Opinion ID: 7281
Heading Depth: 2
Heading Rank: 3

Heading: summary judgment based on due process

Text: 29 Appellants challenge the district court's grant of summary judgment in favor of the Pilots. Specifically, Appellants contend that the court erred in concluding that the Ports have such a pecuniary interest in the flow of vessels to and from their ports that giving the Ports a final veto over the pilotage rates deprives the Pilots of their due process right to a hearing before a fair and impartial tribunal. 30 At the outset we note that the Pilots state repeatedly that they are not challenging the quality or quantity of the Ports' procedure for approving pilotage rate increases. We note further that despite the fact that the Pilots' due process claim rests only on the Ports' status as interested parties, the Pilots do not define interest with any particularity. Rather, they allege simply and conclusionally that because the Ports are legitimately interested parties which opposed the proposal for a pilotage rate increase at the Commission hearing, the Ports cannot constitute a fair and impartial tribunal before which the Pilots must present the same proposal at the subsequent port proceedings. 31 Implicit in this argument is the contention that the Ports are biased by virtue of their having prejudged the facts of the rate-making issue prior to adjudicating that same issue at their own proceedings. 31 The Ports do not dispute that (1) they have an interest in the economic viability of their respective ports, or (2) their representatives attended the Commission hearings and opposed the proposed rate increases. 32 These undisputed facts relating to the Ports' interest apparently persuaded the district court to grant summary judgment in favor of the Pilots. But, the district court went beyond that simple conclusion, labeling the Ports' interest as pecuniary, and observing that the Ports' had a pecuniary interest in the flow of vessels through their ports which is affected by the rates for pilot fees. In light of this perception the district court concluded that, by granting the Ports a final veto over the applications requesting an increase in pilotage rates, the subject sentence of the statute deprived the Pilots of their right to a fair and impartial tribunal. As we are satisfied that the district court erred as a matter of law in reaching this conclusion, we analyze the Ports' interest in light of the relevant due process caselaw and distinguish it from the only two categories of bias under which the Pilots' due process claim and the district court's ruling could fall: (1) Actual bias or probability of actual bias stemming from a pecuniary interest; or (2) irrevocably closed minds as the result of prejudging the issue.
32 A fair trial before a fair and impartial tribunal, whether a court or administrative agency, is a basic requirement of due process. 33 Not only is a biased decisionmaker constitutionally unacceptable, but 'our system of law has always endeavored to prevent even the probability of unfairness.'  34 In an effort to prevent even the probability of unfairness, courts have identified situations in which the probability of actual bias on the part of the judge or decisionmaker is too high to be constitutionally tolerable. Such situations include circumstances in which the adjudicator has a direct, personal, substantial, and pecuniary interest in the outcome of the case or in which the adjudicator has been the target of personal abuse or criticism from the party before him, 35 or situation[s] ... which would offer a possible temptation to the average ... judge to ... lead him not to hold the balance nice, clear and true. 36 These identified situations, as applied to due process claims, represent the standard for reviewing allegations of bias against judicial and quasi-judicial decision-makers. 37 33 The Supreme Court has determined, however, that the strict requirements of neutrality imposed on these types of decision-makers are not applicable to situations involving nonjudicial decision-makers. 38 In Marshall v. Jerrico, Inc., 39 the Supreme Court determined that a federal administrator, who, despite the enforcement aspects of his position, performed no judicial or quasi-judicial function, heard no witnesses, and ruled on no disputed factual or legal questions in carrying out his enforcement tasks. The Court concluded that the administrator functioned in a capacity more akin to that of a prosecutor or civil plaintiff than a judge. 40 In light of the noted distinctions between the administrator's functions and those of a judge, the Court held that the rigid due process requirements imposed on individuals performing judicial or quasi-judicial functions are not applicable to individuals acting in a prosecutorial or plaintiff-like capacity. 41 Thus, according to the Supreme Court, an administrator who functions in a prosecutorial or plaintiff-like capacity is not held to the strict requirements of impartiality imposed on those whose functions are essentially judicial in nature. This is not to say that there are no due process limits on those who perform prosecutorial or plaintiff-like functions: As public officials, these individuals still must serve the public interest and not be motivated by improper factors or otherwise act contrary to law. 42 34 Clearly the Ports are more akin to administrative prosecutors than to those who perform judicial or quasi-judicial functions. The Ports function as policymakers who are authorized by state law to establish the rates for pilotage into and out of the individual ports. In establishing the pilotage rates, the Ports hear no witnesses (in a judicial sense) and issue no findings or rulings on factual or legal questions. Thus, under Marshall, to avoid judicial scrutiny of their individual port hearings, the Ports need only act according to their public interests, within the confines of the law and untainted by any substantial personal interest. 35 The burden of establishing a disqualifying interest on the part of the Ports is on the Pilots. 43 In this instance, a port is a navigational district, an entity whose identity is inseparable from the individuals who comprise the district. Thus, in challenging the Ports' role as adjudicator over pilotage rates, the Pilots of necessity challenge those individuals who are the Ports. It is therefore the interest of those individuals that determines the interest of the Ports. And, unless those natural persons have a disqualifying interest, there is no disqualifying interest on the part of the artificial or juridical person they comprise, i.e., the Ports. 36 As noted above, the Pilots challenge the Ports' status as interested parties but do not allege with particularity any disqualifying interest. The Pilots offer no evidence that the Ports were not acting according to their public interest in vetoing the pilotage rate proposal. And our de novo review of the record reveals nothing to suggest that the Ports qua Ports cannot hold the balance between the role of a decisionmaker on behalf of the public and the ports on the one hand and the Pilots' request for rate increases on the other. 44 We assume, in such balancing, that the Ports, through their individual members, recognize that shipping is the lifeblood of the ports; that the Pilots are indispensable to ship traffic; and that the pilotage rates are of vital importance to the Pilots. Likewise, we assume that the Ports are aware that pilotage rates that are too low will result in a dearth of pilots, whereas rates that are too high will make the Ports noncompetitive. We surmise that in an effort to reconcile these two extremes, the Ports do in fact hold the balance on behalf of the public, seeking a happy medium in which both the ports and the Pilots can co-exist and function. 37 We observe that the Pilots do not contend on appeal that the Ports violated Texas law or that the Ports' decision to veto the rate increase was motivated by any substantial personal interest. And, as we noted above, our de novo review of the record reveals nothing to suggest that there would have been any support for such allegations had they been presented. We conclude, therefore, that the Pilots have failed to state any constitutional due process violation based on a disqualifying interest of the Ports. Accordingly, we hold that the district court erred as a matter of law in granting summary judgment in favor of the Pilots on the basis of the Ports' interest. 45
38 We also conclude that the Pilots' implicit allegation that the Ports' minds were irrevocably closed to the proposed pilotage rates by having prejudged the facts of the rate-making dispute prior to adjudicating that same dispute at their own proceedings is without merit. The contention that a tribunal is unconstitutionally biased because it has prejudged the facts of a particular dispute carries a more difficult burden of persuasion than a claim based on actual bias. 46 Allegations of bias based on the prejudgment of the facts or outcome of a dispute generally stem from the fact that an administrative body or hearing officer has dual roles of investigating and adjudicating disputes and complaints. In situations in which this type of bias is raised, the honesty and integrity of those serving as adjudicators is presumed. 47 In addition, there is a presumption that those making decisions affecting the public are doing so in the public interest. 48 Thus, a party challenging this presumption of honesty must convince the court that under a realistic appraisal of psychological tendencies and human weakness, conferring investigative and adjudicative powers on the same individuals poses such a risk of actual bias or prejudgment that the practice must be forbidden if the guarantee of due process is to be adequately implemented. 49 39 Although courts have observed that an administrative body that has prejudged the facts or the outcome of a dispute cannot render a decision that comports with due process, 50 we have held that we will not infer bias when no evidence is presented to indicate that a hearing officer's mind was irrevocably closed. 51 Here, we are satisfied that, even in light of the fact that the Ports attended the Commission hearing, presumably in firm opposition to the pilotage rate increase, there still is nothing in the summary judgment record of this case to suggest that, at the subsequent port proceedings, the Ports' minds were irrevocably closed regarding the rate increase. 40 Indeed, the record supports just the opposite determination, that the Ports' minds were not irrevocably closed. The summary judgment evidence reflects that the Ports permitted the Pilots to present testimony and evidence in support of their proposal, including an opportunity for questions and answers. In addition, rather than veto the rate increase on the spot--as one might expect from those whose minds are irrevocably closed--the Ports assigned to board members or members of the ports' staffs the task of studying the proposed rate increase, and instructed these individuals and committees to address the issues relating to the increase and to report back at the next meeting. On at least one occasion a representative of the Pilots met separately with a representative of the Ports to discuss the Pilots' proposal. Clearly, this evidence supports our determination that there is no credible suggestion that the Ports had irreversibly prejudged the facts to the extent that their minds were permanently closed to the issue of the rate increase or that the Ports' administrative procedures posed an unacceptable risk of bias. 52 III