Court Opinion

ID: 9729998
Source: CourtListenerOpinion
Date Created: 2023-08-26 14:56:44.67781+00
Date Added: 2024-06-11T18:26:03.155820
License: Public Domain

REGAN, J.
I dissent. In the proceeding in mandate the trial court ruled sections 3060 and 3066 of the Vehicle Code are violative of due process *994of law “because four of the nine members of the Board are, by statute,... new car dealers, who may reasonably be expected to be antagonistic to franchisors such as American Motors.” The majority, in sustaining the trial court, asserts “the objectionable feature of dealer-membership on the Board is the distinct possibility that a dealer-manufacturer controversy will not be decided on its merits but on the potential pecuniary interest of the dealer-members.” Further, the majority states: “The state may not establish an adjudicatory tribunal so constituted as to slant its judicial attitude in favor of one class of litigants over another.” Following this observation to its logical conclusion the presence on the board of one dealer would be violative of due process of law. This conclusion is flawed in a number of respects. It is sheer speculation to conclude, absent a finding of actual bias, that a dealer-member has a pecuniary interest antagonistic to the manufacturer in disputes between dealer and manufacturer. It is more reasonable to conclude that a dealer-member would “slant its judicial attitude” against a competitive dealer.
I am in agreement with the holding in Rite Aid Corp. v. Bd. of Pharmacy of State of N.J. (D.N.J. 1976) 421 F.Supp. 1161. There a pharmacy chain store system sought to declare unconstitutional and to enjoin the enforcement of certain New Jersey statutes regulating the practice of pharmacy. The pertinent state law provides memberships in the board of pharmacy shall consist of five members who shall be registered pharmacists actually engaged in conducting a pharmacy and who shall continue in the practice of pharmacy during the term of his office.
Rite Aid contended the statute facially unconstitutional because it requires that pharmacists regulate their business competitors and is unconstitutional as applied to Rite Aid and chain stores in general as independent pharmacists are required to regulate chain store pharmacies. (The court found Rite Aid’s constitutional claims to be without merit.)
Thus, argued Rite Aid, the board members are necessarily biased and can neither be impartial in their regulatory functions nor in adjudicating alleged violations of the pharmacy act by Rite Aid and other non Board-member pharmacists.
The court took notice of Turney v. Ohio (1927) 273 U.S. 510 [71 L.Ed. 749, 47 S.Ct. 437, 50 A.L.R. 1243], relied upon by the majority here as a *995“landmark case on due process limitations upon such pecuniary conflicts of interest,” and noted in Rite Aid, supra, 421 F.Supp. pages 1169-1170:
“It is fundamental that one accused of violating the law is entitled to a fair trial in a fair tribunal. Tumey v. Ohio, 273 U.S. 510, 47 S.Ct. 437, 71 L.Ed. 749 (1927); In re Murchison, 349 U.S. 133, 75 S.Ct. 623, 99 L.Ed. 942 (1955). In achieving that standard we have sought to prevent not only actual bias, but also the appearance of bias. In re Murchison, supra at 136, 75 S.Ct. 623. To this end, the Supreme Court has stated that ‘every procedure which would offer a possible temptation to the average man as a judge . . . not to hold the balance nice, clear, and true between the state and the accused, deprives the latter due process of law.’ Tumey v. Ohio, supra, 273 U.S. at 532, 47 S.Ct. at 444. It is clear that where the adjudicator has a substantial pecuniary interest in the outcome, the probability of actual bias is too high to be constitutionally tolerable. Withrow v. Larkin, 421 U.S. 35, 46-47, 95 S.Ct. 1456, 43 L.Ed.2d 712 (1975); Gibson v. Berryhill, 411 U.S. 564, 579, 93 S.Ct. 1689, 36 L.Ed.2d 488 (1973).
“We do not believe that the Board, consisting as it does of five pharmacists and two lay persons as required by N.J.S.A. 45:14-1, creates a situation of probable bias in the regulation of pharmacists. The claim made by Rite Aid is similar to the argument advanced by the plaintiff in Kachian v. Optometry Examining Board, 44 Wis.2d 1, 170 N.W.2d 743, 747-48 (1969). In this argument Rite Aid is not claiming actual bias but rather contends that ‘. . . there is an inbuilt, inescapable even if indirect, financial interest involved when [a pharmacist] board member sits in judgment on a fellow-[pharmacist].’ Kachian, 170 N.W.2d at 747-48.
“Admittedly, the practice and conduct of a retail pharmacy primarily involves commercial activity in which various retail pharmacies compete for customers. Cf. Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, Inc., 425 U.S. 748, 96 S.Ct. 1817, 48 L.Ed.2d 346 (1976) . However, mere theoretical competition alone has never been a sufficient predicate for an inductive conclusion of probable economic bias. Apoian v. State, 235 N.W.2d 641 (S.D. 1975); Blanchard v. Michigan State Bd. of Exam, in Optometry, 40 Mich.App. 320, 198 N.W.2d 804 (1972); Kachian v. Optometry Examining Board, supra.
“Rite Aid, however, argues that Gibson v. Berryhill, supra, and Wall v. American Optometric Association, Inc., 379 F.Supp. 175 (N.D.Ga.) (3 judge dist. ct.) aff'd mem. 419 U.S. 888, 95 S.Ct. 166, 42 L.Ed.2d 134 (1974), support its facial attack on the N.J.S.A. 45:14-1. We cannot agree.
*996“Gibson v. Berryhill involved a disciplinary proceeding against a non-self-employed optometrist who was not, and could not become a member of the Alabama Optometric Association. The disciplinary proceeding was conducted by the Alabama Board of Optometry whose members were limited by statute to members of the Association, which itself, limited its members to self employed optometrists. Thus, out of Alabama’s 192 practicing optometrists, only the 100 Association members were eligible for appointment to the Board. On that record, the Supreme Court agreed ‘that the pecuniary interest of the members of the Board of Optometry had sufficient substance to disqualify them, given the context in which [the] case arose.’ 411 U.S. at 579, 93 S.Ct. at 1698.
“In Wall v. American Optometric Association, Inc., supra, the members of the Georgia State Board of Examiners in Optometry were traditionally chosen by the governor from among the members of the Georgia Optometric Association, a private organization which was composed of ‘dispensing’ as contrasted with ‘prescribing’ optometrists. Thus, out of Georgia’s 300 optometrists, only the 200 members of the Association were eligible for appointment to the Board which regulated the practice of optometry. In this circumstance, the district court found that the board members had a substantial pecuniary interest and hence could not be ‘called disinterested in the outcome of plaintiffs’ license revoca ting proceedings.’ 379 F.Supp. at 189.
“It is clear that both Gibson and Wall involve constitutional attacks addressed not to the face of the statutes involved, but rather to the manner in which they were applied. In neither case did the courts rest their holdings on the fact that mere board membership of individuals in the identical profession as those to be regulated, created a temptation to be biased.
“There is nothing that appears on the face of N.J.S.A. 45:14-1 to indicate the presence of that kind of substantial pecuniary interest which was found to disqualify board members in Gibson and Wall. As in Gibson and Wall, to determine if such an interest exists, we must look to more than the mere words of the statute. Evidence is required. Recognizing that the plaintiffs here attack the statute on both facial and ‘as applied’ grounds, we therefore ordered the taking of evidence to afford the plaintiffs an opportunity to prove, if they could, the existence of the required substantial pecuniary interest. We treat with that argument infra.
*997“In connection with the instant facial attack, however, we have been shown no basis for us to require the disqualification of board members just by reason of their sharing the same profession as plaintiffs. Nor have we been shown any authority which holds that, as a matter of law, mere self regulation of a profession without more, violates due process. We decline to so hold and therefore reject Rite Aid’s facial argument.” (Fns. omitted.)
In Hortonville Dist. v. Hortonville Ed. Assn. (1976) 426 U.S. 482, 491 [49 L.Ed.2d 1, 8, 96 S.Ct. 2308], the Supreme Court has recently reiterated general language about due process and disqualifying bias in one case cannot reliably be applied to another case without further analysis. “We must focus more clearly on first, the nature of the bias respondents attribute to the Board, and second, the nature of the interest at stake in this case.”
The board contends in its closing brief that: “As expressed in a recent law review article: ‘An analysis of the circumstances which permit conclusive presumptions of invalidity [because of the possibility of bias on the part of the decision-maker] indicates that it is the degree of monetary benefit accruing to the decision maker, or the degree of prejudgment, or the degree of previously formulated hostility or animosity which determines whether the decision is to be disregarded because of bias.’ F. Davis, Withrow v. Larkin and the ‘Separation of Functions’ Concept in State Administrative Proceedings, 27 Ad.L.Rev. 407, 409 (1975). Emphasis in original; footnotes deleted, brackets supplied.”
In commenting upon the situation where there is a dealer and manufacturer dispute the majority points to the mandated dealer-board members, and the lack of counter balance in mandated manufacturer members. We must note on this point the appendix A to appellant’s opening brief, a declaration concerning the drafting, negotiations and movement of the legislation creating the board. It declares: [1] “One of the major issues . . . before successful passage was the question of adding manufacturer’s representatives on the . . . Board.” This was declined by their representatives allegedly because it would create potential antitrust liabilities. Thus the majority’s claim that “The evil here lies in the state’s insistence that under all circumstances the adjudicatory deck of cards be stacked in favor of car dealers” is negated. In this dissent I stress the importance of having members on the board with the expertise to understand all aspects of each case before it. Sans such members a board can become an ineffectual group directed in its deliberations and decisions by an executive officer or consultant.
*998I cannot accept the judgment of the majority which is predicated on an unfounded assumption of “antagonism” by the board toward manufacturers. The dealer-members have not been shown to possess a pecuniaiy interest which would bias them under any judicially accepted test. It has not been established that the board is not an impartial tribunal for franchise termination protests.
I would reverse the judgment.
Á petition for a rehearing was denied June 15, 1977. Regan, J., was of the opinion that the petition should be granted. Appellant’s petition for a hearing by the Supreme Court was denied August 4, 1977. Bird, C. J., was of the opinion that the petition should be granted.