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Bias in environmental agency decision making.

I.   Introduction
II.  Fairness in Administrative Law
     A. Doctrinal Bases for Requiring an Unbiased Decision Maker.
     B. Impermissible Bias as a Function of Type of Proceeding
     C. A Taxonomy of Agency Bias
        1. Conflict of Interest
        2. Personal Animus or Favoritism
        3. Prejudgment of Facts, Law, or Policy
        4. Separation of Functions
        5. Ex Parte Communications
        6. Improper Political Influence
III. Empirical Study of Bias in Environmental Proceedings
     A. Study Design and Methods
     B. Study Results
IV.  Conclusion


I. INTRODUCTION

When the British Petroleum (BP) Deepwater Horizon drilling rig began leaking oil into the Gulf of Mexico, attention turned to the cozy relationship between BP and officials at the Minerals Management Service (MMS) charged with developing and enforcing environmental and safety regulations for oil operations on federal lands. Inspector General reports revealed that MMS employees had been accepting free gifts from oil and gas firms, many of whom employed their family members and personal friends, and engaging in sexual relationships with industry officials. (1) It was common practice for the regulatory agency, which referred to the oil companies as "clients" and "customers," to waive environmental reviews and rubber stamp industry-proposed standards as satisfying the federal requirements. (2) One cause of this institutional failure was the conflict created by combining regulatory and revenue-collection functions within the same agency, which is alleged to have created bias within the MMS toward oil industry projects and requests. (3)

In the licensing proceeding for the Yucca Mountain radioactive waste disposal facility, parties alleged that some Nuclear Regulatory Commissioners prejudged whether the Department of Energy could legally withdraw its licensing application. Two counties in the proceeding moved for their recusal based on statements during congressional confirmation hearings that they would not "second guess" the Department of Energy's decision to abandon the project. (4) What looked to the parties like an obvious case where a reasonable person would harbor doubts about the impartiality of the decision maker was, nevertheless, viewed by the commissioners as an impartial commitment not to question the basis for a party's actions. (5)

More recently, critics of the proposed 1,700 mile Keystone XL oil pipeline allege that the environmental review process has been tainted by State Department favoritism toward the company that plans to build the pipeline and by a financial conflict of interest in the company hired to develop an important environmental impact statement. (6) Responding to a request from members of Congress, the State Department's Office of Inspector General conducted an investigation finding neither evidence of improper influence, nor a relationship between the pipeline proponent and the environmental impact statement contractor, nor bias by the Department toward the pipeline company. (7)

Similar issues of bias repeatedly occur in state agency environmental decisions. An agency director mentioned to public officials that a pending landfill permit application seemed like a "political hot potato," implying that it could be denied for that reason. (8) In another case, a member of a county board was quoted in a newspaper as saying, prior to a hearing on a landfill siting application, that residents in the area "have had enough of landfills." (9) The heads of state environmental agencies have repeatedly faced calls for their disqualification based on possible conflicts of interest. (10) Governors, with the power to appoint and dismiss agency decision makers, are often aggressive proponents or opponents of projects and have not hesitated to express their opinions, often in very strong terms, on how ongoing disputes regarding those projects should be resolved by state agency officials. (11)

Indicative of the confusing outcomes of many of the court cases dealing with allegations of impropriety in environmental proceedings, the "political hot potato" reference was deemed sufficient evidence of partiality to force the recusal of the agency official. (12) Yet, declaring that there are already enough landfills in the area of a proposed landfill was held not to indicate to a disinterested observer that the decision maker had in some measure adjudged the merits of the case in advance of the landfill siting hearing. (13)

Beyond the reported instances, perceptions of bias in environmental proceedings are widespread. (14) Where bias occurs, it can have significant impacts on the implementation and enforcement of environmental laws. Biased proceedings--by prejudicing the outcome and leading to decisions that are not based on the facts or law--can undermine the goals of environmental laws, harming both public health and the environment. Biased processes also interfere with the ability of citizens and regulated entities to obtain a fair hearing and, ultimately, justice. The mere perception of unfair proceedings can undermine the credibility of, and confidence in, environmental agencies and erode support for, and compliance with, environmental programs. (15) Conversely, "enhancing the perceived fairness of the rulemaking process itself can increase the level of voluntary compliance with environmental regulations." (16)

Yet, environmental decision makers are under substantial, and seemingly increasing, economic and political pressure to favor certain sides in environmental controversies. (17) Consequently, court cases dealing with allegations of improper agency bias in environmental proceedings, a fraction of the instances of environmental agency misconduct alleged to have occurred, are not uncommon. (18) Indeed, administrative law treatises and articles often use cases from environmental agencies to illustrate legal principles dealing with issues of due process and lack of agency impartiality. (19)

In spite of this prevalence, there has been no systematic effort in the academic literature to address the types of improprieties that arise in environmental proceedings and how legal rules governing bias have been applied in environmental proceedings. This Article addresses that gap, taking both a doctrinal and empirical approach. Part II of the Article lays out the basic legal principles that govern fairness in administrative proceedings and illustrates how environmental cases have dealt with allegations of improper agency proceedings. Part III provides the results of the first empirical study of court cases dealing with allegations of bias in environmental proceedings, concluding that while courts do not often find agency decisions unlawful on grounds of bias, reported claims of bias have increased over the last four decades and, in some types of cases, enjoy a reasonable level of success. Finally, Part IV offers observations on addressing bias in environmental agency proceedings and suggests some reforms that would provide greater fairness in the handling of potential bias issues.

II. FAIRNESS IN ADMINISTRATIVE LAW

"Bias," as used herein, encompasses a number of improper actions by or towards an agency that might affect the fairness, impartiality, or integrity of the agency's decision making. Therefore, bias goes beyond predisposition toward a party and includes matters such as conflicts of interest, ex parte communications, separation of agency functions, and inappropriate efforts to influence an agency decision. By focusing on what some have termed the "integrity of the decisionmaking process," (20) however, this Article does not address hidden cognitive biases or heuristics that also might influence the decisions of an agency employee or official and tilt a decision in a certain direction. (21)

A. Doctrinal Bases for Requiring an Unbiased Decision Maker

The issue of administrative fairness has been described as "one of the most complex aspects of administrative practice," (22) and determining if what appears to be a biased government decision unlawfully taints the outcome is a function of characterizing the legal basis for the allegation, the type of proceeding involved, and the type of bias alleged.

Not all governmental decisions made in a biased manner are unlawful. To be impermissible, the biased action must be prohibited by the Due Process Clause, a provision in the underlying substantive statute, an administrative procedure act, regulations implementing the underlying statute, or government codes policing the conduct of the agency or board.

The Due Process Clause requires some type of hearing before the government can deprive a person of life, liberty, or property. (23) In analyzing a government decision under the Due Process Clause, three limitations are relevant. First, the requirement for procedural due process only applies to "individualized fact-based deprivations" and not to "policy-based deprivations." (24) Thus, when a government decision applies to a class of individuals or entities, rather than to an individual's person or property, the right to procedural due process does not apply. (25) Second, "[t]he requirements of procedural due process apply only to the deprivation of interests encompassed by the Fourteenth Amendment's protection of liberty and property." (26) Although courts have moved away from the "right-privilege" distinction by extending due process protection to the denial of government benefits and entitlements, a party claiming a due process right to procedural fairness must still demonstrate that it possesses a liberty or property interest at risk in the proceeding. (27) Finally, where protected interests are implicated by an individualized government action, some kind of hearing is due. (28)

Determining what that hearing must entail involves a balancing of interests under the three-part framework set forth by the Supreme Court in Mathews v. Eldridge. (29) At the very least, "an unbiased tribunal is a necessary element in every case where a hearing is required." (30) This constitutional guarantee requires not simply an absence of actual bias but also is implicated where "the probability of actual bias on the part of the judge or decisionmaker is too high to be constitutionally tolerable." (31) Courts note the heightened importance of an impartial decision maker in administrative adjudications where many of the procedural safeguards traditionally found in judicial proceedings are relaxed. (32)

The statute under which the government agency or official is acting also may establish requirements for making a fair decision, though the legislature cannot establish procedures below the minimum required by the Due Process Clause. (33) For example, the legislature may impose conflict of interest restrictions or recusal requirements on government employees and elected officials. (34) In fact, as a way to help avoid biased decisions, a number of federal statutes impose financial disclosure and conflict of interest prohibitions on government officials. (35)

Administrative procedure acts are another important source of rights to an unbiased agency proceeding. The federal Administrative Procedure Act (APA) (36) contains provisions that help ensure adjudications are conducted in an impartial manner, prohibit ex parte communications, and prevent someone engaged in investigative or prosecutorial functions from participating in the decision on the same matter. (37) State administrative procedure acts contain similar safeguards. (38)

An agency also may create rights to an unbiased decision maker through regulations setting forth the process by which decisions must be made. (39) Thus, some agencies have developed regulations guarding against conflicts of interest and prejudgment of the outcome of a proceeding. (40) Other agency regulations govern the behavior of administrative law judges and their duty to act fairly, impartially, and without any interest in the parties or outcome. (41)

Finally, some government ethics codes prohibit government employees and officials from taking part in decisions in which they may appear to be partial. For example, 18 U.S.C. [section] 208 makes it a crime for an officer or employee of the executive branch to participate personally and substantially in a decision in which the person or her family has a financial interest. (42) Similarly, Executive Order 12,731 and federal regulations set forth provisions "to ensure that an employee takes appropriate steps to avoid an appearance of loss of impartiality in the performance of his official duties." (43)

B. Impermissible Bias as a Function of Type of Proceeding

In no government proceeding must a decision maker be free of all bias; indeed, no person can be totally free of biases, particularly towards issues of policy. (44) Rather, a decision maker or proceeding may not be impermissibly biased. (45) Determining what bias is legally impermissible depends in large measure on whether the proceeding adjudicates disputed facts or aims to set policy or general requirements. (46)

Under administrative law, agency actions generally result in either a "rule" or an "order." A rule, under the APA, is an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization or procedures of an agency. (47) An order is defined as the final disposition of an agency in a matter other than a rule, including licensing. (48) "Adjudication" is the agency process for formulation of an order, which generally resolves particular rights and duties. (49) "[A]djudication is concerned with the determination of past and present rights and liabilities. Normally, there is involved a decision as to whether past conduct was unlawful.... Or, it may involve the determination of a person's right to benefits under existing law." (50)

In environmental matters, permits; land use decisions applied to particular pieces of property; and sanctions for violating statutes, regulations, and permits are handled through adjudications by either agencies or legislative bodies acting in an administrative or quasi-judicial capacity. (51) As noted above, it is the individualized determinations addressed in adjudications that are protected by due process; policy decisions handled in rulemaking proceedings are generally not protected. (52)

Because agencies and boards adjudicate millions of matters each year, federal and state administrative procedure acts have divided proceedings into "formal" and "informal" adjudications as a way to define the extent of the procedures required. Under the APA, the procedural requirements for formal adjudication apply when the adjudication is required by statute "to be determined on the record after opportunity for an agency hearing." (53) Where Congress has not employed the particular words "on the record," courts disagree over whether an agency must employ formal adjudication procedures; the Supreme Court has not addressed the issue. (54) The trigger for a formal adjudicative hearing under state administrative procedure acts is defined by a statute other than the administrative procedure act, not by the particular use of the term "on the record." (55)

Where an agency proceeding is deemed formal adjudication, the required process mirrors many aspects of a judicial proceeding, including an oral evidentiary hearing, requirements for an impartial decision maker, a ban on ex parte communications, and separation of the decision maker from investigative and prosecutorial functions on the same matter. (56)

"Informal adjudication" is not formally defined but refers to the agency process for issuing an order when a formal adjudication is not required. (57) It is estimated that 90%-95% of all agency decisions are made through informal adjudication. (58) These include the vast majority of permit and licensing proceedings, as well as agency compliance and remedial orders to address violations of statutes and regulations. (59)

The APA imposes few mandates on informal adjudications, generally only requiring a right to appear in some fashion with counsel, prompt notice of the denial of any written application or request, and some brief statement of the grounds for any denial. (60) Significantly, informal adjudications under the APA are not required to include procedures to protect against agency bias. (61) Informal adjudications under state administrative procedure acts similarly do not directly address bias. (62)

Where adjudication may result in a deprivation of a person's liberty or property interest, due process would apply and require an impartial decision maker, though under Mathews v. Eldridge, the procedures to protect those interests in many situations could be minimal. (63) Agencies are free to devise additional procedural safeguards to protect against bias. (64) However, under Vermont Yankee Nuclear Power Corp. v Natural Resources Defense Council, Inc. (Vermont Yankee), (65) "[a]bsent constitutional constraints or extremely compelling circumstances" reviewing courts cannot compel federal administrative agencies to provide procedures beyond those required by the underlying statute or the APA. (66)

Agency rulemaking procedures provide few protections against biased decision makers. As noted, the APA defines a "rule" as an agency statement of general or particular applicability and future effect designed to describe the organizational procedures of an agency or implement, interpret, or prescribe law or policy. (67) "Rulemaking" is simply the process for formulating, amending, or repealing a rule. (68) As explained in the Attorney General's Manual:
   The object of the rule making proceeding is the implementation or
   prescription of law or policy for the future, rather than the
   evaluation of a respondent's past conduct. Typically, the issues
   relate not to evidentiary facts, as to which the veracity and
   demeanor of witnesses would be important, but rather to the
   policy-making conclusions to be drawn from the facts. (69)


Thus, rules differ from orders because they usually apply to a class, rather than a named person or entity; regulate future conduct; and involve the consideration of legislative rather than adjudicative facts. Although not common, a rule may apply to a single person or entity, provided it exhibits the other characteristics of a rule. (70)

As with adjudications, the APA establishes "formal" and "informal" rulemaking proceedings. (71) Under the APA, when rules are required by a statute to be made "on the record after opportunity for an agency hearing," (72) the procedures for formal rulemaking apply, including the right to present evidence and cross-examine witnesses. (73) This also includes the right to a hearing "conducted in an impartial manner" and restrictions on ex parte communications. (74) The Supreme Court has held that a statutory right to a "hearing," rather than to a hearing "on the record," is not sufficient to compel formal rulemaking procedures. (75) Formal rulemaking, with its trial-type procedures, accordingly, is an infrequent method of issuing agency rules. (76)

Informal rulemaking is the process used to develop almost all rules and requires minimal procedural steps. Known as notice-and-comment rulemaking, informal rulemaking under section 553 of the APA must simply provide general notice of the proposed rule, give interested persons an opportunity to participate through written submissions with or without accompanying oral presentations, and provide a concise general statement of the final rule's basis and purpose. (77) Even these minimal notice procedures are not required for interpretative rules; general statements of policy; rules of agency organization, procedure, or practice; or when good cause makes the notice and comment procedures impracticable, unnecessary, or contrary to the public interest. (78)

The APA's informal rulemaking provisions impose no requirements for an impartial proceeding or neutral decision maker, reflecting the quasi-legislative nature of the process, and the fact that promulgated rules will generally have a prospective effect and apply to a class of situations, rather than any specific individual. (79) Congress or agencies may provide additional procedural rights for certain rulemaking proceedings, including requirements for the handling of ex parte communications. (80) In addition, because rulemaking does not address individual rights, due process ordinarily does not require more procedural protection in informal rulemaking than that provided by Congress. (81) Courts, therefore, cannot require additional procedural steps. (82)

C. A Taxonomy of Agency Bias

The right of a party to an unprejudiced decision maker is both a feature of due process and set out in parts of administrative procedure acts. (83) Yet determining if there is a requirement for fairness and whether a decision maker or the proceeding was sufficiently unbiased often requires demarcating one type of bias from another. (84) Courts have identified at least six categories of impropriety that can negatively affect the integrity of the decision-making process. (85)

1. Conflict of Interest

A conflict of interest between the official's responsibilities to the public and his or her personal interest where the decision maker stands to gain or lose from the outcome is a source of potential bias. (86) A conflicting interest has been defined as arising "when the public official has an interest not shared in common with the other members of the public." (87) In effect, there is a conflict between the private interest of the decision maker and the responsibilities that go with the decision maker's official position. The result is a decision influenced, or potentially influenced, by the self-interest of the decision maker and not based on an impartial consideration of the facts and law.

A number of Supreme Court cases relate to financial conflicts of interest by government officials. In Tumey v. Ohio, (88) a mayor was allowed to retain as compensation part of the fines he assessed against defendants in his municipal court, yet received no compensation if the defendant was not convicted. (89) The Court set out the test for determining if a decision maker's interest in the outcome should be disqualifying: whether the procedure "would offer a possible temptation to the average man as a judge to forget the burden of proof required to convict the defendant, or which might lead him not to hold the balance nice, clear, and true between the state and the accused." (90) In a later case, Ward v Village of Monroeville, (91) the Court found that even though a mayor's compensation was not directly related to the outcome of a case, because up to one half of the village's revenues came from the fines, forfeitures, costs, and fees imposed by the mayor on convicted defendants in his traffic court, the possible temptation to generate city revenue created too much potential for partisan decision making. (92) In cases involving a financial interest in the outcome, courts do not require proof of actual prejudice but only a showing that there is a possible temptation for the decision maker not to act impartially between the competing parties or interests. (93)

Although these cases involved judicial proceedings, this pecuniary interest rule is applied to administrative proceedings. (94) In Gibson v Berryhill, the Court held that a state board of optometry composed solely of independent optometrists was disqualified from deciding if other optometrists employed by a company, and therefore not independent, were aiding and abetting a corporation in the illegal practice of optometry. (95) The Court determined that if the board were to find the practice illegal, then the individual members of the board would inherit the business of these company optometrists, stating that "those with substantial pecuniary interest in legal proceedings should not adjudicate these disputes." (96) In contrast, where a majority of the members of an optometry board had to be members of a specific optometry organization, the Court found that a general economic, rather than a personal pecuniary, interest by agency decision makers in the subject they regulate--common with members of appointed boards and commissions at the state and local level--did not deny regulated optometrists their right to a fair and impartial hearing. (97) Similarly, where the prosecutor performed no judicial or quasi-judicial function, no government official stood to profit economically from vigorous enforcement, and the enforcing agency was not financially dependent on maintaining a high level of penalties, the possibility of pecuniary bias was too remote to prohibit the agency's practice of keeping part of the civil penalties it collected. (98)

The significant financial interests at stake in many environmental disputes have made allegations of financial conflicts of interest not uncommon and have resulted in a number of instances where there was a sufficient pecuniary interest to disqualify the decision maker. Land use decisions, in particular, have been problematic where the value of the decision maker's own property would be directly enhanced or reduced by the adjudicated decision. (99) So too, where an official has an ownership interest in a party to the environmental proceeding the official is disqualified. (100) Applying the "possible temptation to the average man as a judge" test to less direct pecuniary benefits, such as where a relative's land might increase in value from the adjudication or where the decision maker's property was part of a large group of affected properties, has not resulted in disqualification. (101)

Current or potential future employment also raises conflict of interest concerns. Where a decision maker's current employer or company would benefit directly from the decision or where the decision maker is seeking employment or a contract from a party, the potential for partiality is too great and disqualification is required. (102) In contrast, an employment relationship between an official's family member and a party is not necessarily disqualifying, particularly if the family member is not working on the matter under consideration. (103) In addition to general government employee conflict of interest prohibitions, a number of environmental statutes mandate that decision makers disclose potential conflicts of interest in a pending matter and refrain from participating in any decision relating to that matter. (104) Recently, a number of state environmental officials have faced conflict of interest charges because of prior work relationships. (105)

Courts have struggled with the due process implications of an environmental board or agency holding a pecuniary interest in the matter pending before it. A series of cases involving the U.S. Forest Service have addressed concerns over the potential conflict arising from the Service's budgeting process, which allows the agency to keep a percentage of the funds it realizes from authorizing timber sales. (106) Both the Sixth and Ninth Circuits have noted that this financial interest predisposes the Forest Service toward certain timber proposals. (107) The Sixth Circuit has stated that the Service's budgeting process may result in decisions "made, not because they are in the best interest of the American people but because they benefit the Forest Service's fiscal interest." (108) The Ninth Circuit has similarly found that the Service's substantial financial interest in timber harvesting can make it "more interested in harvesting timber than in complying with our environmental laws." (109) Although these appellate decisions were reversed on other grounds, courts continue to note the Forest Service's apparent conflict of interest and the conflict's effect on the agency's duty to objectively evaluate timber proposals. (110)

The financial interest of the government authority in the underlying property was directly at issue in E & E Hauling, Inc. v. Pollution Control Board, (111) where the county board that reviewed the landfill siting application owned the proposed landfill property through another district run by the board and would receive $30,000 per month in revenue from its operation. (112) The Illinois Supreme Court was persuaded that the legislature, in giving local authorities the power to approve landfill locations within their jurisdiction, found nothing fundamentally unfair about a local authority passing judgment on property it owned. (113) The court also did not find the $30,000 per month a sufficient temptation for the county board not to accord the other parties their due process of law when compared to the authority's $163.5 million total annual budget. (114) A later Illinois appellate court similarly held that it was not fundamentally unfair for a landfill site approval decision to be made by the same public body that had recently purchased forty acres of land and spent large sums of public funds for the purpose of constructing that landfill, basing its decision not on the U.S. Supreme Court's "possible temptation" test but simply deferring to the legislature's decision to vest responsibility for landfill siting decisions with local authorities. (115)

An extreme example of agency pecuniary bias involved the Puerto Rico Environmental Quality Board (EQB). The EQB proposed a fine of seventy-six million dollars against Esso Standard Oil for fuel leaks from underground storage tanks at one of its service stations. (116) The fine exceeded any previous fine levied by the EQB by 5,000 times, represented twice the EQB's annual budget, and would be placed into a discretionary account administered by the EQB and disbursed by its chairman. (117) Esso sought a permanent injunction against the fine, arguing that the EQB's institutional interest in imposing the hefty fine denied the company its due process of law. (118) The court agreed, holding that although members of the EQB may not stand to gain personally, the potential benefit to the EQB's budget--especially where the EQB had complete discretion over the use of the seventy-six million--made the possibility of temptation and appearance of bias infecting the proceeding undeniable. (119)

Mechanisms whereby the adjudicator of an environmental dispute is funded directly by one party also may raise possible temptations to decision makers and undercut the neutrality required by due process. (120) In contrast, where a board's institutional interest in funds that might result from its decision is minimized by a statute that strictly limits how much the board would receive and how it must be expended, the relationship of the board to the funds is too remote to support a finding of institutional bias. (121)

The slanted composition of environmental boards or commissions raises questions about institutional bias. Local land use boards, in particular, are often made up of persons involved in buying, selling, or developing real estate who, although perhaps not having a personal or financial stake in the particular piece of property at issue, favor such development and minimize health, safety, or welfare concerns. (122) Some state laws seek to obtain a balance of views on environmental boards. (123) However, legislative efforts to address such institutional bias, particularly at the local level, are generally rare, (124) and successful legal challenges to the composition of environmental boards are also seemingly rare. (125)

A number of cases have addressed allegations that the contractor preparing an environmental impact statement (EIS) under the National Environmental Policy Act (NEPA) (126) had a disqualifying conflict of interest. (127) NEPA regulations require that contractors execute a disclosure statement specifying that they have no financial or other interest in the outcome of the project, (128) interpreted to mean an agreement, enforceable promise, or guarantee of any future work on the project. (129) Courts draw a distinction between contractors hired to prepare an EIS and those who merely participate by producing background papers used by preparers of an EIS, finding NEPA's conflict-of-interest regulations apply only to actual preparers. (130) Where a conflict of interest exists, "[the contractor] should be disqualified from preparing the EIS, to preserve the objectivity and integrity of the NEPA process." (131)

Despite this direction, courts repeatedly excuse the failure to execute the disclosure statement, and even excuse clear instances of a conflict of interest under the regulations, focusing not on the conflict but on whether the breach compromised the objectivity and integrity of the NEPA process. (132) They rationalize that any error was harmless, holding that the degree of oversight exercised by the agency over the contractor was sufficient to cure the conflict or failure to file the required disclosure form. (133)

2. Personal Animus or Favoritism

Personal prejudice by a decision maker toward a party, witness, or attorney is what is most often thought of as bias. (134) In those instances, a statement, action, or relationship is believed to evidence personal animus against or improper favoritism toward a party, thereby interfering with the neutrality required by the law. (135) As one commentator observed, "[t]here is little doubt that a close association or relationship with an interested party will often have a greater impact on a decision than many pecuniary interests." (136)

Illustrative is Stivers v. Pierce, (137) where an applicant for a private investigator license successfully alleged that a soured business relationship between the applicant and a licensing board member resulted in a review that was inconsistent with the requirement that the license application be determined by an impartial decision maker. (138) Employment relationships can also raise problems, as when a person is asked to pass judgment on a decision made by a peer or already approved by the decision maker's boss. (139) To be disqualifying, the personal bias generally must arise in an adjudication and "must stem from an extrajudicial source and result in an opinion on the merits on some basis other than what the judge learned from his participation in the case." (140) Remarks from decision makers during the course of a proceeding, even if disapproving or hostile to a party or cause, do not ordinarily support a bias or partiality challenge unless "they reveal such a high degree of favoritism or antagonism as to make fair judgment impossible." (141)

Allegations of bias must overcome the strong presumption of honesty and integrity that attaches to the decisions of public officials when acting in an adjudicative capacity. As the Supreme Court explained, government administrators "are assumed to be men of conscience and intellectual discipline, capable of judging a particular controversy fairly on the basis of its own circumstances." (142) Consequently, those alleging bias in an administrative proceeding generally have a "difficult burden of persuasion to ... overcome a presumption of honesty and integrity in those serving as adjudicators." (143) The presumption, nonetheless, "is not to shield ... action from a thorough, probing, in-depth review" (144) and can be overcome by showing actual bias or "an unacceptable probability of actual bias." (145) Although a party generally may not inquire into the mental processes of government decision makers, where there is a "strong showing of bad faith or improper behavior," a party may be entitled to discovery outside the administrative record and examine government personnel. (146)

Environmental decisions, particularly those dealing with local matters, often involve personal and professional relationships between the decision maker and the parties, giving rise to allegations of bias for or against a party. In particular, the so-called "revolving door" movement of employees between government and regulated industries can create a perception in environmental disputes that a government decision maker may be favoring a former employer. (147) Nevertheless, without some additional evidence suggesting bias, courts have not found past employment relationships sufficient to overcome the presumption that government employees perform their functions without bias. (148)

In local land use matters, it is not unusual for a decision maker to belong to an organization participating in the proceeding. Some courts have found that in a contentious matter a decision maker's membership in an organization might be grounds for disqualification, reasoning that pressures of loyalty to the organization, conscious or not, would have a tendency to influence the official's vote. (149) Others hold that membership alone is not disqualifying, (150) though a more active role in an organization as a director, or a leadership role as an individual in opposing a different project by a party, is problematic. (151)

Personal or business relationships have at times required recusal on contested environmental matters. Some statutes define what relationships are impermissible; others more generally direct a government officer or employee to avoid participating in a decision where a direct or indirect personal relationship "might reasonably be expected to impair [the person's] objectivity or independence of judgment." (152) Even in the absence of a statute, matters involving a relative or a person with whom a decision maker has a particularly close relationship can impair the required objectivity. (153) A business relationship with a party or its representative, again not uncommon in local environmental matters, may not be disqualifying if the business matter is not related to the underlying proceeding. (154)

Outright hostility toward a party or its representative is not permitted. In one matter involving an application for a controversial air permit, an agency decision maker wrongly instructed agency staff to meet with only one side to the dispute and to treat the other side's position as adversarial to that of the agency. (155) Impermissible animus has also been found where an agency employee distributed an email demeaning a party's counsel and motives while favoring the interests of his personal friends on the other side of the dispute, (156) as well as where a party had a pending lawsuit against a decision maker on a related matter. (157) On the other hand, courts repeatedly reject claims that efforts by hearing officers in environmental adjudications to control the hearing or clarify testimony constitute impermissible partiality. (156)

3. Prejudgment of Facts, Law, or Policy

Prejudgment of a matter prior to the close of the evidence or proceeding may also constitute decision-maker bias, particularly in an adjudication. Courts are careful to distinguish, however, between a decision maker who has prejudged facts that are at issue in an adjudication (the "adjudicative facts" of who, what, when, where, how, and why) and prejudgment of the underlying law or policy--including the general "legislative facts" upon which a decision would be based. (159)

Preconceptions as to matters of law or policy are not a basis to disqualify a decision maker or invalidate a decision. As Judge Jerome Frank explained, while "there can be no fair trial before a judge lacking in impartiality and disinterestedness.... [if] 'bias' and 'partiality' be defined to mean the total absence of preconceptions in the mind of the judge, then no one has ever had a fair trial and no one ever will." (169) Thus, an agency decision maker, often appointed because of existing views on a subject, is not "disqualified simply because he has taken a position, even in public, on a policy issue related to the dispute, in the absence of a showing that he is not 'capable of judging a particular controversy fairly on the basis of its own circumstances.'" (161) It is also not improper for an agency adjudicator in the performance of their statutory role to have a general familiarity with the legal and factual issues involved in a case before judging the matter. (162)

Nevertheless, prejudgment of the specific facts of a pending contested case is prohibited. In Texaco, Inc. v. Federal Trade Commission, (163) the commission chairman gave a speech, prior to submission of an unfair competition complaint to the commission for decision, which used the respondents as an example of a company that had violated the law. (164) The court held that by appearing to have adjudged the specific facts as well as the law of the case in advance of hearing the evidence, the chairman denied respondents their due process; the court then invalidated the commission's decision. (165) By contrast, a speech by a federal official did not require disqualification where the commissioner was simply stating views on important economic matters at issue and not prejudging the ultimate issue in the dispute. (166) The often stated test from Cinderella Career & Finishing School v. Federal Trade Commission (167) is whether "a disinterested observer may conclude that [the agency] has in some measure adjudged the facts as well as the law of a particular case in advance of hearing it." (168)

Evidence of prejudgment generally must be displayed outside of and prior to the initiation of the adjudicative proceeding. (169) In addition, having decided the same or a similar case against a party does not disqualify an administrative law judge from later deciding the case on remand or rehearing. (170)

The standard for disqualification in rulemaking proceedings is significantly more stringent and requires "a clear and convincing showing that the agency member has an unalterably closed mind on matters critical to the disposition of the proceeding." (171) The rationale for treating rulemaking prejudgment claims differently is that, unlike an adjudicator, an administrator seeking to translate broad statutory commands into concrete regulations must be allowed to engage in debate and discussion, and even express opinions, about the policy matters behind a possible rule. (172) As one commentator observed: "A rulemaking decision rarely, if ever, can be infected with impermissible bias because rules rarely depend on agency resolutions of disputed issues of adjudicative fact. Rather, most rules depend entirely on resolution of issues of law, policy, and legislative fact." (173)

Allegations of prejudgment in environmental matters are not uncommon. Many prejudgment problems result from the challenges faced by local elected officials when required to act at different times as legislators or adjudicators. (174) In their legislative role, and especially in the context of communicating with constituents and publicly expressing their views on matters of policy, pre-hearing opinions on controversial environmental issues are to be expected. (175) Nonetheless, when that elected official then acts in a quasi-judicial role and adjudicates a dispute over that same matter, "the requirements of due process attach, and the proceeding must be fair, open, and impartial," (176) which precludes prejudgment of the law and facts in dispute.

This distinction between an official's legislative and adjudicative roles can be tricky in land use cases. When the focus of the local governing body shifts from the legislative adoption of a zoning ordinance to a determination about the application of an ordinance or rule to a particular tract of land, the proceeding becomes quasi-judicial in nature. (177) Frustration with the legal problems that flow from these different roles led the Illinois legislature, after a number of courts found improper prejudgment statements by local officials, to amend its waste facility siting statute to allow the legislature to express opinions on an issue related to that body's site approval process without being precluded from later voting on that contested matter. (178)

Even in the absence of a statute authorizing expressions of opinion on contested matters, general views on environmental issues or methods should not be regarded as sufficient evidence that the official has prejudged the adjudicative facts of a particular proposal or dispute. Thus, a stated view on a particular policy matter (e.g., landfills are undesirable) does not indicate that the official cannot fairly adjudge the facts and law on a related matter (e.g., whether this landfill proposal fits the criteria for approval). (179) Also, having advance knowledge of certain facts in dispute is not grounds for disqualifying a decision maker, provided that person had not made a prior judgment about the outcome of the matter or a prior commitment to disputed facts. (180) Even a statement of tentative conclusions based on evidence submitted prior to a hearing is permitted, provided the decision maker still has an open mind and considers all evidence presented. (181) An earlier position on environmental issues in the present matter also need not be disqualifying. (182) Moreover, a plaintiff must show that the prejudgment was displayed prior to the hearing, not based on questioning during the hearing. (183)

Thus, an environmental official's statement, upon witnessing black smoke and malfunctioning equipment in an incinerator control room, that she would "use every legal means at my disposal to close this facility and keep it closed," disqualified her from later reviewing an administrative hearing officer's determination of the legality of a compliance order and penalty assessment against the facility. (184) Surprisingly, even a passing observation that a landfill permit application seemed "like a political hot potato," which led some listeners to believe that the official had already decided to deny the pending application, was deemed sufficient evidence to disqualify the official. (185)

In contrast, a statement that the residents around a proposed landfill site "have had enough of landfills," attributed to a board member in a newspaper article prior to the landfill application hearing, was not viewed as sufficient evidence of prejudgment to overcome the presumption that administrative officials are fair. (186) Similarly, a statement by the president of the board that the alleged waste disposal violations under review were "pretty blatant" was viewed as simply an explanation that the seriousness of the case caused the board to conduct the hearing in a certain manner. (187)

These competing results indicate that the outcome of a prejudgment allegation in an environmental adjudication is often hard to predict. This uncertainty results in part from whether the court relies on an appearance of fairness standard or requires proof of actual bias, how strongly the court applies the presumption of honesty and integrity in those serving as adjudicators, whether the statement is treated as expressing views about issues or processes rather than about the particular facts under review, and whether the objecting party has provided concrete evidence of prejudgment rather than asking a court to imply that the adjudicator was biased toward the matter under dispute. (188)

Successfully challenging an official's participation in an environmental rulemaking proceeding on prejudgment grounds is even more unlikely. An Environmental Protection Agency (EPA) official's prior role in advocating for a more stringent lead air quality standard while with an environmental organization was not deemed clear and convincing evidence of an unalterably closed mind. (189) Similarly, a federal official's outspoken support for a drift gillnet ban prior to his appointment to a federal agency did not disqualify him from issuing a new regulation banning some drift gillnets. (190)

If predicting the outcomes of allegations of prejudgment of the facts are uncertain, it is clear that a decision maker's predisposition toward environmental issues or policy, even to the point of being accurately labeled as "anti-environment" or "anti-landfill," is not grounds for disqualification. Decision makers may have a clear pre-hearing ideological or political bent toward environmental issues, perhaps much to the disappointment of parties appearing before them in an adjudication. (191)

NEPA cases raise a particular set of prejudgment issues. (192) One concern is that agencies often have an institutional bias in favor of a project and prejudge the outcome of the environmental review process. (193) Although NEPA requires agencies to objectively evaluate proposals, the test applied by courts is "good faith objectivity," not subjective impartiality. (194) Indeed, courts have observed that NEPA assumes that an agency will inevitably be biased in favor of a project it is promoting and that the required NEPA environmental analysis is intended to help address this inherent bias. (195) As one court explained: "[I]t is possible for federal officials and federal employees to comply in good faith with [NEPA] even though they personally oppose its philosophy, are 'anti-environmentalists', and have unshakable, preconceived attitudes and opinions as to the 'rightness' of the project under consideration." (196)

Thus, statements or actions by the agency preparing an environmental impact statement that promote the project, show a clear preferred alternative, or express confidence that the project will be approved, while perhaps demonstrating subjective partiality, do not prove lack of good faith objectivity. (197) Lack of objective good faith has been shown, however, by the agency's failure to follow NEPA's procedural provisions, such as by misrepresenting facts, not acknowledging conflicts created by the proposal, and failing to identify and consider feasible alternatives. (198)

A second NEPA prejudgment issue is whether the agency committed itself, through an agreement or expenditure of resources, to a certain outcome before the conclusion of the study process. NEPA regulations require that the environmental review process be used to assess environmental impacts, not rationalize decisions already made. (199) Hence, unlawful predetermination occurs when an agency "irreversibly and irretrievably commits itself to a plan of action that is dependent upon the NEPA environmental analysis producing a certain outcome, before the agency has completed that environmental analysis." (200)

For example, where the contractor hired to prepare the environmental analysis was contractually obligated to develop a "finding of no significant impact" (FONSI) and the agency committed to having it signed by a set date, the court found unlawful predetermination of the outcome of the NEPA analysis. (201) Entering into a contract to support a project before considering the environmental consequences through the NEPA process also was considered an irretrievable commitment, not simply a stated preference for a preferred course of action. (202) In contrast, spending limited resources to pre-mark trees for harvesting was not considered such an irreversible and irretrievable commitment of resources to foreclose other alternative actions. (205)
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Title Annotation:I. Introduction through II. Fairness in Administrative Law C. A Taxonomy of Agency Bias 3. Prejudgment of Facts, Law, or Policy, p. 957-992
Author:Kuehn, Robert R.
Publication:Environmental Law
Date:Sep 22, 2015
Words:7789
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