Opinion ID: 1622303
Heading Depth: 1
Heading Rank: 7

Heading: whether the chancery court applied an improper standard of appellate review in this case.

Text: ¶ 25. EDS argues the chancery court applied an improper standard of review in this case. EDS asserts there was a legal question based on undisputed facts concerning Helen Wetherbee's involvement on both sides of the fiscal agent source solicitation and selection function. EDS now argues this Court must conduct a de novo review of whether DOM properly awarded its fiscal agent contract to Consultec, giving no deference to DOM, the Board or the chancery court. DOM argues the chancery court applied the correct standard of review to this appeal from an administrative agency. ¶ 26. After conducting an independent review of the record, the chancellor determined the matters before the court were appellate in nature, and the cause of action would, therefore, be treated as an administrative appeal. In her Order and Final Judgment of the Court, the chancellor stated, inter alia: This Court having heard testimony on these matters finds that the matters before this Court are essentially appellate in nature and therefore will be treated as an administrative appeal.                 By joint stipulation filed October 23, 2001, the scope of the litigation was narrowed considerably. Consultec and EDS dismissed all claims without prejudice as against each other. The allegations once again constitute what essentially purports to be an appeal from the DOM's administrative agency decision awarding the contract to Consultec. ¶ 27. As always, one of our first concerns in considering any case before us is the appropriate standard of review. Here, we are confronted with a case wherein the learned chancellor received extensive sworn testimony over the course of a full two-day hearing and the record reveals the trial judge and the attorneys pushed long and hard to conclude the hearing within that two-day period. Indeed, the record before us reveals a somewhat hybrid proceeding wherein the chancellor clearly considered the administrative record and likewise received testimony and additional exhibits at the two-day hearing. At the commencement of the hearing, one of the attorneys for EDS stated in his opening statements to the trial court: We are here now this morning to deal with EDS's motion for preliminary injunction/summary judgment, and say from the outset, Judge, that the way we view this situation, the nature of the relief that we are requesting today and the nature of the arguments that will be presented to you will suggest the possibility of this being more in the nature of permanent relief than preliminary relief. However, at the conclusion of the attorneys' opening statements to the court, yet another attorney for EDS stated: Yes. Your Honor, as a preliminary matter, [DOM attorney] and I have reached a stipulation thatand I think Consultec will probably agree with this too, that if the Court considers this an administrative appeal, then the record that was proffered by [DOM attorney] last week is the record upon which it will be considered. Now by so doing, we don't wantEDS does not waive its argument that that's not how this should be treated, but we have no objection to the admissibility of all that evidence no matter how the Court treats it. ¶ 28. EDS, through its chancery court pleadings, initially sought injunctive and declaratory relief, but, as already noted, numerous causes of action and claims for relief were subsequently added through the filing of amended complaints. On October 31, 2001, the learned chancellor was confronted with a not-uncommon occurrence for our trial judges, especially in emergency situations involving complex litigation with numerous issuesa good faith pre-hearing effort by the court and counsel to narrow the issues into a manageable format so that the court could fairly but efficiently deal with the relevant issues in the time allotted based on the hectic schedules of the court and counsel. We deduce from the record before us that at least one of the main reasons for the chancellor's receiving testimony was to develop the record on EDS's request for injunctive relief as well as the parties' motions and cross-motions for summary judgment. However, we again note that EDS had no objection to the administrative record being received into evidence at the chancery court hearing if the [chancellor] considers this an administrative appeal, although EDS did not waive its right to object to the chancellor's affording deferential appellate review by way of a decision based on the administrative record. We do note the record reveals that toward the end of the two-day chancery court hearing, DOM's attorney stated: Maybe I'm confused, but I thought we were here, while we have heard testimony on any number of issues, with regard to focusing on whether there is an ethics in government violation, and I fail to see how, while we've gotten off into future enhancements, how that is in any way relevant to the question that I understood we were here to address today, and that is, first, the question of whether there's an ethics in government violation for the purposes of preliminary injunctive relief and, secondly, whether if in fact those violations did not exist, whether the Court is going to take this under advisement pursuant to review of an agency action based on a differential standard. EDS's response to this objection was that DOM and Consultec had through the testimony of their witnesses necessitated EDS's cross-examination of a Consultec witness on certain issues. DOM's attorney disagreed with EDS's explanation of the need to conduct cross-examination on certain issues, but in the end, the chancellor permitted EDS's cross-examination of a Consultec witness. ¶ 29. We conclude from the entire record before us that while the chancellor allowed a record to be developed at the two-day hearing by way of the introduction of sworn testimony and exhibits since the hearing involved not only the appellate review of an administrative agency, but also numerous other issues, such as EDS's request for injunctive relief, the chancellor did not err in ultimately concluding that the matters before her were essentially appellate in nature and therefore [would] be treated as an administrative appeal. ¶ 30. The standard of review on a decision of an administrative agency by an appellate court is found in Tillmon v. Miss. State Dep't of Health, 749 So.2d 1017 (Miss.1999): This court generally accords great deference to the agency's interpretation of its own rules and statutes which govern its operation. Mississippi State Tax Comm'n v. Mask, 667 So.2d 1313, 1314 (Miss.1995). An appeal from an administrative agency is a limited one. Mainstream Sav. & Loan Ass'n v. Washington Fed. Sav. & Loan Ass'n, 325 So.2d 902, 903 (Miss.1976). In reviewing decisions of administrative agencies, this court will entertain the appeal only to determine: whether or not the order of the administrative agency (1) was unsupported by substantial evidence, (2) was arbitrary and capricious, (3) was beyond the power of administrative agency to make, or (4) violated some statutory or constitutional right of the complaining party. Id. at 903; See also, Mississippi Comm'n on Envtl. Quality v. Chickasaw County Bd. of Supervisors, 621 So.2d 1211, 1215 (Miss.1993). Tillmon, 749 So.2d at 1020-21. Review by the appellate court is limited to the record and to the agency's findings. Miss. Comm'n on Envtl. Quality v. Chickasaw County Bd. of Sup'rs, 621 So.2d 1211, 1216 (Miss.1993). See Miss. Employment Sec. Comm'n v. PDN, Inc., 586 So.2d 838, 840 (Miss.1991); Barnett v. Miss. Employment Sec. Comm'n, 583 So.2d 193, 195 (Miss. 1991); Ray v. Bivens, 562 So.2d 119, 121 (Miss.1990). The appellate court may not reweigh the facts, nor may it substitute its judgment for that of the agency. Chickasaw County Bd. of Sup'rs, 621 So.2d at 1216. See Miss. Pub. Serv. Comm'n v. Merchants Truck Line, Inc., 598 So.2d 778, 782 (Miss.1992); Miss. Pub. Serv. Comm'n v. Columbus & Greenville Ry., 573 So.2d 1343, 1346 (Miss.1990); The lower tribunal is the trier of fact as well as the judge of the witnesses' credibility. Nelson v. Miss. State Bd. of Veterinary Med., 662 So.2d 1058, 1062-63 (Miss.1995). This Court has held that a holding which is supported by substantial evidence cannot be arbitrary and capricious. McDerment [v. Mississippi Real Estate Comm'n], 748 So.2d at 119. Substantial evidence is defined as evidence which is substantial, that is affording a substantial basis of fact from which the fact in issue can be reasonably inferred. Delta CMI v. Speck, 586 So.2d 768, 773 (Miss.1991) (quoting State Oil & Gas Bd. v. Mississippi Min. & Roy. Own. Ass'n, 258 So.2d 767 (Miss. 1971)). Decisions which one could consider to be fairly debatable are not arbitrary or capricious. City of Biloxi v. Hilbert, 597 So.2d 1276, 1281 (Miss. 1992). Miss. Bureau of Narcotics v. Stacy, 817 So.2d 523, 526-27 (Miss.2002). ¶ 31. Because the chancery court appropriately found from the record before it that the case was an administrative appeal, the chancellor applied the correct standard of review in affirming the award of the contract to Consultec, finding that DOM did not make its decision against the substantial weight of the evidence. However, this Court must now determine whether the chancellor properly affirmed the award of the contract to Consultec.