Court Opinion

ID: 9766440
Source: CourtListenerOpinion
Date Created: 2023-08-29 04:48:30.094796+00
Date Added: 2024-06-11T07:30:22.627269
License: Public Domain

SMITH, Judge,
dissenting.
I dissent from the Majority’s holding that Claimant failed to demonstrate his due process rights were violated in this case. This Court has consistently recognized the principle that the constitutional guarantee of due process of law applies equally to administrative agency proceedings, Begis v. Industrial Board of the Department of Labor and Industry, 9 Pa.Commonwealth Ct. 558, 308 A.2d 643 (1973), and further that due process also includes the requirement that a litigant know how the proceedings will be conducted. See Department of Health v. Brownsville Golden Age Nursing Home, Inc., 103 Pa.Commonwealth Ct. 449, 520 A.2d 926 (1987).
I find nothing more persuasive than the proposition that a claimant shall possess the right to have his or her case decided by the factfinding referee in a workers’ compensation proceeding where no compelling or justifiable reason exists for the Bureau of Workers’ Compensation to substitute that referee for another referee to render the decision.1 Likewise, I strongly disagree with the Majority’s reference to and reliance upon unemployment compensation case law, where the Board *658is the ultimate factfinder, to support the Majority’s view since it is the referee in workers’ compensation proceedings, and not the Board, who serves as the ultimate factfinder vested with sole authority and power to make credibility determinations, to weigh the evidence, and to make findings of fact and conclusions of law. Moreover, this is not a case as the Majority writes where one tribunal assesses credibility and renders a decision whereas another tribunal has received the actual testimony. This practice has no place in workers’ compensation law.
I.
Referee Kathleen Vallely presided at all of the scheduled hearings in this matter on February 5, February 25, and April 2, 1991 where the sole issue to be decided was whether Claimant was injured during the course of his employment. On April 2, 1991, Referee Vallely closed the record and thereafter requested briefs from counsel for her review. On May 30, 1991, however, it was Referee Roney who issued a decision dismissing Claimant’s claim petition, finding Employer’s witnesses’ testimony more credible than that of Claimant’s witnesses and concluding that Claimant did not have a contract for transportation to and from work, had a fixed place of work at the job site where he worked for four months preceding the accident, and was not furthering Employer’s interest at the time of the injury.
Claimant validly argues that he was denied his due process rights to a fair hearing because he was not given notice of Referee Vallely’s replacement or an opportunity to object prior to entry of the decision by Referee Roney and because there was no compelling or justifiable reason to substitute the factfinding referee.2 The Board rejected Claimant’s challenge, concluding that previous decisions of this Court have approved *659the use of substitute referees pursuant to Section 415 of The Pennsylvania Workmen’s Compensation Act (Act), Act of June 2, 1915, P.L. 736, as amended, 77 P.S. § 851. Section 415 provides:
Transfer of petition to another referee
At any time before an award or disallowance of compensation or order has been made by a referee to whom a petition has been assigned, the department may order such petition heard before any other referee. Unless the department shall otherwise order, the testimony taken before the original referee shall be considered as though taken before the substituted referee.
Section 504 of the Administrative Agency Law, 2 Pa.C.S. § 504, provides that “no adjudication of a Commonwealth agency shall be valid as to any party unless he shall have been afforded reasonable notice of hearing and an opportunity to be heard.” Furthermore, in an administrative proceeding, the broadest dimensions of constitutional protection must be provided to the factfinding process. Roche v. State Board of Funeral Directors, 63 Pa.Commonwealth Ct. 128, 437 A.2d 797 (1981). Here, the Bureau failed to explain the reason for replacing Referee Vallely after the close of the record and instead merely asserts to this Court that although the record fails to indicate why Referee Roney was unavailable to hear the case, it was necessary for Referee Vallely to preside at the hearings “to keep the case moving” and that the Bureau has absolute discretion to reassign cases at any time under Section 415.
The United States Supreme Court has stated that, “[t]he requirement of a ‘full hearing’ has obvious reference to the tradition of judicial proceedings in which evidence is received and weighed by the trier of the facts.” Further, the hearing, in an administrative proceeding, should afford the safeguard, among others, that the one who decides shall be bound in good conscience to consider the evidence and to arrive at conclusions uninfluenced by extraneous considerations. Morgan v. United States, 298 U.S. 468, 480, 56 S.Ct. 906, 911, 80 L.Ed. 1288 (1936). Therefore, generally, “[t]he one who decides *660must hear.” Id. at 481, 56 S.Ct. at 912. Due process however does not require that in all administrative proceedings the actual determinations be made by the person hearing the evidence. Morgan; Utica Mutual Ins. Co. v. Vincent, 375 F.2d 129 (2d Cir.1967), cert. denied, 389 U.S. 839, 88 S.Ct. 63, 19 L.Ed.2d 102 (1967). See also Majority Opinion, page 957, referencing unemployment compensation law and citing Peak v. Unemployment Compensation Board of Review, 509 Pa. 267, 501 A.2d 1383 (1985).
Moreover, the general principle that a witness shall be seen and heard by the decider of facts is such an important one that it should not be lightly abandoned. Smith v. State, 214 N.Y. 140, 143, 108 N.E. 214, 215 (1915). Further, considerations of administrative efficiency and convenience must not be allowed to devour one’s due process rights to a fair and meaningful agency determination. Wampler v. Review Board of Indiana Employment Security Div., 498 N.E.2d 998 (Ind. Ct.App.1986).
Due to the Bureau’s failure to give notice of Referee Vallely’s substitution before the decision, Claimant was precluded from raising any objections and presenting any procedural requests which may have been necessitated prior to entry of the referee’s decision. The failure of Claimant to specify precisely what objections he would have raised had he been given prior notice in no manner defeats his entitlement to due process in the initial proceedings before the referee as the Majority implies, or to challenge on appeal the legality of the procedures followed. In Bogowich v. State Workmen’s Ins. Fund, 105 Pa.Superior Ct. 366, 161 A. 623 (1932), the Superior Court held that since no objection was made to the rendering of an adjudication by the substitute referee, no question of law as to the legality of the procedure was raised. In Wilder v. Jones & Laughlin Steel Corp., 8 Pa. Commonwealth Ct. 505, 303 A.2d 537 (1973), this Court adopted the observations made by the court in Bogowich, stating that:
We do not discover anything in the record indicating that any objection was made when, upon the incapacitation of Referee Jones, the case was referred for adjudication to *661Referee Baldrige; nor any question raised before the Board as to the regularity of the proceedings before the latter referee; nor any request made to him that he call any of the witnesses before him, in order that he might see and hear them; nor any request to the Board for a hearing de novo. The appeal, then, appears to us to raise no question of law as to regularity of the procedure. Appellant should not be heard to complain of a matter of practice to which he made no objection until after the award was made. (Emphasis added.)
Id. at 510, 303 A.2d at 540.
It becomes apparent from the court’s observations that a claimant cannot object prior to a substitution unless that claimant is given prior notice of the substitution. Nevertheless, this Court has held that an objection to factual findings made by a substitute referee must be timely raised to preserve the issue. Wilder. Here, the Bureau’s lack of notice of substitution precluded Claimant from making a timely objection. Consequently, any practice short of notice of substitution of the factfinding referee and an opportunity to object affords a claimant less than a full and fair opportunity to be heard and to know as well how the proceeding will be conducted.3
II.
The Bureau maintains that the procedures employed in this case were consistent with established precedent which has *662upheld the Bureau’s authority to substitute referees. In Arena v. Packaging Systems Corp., 510 Pa. 34, 507 A.2d 18 (1986), the Pennsylvania Supreme Court held that where the substitute referee assigned to render a decision due to retirement of the first referee did not have an opportunity to observe the witnesses, the same deference should be given to his findings, even though the substitution may have removed the first reason for giving deference to the factfinding referee which is that the one who observes the witnesses is in the best position to rule on the credibility of those witnesses.
Claimant’s challenge though is not to the Bureau’s authority under Section 415 to substitute a referee or the deference to be given that referee; rather, it is to the Bureau’s implementation of Section 415 in cases where the factfinding referee is substituted prior to decision where there is no compelling or justifiable reason for the substitution.4 Although Section 415 does not expressly restrict the Bureau’s authority to substitute a factfinding referee only in cases of compelling or justifiable reasons, such restriction may be implied. Recognizing a basic principle of statutory construction, this Court must presume that the legislature did not intend to violate constitutional protections in enacting a statute. Section 1922(3) of the Statutory Construction Act of 1972, 1 Pa.C.S. § 1922(3).
In all prior decisions by courts of this Commonwealth where substitute referees’ findings were challenged on the same or similar grounds presented here, the causes for referee substi*663tutions included referee resignation, death, retirement, incapacitation, recusal for ethical reasons or other compelling or justifiable grounds. See, e.g., McAfee v. Workmen’s Compensation Appeal Board (Allegheny General Hosp.), 134 Pa.Commonwealth Ct. 562, 579 A.2d 1363 (1990) (referee substitution due to emergency created by workload increase); Ogden v. Workmen’s Compensation Appeal Board (Carolina Freight Carriers Corp.), 127 Pa.Commonwealth Ct. 286, 561 A.2d 837 (1989), appeal denied, 524 Pa. 635, 574 A.2d 75 (1990) (referee death); A & P Tea Co. v. Workmen’s Compensation Appeal Board (Giglio), 114 Pa.Commonwealth Ct. 507, 539 A.2d 51 (1988) (referee substitution upon remand due to referee reassignment to another county); Rockwood Area School Dist. v. Workmen’s Compensation Appeal Board (Tipton), 98 Pa.Commonwealth Ct. 309, 511 A.2d 263 (1986), appeal denied, 515 Pa. 596, 528 A.2d 604, 605 (1987) (referee death); Thomas v. Workmen’s Compensation Appeal Board (State Farm Ins. Cos.), 78 Pa.Commonwealth Ct. 274, 467 A.2d 430 (1983) (referee reassignment upon remand due to ethical concerns); King Kup-Schoener Candies, Inc. v. Workmen’s Compensation Appeal Board, 10 Pa. Commonwealth Ct. 351, 310 A.2d 717 (1973) (referee resignation); Wilder (referee death); Duquesne Brewing Co. v. Dyda, 8 Pa.Commonwealth Ct. 531, 303 A.2d 541 (1973) (referee resignation); Bogowich (referee incapacitation). Substitution was upheld in these cases either because the issue was waived or due to referee deference.
In all reported cases analyzed, the record demonstrated that a compelling or justifiable event or circumstance occurred which triggered reassignment or substitution. The record in the matter sub judice is devoid of any event or circumstance which justifies the replacement of Referee Vallely who conducted all three of the hearings held in this case, observed the witnesses’ demeanor, and was in the best position to rule on the credibility of those witnesses. As indicated, in workers’ compensation cases, the referee is the ultimate factfinder with sole power to make credibility determinations and to weigh the evidence and is also empowered to reject one witness’ testimony over that of another. Kraemer v. Workmen’s Com*664pensation Appeal Board (Perkiomen Valley School Dist.), 82 Pa.Commonwealth Ct. 469, 474 A.2d 1236 (1984).
Thus this Court should hold that the Bureau abuses the discretion granted to it by Section 415 when, under the specific circumstances presented in the matter sub judice, the Bureau without notice to the parties and an opportunity to object substitutes the factfinding referee with another referee to render the decision where no compelling or justifiable reason exists to replace the factfinding referee.5 Anything less results in the denial of Claimant’s due process rights to a full and fair hearing. Accordingly, the Board’s order should be vacated and this matter remanded to the Board to direct Referee Vallely to make necessary factual findings and to issue a new decision consistent "with those findings.

. In an order dated September 28, 1992, this Court invited the Workmen's Compensation Appeal Board and the Bureau oí Workers’ Compensation to file briefs addressing the practice and procedure concerning substitution of referees. Only the Bureau filed a brief in this matter. (At no stage of the appeals process has the Board or Bureau sought to supplement the record or 1o explain that a compelling or justifiable reason necessitated replacement of the factfinding referee.)

. The precise issue presented has not been directly confronted by this Court; thus, where Pennsylvania law affords little or no authority as to the issue in question, the law of other jurisdictions, although not binding on this Court, may be considered as guidance. Marchione v. Unemployment Compensation Board of Review, 57 Pa.Commonwealth Ct. 439, 426 A.2d 735 (1981).

. When reassignment of a case is agreed to by the Bureau, the parties and the referee, the Bureau is required to give notice of reassignment to all the parties pursuant to 34 Pa.Code § 131.22(a). The Bureau argues that it was not required to give notice of reassignment in this case because the Bureau never formally reassigned the case to Referee Vallely and there was no agreement of reassignment. However, if the Bureau is required to give notice of reassignment upon agreement, it logically follows that the Bureau must give notice in cases of unilateral reassignment or substitution to provide an opportunity to object, most notably in instances where ethical or procedural concerns may be raised. Also, this Court attaches little significance to the Bureau's contention that Claimant’s failure to object to Referee Vallely presiding over the hearings somehow diminishes Claimant’s position.

. The concerns raised by Claimant are reflected in enactment of Section 554(d) of the Federal Administrative Procedure Act, 5 U.S.C. § 554(d), which provides that ”[t]he employee who presides at the reception of evidence ... shall make the recommended decision or initial decision ... unless he becomes unavailable to the agency.” (Emphasis added.) Section 554(d) is instructive in interpreting Section 415 of the Act.
Section 554(d) has been interpreted to allow an agency, once the examiner who presided at the hearings becomes unavailable, to dispense with a de novo hearing of testimony before the new examiner only when, demeanor evidence is unnecessary or of little consequence in deciding the case. See Millar v. Federal Communications Comm'n, 707 F.2d 1530 (D.C.Cir.1983); Van Teslaar v. Bender, 365 F.Supp. 1007 (D.Md.1973).

. The Pennsylvania Supreme Court has defined an abuse of discretion as follows: “not merely an error of judgment, but if in reaching a conclusion the law is overridden or misapplied' or the judgment exercised is manifestly unreasonable, or the result of partiality, prejudice, bias, or ill-will, as shown by the evidence or the record, discretion is abused.” Hainsey v. Pennsylvania Liquor Control Board, 529 Pa. 286, 297, 602 A.2d 1300, 1305 (1992) (emphasis in original).