Court Opinion

ID: 6261611
Source: CourtListenerOpinion
Date Created: 2022-02-17 22:08:04.010785+00
Date Added: 2024-06-11T08:59:43.623430
License: Public Domain

POMEROY, Justice,
dissenting.
I am obliged to dissent from the majority’s disposition of the important question of administrative law presented by this appeal.1 The Court holds that the mathematical definition of de facto segregation promulgated by the Human Relations Commission is but a general statement of policy, and so is not an administrative regulation subject to either the notice and comment requirements of the Commonwealth Documents Law, 45 Pa.C.S.A. § 1101 *359et seq. (Supp.1977-1978), or the filing and publication requirements of the now-repealed Sec. 21 of the Administrative Agency Law, Act of June 4, 1945, P.L. 1388, as amended, 71 P.S. § 1710.21.2 I am unable to agree.
I.
For an administrative agency in Pennsylvania to assure that regulations which it issues are valid and en*360forceable, the agency must comply with certain procedural requirements of the Commonwealth Documents Law, supra. These include providing public notice of the proposed rule, making a request for written comments by any interested party, giving due consideration to such comments, holding “hearings as seem appropriate,” and submitting the finally-adopted rule for inclusion in the “Pennsylvania Code”. 45 Pa.C.S.A. §§ 1201-1208. Three purposes, at the least, are served by these requirements: (1) they afford a democratic process of providing affected or interested citizens an opportunity to participate in the formulation of standards which govern their conduct; (2) they give the rulemaking agency the benefit of a wide spectrum of thought on the proposed rule; (3) they apprise regulated parties of prescribed conduct.3 These purposes would seem to be particularly important with regard to the Commission’s de facto segregation definition, touching as it does upon one of the more sensitive issues of our day and one about which informed judgment is divided. See Uniontown Area School District v. Pennsylvania Human Relations Commission, 455 Pa. 52, 63-75, 313 A.2d 156, 161-168 (1973). The Commission argues, however, that the definition in question is not a regulation within the meaning of the Act, but a guideline merely, a statement of policy without binding effect, and thus not subject to the notice and comment requirements of the statute.4
*361The majority is persuaded by the Commission’s characterization of its rule for two reasons, neither of which can I accept. The first is “the language and form of the guidelines”. Opinion of the Court ante at 678. By this I take it that the Court is referring to the wording of the title of the document which contains the segregation definition- — “Recommended Elements of a School Desegregation Plan” — and the fact that the definition is framed not as an imperative but in the form of a question:
“3. How nearly does the desegregation plan bring the percent Negro pupils in each building to within 30% of the percent Negro pupils among the buildings of the same grade span?”
To my mind, focusing on the grammatical format of a statement affords a weak basis indeed for determining the applicability of the statutory requirement here involved.
Even if one acknowledges that the heading of a statement and its linguistic style is not an altogether irrelevant factor in deciding whether an administrative announcement is a “regulation”, surely the agency’s characterization of it as “guideline”, “recommendation”, or “policy statement”, being both self-serving and conclusory, is entitled to but little weight in a court’s decision as to what in actuality is the nature of the statement and whether the agency must comply with notice and comment procedure. In an analogous situation, our courts have declined to allow form to be determinative and have held that an informal agency letter could suffice as an appealable administrative “adjudication” for purposes of § 2(a) of the Administrative Agency Law. See Finkle v. Pa. State Real Estate Commission, 17 Pa.Cmwlth. 221, 331 A.2d 593 (1975); Newport Homes, Inc. v. Kassab, 17 Pa.Cmwlth. 317, 332 A.2d 568 (1975). See also Columbia Broadcasting System v. United States, 316 U.S. 407, 62 S.Ct. 1194, 86 L.Ed. 1563 (1942). Applying that reasoning here, it is the Commission’s application of its *362rule which should receive the major consideration. As the Court of Appeals for the Third Circuit held in Texaco v. F.P.C., 412 F.2d 740, 744 (1969), a court must look to the operation of an agency’s ruling and determine whether or not “rights and obligations” are imposed on affected parties.
Recognizing that this is the more important inquiry, the majority does purport to look to the “treatment of the guidelines.” Opinion of the Court ante at 678. It concludes, however, that the Commission’s de facto segregation definition has not been applied in a binding fashion. I disagree.
The Commission’s “guideline” characterization is belied by the express terms of its final orders filed in this and other cases. In the present case, the Commission’s order directs the school district to submit a desegregation plan which will eliminate racial imbalance, a condition which the order flatly declares to be present in schools “having a percent Negro enrollment less than or more than 30% of the percent of Negro pupils among the buildings of the same grade”; the order also stipulates that the plan shall conform to the “Recommended Elements” definition of de facto segregation.5 In Union-town, supra, the Commission issued five similar orders in regard to the five school districts involved in that appeal. 455 Pa. at 59-60, 313 A.2d 156. More recently, in the case of Pennsylvania Human Relations Commission v. School District of Philadelphia, 23 Pa.Cmwlth. 312, 352 A.2d 200 (1976), the Commonwealth Court observed that the Commission in that case “insisted that any plan *363submitted by the District must bring all of the Philadelphia schools within its Recommended Element No. 3.” Id. 23 Pa.CmwIth. at 325, 352 A.2d at 208. It is difficult to imagine how any rule or regulation formally adopted in accordance with law could be given a more imperative rendering than this.6 In the light of these cases, I have no hesitation in saying that the rule before us “establishes a standard of conduct which has the force of law.” Pacific Gas & Electric Co. v. F.P.C., 164 U.S.App.D.C. 371, 506 F.2d 33, 38 (1974).7
The Commission argues, however, that this characterization of its rule as an inflexible norm is inaccurate; it asserts that deviations from the 30 percent range definition have in fact been permitted. It is on the basis of this assertion (in addition to the above “language” argument) that the majority concludes that the definition is not a regulation subject to notice and comment requirements.
Although the Commission cites no reported decisions to support its claim, it may be conceded that on occasion *364it does make exceptions to its “guidelines”.8 Thus among the Commission’s conclusions of law in the instant adjudication is the following:
“Absent persuasive justification for an exception to ‘Recommended Elements of a School Desegregation Plan’ number 3, a segregated school is one in which its percent Negro enrollment is less than or more than 30 percent of the percent Negro pupils among the buildings of the same grade span.” (Emphasis added).
Accepting this statement as an accurate illustration of. the manner in which the Commission applies its pronouncement, the definition may thus be described as a general rule to which exceptions will be made, but only for “persuasive” reasons. It operates, then, in the same manner as a rebuttable presumption and has the full force of substantive law, shifting the burden of persuasion to respondents in Human Relations Commission proceedings.9 As such, it is nothing less than a “regulation” as that term is used in the statute in question. See *365Pickus v. United States Board of Parole, 165 U.S.App.D.C. 284, 507 F.2d 1107 (1974).10
I do not conceive it to be the function of a court to strive to release an administrative agency from the requirements of the Commonwealth Documents Law. The salutary purposes of that Act are too easily defeated when we sanction closed-door rulemaking cloaked in the guise of rendering “policy guidelines”. That this should occur in a case dealing with a subject of crucial importance to the community and where the need for informed and even-handed administrative decision-making is great is, in my view, most unfortunate. I therefore adhere to the view expressed by the plurality in Uniontown, supra 455 Pa. at 80 n. 29, 313 A.2d 156, 171, that this de facto segregation definition, while a permissible exercise of administrative power, is “clearly a substantive rule of law”.
II.
According to the analysis of the majority, the medium employed by the Human Relations Commission to exercise its statutory authority to define segregation has been case-by-case adjudication, not the promulgation of rule. For the reasons stated in part I, supra, I disagree with that analysis; the Commission’s approach is essentially the application of its a priori mathematical formu*366la to the facts at hand.11 That point aside, I add a few words concerning the propriety of the Commission’s foresaking rulemaking in favor of an adjudicative approach.
In Uniontown, 455 Pa. at 75, 313 A.2d 156, the plurality held that the Commission’s definition of de facto segregation could not be viewed as an interpretation of legislative intent with regard to the proscription against “unlawful discriminatory practice [s]” in the Human Relations Act, 43 P.S. § 955. The rule was upheld, however, because of a finding that in the Human Relations Act the General Assembly had granted to the Commission broad “legislative” (as contrasted with “interpretative”) power under the Act; given that finding, the rule relative to segregation was as “binding upon a court as a statute”, review being limited to an ascertainment of “reasonableness”. Id. at 76, 313 A.2d at 169.
I am of the view that in exercising a power which is legislative in nature, an administrative agency in this Commonwealth should establish through the rule making process some identification or definition of conduct which it will monitor and which will cause it to take remedial action. The agency’s basic legislative tenets should be announced through rule making as the closest approximation to the legislative process, rather than by ad hoc decision-making, which approaches the judicial *367process.12 The Human Relations Commission has been endowed by the General Assembly with a broad grant of legislative power, for the Act itself nowhere defines the conduct which is interdicted, viz., discrimination. If the Commission is to have the relatively unrestrained authority to identify discrimination of the kinds prohibited by the Act and then to fashion remedies to eliminate those evils, it seems to me that the Commission should be held to strict compliance with notice and comment requirements — i. e., rulemaking procedures — which facilitate the openness and accountability which should accompany legislative decision-making.13 It would, of course, still be for the Commission to apply the rules or regulations it had promulgated on a case-by-case basis as they arise; but the basic rules of the game would be known ahead of time. Where, however, the Commission carries out its legislative mandate in the absence of a regulation properly adopted as prescribed by law, it does so on an undefined basis, insulated from significant guidance or restraint from either statute, rule, or court.14
*368To limit the exercise of unbridled administrative discretion, as well as to avoid the possibility of inconsistent treatment of individual cases, Professor Davis proposes that there should be a “requirement, judicially enforced, that administrators must strive to do as much as they reasonably can do to develop and to make known the needed confinements of discretionary power through standards, principles, and rules.” K. C. Davis, Administrative Law Treatise § 6.13, at 278 (Supp.1970). See also Davis, Administrative Law in the Seventies §§ 2.~ 00-2.00-6 (1976); R. Stewart, “The Reformation of American Administrative Law”, 88 Harv.L.Rev. 1667, 1698-1702 (1975). I find that advice sound in general, and of particular pertinence to the case at bar.
In sum, it is my view that the usefulness, delicacy and importance of the task confided to the Human Relations Commission but serve to emphasize that accomplishment of its undertaking should not be jeopardized by an avoidance of the process which is best designed to make known to the public that which the public can expect and that which is required of it.
EAGEN, C. J., joins in this dissenting opinion.

. The record in this case suggests that the appellant, Norristown Area School District, may have been recalcitrant in taking appropriate steps to eliminate an unjustifiable racial imbalance in its schools. It goes without saying that an attitude or conduct which has the effect of perpetuating a racially discriminatory situation is not to be condoned. Such considerations, however, can have nothing to do with the proper disposition of challenges to the legality of procedures by which government undertakes to identify and cure the asserted evil.

. At the time of the adoption, May 15, 1968, by the Human Relations Commission of the document entitled “Recommended Elements of a School Desegregation Plan” which contained its segregation definition here in dispute, the applicable law relative to effectuation of administrative regulations by publication was Sec. 21 of the Administrative Agency Law, 71 P.S. 1710.21. If compliance with this section was requisite and not performed, Sec. 21 provided that the document had “no effect”. The Commission, presumably because it did not consider the document a regulation, did not comply. The Commonwealth Documents Law, 45 Pa.C.S.A. § 1101, et seq., (Supp.1977-1978), was adopted July 31, 1968 and became effective generally on July 1, 1969, with the effective date of several sections being controlled by the date of publication of the first issue of the Pennsylvania Bulletin. Under the Documents Law it was obligatory on an agency to deposit with the Legislative Reference Bureau certified copies of all unfiled administrative regulations in effect on the effective date of the Documents Law, “in default of which such administrative regulations shall become invalid”. 45 Pa.C.S.A. § 1402 (Supp.1975). The current validity of the unfiled document here challenged must be determined in light of the Commonwealth Documents Law. The Court’s reliance, ante at 680, n. 31, on Section 208 of the Documents Law for the proposition that that act is here inapplicable is misplaced. Section 208, 45 Pa.C.S.A. § 1208, provides that a regulation announced after the effective date of the Documents Law is not valid for any purpose until filed by the Legislative Reference Bureau, as a prelude to publication; the section does not speak to the current validity of a regulation which has had “no effect” under prior law. It is noted, however, that the definitions of the term “regulation” contained in the two statutes are essentially the same.
(The Commonwealth Documents Law has since been amended by the Act of July 9, 1976, P.L. 877, No. 160 (effective September 7, 1976). While the 1976 act effectuates a substantial reorganization and revision of the 1968 act, the substantive provisions of the earlier statute which are pertinent to the instant case, viz., sections 102-208 (45 Pa.C.S.A. §§ 1102-1208), remain unchanged. Although the title of the act (“Commonwealth Documents Law”) has been eliminated by the Act of 1976, this opinion nevertheless uses that title for the sake of convenience.)

. See Texaco v. F. P. C., 412 F.2d 740, 744 (3d Cir. 1969), for a discussion of the purpose of the parallel federal statute, the Administrative Procedure Act, 5 U.S.C. § 551 et seq. (1970). See also W. Zeiter, “The New General Rules of Administrative Practice and Procedure and the Commonwealth Documents Law,” 44 Pa.B.Q. 109 (1972); A. Bonfield, “Some Tentative Thoughts on Public Participation in the Making of Interpretative Rules and General Statements of Policy under the APA,” 23 Admin.L.Rev. 101, 104-105 (1971).

. The statute defines the term “regulation” as follows;
“ ‘Regulation’ means any rule or regulation, or order in the nature of a rule or regulation . . .” 45 Pa.C.S.A. § 1102(12).
Since the word is defined in terms of itself, it is of little value.

. The Commonwealth Court commented in this case that “[t]o require a District, on pain of violating a Commission order, to file a plan conforming in all respects to its ‘Recommended Elements’ seems to us to treat the recommendations as something more than mere guidelines.” 20 Pa.Cmwlth. 555, 561, 342 A.2d 464, 468. In an unusual, if not unprecedented, statement the court then “assumed” that the Commission “meant” to make provision for “justification for deviations therefrom.” Id. It should be noted, however, that the court’s mandate simply affirms the Commission’s order.

. It is revealing to note that in School District of Philadelphia, supra, a case decided by the Commonwealth Court after it had decided the instant one, the court apparently considered itself unconstrained by its “mere policy statement” holding in the present case. That is, its order in School District of Philadelphia flatly requires the school district to submit a desegregation plan which cures “racial imbalance as defined by Recommended Element No. 3 of the Commission . . .” Id. at 342, 352 A.2d at 216. To the same effect, see Pennsylvania Human Relations Commission v. School District of Pittsburgh, 28 Pa.CmwIth. 154, 367 A.2d 829 (decided January 13, 1977). It seems to me impossible to avoid the conclusion that the Commonwealth Court does in fact accord to the Commission’s segregation definition the status of a substantive rule of law.

. I cannot agree with the majority that Pacific Gas supports its result in this case. Entering into the circuit court’s holding in that case that notice and comment procedures need not be complied with by the Federal Power Commission was the fact, adverted to by the court, that the FPC’s policy establishing natural gas curtailment priorities had a relatively insignificant impact on regulated parties. 506 F.2d at 42. Certainly no one would argue that the impact of the de facto segregation definition before us is less than substantial.

. It is to be noted, however, that there is no support in the record in this case for the majority’s statement, supra at 678, n. 27, that the Commission has sanctioned desegregation plans which are in non-compliance with the 30 percent definition. As to the quoted excerpt in the same note from the Commonwealth Court’s decision regarding the Commission’s permitting a deviation in the instant case, suffice it to say that the Commission’s final order makes no such allowance for departures from the required mathematical ratio.

. The Commission has acknowledged the “regulation” status of others of its rules which operate in this manner, and has complied with the requirements of the Commonwealth Documents Law with respect thereto. See, for example, the Commission’s regulation appearing at 16 Pa.Code § 41.102 (adopted May 16, 1975, 5 P.A. B. 1798):
“A written or unwritten employment policy or practice which excludes from employment applicants or employes because of pregnancy is in prima facie violation of the Pennsylvania Human Relations Act (43 P.S. § 951 et seq.). The burden shifts to an employer to justify, and clearly demonstrate, the factual basis for his or her assertion that exclusion from employment because of pregnancy is warranted.”

. In Pickus, the Federal Board of Parole argued, inter alia, that its rule establishing factors which it would consider in exercising its discretion to parole eligible prisoners was merely a general statement of policy, not a regulation. The Court of Appeals for the District of Columbia disagreed:
“Although [the guidelines] provide no formula for parole determination, they cannot help but focus the decision-maker’s attention on the Board-approved criteria. They thus narrow his field of vision, minimizing the influence of other factors and encouraging decisive reliance upon factors whose significance might have been differently articulated had [notice and comment] been followed.” 507 F.2d at 1113.

. The following from Uniontown, supra, is instructive:
“The Commission proved a violation of the Human Relations Act in all three hearings involved here as follows: counsel for the Commission called as a witness Mr. Richard B. Anliot, the Commission’s Director of the Education Division. Mr. Anliot, in his examination, introduced himself, testified to the existence of the ‘Desegregation Guidelines for Public Schools’ and the ‘Recommended Elements of a School Desegregation Plan’, and finally reviewed the statistics of racial distribution in appellants’ schools, statistics which had been furnished by the school districts themselves, pointing out in what particular the statistics varied from the distribution permitted under the Commission’s definition. The Commission then rested. Admittedly, no investigation was conducted into the operation of any district beyond ascertainment of the above statistical data.” 455 Pa. at 59-60 n. 8, 313 A.2d at 160.

. Pennsylvania Human Relations Commission v. Chester School District, 427 Pa. 157, 233 A.2d 290 (1967), cited by the majority, is not authority for the Commission to ignore the necessity for a properly adopted regulation. There, evidence of racial imbalance was so pronounced that the Court concluded that the statistics “satisfy any definition of de facto segregation.” Id. at 178, 233 A.2d at 301.

. Since judicial review of the exercise of “legislative” administrative power is restricted, procedures prescribed for rulemaking offer affected parties the only significant opportunity to challenge the wisdom of administrative policy. See A. Bonfield, “Public Participation in Federal Rulemaking Relating to Public Property, Loans, Grants, Benefits, or Contracts,” 188 U.Penn.L.Rev. 540, 541-542 (1970).

. Cf. State Board of Pharmacy v. Cohen, 448 Pa. 189, 292 A.2d 277 (1972). In that case, the Board argued, inter alia, that it had authority to determine what constituted “grossly unprofessional conduct” under the Pharmacy Act for purposes of suspension and revocation of a pharmacist’s license. Not disputing that point, this Court, speaking through Mr. Justice ROBERTS, held that in the absence of an exercise of administrative rulemaking power, the quoted statutory language was unconstitutionally vague:
“[T]he Board contends that its duty to ‘regulate the practice of pharmacy’ gives it the power on a case by case basis to *368‘make an ongoing evaluation of what constitutes unprofessional conduct.’ We believe that such determinations may only be made by statute or rule. The exercise of the Board’s power on a case by case basis not based on statute or rule suffers from constitutional infirmities of vagueness.” Id. at 200-201, 292 A. 2d at 282-283 (Footnotes omitted).
See also, Hornsby v. Allen, 326 F.2d 605 (5th Cir. 1964); Holmes v. New York City Housing Auth., 398 F.2d 262 (2nd Cir. 1968).