Opinion
No. 98CA0100
April 1, 1999 Rehearing Denied May 27, 1999.
Appeal from the District Court of the City and County of Denver, Honorable Nancy E. Rice, Judge, No. 96CV4318
JUDGMENT AFFIRMED
Barry D. Roseman, Denver, Colorado, for Plaintiff-Appellant.
Daniel E. Muse, City Attorney, Ashley R. Kilroy, Assistant City Attorney, Denver, Colorado, for Defendants-Appellees.
Plaintiff, Troy D. Janssen, appeals the district court judgment affirming the decision of a hearing officer for the Denver Career Service Board (Board) who had upheld the termination of plaintiff's employment by the City and County of Denver Department of Aviation (Department). Because we conclude that plaintiff has failed to exhaust his administrative remedies, we affirm.
The Department employed plaintiff as a specialty clerk. It received reports that the odor of marijuana had been detected on plaintiff and in the city vehicle that he had driven while on duty, and that his face was flushed, his eyes were dilated, and his behavior was unusual. The Department then required him to submit to a urine test pursuant to City and County of Denver Executive Order No. 94 (Order). After receiving the test results indicating that plaintiff's urine had tested positive for the presence of marijuana, the Department terminated his employment.
Plaintiff appealed that decision to a hearing officer. After a hearing, that officer found no abuse of discretion by the Department and denied plaintiff's appeal. Plaintiff did not request the Board to reopen or to reconsider the hearing officer's decision. Rather, he sought review in the district court, filing a complaint under C.R.C.P. 106(a)(4).
Contending that plaintiff had failed to exhaust his administrative remedies, defendants filed a motion to dismiss. Although it initially denied the motion, ultimately the trial court agreed with defendant's contention. Nevertheless, it also considered the merits of plaintiff's complaint and affirmed the hearing officer's decision. This appeal followed.
I.
Plaintiff contends the court erred in concluding that he had failed to exhaust his administrative remedies. We disagree.
The doctrine of exhaustion of administrative remedies serves as a threshold to judicial review. It requires parties in a civil action to pursue available administrative remedies before seeking judicial review. If the parties fail to satisfy the exhaustion requirement, a court is without subject matter jurisdiction to hear the action. State v. Golden's Concrete Co., 962 P.2d 919 (Colo. 1998).
A principal objective of the exhaustion doctrine is to prevent piecemeal application of judicial relief and to conserve judicial resources. The doctrine also enables the agency to make initial determinations on matters within its expertise and to compile a record that is adequate for judicial review. It affords an agency the opportunity to correct its own errors, thus minimizing the risk of judicial intervention in the administrative process and preserving the agency's autonomy. See State v. Golden's Concrete Co., supra.
Agency review of a challenged action is also desirable because it provides a court with the benefit of the agency's considered interpretation of statutes or ordinances applicable to it. See Kendall v. Cason, 791 P.2d 1227 (Colo.App. 1990).
When administrative remedies are provided by statute or ordinance, the statutory procedure must be followed if the matter complained of is within the jurisdiction of the administrative authority. Horrell v. Department of Administration, 861 P.2d 1194 (Colo. 1993).
The Denver City Charter C5.25 established the Board and sets forth the Board's duties. The provision states, in pertinent part, that:
The Career Service Board shall:
. . . .
4. Appoint one or more hearings officers to hear and decide appeals by employees . . . from the administrative actions of officers and employees relating to personnel matters, in accordance with personnel rules adopted or to be adopted by the Career Service Board, and, at such hearings, receive evidence, determine the facts de novo, and issue a decision which shall be a final order, subject to the decision being stayed or reconsidered by the Career Service Board.
5. Reopen and reconsider, in accordance with personnel rules adopted or to be adopted by the Career Service Board, a decision of a hearings officer when the party requesting reopening and reconsideration submits written argument or evidence which establishes that (a) new and material evidence is available that was not available when the appeal was heard by the hearings officer, or (b) the decision of the hearings officer involves an erroneous interpretation of the personnel rules of the Career Service Board, or (c) the decision of the hearings officer is of a precedential nature involving policy considerations that may have effect beyond the case at hand. The Career Service Board shall have the authority to stay the decision of a hearings officer. (emphasis added)
Plaintiff argues that, because Denver City Charter C5.25(4) expressly states that the hearing officer's decision "shall be a final order," he was not required to request reopening or reconsideration from the Board before seeking judicial review. We disagree.
We note initially that the doctrine of finality is conceptually distinct from the doctrine of exhaustion of administrative remedies. See Darby v. Cisneros, 509 U.S. 137, 113 S.Ct. 2539, 125 L.Ed.2d 113 (1993) (finality requirement is concerned with whether the initial decision-maker has arrived at a definitive position on the issue that inflicts an actual injury; exhaustion refers to procedures by which an injured party may seek review). A "final decision" in this context means one that marks the consummation of the agency's decision-making process; it must not be one that is tentative or interlocutory in nature. See Bennett v. Spear, 520 U.S. 154, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997).
However, to the extent that finality plays a role here, Charter C5.25(4) also makes a hearing officer's decision expressly subject to stay and reconsideration by the Board when the circumstances set forth in Denver City Charter C5.25(5) are present. Indeed, the entire provision, when read in context, states that the Board "shall . . . reopen and reconsider . . . when . . ." one of the three circumstances is present. The use of the word "shall" is presumed to connote a mandatory meaning. Burns v. Board of Assessment Appeals, 820 P.2d 1175 (Colo.App. 1991).
Plaintiff's "finality" argument is also defeated by Denver Career Service Rule 19-50, which states that: "If the Career Service Board has reopened a decision of the Hearings Officer for reconsideration, the appellate decision rendered by the Board shall constitute the final decision for purposes of requesting judicial review." Hence, in those situations in which one or more of the three grounds for review noted in the Charter are applicable, the Board's decision, not that of the hearing officer, will be the order subject to judicial review. It follows, therefore, that a reopening by the Board means that the hearing officer's decision is not a "final" order that is subject to judicial review until the Board renders its decision.
Concerning the exhaustion issue, we interpret the Charter to require Board review when one or more of the three grounds contained in Charter C5.25(5) is asserted by the party seeking review. See Brooke v. Restaurant Services, Inc., 906 P.2d 66 (Colo. 1995) (claimant required to exhaust administrative remedies for claims asserted when such are covered by anti-discrimination act; exhaustion not required for common law claims not covered); Horrell v. Department of Administration, supra (when administrative remedies are provided by statute, the statutory procedure must be followed if the matter complained of is within the jurisdiction of the administrative authority).
Our interpretation is supported by the nature of the circumstances described in Charter C5.25(5). Each represents a particular instance in which further agency review is highly desirable before submitting the matter to judicial scrutiny. For example, when new material and evidence that were not considered by the hearing officer become available, the agency cannot be said to have considered the issue fully, nor can it be said with certainty that a complete record will exist which fully presents the issue for judicial review.
When a hearing officer's interpretation of a personnel rule is alleged to be erroneous, the Board upon review applies its expertise to interpret its own organic ordinances and rules. And, when a decision has a precedential nature or impact involving policy considerations that may have effect beyond the case at hand, requiring review by the Board will allow it to consider potential ramifications within its own agency structure or purview about which a reviewing court may have little, if any, knowledge.
To construe "exhaustion" in these three situations to be optional would negate the ability of the Board to interpret, in the first instance, its own applicable rules, orders, regulations, and enabling provisions. It would also prevent the Board from correcting the errors of its own hearing officer. A different construction would not only prevent the Board from employing and applying its expertise but it would also trigger a premature exercise of judicial review in a piecemeal fashion before an issue has been fully explored within the agency's own decision-making framework.
Nor are we persuaded that Denver Career Service Rule 19-31 dictates a contrary conclusion. That provision states, in pertinent part:
According to paragraph C5.25 of the Denver City Charter, number 4, a party may request the Career Service Board to reopen and reconsider a decision by the Hearings Officer only on the following grounds . . .
Plaintiff points to the seemingly permissive language that a party "may request" reopening. He argues this indicates that the Board interprets the Charter provision to make further agency review optional. However, this phrase is qualified by the words "only on the following grounds." When read in context, this clause limits the review available. It enables further agency review only in the three described circumstances; if the determination does not involve one of those three situations, no further agency review is even accessible, and immediate resort to judicial review is therefore mandated.
Accordingly, we hold that the Charter requires exhaustion when the matter asserted falls within one of the three circumstances stated in Charter C5.25(5).
Here, in his C.R.C.P. 106(a)(4) complaint seeking judicial review, plaintiff asserted that the hearing officer had abused her discretion by: (1) concluding that reasonable suspicion existed that plaintiff was subject to the effects of an illegal drug such that drug testing was warranted; (2) concluding that the test results received from an outside testing laboratory were, in fact, based on a sample provided by plaintiff, when there was insufficient evidence of chain of custody; and (3) affirming the Department's decision to terminate his employment. Because these contentions essentially seek review concerning the sufficiency of the evidence, they would not, at first blush, appear to trigger the exhaustion requirement.
However, when defendants filed a motion to dismiss, contending that plaintiff had failed to exhaust his administrative remedies, plaintiff fully developed his contentions. He responded first by citing the text of the Order's prohibition concerning illegal drugs and the text of Denver Career Service Rule 16-22 10) (Rule 16-22(10)) describing what constitutes just cause for immediate dismissal. He then argued that the hearing officer's decision was an abuse of discretion because neither the Order nor Rule 16-22(10) allows an agency to terminate the employment of a certified city employee merely because the agency's supervisors believe that a particular test result was generated from a sample of that employee's urine. He asserted that the Order and Rule 16-22(10) prohibit the actual "presence" of an illegal drug, not the existence of a supervisor's belief in that presence.
He also argued that the Order prohibits the presence of an illegal drug within the body at any time only for classified service employees and deputy sheriffs of the Department of Safety. For every other city employee including himself, plaintiff argued, that section of the Order and Rule 16-22(10) prohibit an employee from being subject to the effects of illegal drugs only if such use or influence adversely affects the safety of co-workers or members of the public, the employee's job performance, or the safe and efficient operation of the City facility.
Finally, plaintiff asserted that the hearing officer had failed to make a finding that his alleged consumption of marijuana affected the safety of co-workers or members of the public, his job performance, or the safe and efficient operation of the facility. Plaintiff argued that such a finding was required because, under his interpretation of Rule 16-22(10) as noted above, an employee is not prohibited from being affected by illegal drugs unless such use or influence adversely affects the safety of co-workers or members of the public, the employee's job performance, or the safe and efficient operation of the City facility.
In our view, these expanded assertions claim that the hearing officer had erroneously interpreted the personnel rules of the Board and the text of the Order. All of plaintiff's arguments involve the interpretation of Rule 16-22(10), i.e., what constitutes just cause for immediate dismissal; whether the agency can fire a certified employee merely because the agency's supervisors believe that a test result came from a sample of that employee's urine; whether the Rule prohibits only the actual "presence" of an illegal drug; and whether the Rule prohibits an employee from being "subject to the effects" of illegal drugs only if "such use or influence adversely affects the safety of co-workers or members of the public, the employee's job performance, or the safe and efficient operation of the City facility."
Therefore, because plaintiff contended that the hearing officer had erroneously interpreted the personnel rules of the Board, the hearing officer's decision was subject to reopening and reconsideration by the Board. See Denver City Charter C5.25; Denver Career Service Rule 19-30. Such reopening and reconsideration provides plaintiff with a complete, plain, speedy, and adequate remedy because the Board has full authority to stay and reverse the hearing officer's decision. Hence, judicial review was not yet available because plaintiff had not exhausted his administrative remedies. See C.R.C.P. 106(a)(4) (relief available only if there is no plain, speedy, and adequate remedy otherwise provided by law); State v. Golden's Concrete Co., supra.
II.
Alternatively, plaintiff contends that he is exempt from the exhaustion requirement. Again, we disagree.
There are exceptions to the exhaustion of remedies requirement. As pertinent here, the doctrine has no application when: (1) the administrative agency does not have authority to pass on every question raised; and (2) there is grave doubt that the administrative agency has the authority to pass on the question raised. Gramiger v. Crowley, 660 P.2d 1279 (Colo. 1983).
Thus, a party seeking review of the constitutionality of an agency's enabling legislation need not exhaust administrative remedies. Fred Schmid Appliance Television Co. v. City County of Denver, 811 P.2d 31 (Colo. 1991). Likewise, a party challenging the constitutionality of an agency's decision is not required to exhaust administrative remedies. Collopy v. Wildlife Commission, 625 P.2d 994 (Colo. 1981).
Here, plaintiff asserts on appeal that defendants violated his constitutional rights by requiring him to submit to a drug test under the Order without having reasonable suspicion of on-duty use. Such an assertion, however, does not challenge the constitutionality of the Order. Rather, it challenges the agency's interpretation of the Order and the way the Order was applied to plaintiff. Such challenge was within the agency's authority to hear. See Horrell v. Department of Administration, supra 861 P.2d at 1198 n. 4 (a board may evaluate whether an otherwise constitutional statute has been unconstitutionally applied with respect to a particular personnel action); Kendall v. Cason, supra (agency review is appropriate to allow agency to interpret statute applicable to it in the first instance).
Accordingly, we reject this contention.
III.
Plaintiff asserts that the doctrine of law of the case precluded the trial court from changing its initial ruling in which it denied defendant's motion to dismiss for failure to exhaust administrative remedies. Again, we disagree.
The doctrine of the law of the case is a discretionary rule of practice directing that prior relevant rulings made in the same case generally are to be followed. Gavend v. Malman, 946 P.2d 558 (Colo.App. 1997). It applies unless the court, in its discretion, determines that its former ruling is no longer sound because of changed conditions, it needs to correct its previous ruling because of a legal or factual error, an intervening change in the law has occurred, or manifest injustice would result from its original ruling. Verzuh v. Rouse, 660 P.2d 1301 (Colo.App. 1982).
Plaintiff argues that the trial court was bound by the initial denial of defendants' previous similar motion to dismiss. However, that denial occurred at the pleadings stage before plaintiff had fully developed and established his assertions concerning the hearing officer's interpretation of the Career Service Rules. Thus, the first ruling was no longer sound because of changed conditions. Moreover, the law of the case doctrine does not apply when, as here, an earlier ruling would result in error. See People ex rel. Gallagher v. District Court, 666 P.2d 550 (Colo. 1983).
The judgment of dismissal is affirmed.
JUDGE METZGER concurs.
JUDGE TAUBMAN specially concurs.