Case Name: Frederick ESTABROOK, Appellant, v. IOWA CIVIL RIGHTS COMMISSION, Appellee
Court: Iowa Supreme Court
Jurisdiction: Iowa
Decision Date: 1979-09-19
Citations: 283 N.W.2d 306
Docket Number: No. 62629
Parties: Frederick ESTABROOK, Appellant, v. IOWA CIVIL RIGHTS COMMISSION, Appellee.
Judges: All Justices concur except UHLENHOPP and McCORMICK, JJ., who concur specialty-
Reporter: North Western Reporter 2d
Volume: 283
Pages: 306–315

Head Matter:
Frederick ESTABROOK, Appellant, v. IOWA CIVIL RIGHTS COMMISSION, Appellee.
No. 62629.
Supreme Court of Iowa.
Sept. 19, 1979.
Rehearing Denied Nov. 8,1979.
James R. Potter of Chicago Legal Assistance Foundation, Chicago, Ill., for appellant.
Thomas J. Miller, Atty. Gen., and Raymond D. Perry, Asst. Atty. Gen., for appel-lee.

Opinion:
REYNOLDSON, Chief Justice.
The basic question in this appeal is whether the appellant employee Estabrook was entitled to a chapter 17A contested case evidentiary hearing in the "probable cause" phase of his age-discrimination complaint before the Iowa Civil Rights Commission under the provisions of chapter 601A, The Code 1977.
December 16, 1976, Estabrook filed a complaint with the commission, claiming his employer, Goodyear Tire & Rubber Co., discriminated against him on the basis of age when it changed his work assignment and reduced his wages. Following a commission determination of no probable cause, Esta-brook petitioned district court for judicial review and secured a remand order directing the commission to receive additional evidence and issue a new decision. The commission and staff person assigned to the complaint investigated further and considered affidavits and written materials but did not provide a full-blown section 17A.12 notice and evidentiary hearing.
April 18, 1978, the commission notified Estabrook it still found no probable cause to take action on his complaint.
Estabrook again sought judicial review, contending (1) the commission failed to hold an evidentiary hearing in a contested case proceeding as required by statute, (2) he had a constitutional right to an evidentiary hearing prior to dismissal of his complaint, and (3) the finding of no probable cause was not supported by the weight of substantial evidence.
District court concluded the commission's finding was reviewable as final agency action, but not as a contested case. It therefore utilized the section 17A.19(8)(g) standard ("Unreasonable, arbitrary or capri cious or characterized by an abuse of discretion or a clearly unwarranted exercise of discretion.") and found that it had not been violated. It affirmed the commission's finding. We affirm district court's decision, but on a different basis.
Appealing here, Estabrook asserts the commission's probable cause function is a contested case proceeding under the Iowa Administrative Procedure Act and that the commission's finding of "no probable cause" was not supported by substantial evidence.
Because the procedural issue necessarily involves resolution of constitutional questions, ordinarily we would first examine the substantive merits of Estabrook's dispute with the commission's decision. But his only district court challenge to the merits of that decision was that it was not supported by substantial evidence. Section 17A.19(8)(f) expressly limits this review standard to contested case proceedings.
We cannot review the merits of the commission's ruling under the contested case standard unless and until we decide that ruling involved a contested case proceeding.
I. Contested case evidentiary hearing issue.
Section 17A.2(2) provides:
"Contested case" means a proceeding including but not restricted to ratemak-ing, price fixing, and licensing in which the legal rights, duties or privileges of a party are required by Constitution or statute to be determined by an agency after an opportunity for an evidentiary hearing.
We have said the only question which arises under this definition is whether the Constitution or a statute requires an opportunity for an evidentiary hearing. Airhart v. Iowa Department of Social Services, 248 N.W.2d 83, 86 (Iowa 1976).
A. Although Estabrook asserted on judicial review in district court he had a statutory right to an evidentiary hearing on the probable cause issue, we do not interpret his brief here as taking that position. In any event, we construe the Iowa Civil Rights Act of 1965, chapter 601A, The Code 1977, as requiring a hearing only after certain conditions are met, including a finding of probable cause by the investigating official, § 601A.14(3), an attempt by commission personnel to settle the matter through conference, conciliation, and persuasion, § 601A.14(3), and a commission determination that circumstances warrant further proceedings on the complaint, § 601A.14(6). We find no statutory mandate for another evidentiary hearing prior to the issuance of a probable cause ruling.
B. We thus reach Estabrook's contention that constitutional due process requires a hearing prior to a no probable cause finding.
It must be kept in mind that the Iowa Civil Rights Act of 1965 was designed to correct a broad pattern of behavior rather than merely affording a procedure to settle a specific dispute. Iron Workers Local No. 67 v. Hart, 191 N.W.2d 758, 770 (Iowa 1971).
The legislature established the commission in 1965 "to eliminate unfair and discriminatory practices in public accommodations [and] employment." 1965 Session, 61st G.A., ch. 121 (title of act). Chapter 601A delegates to the commission the power and duty "[t]o receive, investigate, and pass upon complaints alleging unfair or discriminatory practices." § 601A.5(2), The Code 1977. It also authorizes and directs the commission in more general terms to eliminate discrimination. See generally § 601A.5(3)-.5(12). It lists unfair and discriminatory practices in employment, public accommodations and services, housing, and credit transactions. See § 601A.6-.9.
"Any person claiming to be aggrieved by a discriminatory or unfair practice may . . . file with the commission a . . . complaint . ." § 601A.14(1). The commission then makes "a prompt investigation." § 601A.14(3). If it determines "that probable cause exists for crediting the allegations of the complaint, the investigating official shall promptly endeavor to eliminate such discriminatory or unfair practice by conference, conciliation, and persuasion." Id. The commission may seek a temporary injunction when it appears the complainant may suffer irreparable injury. § 601A.5(4).
When informal resolution is unsuccessful, the commission may commence formal proceedings against the respondent. § 601A.14(6). The commission may amend the complaint allegations. § 601A.14(10). It presents the case in support of the complainant through one of its own attorneys. § 601A.14(7). The complainant may be allowed to intervene and present evidence. § 601A.14(8). In that event, complainant has the burden of proof. § 60lA.14(ll).
If the commission finds respondent has engaged in a discriminatory or unfair practice, it issues a cease and desist order and orders whatever "affirmative action" it judges to be necessary. § 601A.14(12). In employment cases affirmative action may include hiring, reinstatement, promotion and back pay. Id.
The legislature apparently also enacted chapter 601A to provide a legal enforcement tool for federal civil rights legislation. The Civil Rights Act of 1964, 42 U.S.C. § 2000a(a), 2000e-2 (1974), proscribes discrimination in public accommodations and employment on the basis of race, color, religion, national origin, or (in employment) sex. The federal Age Discrimination in Employment Act of 1967, 29 U.S.C. § 623 (1975), proscribes discrimination in employment on the basis of age.
The employment portions of these federal laws are administered and enforced by the Equal Employment Opportunity Commission and the Department of Labor respectively. That Congress anticipated creation of state commissions to effect this federal mandate, however, is clear from examination of the legislation. Referring to the Civil Rights Act, the Supreme Court recently said: Oscar Mayer & Co. v. Evans, - U.S. -,-, 99 S.Ct. 2066, 2071, 60 L.Ed.2d 609, 615 (1979) (citation omitted). The Court concluded the purpose, relevant language, and legislative history of the Civil Rights Act and Age Discrimination in Employment Act were the same, and transposed the legislative intent of section 2000e-5(c) onto 29 U.S.C. § 633(b).
Congress intended through [42 U.S.C. § 2000e — 5(c)] . to give state agencies a limited opportunity to resolve problems of employment discrimination and thereby to make unnecessary resort to federal relief by victims of the discrimination.
"[P]rior resort to appropriate state proceedings is required under [section 633(b)], just as under [section 2000e-5(c)]." Oscar Mayer,-U.S. at-, 99 S.Ct. at 2071, 60 L.Ed.2d at 616. See also Love v. Pullman Co., 404 U.S. 522, 92 S.Ct. 616, 30 L.Ed.2d 679 (1972) (prior resort to deferral states required under section 2000e-5(c)). If settlement on the local level is unsuccessful or does not occur within sixty days, then a complainant may utilize federal administrative and, ultimately, judicial remedies. In its own determination of reasonable cause, EEOC accords "substantial weight" to state findings. 42 U.S.C. § 2000e-5(b). There are no comparable provisions for crediting state findings in the Age Discrimination in Employment Act. Under both statutes, however, the civil suit brought by a still-dissatisfied complainant is a de novo trial rather than judicial review of administrative action. McDonnell Douglas Corp. v. Green, 411 U.S. 792, 799, 93 S.Ct. 1817, 1822-23, 36 L.Ed.2d 668, 676 (1973) (Civil Rights Act); Nabors v. United States, 568 F.2d 657 (9th Cir. 1978) (Age Discrimination in Employment Act).
In these situations we are not dealing with "civil liberties" which are immunities — restraints on government — protected by constitutional provisions. Rather, we are involved with "civil rights" which are enforceable claims rooted in legislation. Iron Workers, 191 N.W.2d at 771. The requirements of procedural due process apply only to the deprivation of interests encompassed by the fourteenth amendment's protection of liberty and property. Greenholtz v. Inmates of Nebraska Penal & Correctional Complex,-U.S.-,-, 99 S.Ct. 2100, 2103, 60 L.Ed.2d 668, 675 (1979); Board of Regents v. Roth, 408 U.S. 564, 569, 92 S.Ct. 2701, 2705, 33 L.Ed.2d 548, 556 (1972). When protected interests are at stake ordinarily there is a right to some kind of prior hearing. Mathews v. Eldridge, 424 U.S. 319, 333, 96 S.Ct. 893, 902, 47 L.Ed.2d 18, 32 (1976); Board of Regents v. Roth, 408 U.S. at 569-70, 92 S.Ct. at 2705, 33 L.Ed.2d at 556; Auxier v. Woodward State Hospital-School, 266 N.W.2d 139, 142 (Iowa), cert, denied, 439 U.S. 930, 99 S.Ct. 319, 58 L.Ed.2d 324 (1978). In this context "property interest" does not necessarily relate to real or chattel property, but may encompass fixed, statutory entitlements or benefits. However,
[t]o have a property interest in a benefit, a person . . . must have more than a unilateral expectation to it. He must, instead, have a legitimate claim of entitlement to it. .
Property interests, of course, are not created by the Constitution. Rather, they are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law — rules or understandings that secure certain benefits and that support claims of entitlement to those benefits.
Roth, 408 U.S. at 577, 92 S.Ct. at 2709, 33 L.Ed.2d at 561.
We may assume for the purposes of this opinion Estabrook has a property interest in the form of his right not to be discriminated against because of his age — a right foundationed by federal and state enactments. But it is plain that no commission action he now complains of deprived him of this right. If, as here, the commission terminates the proceedings on a no probable cause finding he merely has exhausted his state administrative remedy. See City of Iowa City v. Westinghouse Learning Corp., 264 N.W.2d 771 (Iowa 1978); 29 U.S.C. § 633. He may then file a civil action in either state or federal court to enforce his extensive rights under the federal enactment. 29 U.S.C. § 626(c); Jacobi v. High Point Label, Inc., 442 F.Supp. 518 (M.D.N.C. 1977); see Johnson v. Butler Brothers, 162 F.2d 87, 88 (8th Cir. 1947).
We have recognized that a duty which will foundation a justiciable claim can be created by statute if the legislature purposed or intended to protect a class of persons to which the victim belongs against a particular harm which the victim has suffered. Wilson v. Nepstad, 282 N.W.2d 664, 667 (Iowa 1979), and citations. More specifically, we have recognized a person subjected to discrimination may have a remedy in civil court in the form of compensatory damages. Iowa Civil Rights Commission v. Massey-Ferguson, Inc., 207 N.W.2d 5, 10 (Iowa 1973); Iron Workers, 191 N.W.2d at 768. See also Pompey v. General Motors Corp., 385 Mich. 537, 559-60, 189 N.W.2d 243, 254-55 (1971).
Clearly, Estabrook's basic right not to be discriminated against is not adjudicated by the commission's no probable cause finding. The issue thus narrows to the question whether Estabrook had such a property interest in the procedural mechanics of chapter 601A as to automatically activate a due process evidentiary hearing right.
We may turn to the enactment to explore the dimensions of Estabrook's alleged property right to have his claim pursued through the commission. Examining the statutory provisions, we find the legislature did not intend to require the commission to process every complaint which merely generated a minimal prima facie case. The commission's investigating official necessarily must obtain such information as to lead him to reasonably conclude a prohibited discrimination has occurred, for he or she must then "promptly endeavor to eliminate such discriminatory or unfair practice . . . § 601A.14(3) (emphasis added). When the controversy is not settled by conference, conciliation, and persuasion, the commission proceeds further with notice and hearing "if the commission determines that the circumstances warrant" that action. § 601A.14(6) (emphasis added).
We are further persuaded the legislature did not intend to create a fixed right to a remedy through the commission route because its level of funding and staffing for the commission would make it impossible to carry out such an assignment. We judicially note the commission's biennial (1977 and 1978) report. Salsbury Laboratories v. Iowa DEQ, 276 N.W.2d 830, 835 (Iowa 1979). In fiseal year 1978 the commission was able to process only nineteen cases through public hearing. The year-end case inventory rose from 869 in 1977 to 901 in 1978. Of 807 cases closed in fiscal year 1977, 315 (39 percent) were disposed of on a no probable cause finding. In fiscal year 1978, 675 cases were closed. Of these, 274 (41 percent) were disposed of on a no probable cause finding. We believe the legislative intent was to permit the commission to be selective in the cases singled out to process through the agency, so as to better impact unfair or discriminatory practices with highly visible and meritorious cases.
So finding, we hold chapter 601A did not create for Estabrook a "property right" to have his claim processed through the commission, nor did the no probable cause finding adjudicate his legal rights or affect his judicial remedies. It follows he was not entitled to a due process evidentiary hearing on the issue of probable cause. The commission's probable cause function is not a section 17A.12 contested case because the Constitution does not require an evidentiary hearing. This determination is supported by Georator Corp. v. EEOC, 592 F.2d 765, 768-69 (4th Cir. 1979); Kelly v. EEOC, 468 F.Supp. 417, 418 (D.Md.1979); Stewart v. EEOC, 17 Fair Empl.Prac.Cas. 1633 (N.D. 111.1978); EEOC v. Johnson Co., 421 F.Supp. 652, 656-57 (D.Minn.1975); Marshall v. Fair Employment Practice Commission, 21 Cal. App.3d 680, 685, 98 Cal.Rptr. 698, 701-02 (1971).
II. Substantial evidence issue.
Our above analysis suggests a subsumed issued whether Estabrook is a person "aggrieved or adversely affected" and thus entitled to any judicial review under section 17A.19. Id. The posture of this appeal makes it unnecessary to reach that question. Although Estabrook, in his amended petition, referred to the commission's failure to conduct an evidentiary hearing as "unreasonable, arbitrary or capricious or characterized by an abuse of discretion," his only challenge to the merits of the commission's finding of "no probable cause" before the district court was that the finding was not supported by substantial evidence. Again on this appeal, Estabrook raises only the section 17A.19(8)(f) ground that the no probable cause finding was not supported by substantial evidence.
Section 17A.19(8)(f) expressly limits its application to contested case proceedings. We have already found this is not a contested case.
The constitutional issue Estabrook raises is only in the context of an evidentia-ry hearing requirement, thus seeking to meet the section 17A.2(2) definition of "contested case." Estabrook has not raised the question of what minimal process less than an evidentiary hearing would be due him in the commission investigation were he found to have a property interest in the procedural mechanics of chapter 601A. This court does not address issues, even of constitutional magnitude, not presented to the district court. In re Staros, 280 N.W.2d 409, 411 (Iowa 1979). We therefore affirm the district court's ruling, although on a different ground.
We add the caveat that chapter 601 A, The Code 1977, was revised extensively effective January 1, 1979. 1978 Session, 67th G.A., ch. 1179. This opinion makes no attempt to study the effect of those changes.
AFFIRMED.
All Justices concur except UHLENHOPP and McCORMICK, JJ., who concur specialty-