Source: http://news.lawreader.com/?p=252
Timestamp: 2019-04-20 02:47:19+00:00

Document:
“In l991, the Supreme court in Kentucky Association of Realtors v. Musselman, upheld nominating commissions. But that decision was contingent on a Governor’s power to reject the proposed names and ask for a new list.�?
That conclusion by the Courier Journal is clearly incorrect and misstates the clear meaning of Musselman.
In the Musselman case, the trial judge had held a portion of KRS 324.281 unconstitutional. That ruling was overruled by the Supreme Court and the concept of nominating committees was upheld. That statute is clearly distinquished from the statute applying to the appointment of University Regents.
The last phrase of KRS 324.281 allows the Governor to appoint from the list of nominees submitted to him by the Ky. Association of Realtors, “OR FROM A NEW LIST SUPPLIED BY THE ASSOCIATION.�?
“The Governor shall select the appointees from among the nominees.�?
We must conclude that the statement of the Courier Journal is incorrect. The Supreme Court in Musselman upheld the concept of nominating commissions submitting a list of nominees to the Governor. The reference to the right of the Governor to reject the list is based solely on the wording of KRS 324.281 which arguably allows the Governor to demand a new list, and that wording is not found in KRS 164.005, in fact KRS 164.005 has wording directly contrary to the right of the Governor to reject the initial list of nominees.
The implication in the Courier Journal article that the Musselman decision applied to KRS 164.005 by creating or recognizing the right of the Governor to reject the original list of nominees is just incorrect. The Musselman decision only applied to the wording of KRS 324.281.
Further we should point out that the Musselman case was decided by the Ky. Supreme Court in l991. The legislative history of KRS 164.005 shows that it was adopted subsequent to the Musselman decision and one must conclude that the legislature was aware of the Musselman decision when it adopted the current version of KRS 164.005. The courts have long held that deference must be given to the legislature when interperting the wording of statutes they enact. Therefore, one is required to assume that the legislature knew what they were doing when they adopted KRS 164.005, and that they intended the language used to be strictly followed. The statute regarding the appointment of Regents was enacted in the next session of the General Assembly after the Musselman decision.
The rules of statutory construction force one to conclude that the legislature was aware of the Musselman decision and intentionally deleted the option of the Governor to reject the list of nominees and demand another list.
ch. 91, sec. 1, effective March 22, 1994; and ch. 447, sec. 3, effective April 11, 1994.
– Created 1992 Ky. Acts ch. 10, sec. 3, effective February 20, 1992, effective February 20, 1992.�?
Commonwealth of Kentucky; and Kentucky Real Estate Commission, Appellees.
Nos. 90-SC-664-TG, 90-SC-665-TG. Supreme Court of Kentucky.
Aug. 29, 1991. Rehearing Denied Nov. 21, 1991.
Fred E. Fugazzi, Jr., W. Terry McBrayer, Lexington, for Kentucky Assoc. of Realtors.
Peter L. Ostermiller, Robert G. Stallings, Louisville, for Musselman.
Kevin J. Hable, William H. Hollander, Sheryl G. Snyder, Louisville, for Wilkinson.
T. Kennedy Helm, III, Judith A. Villines, Frankfort, for amicus curiae.
John L. Ackman, Jr., Louisville, for Kentucky Real Estate.
Frederic J. Cowan, Atty. Gen., Robert V. Bullock, Asst. Atty. Gen., Frankfort, Kelly Mark Easton, Louisville, for Cowan.
(4) The Attorney General of Kentucky.
The appellee seeks to have a portion of KRS 324.281 declared unconstitutional. The statute provides the statutory structure for the Real Estate Commission, and specifically limits the Governor’s power of appointment of real estate agents to serve as members of the Commission to a list supplied by the Association. The Complaint alleges “there are approximately 24,000 real estate licensees in the Commonwealth of Kentucky, of which approximately one-third are members of the KAR [the Association],” that the statute is arbitrary and in violation of Section 2 of the Kentucky Constitution, and that it violates the separation of powers principle in Sections 27 and 28 of the Kentucky Constitution, thus also infringing on Section 69, which vests the “supreme executive power of the Commonwealth” in the Governor.
We have granted transfer, and for reasons that follow we hold the statute in question does not violate the sections of the Kentucky Constitution in question. Thus we reverse the trial court’s decision.
The statute limits the power of the Governor to appoint two names on a list provided by the Association, but it neither limits appointees to members of the Association nor does it compel the Governor to appoint someone on the list. Strictly speaking, the Association may nominate any licensed real estate agent who meets the qualifications in Subsection (1) of KRS 324.281, without regard to membership in the Association, and the Governor may reject all the names on the list provided by the Association and forego making an appointment until provided with a list that includes a person whom the Governor deems suitable for appointment to the office.
The Commission consists of five persons, four of whom are selected in this manner, and a fifth who “shall be a citizen at large who is not associated with or financially interested in the practice or business regulated.” KRS 324.281(1). No governmental or regulatory authority is delegated to the Association unless the power to “supply a list” as specified in KRS 324.281(3), quoted above, should be classified as a grant of such power. We have not been presented with any valid reason why it should be so construed.
The appellee concedes the creation of a regulatory commission such as the one in question is a proper exercise of legislative power. So is the designation of qualifications or criteria for persons who shall serve on such a Commission, so long as such qualifications or criteria are not impermissibly “arbitrary” within the context of Ky.Const. Section 2. The primary question in this case is whether the General Assembly has encroached upon the exclusive power of the executive by delegating to the Association responsibility to “supply a list” from which the Governor shall choose his appointee. The almost identical question was first addressed by this Court in Elrod v. Willis, 305 Ky. 225, 203 S.W.2d 18 (1947), which now has been the controlling precedent on this point for almost 45 years.
In Elrod we held constitutional a section of the statute creating the Kentucky Disabled Ex-Servicemen’s Board, a state agency with “full executive powers” to administer a claims program for disabled veterans, which specified that “all appointments to the Board shall be made by the Governor from a list of five (5) names … submitted by” the Kentucky branch of the American Legion. The Legion was, and is, a private, voluntary organization, in the same sense as is the Kentucky Real Estate Association in the present case, and the function designated to it by statute was substantially identical to the same function provided for by KRS 324.281(3), with which we are now concerned.
Now no less than twelve other state regulatory Boards and agencies utilize a similar method in an effort to insure the appointment of qualified individuals. 2 Thus a large body of statutory law has developed since 1947 in reliance on Elrod v. Willis.
Although we would not hesitate in overruling a longstanding precedent if presented with compelling and specific reasons why such precedent is clearly erroneous despite the unsettling nature of such a decision, no such specific and compelling reasons for overruling Elrod have been presented here. On the contrary, the appellee’s argument against the Elrod case is limited to appellee’s claim that Elrod has lost its vitality because of our decision in Legislative Research Com’n. (LRC) v. Brown, Ky., 664 S.W.2d 907 (1984).
The appellee argues that, while Elrod v. Willis was not overruled in LRC v. Brown, it did not survive it. But there are sharp factual differences, which we will later address, between the statutory structure declared unconstitutional in LRC v. Brown and the structure validated in Elrod v. Willis.
In analyzing the function delegated by statute to the American Legion in Elrod, we stated “the legislature has not attempted to appoint administrative officers, nor has it completely denied the appointive function of the executive.” 203 S.W.2d at 20. It has “simply limited the Governor’s selection to a list of men named by an organization which is not affected by the limitation of Section 27.” Id.
Utilizing a private, voluntary organization of this nature is “a recognition that organizations whose objectives coincide with the objectives of the law creating the agency, may render a material service to the Governor by nominating men to staff that agency who are qualified by interest, experience, and background.” Id.
“… an Employment Service Commission composed of a Director of Employment Service and two members, one representing labor and the other management, to be appointed by the Commissioner of Industrial Relations, with the approval of the Governor, from lists of names submitted to him by representatives of labor and management.” 202 S.W.2d at 379.
It also provided certain criteria or qualifications for the Director, including “at least four years’ full time paid experience in the administration and supervision of a statewide system of public employment service offices,” 202 S.W.2d at 380, which substantially narrowed the Governor’s choice for this position.
Discussing first the constitutionality of the limitations on the Governor’s appointive powers imposed by the statutory qualifications for the office, we said “it is only where the classifications are arbitrary and unreasonable, so as to exclude one or more of a class without a reasonable basis, that the Act is void.” 202 S.W.2d at 381.
“Nor is it unusual in this jurisdiction for the Governor to be required to make appointments from lists submitted to him. It is provided in KRS 116.010 that the Governor shall appoint two members of the State Board of Elections Commissioners from a list of names if submitted to him by each major political party.” Id.
“Perhaps no state forming a part of the national government of the United States has a Constitution whose language more emphatically separates and perpetuates what might be termed the American tripod form of government than does our Constitution,….” 664 S.W.2d at 913.
We “conclude that any statute subject to the scrutiny of Sections 27-28 of the Kentucky Constitution should be judged by a strict construction of those time-tested provisions.” 664 S.W.2d at 914.
We do not now retreat from our decision in LRC v. Brown one iota. Nevertheless, there is a fundamental and critical difference between the statutes held constitutionally flawed in LRC v. Brown and the statutes proved as constitutionally valid in Elrod v. Willis and Fraysure v. Ky. Unemployment Comp. Com’n.
of those departments, shall exercise any power properly belonging to either of the others.” But the statute presently in question, as in the Elrod and Fraysure cases, gives the General Assembly no voice in the selection of committee members; its reach extends solely to providing a method of selection with reasonable criteria to generate commission members qualified for the position through participation of an organization, the Kentucky Association of Realtors, which is independent of legislative control.
Conceivably, there are circumstances in which designating an organization by statute to participate in the nominating process could raise questions regarding the exercise of “arbitrary power” under Ky.Const. Section 2, or perhaps of unauthorized grant of “separate public … privileges” under Ky.Const. Section 3. But this would be only if there was some substantial, demonstrable defect in the organization selected exposing the legislative choice as unreasonable and inappropriate for obtaining a valid legislative objective. There is nothing in the present fact situation suggesting a case for unconstitutionality on such grounds.
Therefore, for the reasons stated herein, we reverse and vacate the judgment of the trial court and remand the case with directions to enter a new judgment upholding the constitutionality of the statute and dismissing the Complaint.
STEPHENS, LEIBSON, REYNOLDS, SPAIN and WINTERSHEIMER, JJ., concur.
LAMBERT, J., dissents by separate opinion in which COMBS, J., joins.
In my view, the statute under consideration is in clear violation of Sections 27, 28 and 69 of the Constitution of Kentucky. Despite the valiant attempt of the majority to say otherwise, the Legislature has in effect appropriated executive prerogative by conferring upon a trade association the arbitrary power, in violation of Sections 2 and 3 of our Constitution, to limit the pool of persons from which the governor may make his appointment. While it may be unimportant for purposes of constitutional analysis, it should not go unnoticed that only approximately one-third of Kentucky’s licensed real estate agents are members of the trade association to which the Legislature has granted such power.
In defense of its position, the majority observes that the association has a right to include on its list of possible appointees persons who are not its members, and it is noted that the governor would be entitled to refrain from making any appointment until the list submitted included the names of persons whom he believed to be suitable. While such facts may provide enough breathing space to prevent a stalemate, if a test of wills should develop between the executive and the association, the executive would have to yield or have his power of appointment thwarted. As the governor can appoint only from the list submitted, the entity which controls the list controls who shall be appointed.
act. LRC v. Brown, at 920-924. As such and in view of the importance we have ascribed to the principle involved, we should not countenance an evasion or circumvention of the rule established.
The majority has emphatically declared, “We do not now retreat from our decision in LRC v. Brown one iota.” Despite such protestation, there is a great similarity between the statutes held unconstitutional in LRC v. Brown and the statute upheld in this case. The majority attempts to distinguish this case from LRC v. Brown on the grounds that “the General Assembly [has] no voice in the selection of committee members; its reach extends solely to providing a method of selection … which is independent of legislative control.” Said otherwise, the majority has the view that the General Assembly may, by delegation of authority to a trade association, do what it cannot do directly. Such a distinction is without a difference.
COMBS, J., joins in this dissent.
1 One of those groups, the Kentucky Society of CPAs, by leave of court, has filed an Amicus Curiae Brief herein.
2 KRS 325.230(1)–Accountancy; KRS 330.050(2)–Auctioneers; KRS 316.180(1)–Embalmers and Funeral Directors; KRS 311.530–Medical Licensure; KRS 314.121(1)–Nursing; KRS 320.230(1)–Optometric Examiners; KRS 217B.505(2)–Pest Control; KRS 315.150(2)–Pharmacy; KRS 327.030–Physical Therapy; KRS 311.410(1)–Podiatry; KRS 165A.340–Proprietary Education; KRS 319.020(2)–Examiners of Psychology.

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