Case Name: DEPARTMENT OF CIVIL RIGHTS ex rel JOHNSON v. SILVER DOLLAR CAFE
Court: Michigan Supreme Court
Jurisdiction: Michigan
Decision Date: 1992-09-29
Citations: 441 Mich. 110
Docket Number: Docket No. 91348
Parties: DEPARTMENT OF CIVIL RIGHTS ex rel JOHNSON v SILVER DOLLAR CAFE
Judges: Cavanagh, C.J., and Brickley and Griffin, JJ., concurred with Levin, J.
Reporter: Michigan Reports
Volume: 441
Pages: 110–139

Head Matter:
DEPARTMENT OF CIVIL RIGHTS ex rel JOHNSON v SILVER DOLLAR CAFE
Docket No. 91348.
Argued April 7, 1992
(Calendar No. 3).
Decided September 29, 1992.
Mary H. Johnson filed a complaint with the Civil Rights Commission against her employers, Paul and Margaret Anson, doing business as the Silver Dollar Cafe, alleging sexual harassment by Paul Anson. The commission adopted a hearing referee’s finding of harassment, awarding Ms. Johnson $2,660 in back wages and $30,000 in compensatory damages. The Hillsdale Circuit Court, Harvey W. Moes, J., affirmed, but reduced compensatory damages to $4,515. The Court of Appeals, Sawyer, P.J., and Hood, J. (Murphy, J., concurring), reversed and remanded for reinstatement of the award of compensatory damages (Docket No. 125790). The defendants appeal.
In an opinion by Justice Levin, joined by Chief Justice Cavanagh, and Justices Brickley and Griffin, the Supreme Court held:
A circuit court, in reviewing a decision of the Civil Rights Commission, may substitute its judgment for that of the commission. The Court of Appeals must review the judgment of the circuit court under the clearly erroneous standard, substituting its judgment for that of the circuit court only where, after review of the whole record, it is left with the definite and firm conviction that a mistake has been committed. Remand to the Court of Appeals is required for reconsideration of its decision under the clearly erroneous standard.
Justice Boyle, joined by Justice Mallett, concurring in part and dissenting in part, stated that both the Civil Rights Act and the constitution provide for de novo review of Civil Rights Commission decisions by the circuit court. While the court may substitute its judgment for the findings, conclusions, and decision of the commission, its review is not one of unfettered substitution of judgment. The reviewing court must recognize the superior position of the initial factfinder in resolving issues of credibility. In this case, the circuit court did not review the matter de novo. Rather, it applied the substantial evidence test to the record and made no independent findings of fact, requir ing remand to the circuit court for review de novo of the findings and conclusions of the commission.
The circuit court also applied an incorrect legal standard when it reduced the compensatory damages award, comparing damages for the mental anguish caused by sexual harassment to damages for wrongful death and injury resulting from automobile accidents.
Justice Riley, concurring in part and dissenting in part, stated that review by the circuit court of decisions of the Civil Rights Commission is limited to determining whether the commission’s findings of fact and legal conclusions are supported by competent, material, and substantial evidence on the whole record. In this case, the circuit judge, in applying the substantial evidence test to the record and the evidence presented, concluded that the evidence did not support the decision to award $30,000 in compensatory damages and did not substitute his judgment for that of the Civil Rights Commission.
Reversed and remanded.
188 Mich App 147; 469 NW2d 42 (1991) reversed.
Frank J. Kelley, Attorney General, Gay Secor Hardy, Solicitor General, Michael R. Smith, Prosecuting Attorney, and Robert L. Willis, Jr., Susan I. LefHer, and Mary Louise Pridmore, Assistant Attorneys General, for the plaintiff.
Kurt Berggren for the defendant.

Opinion:
Levin, J.
The circuit judge, on appeal from the Civil Rights Commission, reduced an award for sexual harassment to Mary Helen Johnson against her employers, Paul and Margaret Anson, doing business as Silver Dollar Cafe. The Court of Appeals reinstated the award.
We reverse and remand to the Court of Appeals to consider whether the circuit judge clearly erred in awarding $4,515 compensatory damages for humiliation, extreme embarrassment, emotional distress, indignities to Johnson and her character, and great mental anguish.
I
Johnson worked for the Silver Dollar Cafe for approximately fifteen months during 1983 and 1984. The owners, Paul Anson and his wife, Margaret Anson, both worked in the restaurant. Almost immediately after Johnson was hired, Paul Anson made explicit sexual remarks, including that he would like to suck Johnson's breasts and engage in cunniliiigus. He offered her money to go to bed with him. When she bent over to pick up a pad on the floor, he grabbed her buttocks.
Johnson complained to Margaret Anson, who sometimes observed this behavior. Margaret Anson would apologize and promise that she would speak to Paul Anson and see that such conduct ceased, and asked Johnson not to quit. But the harassment continued until, eventually, Johnson was discharged. The stated basis was that she had failed to report all the tips she had received.
Johnson claimed that she experienced nightmares, crying spells, and great emotional pain and distress. The Civil Rights Commission awarded Johnson $2,660 in back wages and $30,000 for humiliation, extreme embarrassment, emotional distress, indignities to her person and character, and great mental anguish.
The circuit judge affirmed the award of $2,660 in back wages, but reduced the compensatory award from $30,000 to $4,515, approximately twice the wages. The Court of Appeals reinstated the compensatory award of $30,000.
ii
The Ansons do not challenge the finding of sexual harassment or the award of $2,660 in back pay. They contend that the Court of Appeals erred in stating that "the circuit court is permitted to substitute its findings of fact only when it has determined that the referee's findings were not supported by competent, material, and substantial evidence" and may not "substitute its own findings of fact merely because it disagrees with those reached by the referee."
In Walker v Wolverine Fabricating & Mfg Co, Inc, 425 Mich 586; 391 NW2d 296 (1986), this Court held that a person who is aggrieved by a decision of the Civil Rights Commission may not introduce evidence on review by the circuit court, and that review by the circuit court is on the record made before the commission.
The Civil Rights Commission contends that Walker also ruled that the review de novo contemplated by the constitution and the statute is limited to a determination whether there is competent, material, and substantial evidence to support the decision of the Civil Rights Commission, and, accordingly, the circuit court may not make its own findings of fact unless there is an absence of competent, material, and substantial evidence.
The Ansons did not seek to introduce additional evidence in circuit court, and thus there is no need to reconsider whether the decision in Walker, barring the introduction of additional evidence in the circuit court, should be reconsidered. We thus do not readdress the question actually presented and decided in Walker. As set forth in Walker, additional evidence may not be introduced in the circuit court on review of a decision of the Civil Rights Commission. Review by the circuit court shall continue to be on the record made before the commission.
iii
Although not necessary to decision, this Court in Walker opined regarding the scope of circuit court appellate review, stating:
[T]he circuit court shall review the record produced at the cec anew, drawing its own inferences and conclusions from that record. The court shall determine whether the cec's factual findings and legal conclusions are supported by competent, material, and substantial evidence on the whole record, and whether it acted arbitrarily or without authority.[ ] [Emphasis added.]
The Court of Appeals acknowledged that the foregoing statement is "confusing and contradictory," stating:
The first sentence states that the review is de novo; however, the second describes the more limited review to determine if the findings are supported by "competent, material, and substantial" evidence. This language is usually associated with the standard of review provided in Const 1963, art 6, § 28 and § 106 of the Administrative Procedures Act [MCL 24.306(d); MSA 3.560(206)(d)].[ ]
In an apparent effort to harmonize the "confusing and contradictory" language of Walker, the Court of Appeals said: "While the review of crc orders is labeled 'de novo,' we conclude that the scope of review is qualified by the inclusion of this limiting language" — "competent, material, and substantial evidence" language.
IV
The Civil Rights Commission was established pursuant to Const 1963, art 5, § 29, which provides in part:
Appeals from final orders of the commission, including cease and desist orders and refusals to issue complaints, shall be tried de novo before the circuit court having jurisdiction provided by law.
The constitution also provides for judicial review of agency decisions, and that such review shall include "as a minimum" a determination whether an agency decision, in which a hearing is required, is supported by "competent, material and substantial evidence on the whole record."
The Civil Rights Commission would read out of the clause "tried de novo" the words "de novo" as well as the word "tried."
The term "de novo" has been defined as "anew; afresh; again; a second time; once more; in the same manner, or with the same effect." It has been said:_
The very concept, "de novo" hearing, means that all matters therein in issue are to be considered "anew; afresh; over again,". . . . [People v Bourdon, 10 Cal App 3d 878, 881; 89 Cal Rptr 415 (1970).][ ]
To give meaning to the term "de novo," we must hold that a circuit court, in reviewing a decision of the Civil Rights Commission, may substitute its assessment for the findings, conclusion, and decision of the Civil Rights Commission.
v
Because it is clear that the circuit judge substituted his judgment for the judgment of the Civil Rights Commission, there is no need to remand to the circuit court for further consideration.
It is, however, necessary to remand to the Court of Appeals to reconsider its decision. We agree with the Civil Rights Commission that the governing standard on review by the Court of Appeals of a decision of the circuit court, following review by that court of a decision of the Civil Rights Commission, is set forth in Dixon v Ford Motor Co, 402 Mich 315, 318-319; 262 NW2d 666 (1978).
In Dixon, the Civil Rights Commission determined that the plaintiff had been discharged be cause of race. The circuit court affirmed. The Court of Appeals reversed on the ground that the circuit court's decision was not "supported by competent, material and substantial evidence." This Court reversed and reinstated the judgment of the circuit court. This Court said that the Court of Appeals reviews a decision of the circuit court under the clearly erroneous standard, and that the Court of Appeals shall "substitute its own appraisal of the record where, on. review of the 'whole record,' it is 'left with the definite and firm conviction that a mistake has been committed.' Tuttle v Dep't of State Highways, 397 Mich 44, 46; 243 NW2d 244 (1976)." See Beason v Beason, 435 Mich 791, 802; 460 NW2d 207 (1990).
We reverse and remand to the Court of Appeals to consider whether the circuit judge clearly erred in awarding $4,515 compensatory damages for humiliation, extreme embarrassment, emotional distress, indignities to Johnson and her character, and great mental anguish.
Cavanagh, C.J., and Brickley and Griffin, JJ., concurred with Levin, J.
188 Mich App 147; 469 NW2d 42 (1991).
Id., p 154.
Const 1963, art 5, § 29; see part m for text.
"An appeal before the circuit court shall be reviewed de novo." MCL 37.2606(1); MSA 3.548(606)(1).
In Walker, the complainant appealed from a decision of the Civil Rights Commission dismissing his complaint after finding that there were insufficient grounds to issue a charge. The meritorious issue on appeal was thus whether there was sufficient evidence to support a charge.
In the instant case, a charge was filed, and thus the issue would be somewhat different, namely, whether there was sufficient evidence to support the decision of the commission finding for or against the complainant.
Id., p 617.
Silver Dollar, supra, p 153.
Id.
Id.
This review shall include, as a minimum, the determination whether such final decisions, findings, rulings and orders are authorized by law; and, in cases in which a hearing is required, whether the same are supported by competent, material and substantial evidence on the whole record. [Const 1963, art 6, §28.]
25A CJS, p 483.
Similarly, see Doe v United States, 261 US App DC 206; 821 F2d 694 (1987); Broad Street Food Market, Inc v United States, 555 F Supp 1319 (D RI, 1983); Farmingdale Supermarket, Inc v United States, 336 F Supp 534 (D NJ, 1970); Hohenberg Bros Co v Missouri Pacific R Co, 586 SW2d 117 (Tenn App, 1979); Southern Canal Co v State Bd of Water Engineers, 159 Tex 227; 318 SW2d 619 (1958); Webster City v Draheim, 292 NW2d 406 (Iowa, 1980); Dep't of Motor Vehicles v Andersen, 84 Wash 2d 334; 525 P2d 739 (1974); Wright v Employment Div, 24 Or App 323; 545 P2d 613 (1976); In re Reassignment of Hayes, 261 NC 616; 135 SE2d 645 (1964); Rudolph v Alabama, 286 Ala 189; 238 So 2d 542 (1970); In re Poole, 136 Vt 242; 388 A2d 422 (1978); Pinkett v Maryland, 30 Md App 458; 352 A2d 358 (1976); Young v Dep't of Environmental Resources, 144 Pa Commw 16; 600 A2d 667 (1991).
The quoted passage appears in the second of the following two paragraphs of the opinion of the Court:
An appeal to the circuit court from a final order of the commission is a trial de novo. The Court of Appeals was of the opinion that although it was reviewing the case on appeal from the circuit court since Const 1963, art 6, § 28 and MCLA 24.306; MSA 3.560(206) require a determination whether the judgment of the circuit court was "supported by competent, material and substantial evidence on the whole record," its review was not governed by the "clearly erroneous" standard contained in GCR 1963, 517.1.
The constitutional standard for judicial review of agency action — competent, material and substantial evidence on the whole record — is not a higher standard than the "clearly erroneous" standard of rule 517.1. Rule 517.1 requires that the reviewing court substitute its own appraisal of the record where, on review of the "whole record," it is "left with the definite and firm conviction that a mistake has been committed." Tuttle v Dep't of State Highways, 397 Mich 44, 46; 243 NW2d 244 (1976). If the reviewing court, the Court of Appeals, concludes on its examination of the record that the judgment on appeal is not supported by "competent, material and substantial evidence on the whole record," then it should have a "definite and firm conviction that a mistake has been committed." [Dixon, supra, pp 317-318.]