination.
contested cases, only applies when the administ rative decision "is not s ubject to administrative review." Even assuming the probable cause de termination resulted from a non-contested case, Impey was required by statute to seek AHC review.

1213 Conclusion Because § 105.961 does not violate article V, section 18, and b ecause Impey failed to exhaust his administrative remedies, the circuit court's judgment is affirmed.

____ _______________________ Zel M. Fischer, Judge All concur.