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referring to "the prerequisite that the party seeking declaratory relief present the court with an actual controversy"
Summary of this case from Christy's Auto Rentals, Inc. v. Mass. Homeland Ins. Co.Opinion
August 29, 1977.
PRESENT: Bevilacqua, C.J., Paolino, Joslin, Kelleher and Doris, JJ.
1. DECLARATORY JUDGMENT. Purpose of Declaratory Judgment. The purpose of declaratory judgment actions is to render disputes concerning the legal rights and duties of parties justiciable without proof of a wrong committed by one party against another and thus to facilitate the termination of controversies. G.L. 1956, § 42-35-7
2. DECLARATORY JUDGMENT. Declaratory Judgment Statutes Should be Liberally Construed. In the light of their remedial nature, declaratory judgment statutes should be liberally construed and not interpreted in a narrow or technical sense.
3. DECLARATORY JUDGMENT. Requirement of an Actual Controversy. Party seeking declaratory relief must present the court with an actual controversy.
4. DECLARATORY JUDGMENT. Advisory Opinions and Adjudicating Hypothetical Issues Prohibited. In a declaratory judgment action, trial judges may not dispense with the traditional rules prohibiting them from rendering advisory opinions or adjudicating hypothetical issues.
5. DECLARATORY JUDGMENT. General Principles of "Liberal Construction" and "Actual Controversy" Apply With Equal Force Where Validity or Applicability of Rules is At Issue. General principles that declaratory judgment statutes should be liberally construed and that party seeking declaratory relief must present the court with an actual controversy apply with equal force to actions seeking declaratory judgments as to the validity or applicability of rules. G.L. 1956, § 42-35-7.
6. DECLARATORY JUDGMENT. Actual Controversy Relating to Challenged Rules Must Be Established. To warrant judicial determination of validity of rules sought to be challenged by action for a declaratory judgment, appropriate facts must be established from which court may determine that an actual controversy relating to the validity of the agency's rules exists. G.L. 1956, § 42-35-7.
7. DECLARATORY JUDGMENT. Applicants Presented Sufficient Facts to Entitle Them to Declaratory Judgment. Applicants who sought and were denied hoisting engineers' licenses presented trial court with sufficient facts to entitle them to a declaratory judgment as to the validity of the licensing board's rule providing for oral examinations where applicants sought to attack facial validity of board's rule permitting oral examinations on ground that rule violated due process by failing to provide for adequate safeguards against discrimination and where applicants presented evidence to indicate that no record was kept of their actual answers to questions asked during the oral examination. G.L. 1956, §§ 42-35-1 et seq., 42-35-7.
8. DECLARATORY JUDGMENT. Where Applicants' Legal Rights or Privileges Were Threatened, Applicants Were Entitled to Have Validity of Rules Determined. Where licensing board's rule establishing a one-year residency requirement for licensure as hoisting engineer could be used to deny license applications by Massachusetts residents, residency rule threatened to interfere with or impair the applicants' legal rights or privileges and, therefore, applicants were entitled to have validity of rule determined by trial court. G.L. 1956, § 42-35-7.
9. DECLARATORY JUDGMENT. In the Interests of Avoiding Delay Case Not Remanded Where Issues Involved Were Question of Law Appropriate for Supreme Court Consideration. Though Supreme Court's conclusion that trial court erred in refusing to render a declaratory judgment would normally require that case be remanded for further proceedings, where issues involved depended entirely on questions of law, it was appropriate that Supreme Court consider issues in the interest of avoiding further delay.
10. EVIDENCE. Judicial Notice. Supreme Court could take judicial notice of such rules and regulations as an inferior tribunal of original jurisdiction might have properly noticed.
11. CONSTITUTIONAL LAW. Allegation That Former Rule Violated Due Process Not Moot. If revised rule for examining and licensing hoisting engineers did in fact allow a candidate the option of selecting either an oral or written examination, allegation that former rule permitting licensing board to administer oral examinations violated fundamental due process in that it did not adequately safeguard against discrimination by the board would have become moot; however, in view of fact that revised rule allowed licensing board to choose form of examination, issue was not moot.
12. CONSTITUTIONAL LAW. No Certain Formula For Procedural Safeguards Required at Proceedings Granting, Revoking or Transferring License. A state cannot exclude a person from the practice of law or from any other occupation in a manner or for reasons that contravene the due process or equal protection clause; however, procedural safeguards that must constitutionally attend proceedings granting, revoking or transferring licenses need follow no certain formula and identification of precise dictates of due process requires balancing the governmental and personal interest and burdens involved. U.S.C.A. Const. Amend. 14.
13. LICENSES. Approval or Denial of License Applications was Administrative Function. In exercising its power to approve or deny applications for licenses as hoisting engineers, as distinguished from its power to adopt regulations, Board of Examiners of Hoisting Engineers acted in an administrative rather than in a legislative capacity.
14. CONSTITUTIONAL LAW. Due Process in Administrative Procedures. Opportunity to Be Heard. Due process within administrative procedures requires the opportunity to be heard at a meaningful time and in a meaningful manner.
15. CONSTITUTIONAL LAW. No "Meaningful Review" Where There Was No Record of Oral Examination Taken by Applicants. For purpose of rule that due process requires the opportunity to be heard at a "meaningful" time and in a "meaningful" manner, where there was no record of oral examinations taken by applicants for hoisting engineers licenses, except for the licensing board's conclusory finding that the applicants failed the oral examination, fact that unsuccessful applicants had opportunity to challenge the board's denial of their license applications did not provide a "meaningful" review; without record of questions and answers, applicant could not hope to prove that the board's action was arbitrary, capricious or discriminatory and any "meaningful" review was effectively precluded.
16. LICENSE. Judicial Review of Licensing Board. Where there is a clear, unequivocal allegation of probative facts that would establish fraud, imposition, discrimination or manifest unfairness on the part of examiners for an occupational license, courts will review to determine whether the licensing board was clearly wrong or abused discretion.
17. CONSTITUTIONAL LAW. Due Process Prohibits Privilege of Doing Business Being Dependent on Official Whim. In attempting to achieve appropriate balance of governmental and personal interests, due process cannot tolerate a licensing system that makes the privilege of doing business dependent on official whim.
18. CONSTITUTIONAL LAW. Rule Providing For Unrecorded Oral Examinations Violates Due Process. A licensing agency rule providing for oral examinations which makes no provision for the recording of questions and answers violates the guarantees of due process.
19. CONSTITUTIONAL LAW. Strict Judicial Scrutiny of State Statutory Classification. In order to withstand "strict judicial scrutiny" of a state statutory classification, state must be able to demonstrate that its purpose or interest in imposing the classification was both constitutionally permissible and substantial and that its use of the classification was necessary to the accomplishment of its purpose or the safeguarding of its interest.
20. LICENSES. Board's Restriction on Licensing of Aliens Unconstitutional in Absence of Any State Interest. Where state failed to claim any interest whatsoever and there was no conceivable substantial or constitutionally permissible interest that would justify the discrimination between aliens and citizens, licensing board's restriction on the ability of aliens to become licensed hoisting engineers was unconstitutional.
Unsuccessful applicants for license as hoisting engineers brought declaratory judgment action to determine the validity and applicability of certain regulations promulgated by the Board of Examiners of Hoisting Engineers. The Superior Court, Providence and Bristol Counties, Bourcier, J., dismissed the complaint. Plaintiffs appealed, and the Supreme Court, Bevilacqua, C.J., held that: (1) the license applicants presented the trial court with facts sufficient to entitle them to a declaratory judgment as to the validity of the licensing board's rule providing for oral examinations; (2) because the licensing board's residency rules threatened to interfere with or impair the applicants' legal rights or privileges, the applicants were entitled to have the validity of the rule determined; (3) a revision in the rules for licensing hoisting engineers did not render moot the applicants' contentions that the licensing board's administration of oral examinations violated fundamental due process; (4) the licensing board rule providing for oral examinations which made no provision for the recording of questions and answers violated the guarantees of due process, and (5) the licensing board's restriction on the ability of aliens to become hoisting engineers was unconstitutional.
Appeal sustained and judgment reversed.
Joseph DeGianfilippo, for plaintiffs.
Julius C. Michaelson, Attorney General, W. Kenneth O'Donnell, Special Assistant Attorney General, for defendants.
This appeal is from a judgment entered for the defendant, The Board of Examiners of Hoisting Engineers (the licensing board), in a declaratory judgment action to determine the validity and applicability of certain regulations promulgated by the licensing board. The plaintiffs filed their complaint pursuant to the provisions of G.L. 1956 (1969 Reenactment) § 42-35-7 of the Administrative Procedures Act.
The complaint discloses the following facts. The plaintiffs, Frederick Millett, a Canadian citizen, and Dana Cushing, are residents of Massachusetts and have been duly examined and issued hoisting engineers' licenses by that state. In June of 1971 they applied to the licensing board for similar licensure in Rhode Island. Their applications were returned, however, with an accompanying notification that it was the policy of the licensing board not to issue licenses to non-residents of Rhode Island unless there was to be employment within the state. Thereafter, plaintiffs' employer advised the licensing board by letter that plaintiffs had employment within the state and their applications were subsequently renewed.
On March 21, 1972, plaintiffs were individually administered oral examinations by the licensing board. The examinations were conducted pursuant to the "Rules and Regulations for Examining and Licensing of Hoisting Engineers," which had been adopted by the licensing board and duly filed with the Secretary of State of Rhode Island. Except for the three members of the licensing board, there were no witnesses present during the examinations and no record of the examinations was maintained. Thereafter, plaintiffs were notified by letter that they had failed to pass the examination.
The plaintiffs then commenced this action in Superior Court alleging that Rule 1 and Rule 9 of the licensing board's regulations were invalid. Rule 1 provides that every applicant for a hoisting engineers' license shall appear before the board and "pass a satisfactory examination which may consist of oral or written questions or a combination of both." Rule 9 provides that a hoisting engineers' license shall not be granted to an applicant who has not been a resident of Rhode Island for a period of at least 1 year. The plaintiffs contend that Rule 1 does not provide adequate safeguards to preclude discriminatory action by the licensing board, that Rule 9 is unconstitutional, and that both rules have been applied by the licensing board so as to discriminate against non-union members and nonresidents.
At the hearing in Superior Court, plaintiffs, in response to questions initiated by the trial justice, testified that they felt they had been unfairly tested because of their non-union status. They did not attempt to establish that they should have been issued a hoisting engineers' license on the basis of their responses to questions asked during the licensing examination. At the hearing a former member of the board at the time plaintiffs were examined was called as a witness to testify as to what took place at that time. Each of the three board members asked the applicants a number of questions drawn from an established list compiled by the licensing board for such use. The content of the questions dealt with the technical operation and mechanics of engines as well as rules of safety when operating the machinery. A record was kept by the examiner of which questions were asked of each applicant and the score he received for that question. No record, however, was kept of the applicants' actual answers. An average of 70 or better was necessary in order to achieve a passing grade. The board's records indicate that plaintiff Cushing received scores of 20, 65, and 39 while plaintiff Millett received scores of 20, 50, and 53.
We note that the plaintiffs did not in this action seek the immediate issuance of a license.
After presentation of plaintiffs' case, the licensing board moved for entry of judgment for defendants. It contended that there was no showing of unfairness to plaintiffs and that because they were permitted to take the examination, the board had waived the residency requirement; therefore, this particular allegation was rendered moot.
The trial justice granted the board's motion, treating it as one of involuntary dismissal under Super. R. Civ. P. 41(b)(2). He found that there was insufficient evidence presented by plaintiffs which would permit the court to conclude that the rules or their threatened application interfered with or impaired the legal rights or privileges of plaintiffs. Dismissal was granted without prejudice to plaintiffs' rights to return at a future time and present further evidence to substantiate their claims.
In urging error, plaintiffs contend that the trial justice misconceived the nature of relief sought in their declaratory action and the evidence required to support such relief. Specifically, they attack the trial justice's belief that in order to be entitled to relief, plaintiffs must establish as a matter of fact that their legal rights or privileges were interfered with by application of the licensing board's rules.
The initial question which this court must determine on appeal is the propriety of the trial justice's decision to grant the motion for entry of judgment in defendants' favor.
[1-4] The purpose of declaratory judgment actions is to render disputes concerning the legal rights and duties of parties justiciable without proof of a wrong committed by one party against another, and thus facilitate the termination of controversies. 1 Anderson, Actions for Declaratory Judgments § 4 (2 ed. 1951). Theroux v. Bay Assoc., Inc., 114 R.I. 746, 748, 339 A.2d 266, 267 (1975); Portsmouth Hosp. v. Indemnity Ins. Co., 109 N.H. 53, 242 A.2d 398 (1968); Davis v. State, 183 Md. 385, 37 A.2d 880 (1944). In light of their highly remedial nature then declaratory judgment statutes should be liberally construed; they should not be interpreted in a narrow or technical sense. Sherwood Medical Indus. Inc. v. Deknatel, Inc., 512 F.2d 724 (8th Cir. 1975); Beacon Constr. Co. v. Matco Elec. Co., 521 F.2d 392 (2d Cir. 1975); Beaudoin v. State, 113 N.H. 559, 311 A.2d 310 (1973). Naturally, there remains the prerequisite that the party seeking declaratory relief present the court with an actual controversy. Malinou v. Powers, 114 R.I. 399, 404, 333 A.2d 420, 423 (1975); Goodyear Loan Co. v. Little, 107 R.I. 629, 269 A.2d 542 (1970); Lamb v. Perry, 101 R.I. 538, 225 A.2d 521 (1967). Trial justices may not dispense with the traditional rules prohibiting them from rendering advisory opinions or adjudicating hypothetical issues. Lamb v. Perry, supra.
The principles outlined in the preceding paragraph describing generally the nature and scope of declaratory actions are applicable with equal force to § 42-35-7, the statutory provision pursuant to which the complaint in the instant case was filed. That provision reads:
"Declaratory judgment on validity or applicability of rules. — The validity or applicability of any rule may be determined in an action for declaratory judgment in the superior court of Providence county, when it is alleged that the rule, or its threatened application, interferes with or impairs, or threatens to interfere with or impair, the legal rights or privileges of the plaintiff. The agency shall be made a party to the action. A declaratory judgment may be rendered whether or not the plaintiff has requested the agency to pass upon the validity or applicability of the rule in question."
Interpretation of this statute presents a question of first impression in Rhode Island and, while it was based on an identical provision in the Model State Administrative Procedures Act, which has been adopted in substantial part in at least 27 states, there is a conspicuous absence of decisional law interpreting its language. Nevertheless, since the previously discussed principles relating generally to declaratory relief are applicable to this statute, it is clear that to warrant a determination by the trial justice of the validity of the questioned rules, plaintiffs must demonstrate a sufficient allegation of interest. Malinou v. Powers; Goodyear Loan Co. v. Little; Lamb v. Perry, all supra. That is, appropriate facts must be established from which the trial justice may determine that an actual controversy relating to the validity of the agency's rules exists.
The major thrust of plaintiffs' complaint is an attack on the facial validity of the board's rule permitting it to administer oral examinations. Their belief is that the rule violates fundamental due process insofar as it does not provide for adequate safeguards to preclude discrimination on the part of the board's members.
At the hearing it was not disputed that plaintiffs had sought licensure to operate hoisting equipment in this state and were denied it. Furthermore, the evidence presented indicated that no record of plaintiffs' actual answers to questions asked during the examination was kept.
Clearly, under these circumstances plaintiffs have a legal interest in the relief they seek. That is, they have presented sufficient facts giving rise to some conceivable legal hypothesis which will entitle them to some relief against defendant. 1 Anderson, Actions for Declaratory Judgments § 14 (2d ed. 1951); see Goodyear Loan Co. v. Little, supra at 631, 269 A.2d at 543 (1970). We conclude, then, that plaintiffs presented the trial justice with sufficient facts entitling them to a declaratory judgment as to the validity of the licensing board's rule providing for oral examinations.
With respect to the licensing board's rule establishing a 1-year residency requirement, the trial justice apparently believed that plaintiffs had not established that the rule interfered with their legal rights since they were allowed to take the examination. While it was not expressly stated in the pleadings or at the hearing, it is reasonable to infer from what has been established that plaintiffs intend to reapply for a hoisting engineers' license in which case the residency requirement could be used to block their successful application for licensure. Accordingly, since the residency rule "threatens to interfere with or impair, the legal rights or privileges" of plaintiffs within the meaning of § 42-35-7 they were entitled to have its validity determined by the trial justice.
In view of the fact that the plaintiff Dana is a Canadian citizen Rule 9 would preclude him from obtaining a license.
Our conclusion that the trial justice was in error in refusing to render a declaratory judgment would normally require that the case be remanded to the trial court for further proceedings. However, in view of the fact that the issues involved depend entirely on questions of law, we consider them in the interest of avoiding further delay.
[10, 11] Since the commencement of this action in Superior Court, the Rules and Regulations for Examining and Licensing Hoisting Engineers have been revised. The pertinent revised rules are as follows:
The legislation authorizing the board to "make suitable rules and regulations for examining and licensing of hoisting engineers" is G.L. 1956 (1968 Reenactment) § 28-26-4 (emphasis added).
"1. Every applicant for a hoisting engineer's license shall appear before the examining board for examination. Examinations may be given orally, in writing, or a combination thereof. In addition to the herein above enumerated examinations, on-the-job examinations may be conducted by the Board."
* * *
"7. Licenses shall in no case be granted to an applicant who is not a citizen of the United States."
While the record contains no statement of the licensing board's revised rules and regulations, we can take judicial notice of those regulations which an inferior tribunal of original jurisdiction may have properly noticed. Hooper v. Goldstein, 104 R.I. 32, 37, 241 A.2d 809, 812 (1968).
With respect to Rule 1 the state contends that inasmuch as the present rules and regulations provide that candidates may choose a written examination, this question has become moot. We could agree with the state's contention if in fact Rule 1 allowed a candidate the option of selecting either an oral or written examination. An accurate reading of the rule, however, indicates that the choice as to the form of the examination lies with the board. Thus, this issue is not rendered moot and, accordingly, the constitutionality of this rule is at issue.
The plaintiffs contend that Rule 1 insofar as it provides for oral examinations without any provision for the recording of questions and answers violates due process. Specifically they argue that Rule 1 does not provide adequate safeguards to preclude arbitrary or discriminatory action by the licensing board, since the failure to record questions and answers during the examination prevents meaningful review of the board's action.
General Laws 1956 (1969 Reenactment) § 42-35-18(b)(6) of the Administrative Procedures Act (APA) specifically exempts the procedures of the Board of Examiners of the Hoisting Engineers from the notice and hearing provision, the provision requiring specific findings of fact in any contested case, and other enumerated provisions of the APA. Thus, the licensing board is under no statutory requirement that it support its decision in writing and include therein findings of fact.
It is well established that "[a] State cannot exclude a person from the practice of law or from any other occupation in a manner or for reasons that contravene the Due Process or Equal Protection Clause of the Fourteenth Amendment." (Emphasis added.) Schware v. Board of Bar Examiners. 353 U.S. 232, 238-39, 77 S.Ct. 752, 756, 1 L.Ed.2d 796, 801 (1957). See also Hallmark Clinic v. North Carolina Dep't of Human Resources, 380 F. Supp. 1153 (E.D.N.C. 1974); Mackay v. Nesbett, 285 F. Supp. 498 (D. Alaska 1968). However, the procedural safeguards that must constitutionally attend proceedings granting, revoking or transferring licenses necessary to carry out an occupation follow no certain formula. See Do-Right Auto Sales v. Howlett, 401 F. Supp. 1035 (N.D. Ill. 1975); accord, Raper v. Lucey, 488 F.2d 748 (1st Cir. 1973). The identification of the precise dictates of due process requires a balancing of the governmental and personal interests and burdens involved. Fusari v. Steinberg, 419 U.S. 379, 95 S.Ct. 533, 42 L.Ed.2d 521 (1975); Cafeteria Restaurant Workers Union, Local 473 v. McElroy, 367 U.S. 886, 81 S.Ct. 1743, 6 L.Ed.2d 1230 (1961); Do-Right Auto Sales v. Howlett, supra. See also State v. Ouimette, 117 R.I. 361, 367 A.2d 704 (1976).
[13-16] The plaintiffs' strong interest in having a record kept of the questions and answers of each oral examination is clear. In exercising its power to approve or deny plaintiffs' application for a license, as distinguished from its power to adopt regulations, the board acted in an administrative rather than legislative capacity. See Potter v. Board of Selectmen, 166 Conn. 376, 349 A.2d 844 (1974). It is well established that due process within administrative procedures requires the opportunity to be heard "at a meaningful time and in a meaningful manner." Raper v. Lucey, supra at 753, quoting Goldberg v. Kelly, 397 U.S. 254, 267, 90 S.Ct. 1011, 1020, 25 L.Ed.2d 287, 299 (1970). See also Greene v. McElroy, 360 U.S. 474, 79 S.Ct. 1400, 3 L.Ed.2d 1377 (1959); Schware v. Board of Bar Examiners, supra; Orr v. Trinter, 444 F.2d 128 (6th Cir. 1971). Although plaintiffs in the instant case had the opportunity to challenge the board's denial of their applications for a license, we are unable to comprehend how such a review could be said to be "meaningful" in the absence of a record of the oral examination. Here, there was no record except the board's conclusory finding that plaintiffs failed the oral examination. Without a record of questions and answers, an applicant could not hope to prove that the board's action in denying his license application was arbitrary, capricious or discriminatory; any meaningful review if effectively precluded. By this we do not mean that courts "will not embark on an investigation to ascertain the integrity of the examination results in the absence of clear unequivocal allegations of probative facts that would establish fraud, imposition, discrimination or manifest unfairness on the part of the examiners." In re DeOrsey, 112 R.I. 536, 543, 312 A.2d 720, 724 (1973). However, where this condition is met, courts will review to determine whether the board was clearly wrong or abused its discretion. In re DeOrsey, supra; In re Capace, 110 R.I. 254, 291 A.2d 632 (1972).
We are of the opinion that the countervailing governmental interests are insubstantial in comparison with the interests of the applicants. Any financial burden that such recordkeeping would impose appears minimal. Moreover, we do not believe the additional administrative effort involved in keeping a record of the answers would be unduly burdensome, particularly in view of the fact that the licensing board presently keeps some record of the questions asked.
[17, 18] In attempting to achieve the appropriate balance of governmental and personal interests, we are mindful that "due process cannot tolerate a licensing system that makes the privilege of doing business dependent on official whim." Hallmark Clinic v. North Carolina Dep't of Human Resources, supra at 1158, citing Yick Wo v. Hopkins, 118 U.S. 356, 370, 6 S.Ct. 1064, 1071, 30 L.Ed. 220, 226 (1886). Thus, we conclude that a licensing agency rule providing for oral examinations which makes no provision for the recording of questions and answers violates the guarantees of due process.
With respect to the validity of Rule 7 of the revised rules, providing that licensure shall not be granted to applicants who are not citizens of the United States, we are guided by the standards enunciated in recent Supreme Court decisions. Examining Bd. of Eng'rs. Architects Surveyors v. Flores de Otero, 426 U.S. 572, 96 S.Ct. 2264, 49 L.Ed.2d 65 (1976); In re Griffiths, 413 U.S. 717, 93 S.Ct. 2851, 37 L.S.Ct. 2842, 37 L.Ed.2d 853 (1973); Graham v. Richardson, 403 U.S. 365, 91 S.Ct. 1848, 29 L.Ed.2d 534 (1971). An analysis of these cases reveals that state classifications based on alienage are subject to "strict judicial scrutiny." In order to withstand such scrutiny the state must be able to satisfy the burden of demonstrating that in imposing the classification" its purpose or interest is both constitutionally permissible, and substantial, and that its use of the classification is 'necessary * * * to the accomplishment' of its purpose or the safeguarding of its interest." In re Griffith, supra, at 721-22, 93 S.Ct. at 2855, 37 L.Ed.2d at 915. These principles have found particular application when aliens have been restricted from engaging in private enterprise and occupations that are otherwise lawful, and these restrictions have been uniformly struck down. E.G., Examining Bd. of Eng'rs, Architects Surveyors v. Flores de Otero; In re Griffiths, both supra; Truax v. Raich, 239 U.S. 33, 42, 36 S.Ct. 7, 11, 60 L.Ed.2d 131, 135 (1915).
In the instant case the state has failed to claim any interest whatsoever, no can we conceive of any substantial or constitutionally permissible interest that would justify the discrimination between aliens and citizens. Accordingly, we hold that the licensing board's restriction on the ability of aliens to become licensed hoisting engineers is unconstitutional.
The plaintiffs' appeal is sustained, and the judgment appealed from is reversed.