Court Opinion

ID: 9390311
Source: CourtListenerOpinion
Date Created: 2023-04-27 15:05:32.562552+00
Date Added: 2024-06-11T17:18:33.575689
License: Public Domain

RENDERED: APRIL 27, 2023
                                                           TO BE PUBLISHED

               Supreme Court of Kentucky
                                2022-SC-0025-DG

FRIENDS OF LOUISVILLE PUBLIC ART,                                    APPELLANTS
LLC; LOUISVILLE HISTORICAL LEAGUE,
INC.; MARK THOMPSON; GERALD R.
TONER; DEANNA M. O’DANIEL; JAMES
PRICHARD; CHARLES NICHOLAS MORRIS;
MARTINA KUNNECKE; AND STEVE WISER

                  ON REVIEW FROM COURT OF APPEALS
V.                        NO. 2020-CA-1298
               JEFFERSON CIRCUIT COURT NO. 19-CI-003550

LOUISVILLE/JEFFERSON COUNTY METRO                                     APPELLEES
HISTORIC LANDMARKS AND
PRESERVATION DISTRICTS COMMISSION;
LOUISVILLE/JEFERSON COUNTY METRO
GOVERNMENT; LOUISVILLE METRO
GOVERNMENT CHEROKEE TRIANGLE
ARCHITECTURAL REVIEW COMMITTEE

         OPINION OF THE COURT BY CHIEF JUSTICE VANMETER

                        REVERSING AND REMANDING

      An administrative hearing in Kentucky must provide a modicum of due

process so as to avoid being arbitrary. Typically, judicial review is limited to

determining whether the administrative body acted within its granted powers,

afforded the parties procedural due process, and made determinations

supported by substantial evidence. In this case, the primary issue we resolve
is whether the Court of Appeals and Jefferson Circuit Court erred in affirming

the Louisville/Jefferson County Metro Historic Landmarks and Preservation

Districts Commission’s (“Landmarks Commission”) approval of the

Louisville/Jefferson County Metro Government’s (“Louisville Metro”) 2022

application to remove a statue when Louisville Metro employees participated as

members of the Commission. We hold that the lower courts did err and

therefore reverse and remand to the circuit court with directions to set aside

the Commission’s decision as arbitrary.

                       I.     Facts and Procedural Background

      In August 2018, Louisville Mayor Greg Fischer announced that the

Louisville Metro intended to move a statue located in the historic Cherokee

Triangle Preservation District.1 In order to do so, however, a certificate of

appropriateness was required from the Cherokee Triangle Architectural Review

Committee (“ARC”).2 Accordingly, in December 2018, Louisville Metro filed an

application with the ARC.

      1    The Louisville Courier-Journal reported the following Twitter tweet from Mayor
Fischer:
             @GregFischerLou: I am announcing that the city will be moving
      the Castleman & Prentice statues. My decision is based on the findings
      of our Public Art & Monuments Advisory Committee — Louisville must
      not maintain statues that serve as validating symbols for racist or
      bigoted ideology. 1/8
      4:01 PM · Aug 8, 2018.
Louisville Courier-Journal, Aug. 8, 2018 (https://www.courier-journal.com/story/
news/local/2018/08/08/louisville-move-controversial-castleman-prentice-
statues/939006002/) (last visited Mar. 23, 2023); See “Erasing bigotry, not the
history,” Courier-Journal, Aug. 10, 2018, p. A3.
      2 Under LOUISVILLE/JEFFERSON CNTY., KY., METRO GOV’T ORDINANCES
(“Ordinance”) § 32.252, Louisville Metro created the Cherokee Triangle Preservation
                                             2
      By ordinance, the ARC is comprised of seven members: the Director of

the Department of Codes and Regulations or his/her designee, two members of

the Landmarks Commission appointed by its Chairperson, and four members

who are appointed by the Commission and approved by the Louisville Metro

Council. Ordinance § 32.253(C). At a January 2019 hearing on the

application, six members of the ARC were present. One of those members was

David Marchal, a Louisville Metro officer and employee, who occupied the

position of Deputy Director of Develop Louisville. The parties agree that this

position is a position subject to appointment and removal by the Mayor.3 At

the hearing, a Louisville Metro Historic Preservation Officer presented a report

concerning the application and public comment was permitted. At the

conclusion, the ARC deadlocked, with three votes, including Marchal’s, to

approve the application and three to deny. Due to the tie vote, the application

was deemed denied, Ordinance § 32.257(I), and the ARC failed to issue any

required findings of fact. Ordinance § 32.257(J).

      Louisville Metro timely appealed this denial to the Landmarks

Commission. Like the ARC, the Landmarks Commission is a creature of

District as a Historic Preservation District. The Preservation Ordinances provide that
before any exterior alteration or demolition, including the moving, of a structure may
occur, a certificate of appropriateness is required. Ordinance § 32.252(D), §
32.257(B). These ordinances are authorized under Kentucky Revised Statute (“KRS”)
82.026, which permits “[t]he legislative body of any city [to] enact ordinances
establishing local historic preservation commissions[.]”
      3  This fact was admitted in oral argument before this Court. Additionally,
Friends pled in its complaint that “Marchal is an officer and employee of the applicant
Louisville Metro.” Louisville Metro’s answer admits this fact.

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ordinance. Ordinance § 32.254(A). Its members consist of 13 members, ten of

whom are appointed by the Mayor and approved by the Metro Council; the

Director of the Department of Codes and Regulations or his/her designee: the

Planning Director of the Louisville and Jefferson County Department of

Planning and Design Services; and one member appointed by the President of

the Council and who is not a Council member. Significantly, participants in

the appeal decision were Robert Kirchdorfer, Director of the Department of

Codes and Regulations, and Emily Liu, Planning Director of the Louisville and

Jefferson County Department of Planning and Design Services. The parties

agree that, like Marchal, both Kirchdorfer and Liu occupy positions subject to

appointment and removal by the Mayor.4 Following its hearing, at which much

discussion addressed the failure of the ARC to make required factual findings,

the Commission voted 5-3 to approve the application. Kirchdorfer and Liu

voted with the majority.5

      Following the Landmarks Commission decision, the parties opposing the

application filed a complaint and appeal with the Jefferson Circuit Court. The

       4 Again, these facts were admitted in oral argument before this Court.

Additionally, Friends pled in its complaint that each Liu and Kirchdorfer is “an officer
and employee of the applicant Louisville Metro.” Louisville Metro’s answer admits
these facts.
      5   Kirchdorfer, as Director of the Department of Codes and Regulations, serves
ex officio, on both the ARC and the Landmarks Commission. Since any member who
serves on both the ARC and the Landmarks Commission is prohibited from voting
twice, Ordinance § 32.257(K), Kirchdorfer strategically did not vote when the ARC
considered the application. The record is unclear as to whether Kirchdorfer was
present at the ARC hearing or appointed a designee, as permitted by Ordinance §
32.253(C), to sit. By contrast, Landmarks Commissioners Fuller and Morris who had
voted to deny the application at the ARC hearing were disqualified from voting at the
Landmarks Commission hearing.

                                            4
plaintiffs were Friends of Louisville Public Art, LLC, Louisville Historical

League, Inc., Mark Thompson, Gerald R. Toner, Deanna M. O’Daniel, James

Prichard, Charles Nicholas Morris, Martina Kunnecke and Steve Wiser

(collectively referred to herein as “Friends”). The circuit court affirmed the

Landmarks Commission, holding that its decision was not arbitrary within the

meaning of American Beauty Homes Corp. v. Louisville & Jefferson County

Planning & Zoning Commission, 379 S.W.2d 450, 456 (Ky. 1964), since its

determination was supported by substantial evidence. See Ky. State Racing

Comm’n v. Fuller, 481 S.W.2d 298, 308 (Ky. 1972) (substantial evidence is that

which has sufficient probative value to induce conviction in the minds of

reasonable men). The circuit court did not explicitly address Friends’

argument concerning the conflict of interest of Louisville Metro employees

serving on the Landmarks Commission’s review of their own employer’s

application. Friends appealed to the Court of Appeals, which similarly affirmed

the Landmarks Commission. We granted Friends’ motion for discretionary

review.

                            II.   Standard of Review

      The judicial standard of review of administrative decisions is well-known

and oft stated. As correctly noted by the lower courts in this matter, our

predecessor court’s decision in American Beauty Homes remains the seminal

case as to judicial review of administrative action. In that case, the court held

that review is concerned with the question of arbitrariness. 379 S.W.2d at 456.

That determination is comprised of three elements: 1) whether the agency acted

                                         5
in the exercise of its statutory powers; 2) whether a party affected by an

administrative order received procedural due process; and 3) whether the

agency action is supported by substantial evidence. Id. The court also noted

that “[a]s a general rule the yardstick of fairness is sufficiently broad to

measure the validity of administrative action.” Id. at 456 (citing Commonwealth

ex rel. Meredith v. Frost, 295 Ky. 137, 145-46, 172 S.W.2d 905, 909 (1943))

                                  III.   Analysis

      In this case, Friends argues that the participation of Kirchdorfer and Liu

resulted in a denial of procedural due process.6 We agree.

      As a general rule, in an administrative setting, procedural due process

merely requires “a hearing, the taking and weighing of evidence if such is

offered, a finding of fact based upon a consideration of the evidence, the

making of an order supported by substantial evidence, and, where the party’s

constitutional rights are involved, a judicial review of the administrative

action.” Hilltop Basic Res., Inc. v. Cnty. of Boone, 180 S.W.3d 464, 469 (Ky.

2005) (quoting Morris v. City of Catlettsburg, 437 S.W.2d 753, 755 (Ky. 1969));

see also Ky. Cent. Life Ins. Co. v. Stephens, 897 S.W.2d 583, 590 (Ky. 1995)

(stating “[p]rocedural due process is not a static concept, but calls for such

procedural protections as the particular situation may demand[]”). Pointedly,

in Hilltop, we also stated that nowhere in the list is found the “right to an

      6  While Marchal’s participation on the Committee was similarly impermissible in
this instance, we are reviewing the decision of the Landmarks Commission, as
affirmed by the circuit court and Court of Appeals.

                                          6
impartial tribunal” since that right cannot be guaranteed in the administrative

setting. 180 S.W.3d at 469. Additionally, “[i]n the administrative or legislative

context, . . . the concept of impartiality is, by necessity and by function, more

relaxed and informal.” Id. at 468.

      We, however, did not grant carte blanche to a party to have its own

employees serve as judges: “decision makers are not free to be biased or

prejudicial when performing nonjudicial functions. To the contrary, any bias

or prejudicial conduct which demonstrates ‘malice, fraud, or corruption’ is

expressly prohibited as arbitrary. Furthermore, decisions tainted by

conflicts of interest or blatant favoritism are also prohibited as arbitrary.”

Hilltop, 180 S.W.3d at 469 (emphasis added) (citations omitted); see also

MODEL CODE OF JUD. CONDUCT FOR STATE ADMIN. L. JUDGES Rule 2.11 (AM. BAR

ASS’N 2018) (providing “[a]n [Administrative law Judge (‘ALJ”)] shall disqualify

himself or herself in any proceeding in which the ALJ’s impartiality might

reasonably be questioned[]”). As such, the decision-making participation in

this matter by Louisville Metro employees is an inherent and intolerable

conflict of interest, within the holding of Hilltop.7

      Stated more plainly, Louisville Metro employees, Marchal, Liu and

Kirchdorfer, had a patent conflict of interest that any reasonable person would

       7 The inherent nature of this conflict is readily demonstrated by, for example, if

the chief executive, general counsel, or any other employee of Louisville Gas & Electric
were appointed to an administrative board such as the Landmarks Commission and
LG&E filed an application for a Certificate of Appropriateness. Everyone would
reasonably question that person’s impartiality and agree that that employee could not
properly sit in determining the application.

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recognize, and each of them was, as a legal matter, disqualified from

participation in any determination which was initiated by their employer.

Thus, their participation in the Certificate of Appropriateness determination

resulted in a denial of procedural due process for Friends and rendered the

Landmarks Commission’s decision inherently arbitrary. The Jefferson Circuit

Court and Court of Appeals erred in determining otherwise.

      We do not hold that all of the Mayor’s appointees were disqualified from

serving on the Landmarks Commission. Of the non-Louisville Metro employee

Commission members, five voted to deny the application: two at the ARC

hearing and three at the Commission hearing. This fact demonstrates that

these members were not beholden to Louisville Metro or the Mayor and were

able to exercise independent judgment in this process. By so noting, we do not

impugn the integrity and independent judgement of the non-Louisville Metro

employee ARC or Commission members who voted to approve. Similarly, we do

not impugn the integrity of Marchal, Kirchdorfer or Liu. Their employment and

their being asked to sit in review of an application filed by their employer were

sufficient to raise a reasonable question of impartiality such that recusal was

required as a matter of law. See Abbott, Inc. v. Guirguis, 626 S.W.3d 475, 485

(Ky. 2021) (stating that “the issue is not whether [the judge] was in fact

impartial. On the true issue, i.e., whether his impartiality might reasonably be

questioned, we hold that under the circumstances it was indeed reasonable for

[Abbott] to question [the judge’s] impartiality[]”) (internal citation and quotation

omitted). We further recognize good reasons why Louisville Metro employees

                                         8
occupying these positions might be placed on boards such as the Landmarks

Commission and the ARC, given their expertise and familiarity with the

subject-matter. In the vast majority of cases or applications, their participation

is undoubtedly beneficial and permitted. However, when their employer is the

applicant, they are disqualified and must recuse.

      While the foregoing adequately disposes of this appeal, Friends also raise

another issue which we are compelled to address, the interpretation of the

Landmarks Commission powers when the ARC fails to make requisite findings

of fact. See Ordinance § 32.257(K). Ordinance § 32.257 details the process for

Application for Certificate of Appropriateness. The first ten subsections set

forth the application requirements and the proceedings before the ARC.

Ordinance § 32.257(A)-(J). The final of these subsections emphasizes the

importance of the ARC’s written findings of fact, by stating,

             (I) The [ARC] shall make a decision based upon a written
      finding of fact, which shall approve the application, approve the
      application with conditions, deny the application, or defer
      consideration of the application until a later meeting of the [ARC].
      If the application is approved or approved with conditions, the
      applicant shall be issued a certificate or appropriateness. Any
      application which fails to obtain at least three votes or the votes of
      a majority of the members present whichever is greater for
      approval or conditional approval shall be deemed to be denied.
            (J) The staff and the [ARC] shall, in their decision making
      capacities, each make a written finding of fact based upon the
      information presented which supports a written conclusion
      that the application demonstrates or fails to demonstrate that
      the proposed exterior alteration is in compliance with the
      guidelines.

Ordinance § 32.257 (emphasis added).

                                        9
      Following the ARC’s action, any appeal to the Landmarks Commission is

governed by Ordinance § 32.257(K). In part, this subsection addresses the

proceedings at the Landmarks Commission’s hearing:

      At the meeting to consider the appeal, the Commission shall review
      the application and the record of the prior proceedings and, at the
      discretion of the Chairman, may take additional testimony from
      the applicant, the property owner, appellant, or other interested
      parties for the purpose of supplementing the existing record or for
      the introduction of new information. Upon review of the record
      and any supplemental or new information presented at the
      meeting, the Commission shall make a written determination that
      the decision shall be upheld or overturned. A decision of the staff
      or the [ARC] shall be overturned by the Commission only upon
      written finding that the staff or the [ARC] was clearly erroneous
      as to a material finding of fact related to whether the proposed
      exterior alteration complied with guidelines.

Ordinance § 32.257(K) (emphasis added). We highlight these requirements for

the ARC’s written findings since, by Ordinance, the Landmarks Commission’s

ability to overturn the ARC’s decision can only be based on a written finding

that the ARC was clearly erroneous as to a material finding of fact. The

proceeding was, thus, compromised by the ARC’s failure to make the required

written finding of fact. In the absence of those required findings, the

Landmarks Commission was unable to satisfy the requirements of the

Ordinance.

      Finally, we underscore that we express no opinion as to the fate of the

statue in question. That is ultimately a decision for the citizens of

Louisville/Jefferson County. Those citizens, however, having created a process

for that decision must abide by that process, and must not act arbitrarily in

the process.

                                        10
                                IV.   Conclusion

      This matter is remanded to the Jefferson Circuit Court with direction to

set aside the Landmarks Commission’s decision to grant the Certificate of

Appropriateness.

      All sitting. Conley, Keller, Lambert, Nickell and Thompson, JJ., concur.

Bisig, J., dissents by separate opinion.

       BISIG, J., DISSENTING BY SEPARATE OPINION: Respectfully, I must

dissent. The issue regarding the appropriateness of the Castleman statue has

far-reaching impact for the Louisville community. Certainly, citizens may or

may not agree with the Landmarks Commission decision. The limited role of

this Court is to review whether the Commission acted outside its authority or

disregarded due process.

      The majority’s conclusion that Liu and Kirchdorfer were required to

recuse is contrary to this Court’s holding in Hilltop Basic Resources, Inc. v.

County of Boone, 180 S.W.3d 464 (Ky. 2005). In Hilltop, we began by noting

that participants in judicial proceedings have the right to an impartial tribunal

and that judges “are held to very stringent guidelines and rules of conduct in

order to ensure the highest possible degree of impartiality in both fact and

appearance.” 180 S.W.3d at 468 (emphasis added). We then distinguished

procedural due process rights in the administrative setting, where “the concept

of impartiality is, by necessity and by function, more relaxed and informal.” Id.

Of particular relevance here, we specifically noted that in the administrative

context, only “bias or prejudicial conduct which demonstrates ‘malice, fraud, or

                                        11
corruption’” or “decisions tainted by conflicts of interest or blatant favoritism”

violate due process rights. Id. at 469. Hilltop thus makes clear that while a

mere appearance of impropriety warrants recusal in the judicial context, only

actual bias, prejudice, conflicts, or favoritism require recusal in an

administrative setting.

      The majority notes that Liu and Kirchdorfer are Louisville Metro

employees. Then without further analysis, it summarily asserts that Liu and

Kirchdorfer had “an inherent and intolerable conflict of interest, within the

holding of Hilltop.” Majority Op. at Part III. However, to align with the holding

in Hilltop, the majority must explain how Liu and Kirchdorfer’s roles as

Louisville Metro employees resulted in either “bias or prejudicial conduct which

demonstrates ‘malice, fraud, or corruption,’” or a decision “tainted by conflicts

of interest or blatant favoritism.” Hilltop, 180 S.W.3d at 469 (emphasis added).

Instead, the majority seems to pivot to the inapplicable appearance of

impropriety standard, as it must given the lack of any actual evidence of record

that the votes of either Liu or Kirchdorfer were influenced in any way by their

employment with Louisville Metro. See Majority Op. at Part III (“[W]e do not

impugn the integrity of . . . Kirchdorfer or Liu. Their employment and their

being asked to sit in review of an application filed by their employer were

sufficient to raise reasonable questions of impartiality such that recusal was

required as a matter of law.”) (emphasis added). I therefore disagree both with

the majority’s conclusion that Liu and Kirchdorfer operated under actual

                                        12
conflicts of interest and with its departure from Hilltop in applying the judicial

appearance of impropriety standard to this administrative setting.

      I likewise disagree with the majority’s conclusion that the Commission

could not act on Louisville Metro’s application in the absence of written

findings by ARC. While I acknowledge the lack of written findings by ARC, the

Commission’s actions were in compliance with local ordinance. Contrary to

the majority’s conclusion, the relevant ordinance does not state the

Commission may overturn ARC only where a written material finding of fact by

ARC was erroneous; rather, the ordinance simply states that the Commission’s

finding of error must be written. Louisville Ordinance § 32.257(K). The

discussion of ARC’s procedural defects clouded the Commission’s ultimate

approval of the request to remove the statue. However, review of the record

shows it considered the application, reports and other information in reaching

its conclusion. Thus, because there is no evidence that the Commission’s

decision was tainted by an actual conflict of interest, and because the

Commission properly made its decision after consideration of the relevant

information and hearing public comment, I find no error in its overturning of

the ARC decision. I would therefore affirm the trial court and the Court of

Appeals.

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COUNSEL FOR APPELLANTS:

Stephen T. Porter

Gerald R. Toner
O’Bryan Brown & Toner PLLC

COUNSEL FOR APPELLEES:

Peter Frank Ervin
Justice & Safety Cabinet, Office of Legal Services

Susan Klein Rivera
David A. Sexton
Assistant Jefferson County Attorney

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