Opinion ID: 1119858
Heading Depth: 1
Heading Rank: 4

Heading: substantially of the evidence

Text: We now consider whether TSPC's findings about sexual contact with Michelle and Leasa are supported by substantial evidence. Petitioner's primary claim is that TSPC may not rely entirely on hearsay that would not be admissible in a civil or criminal trial to support findings that petitioner had sexual contact with the students, when TSPC did not show that they were unavailable to testify. [16] Petitioner asserts that such hearsay, in such circumstances, does not constitute substantial evidence. He urges us to adopt the residuum rule, at least in cases where direct evidence is available.
The New York Court of Appeals created the residuum rule in Carroll v. Knickerbocker Ice Co., 218 N.Y. 435, 113 N.E. 507 (1916). 3 Davis, Administrative Law Treatise 239, § 16.6 (2d ed 1980). In that case, the court set aside a workers' compensation award that was based solely on a deceased worker's statements that he had been injured on the job. The relevant statute provided that common law or statutory rules of evidence were not binding on the agency that administered workers' compensation. 218 N.Y. at 440, 113 N.E. 507. The court interpreted that statute to mean that, although the agency could accept any evidence that is offered[,] still in the end there must be a residuum of legal evidence to support the claim before an award can be made. Id. The residuum rule requires that an administrative agency's findings be supported by some evidence that would be admissible in a civil or criminal trial. Under the residuum rule, a finding based solely on hearsay that would not be admissible in a civil or criminal trial could never be supported by substantial evidence in the whole record. 3 Davis, supra, at 239, § 16.6. Some jurisdictions retain the residuum rule. [17] Courts that adopt the rule do so in an effort to ensure reliability of evidence and cross-examination of witnesses. But legal scholars, including McCormick, Wigmore, and Davis, have severely criticized the rule and those rationales for it. First, McCormick reasons that courts concerned about cross-examination fail to consider that much `legal' evidence within the hearsay exceptions is equally untested. Yet the latter is accepted even in jury trials because of its probable reliability. Consequently the residuum rule's mechanical prohibition against uncorroborated hearsay is unsound. Its sound objectives can be secured through the sensitivity of the hearings officers and the wise application of the substantial evidence test which measures the quantity and quality of the supporting evidence regardless of its category or label. McCormick, Evidence 1017, § 354 (3d ed 1984). Second, the residuum rule is predicated on the assumption that hearsay evidence that would be excluded in a civil or criminal trial is inherently unreliable. 3 Davis, supra, at 243. That assumption is not always correct. As McCormick notes, [t]he trustworthiness of hearsay ranges from the highest reliability to utter worthlessness. McCormick, supra, at 914. Third, Wigmore criticizes the residuum rule for resting on the fallacy that requiring a residuum of legal evidence will help ensure the truth of the findings. The rules for admitting evidence in civil or criminal trials are not necessarily or exclusively designed to ensure truth, however. [18] Wigmore concludes that the residuum rule is decidedly not the wise and satisfactory rule for general adoption. 3 Davis, supra, at 242 quoting Wigmore, supra, at § 4b). Finally, Davis argues that courts often fail to recognize the alternative to the residuum rule, which will better achieve the goals that it was designed to attain: The alternative is to allow agencies and reviewing courts to exercise discretion in determining in the light of circumstances of each case whether or not particular evidence is reliable even though it would be excluded in a jury case. In the exercise of such discretion, agencies and reviewing courts will in many circumstances find that particular hearsay or other so-called incompetent evidence has insufficient reliability. Rejection of the residuum rule does not mean that an agency is compelled to rely upon incompetent evidence; it means only that the agency and the reviewing court are free to rely upon the evidence if in the circumstances they believe that the evidence should be relied upon. 3 Davis, supra, at 240. One reason against the rule is that: The reliability of evidence cannot be adequately judged by wholesale thinking that ignores circumstances but must be determined in the light of variable circumstances, including the supporting evidence or lack of it, the opposing evidence or lack of it, the purpose of the proceeding, the practical consequences of a finding either way, the degree of precision needed, the degree of efficacy of cross-examination with respect to a hearsay declaration, and many other such factors. 3 Davis, supra, at 241. Because of its flaws, many courts that once applied the residuum rule have now abandoned it. [19] See 3 Davis, supra, at 239 (citing cases). The Oregon statutes governing evidence in administrative hearings reject the assumption that hearsay evidence is categorically so unreliable that it cannot be substantial. Hearsay evidence is as admissible under ORS 183.450(1) [20] as any other evidence as long as it meets the statutory test of reliability. [21] ORS 183.482(8)(c) provides that [s]ubstantial evidence exists to support a finding of fact when the record, viewed as a whole, would permit a reasonable person to make that finding. That statute makes no provision for weighing some classes of evidence in the record more heavily as classes than other classes of evidence in the record  for example, weighing exhibits more heavily than testimony, or non-hearsay testimony more heavily than hearsay  as a matter of law. We agree with the Court of Appeals' reasoning that [t]he legislature could not have intended that a certain type of evidence, although reliable enough to be admissible under ORS 183.450(1), is categorically incapable of being substantial enough to permit a reasonable person to find in accordance with it under ORS 183.482(8)(c). (Emphasis added.) Reguero v. Teacher Standards and Practices, supra, 101 Or. App. at 34, 789 P.2d 11. Accordingly, we reject the residuum rule and affirm the Court of Appeals' holding that hearsay evidence alone, even if inadmissible in a civil or criminal trial, is not incapable of being substantial evidence under ORS 183.482(8)(c).
Our inquiry does not end there, however. In rejecting the residuum rule, we reject any categorical method of determining substantiality. While our task is not to substitute our judgment for that of the agency, we must decide whether the finding of substantiality is reasonable in the light of countervailing as well as supporting evidence. ORS 183.482(8)(c); Garcia v. Boise Cascade Corp., 309 Or. 292, 295, 787 P.2d 884 (1990). ORS 342.143(2), see supra note 3, requires the applicant to furnish evidence satisfactory to the commission of good moral character. At the beginning of the hearing, TSPC's attorney conceded that petitioner's application for a teaching license establishes on its face, at least prima facia [sic] showing that the [petitioner] meets the eligibility requirements and so we will go forward in terms of order of proof to show why    [petitioner] does not meet the requirements of good moral character. Thus, TSPC concluded that petitioner met his burden under ORS 342.143(1) and (2). TSPC was the proponent of the allegation concerning sexual misconduct. ORS 183.450(2) provides: The burden of presenting evidence to support a fact or position in a contested case rests on the proponent of the fact or position. Thus, TSPC had the burden of presenting substantial evidence to support its allegations that petitioner was guilty of sexual misconduct. [22] The substantial evidence inquiry necessarily is case specific. Davis suggests, and we agree, that in assessing the substantiality of the evidence or lack of it, variable circumstances may be considered, such as: the alternative to relying on the hearsay evidence; the importance of the facts sought to be proved by the hearsay statements to the outcome of the proceeding and considerations of economy; the state of the supporting or opposing evidence, if any; the degree of lack of efficacy of cross-examination with respect to the particular hearsay statements; and the consequences of the decision either way. [23] When the alternative to relying on hearsay is to get the better evidence that is readily available, refusing to rely on the hearsay is appropriate. 3 Davis, supra, at 243. In this case, there was a convenient and apparently inexpensive alternative to relying on the challenged hearsay. Michelle, Leasa, and the other students apparently were readily available to be called as witnesses. No reason was given why they did not testify. In its summation, TSPC was invited by its attorney to continue [the] hearing and to direct [the litigants] to bring in these students and hear their testimony directly. TSPC had the authority to issue subpoenas to require the students to testify at the hearing. ORS 183.440(1). It is beyond question that the students' direct testimony is better evidence than their hearsay statements. The importance of the facts asserted in the hearsay statements to the outcome of this proceeding is likewise indisputable. TSPC's findings of fact, conclusions of law, opinion, and order were based entirely on hearsay, particularly the hearsay testimony of Castner, Minette, and Costelow. [24] Moreover, Castner, Minette, and Costelow were permitted to express their opinion, based on that hearsay, multiple hearsay, gossip, and rumors, that Michelle and Leasa were telling the truth. [25] That reliability of particular evidence must depend upon the quantity and quality of supporting and opposing evidence and on the whole circumstantial setting should be too obvious for argument. 3 Davis, supra, at 245. Evidence in the record countervailing TSPC's findings shows: 1. The only time Leasa made a sworn statement under oath was before the Marion County Grand Jury. At that time, Leasa stated that she had no recollection of petitioner's touching her in the vaginal area. (H) 2. Leasa told Castner that petitioner's touching of Leasa's breast was an accident. (H) 3. The door to petitioner's classroom apparently could not be locked from the inside, contrary to what Leasa's hearsay statement indicated. 4. The classroom in which petitioner allegedly committed inappropriate sexual contact with Leasa was in full public view with large windows on both sides of the room and on the classroom door. 5. Leasa was a student in petitioner's class less than 10-15 days. 6. A teacher's aide testified that she remained in petitioner's classroom after school the whole time, except for a few minutes to do some photocopying, and that she never saw Leasa in petitioner's classroom after school. 7. A teacher testified that he usually met with petitioner after school and that he had never seen petitioner alone with Leasa or Michelle. 8. Leasa was upset because many of her friends were transferred out of petitioner's class. 9. Leasa wanted to be transferred out of petitioner's class to be with her friends. 10. A few days after petitioner reported Michelle to a school counselor for drug abuse and prostitution problems, a school clerical employee overheard Michelle tell Leasa that I'm going to get [petitioner]. (H) 11. Michelle and Leasa were friends. 12. Michelle, Leasa, and the other students whose hearsay statements were received in evidence were friends. 13. Petitioner testified and denied the alleged sexual misconduct. When unsworn hearsay constitutes the major (in this case, the entire ) support for the administrative decision, the importance of providing the adversary (here, the petitioner) with the opportunity to test on cross-examination each of the available declarants' perception, memory, narration, and veracity is undeniable. TSPC had no basis for evaluating the credibility of the declarants of the challenged hearsay on which it based its order. Even where hearsay is sufficiently reliable to be admissible and might be relied on when the consequences of the decision would be minor, that same hearsay might not be relied on when the consequences of the decision would be a profound impact on, for example, the ability of an individual to pursue a chosen profession. The latter is the case here. TSPC drew several conclusions of law, including that [a]ny of these specifications in paragraphs 3, 4, and 5 above, are sufficient alone to support the conclusion that [p]etitioner is guilty of gross neglect of duty and gross unfitness. However, while TSPC attempts to establish that each finding is independently adequate to support its decision, each finding relies on, and cannot be supported independently of, the evidence which we determine is not substantial evidence. Paragraph 3 relies on the finding that petitioner engaged in repeated acts of inappropriate contact with female students, and paragraph 4 relies on the finding that petitioner engaged in sexual contact with Leasa. We have determined that these findings are not supported by substantial evidence. Paragraph 5 concludes that [p]etitioner is guilty of gross neglect of duty and gross unfitness based on his efforts to persuade female students from his class, including Leasa   , to withdraw the allegations against him. This conclusion also relies on the factual findings regarding inappropriate contact with female students which we determine is not supported by substantial evidence. This is necessarily so, because paragraph 5, in isolation, suggests that a person who we must assume was falsely accused of something until proven otherwise can be ineligible for a teaching license for attempting to persuade the accusers to tell the truth. If attempting to persuade someone to tell the truth is a proper basis on which to deny a teaching license or, as paragraph 5 continues, to find that a teacher has exploit[ed] professional relationships with any student for personal gain, or in support of persons or issues, TSPC must do a better job than it has done thus far of explaining why this is so. Because the factual findings TSPC made and relied on to reach its conclusions of law are not supported by substantial evidence, the conclusions of law based on those findings are not permissible. We hold that TSPC's decision in this case was not based on substantial evidence under ORS 183.482(8)(c).