Opinion ID: 4508399
Heading Depth: 2
Heading Rank: 3

Heading: sanction for filing remand motion

Text: Petitioners contend the court of appeals erred in upholding the ALC's imposition of a sanction under SCALC Rule 72 after the ALC found Petitioners' motion to remand the case to the DHEC Board for a final review conference was frivolous. We agree and reverse the imposition of a sanction. If the presiding administrative law judge determines that a contested case, appeal, motion, or defense is frivolous or taken solely for purposes of delay, the judge may impose such sanctions as the circumstances of the case and discouragement of like conduct in the future may require. SCALC Rule 72. In determining whether a case or defense is frivolous, the administrative law judge may refer to S.C. Code Ann. § 15-36-10, the Frivolous Civil Proceedings Sanctions Act [FCPSA]. 2014 Revised Notes to SCALC Rule 72. The amount and type of sanction to be imposed is within the discretion of the presiding administrative law judge. Id. The ALC indeed referred extensively to the FCPSA in reaching its decision to impose a sanction on Petitioners. While the Revised Notes to SCALC Rule 72 recognize that the amount and type of sanction to be imposed are matters for the sound discretion of the administrative law judge, a judge's threshold decision to apply sanctions under the FCPSA sounds in equity rather than at law. See Holmes v. E. Cooper Cmty. Hosp., Inc., 408 S.C. 138, 167, 758 S.E.2d 483, 499 (2014). Therefore, we review the ALC's findings of fact with respect to its threshold decision to grant sanctions under the FCPSA by taking our own view of the preponderance of the evidence. See id. The FCPSA provides an attorney or a pro se litigant in a civil or administrative action may be sanctioned for filing a frivolous motion or document if a reasonable attorney presented with the same circumstances would believe the [item filed] is frivolous, interposed for merely delay, or merely brought for any purpose other than . . . adjudication of the claim or defense . . . . S.C. Code Ann. § 15-3610(A)(4)(a)(iv) (Supp. 2019). A sanction may also be imposed for making frivolous arguments that a reasonable attorney would believe were not warranted under the existing law or if there is no good faith argument that exists for the extension, modification, or reversal of existing law. § 15-36-10(A)(4)(c). While subsection (A)(4) speaks only in terms of an attorney or pro se litigant being subject to sanctions under this act, subsections 15-36-10(C) and (E) extend the specter of a sanction to a party to the action. In determining whether to impose a sanction, a court must consider such factors as the explanation offered for the filing, the complexity of the case, any prior violations, and such other factors the court deems appropriate. § 15-36-10(E). Here, DHEC issued a staff decision granting a Critical Area Permit and Coastal Zone Consistency Certification to the Ports Authority on December 18, 2012. Petitioners requested a final review conference from DHEC, asserting DHEC staff did not engage in a full analysis of the proper considerations in evaluating the permit application. After DHEC notified the parties that it had decided not to conduct a final review conference, Petitioners submitted a request for a contested case hearing with the ALC. Petitioners thereafter filed a motion with the ALC requesting a remand to the DHEC Board for a final review conference. Petitioners argued the DHEC Board's failure to conduct a final review conference violated the mandatory language in section 44-1-60 imposing a duty on DHEC to conduct a review of the staff decision upon timely request by an affected person to ensure the decision was consistent with agency policy and supported by the administrative record. See S.C. Code Ann. § 44-1-60(F) (2018) (No later than sixty calendar days after the date of receipt of a request for final review, a final review conference must be conducted by the board, its designee, or a committee of three members of the board appointed by the chair. (emphasis added)). Petitioners asserted a final review conference would enable additional information to be supplied, if needed, and allow DHEC to apply its statutorily recognized 'specialized knowledge' in an evidence-based setting so that the agency's rationale (as opposed to [the] staff's rationale) would be reviewed by the ALC. The ALC found that although the word must initially could lead to the conclusion that whenever a request is made, the DHEC Board is required to conduct a conference, other language in the statute clarified that the DHEC Board has the discretion to decline to hold a final review conference. See id. (If the board declines in writing to schedule a final review conference or if a final review conference is not conducted within sixty calendar days, the staff decision becomes the final agency decision, and an applicant, permittee, licensee, or affected person [may request] pursuant to subsection (G) a contested case hearing before the [ALC].). The ALC found the use of the word must in section 44-1-60(F) means that in instances in which the DHEC Board actually elects to hold a conference, it must do so within the statutorily prescribed time. The ALC noted this meaning is further recognized in section 44-1-60(G)(1) of the South Carolina Code (2018). The ALC analyzed the statutes referring to DHEC's specialized knowledge6 cited by Petitioners and found they applied to evidence presented by DHEC in the ALC hearing and did not impact the procedure for requesting a final review conference. The Ports Authority subsequently sought the imposition of a sanction against Petitioners pursuant to SCALC Rule 72, including dismissal of the action, on the ground Petitioners' motion for a remand to the DHEC Board was a frivolous filing that was unsupported by any reasonable legal theory and interposed solely for purposes of delay. After a hearing, the ALC issued an order sanctioning Petitioners for making the remand motion and directing Petitioners to pay $9,300 to the Ports Authority for attorney's fees incurred in opposing the motion. The ALC found the motion was frivolous because Petitioners erroneously relied upon a single word (must) in section 44-1-60(F) while ignoring other language in the statute and administrative rulings and appellate cases recognizing the DHEC Board's discretion. 6 See S.C. Code Ann. § 44-1-60(F)(2) (2018); see also S.C. Code Ann. § 1-23-330(4) (2005). The court of appeals affirmed the ALC, finding Petitioners disregarded a settled rule of statutory construction by failing to consider the statute as a whole. The Ports Authority contends Petitioners have not preserved this issue for review because Petitioners did not appeal the ALC's order denying Petitioners' motion for remand. We disagree. The ALC's order denying the remand motion analyzed the statutory language and ruled solely on the issue of a remand to the DHEC Board for a final review conference. Petitioners did not appeal the remand order but did appeal the ALC's subsequent order finding their motion frivolous and imposing a sanction. While the remand order interpreting the statute is the law of the case, Petitioners' failure to appeal the remand order does not preclude them from appealing the order finding their motion frivolous and imposing a sanction. Petitioners argue they did not disregard the additional language in the statute indicating ALC review is available if the DHEC Board declines to hold a conference. Rather, they read the provisions together (1) to mean the DHEC Board must, in fact, hold a review conference, and (2) to provide an avenue for redress in the ALC if the Board fails to fulfill this statutory obligation. Petitioners acknowledge there are cases referring to the DHEC Board's discretionary authority to hold a conference; however, Petitioners assert they are not conclusive because the statements in those cases were made in general recitations about the facts or the permitting process, and the mandatory-versus-discretionary nature of a final review conference was not disputed. See Ex parte Goodyear Tire & Rubber Co., 248 S.C. 412, 418, 150 S.E.2d 525, 527 (1966) (It is a maxim, not to be disregarded, that general expressions, in every opinion, are to be taken in connection with the case in which those expressions are used. If they go beyond the case, they may be respected, but ought not to control the judgment in a subsequent suit, when the very point is presented for decision. (quoting Cohens v. Virginia, 19 U.S. 264, 399 (1821))). Petitioners argue they have a duty to diligently advance their members' interests, and courts have routinely rejected sanctions for far more aggressive advocacy. Petitioners maintain the imposition of a sanction in these circumstances suppresses the vigorous representation that is needed to protect the public interest. In upholding the sanction, the court of appeals cited no cases directly on point and relied instead on general authority holding a statute shall not be construed by concentrating on an isolated phrase. We agree with Petitioners that the cases cited by the ALC are not controlling because they did not involve a dispute over the particular point pertaining to a remand advanced by Petitioners. While Petitioners were incorrect on the law, our review of the preponderance of the evidence leads us to conclude their filing of the remand motion was not frivolous; we therefore reverse the ALC's imposition of a sanction.