Court Opinion

ID: 9718255
Source: CourtListenerOpinion
Date Created: 2023-08-26 07:19:38.545329+00
Date Added: 2024-06-11T18:23:58.211623
License: Public Domain

LEE D. ANDERSON, Circuit Judge
(dissenting in part, concurring in part).
[IT 28.] I respectfully dissent. I do not agree that the legislature has provided sufficient guidelines or standards to guide the Board in exercising its delegated power.
[¶ 29.] The majority asserts that to hold SDCL 36-20A-15 unconstitutional would be to require “highly specific” enactments that are “so specific that they [would be] comprehensible only by those who practice in that profession.” On the contrary, the legislature could have readily included in the statutory scheme some guidelines similar to those contained in the Board’s administrative rules which implemented the quality review program. For example, ARSD 20:37:13:09 requires a determination of whether the firm under review has complied with the auditing, accounting, and review standards set forth in ARSD 20:37:11:07, and accounting principles under ARSD 20:37:11:08.
[¶ 30.] Had the legislature set forth guidelines similar to those contained in the above-cited regulations and described, even in general terms, what would constitute a satisfactory result, I would agree that SDCL 36-20A-15 should be upheld. However, in enacting SDCL 36-20A-15, the legislature has left the field completely undefined as to the types of rules that may be enacted by the Board in determining what is a satisfactory result. This makes it impossible to determine whether the will of the legislature, in creating the quality review program, has been obeyed.
[¶ 31.] In Affiliated Distillers Brands Corp. v. Gillis, this Court recognized:
The theory of administrative rule making is that in certain fields and in some respects the public interest is better served by delegating a large part of detailed law making to expert administrators, controlled by policies, objectives and standards laid down by the legislature, rather than having all the details spelled out through the traditional legislative process.
81 S.D. 44, 45, 130 N.W.2d 597, 599 (1964). While public accountancy may be such a field and, as the majority has observed, South Dakota may have a “legitimate interest for the protection of its citizens to regulation the profession of public accountancy,” it remains incumbent upon the legislature to control the Board’s exercise of its authority by setting forth at least some standards and guidelines. The principle underlying this requirement may be stated as follows: The legislature must provide, within the statutory scheme, safeguards against the absolute, undefined, and unbounded discretion of the board, agency, or other delegate, so that it may be ascertained whether the delegate is acting in conformity with the will of the legislature. See Affiliated Distillers, 81 S.D. at 45, 46, 130 N.W.2d at 599, 600; Wall v. Fenner, 76 S.D. 252, 76 N.W.2d 722, 724 (1956); Yakus v. United States, 321 U.S. 414, 425, 64 S.Ct. 660, 667, 88 L.Ed. 834, 849 (1944); Ralston Purina Co. v. Hagemeister, 188 N.W.2d 405, 407 (N.D.1971).
[¶32.] Standards and guidelines serve as safeguards by indicating the outer bounds of the delegated authority. See Yakus, 321 U.S. at 425, 64 S.Ct. at 667, 88 L.Ed. at 849. Where there is a lack of standards for the direction of the Board’s action, it becomes impossible to determine whether the will of the legislature has been followed. See Id. In such instances the agency or board has, in essence, been granted unfettered discretion to set legislative policy. This, under our Constitution, cannot be done, regardless of how reasonable the delegation appears.
[¶ 33.] It is true that in determining whether sufficient guidelines or standards are present, we are to examine other legislative enactments dealing with the same subject, as well as the challenged statute. See Application No. 5189-3, 467 N.W.2d at 913; Boe v. Foss, 76 S.D. 295, 77 N.W.2d 1, 13 (1956). However, in applying this line of analysis, I believe the majority has failed to remain focused upon the issue of quality review and, more specifically, the asserted constitutional defect of SDCL 36-20A-15: “producing such *317satisfactory results as the board may specify.
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[¶ 34.] The majority cites a number of sections from SDCL eh. 36-20A, claiming that they “provide the sufficient guide, standard, or intelligible principle to the agency to direct the exercise [of] the delegated authority.” However, none of the statutes which are relied upon by the majority provide the Board with guidance in deciding what satisfactory results of a quality review shall be, much less indicate to the public, the legislature or the courts the outer bounds of the delegated authority.
[¶ 35.] Likewise, the case law cited by the majority is distinguishable from the present ease. In Application No. 5189-3, the Court upheld SDCL 46-5-26(3), which allowed for the extension of construction periods for delay due to “other exigent circumstances.” 467 N.W.2d at 913 (emphasis added). The Court reasonably determined that by using the word “other” in subsection (3), the legislature was relating back to the “other predicates enumerated in the statute,” i.e., the circumstances described in subsections (1) and (2), thereby providing sufficient guidance in interpreting the phrase “exigent circumstances.” Id. In the instant case, the term “satisfactory” is entirely subjective, and there is no similar language in chapter 36-20A to guide the Board in determining what is a satisfactory result. In Yakus, the statutory scheme provided extensive statements of the legislative policies behind the enactments, against which the propriety of the administrator’s actions could be measured.8 No such provision is found in ch. 36-20A. Finally, while the Court in Boe aptly set forth the legal principles which are to guide our analysis, its application of those principles is questionable at best.9 As such, very *318little is gained by comparing SDCL 36-20A to the legislation which was salvaged in Boe.
[¶ 36.] By upholding this statute as constitutional, the majority is recognizing in the Board the absolute and unbounded discretion to determine what a satisfactory result shall be. “The presumption that [the Board] will not act arbitrarily but will exercise sound judgment and good faith cannot sustain a delegation of unregulated discretion.” Affiliated Distillers, 130 N.W.2d at 600.
[¶ 37.] I agree with the majority’s holding on Issue 2 that SDCL 36-20A-15 is not an unconstitutional violation of Boever’s due process rights.

. In Yakus, the challenged statute mandated that the Administrator exercise his authority to fix prices in a manner which would “effectuate the purposes of [the] Act”, which had been set forth hy the legislature as follows:
"to stabilize prices and to prevent speculative, unwarranted, and abnormal increases in prices and rents; to eliminate and prevent profiteering, hoarding, manipulation, speculation, and other disruptive practices resulting from abnormal market conditions or scarcities caused by or contributing to the national emergency; to assure that defense appropriations are not dissipated by excessive prices; to protect persons with relatively fixed and limited incomes, consumers, wage earners, investors, and persons dependent on life insurance, annuities, and pensions, from undue impairment of their standard of living; to prevent hardships to persons engaged in business, ... and to the Federal, State, and local governments, which would result from abnormal increases in prices; to assist in securing adequate production of commodities and facilities; to prevent a post emergency collapse of values; ...”
321 U.S. at 420, 64 S.Ct. at 665, 88 L.Ed. at 846 (citation omitted). The legislature further directed:
"So far as practicable, in establishing any maximum price the Administrator shall ascertain and give due consideration to the prices prevailing between October 1 and October 15, 1941, (or if, in the case of any commodity, there are no prevailing prices between such dates, or the prevailing prices between such dates are not generally representative because of abnormal or seasonal market conditions or other cause, then to the prices prevailing during the nearest two-week period in which, in the judgment of the Administrator, the prices for such commodity are generally representative) ... and shall make adjustments for such relevant factors as he may determine and deem to be of general applicability, including.... Speculative fluctuations, general increases or decreases in costs of production, distribution, and transportation, and general increases or decreases in profits earned by sellers of the commodity or commodities, during and subsequent to the year ended October 1, 1941.”
Id. at 421, 64 S.Ct. at 665-666, 88 L.Ed. at 846 (citation omitted).

. In Boe, the statute at issue authorized the Board of Regents to construct apartment housings and dormitories on the grounds of the institutions which it controlled whenever the Board of Regents deemed such facilities “necessary and feasible ...." 77 N.W.2d at 13 (emphasis added) (citation omitted). In upholding the delegation, the Court created the necessary guidance which the statutoiy scheme was lacking, stating:
The first impression is that it granted a broad discretion to the Board in very general terms. Reflection however will impel the conclusion that the powers granted are operative in a very limited field. Before action can be taken the facts must reveal that a particular structure is "necessary” and "feasible.” These standards are neither difficult to understand nor apply. Whether the structure is “necessary" depends on the relationship of the firm student population at the particular institution to the available acceptable housing in existing dormitories and in the community. The feasibility of that structure will depend on whether the revenue it will produce at rates students can and should pay will be sufficient to induce investors to supply the capital to bring it into being.
*318id. (emphasis added).