Who gets the last word?

Attempts by state Rep. Martin Nesbitt to streamline the appeals process for people challenging state agencies drew bitter opposition from the governor, the attorney general and the Sierra Club.

After months of old-school politicking, however, a rewritten version of House Bill 968, which Nesbitt sponsored, is close to becoming law — but only after the Senate toned it down a bit.

In its original form, HB 968 had sought to make decisions handed down by administrative law judges final in appeals cases. This would have totally changed the way the state Office of Administrative Hearings handles appeals.

“I just realized we had an unfair system,” said Nesbitt (D-Buncombe), an attorney. Appealing a state agency’s decision, he maintains, can become a long ordeal in which the accuser also seems to be acting as the jury. “In the end, the agency that made the decision to start with is the one to make it final,” Nesbitt observes.

But giving the administrative law judge the final say would have been unconstitutional on two grounds, argues Don Hobart, a legal counsel for state Attorney General Mike Easley. First, says Hobart, it would cut citizen experts — appointed to the various boards and commissions by elected officials — out of the appeals process. That, he contends, would violate article IV of the state constitution. Secondly, he says, by giving that final authority to an administrative law judge, you “create within the executive branch a ‘mini’ or ‘shadow’ judicial court.” HB 968, notes Hobart, is one of the only bills coming out of this year’s short session that Gov. Jim Hunt had at one time threatened to veto.

Here’s how the appeals process works now: Suppose a biologist from the state Department of Environment and Natural Resources fines a farmer for improper storage of a pesticide. The farmer could appeal, and an administrative law judge would gather all the facts and then spend a month writing up a recommendation. That recommendation would then go to the board or commission that oversees the agency (in this case, the Environmental Management Commission) for final approval or denial.

But as someone else in the attorney general’s office (who declined to be identified) said: “Everybody appeals everything.” In effect, then, the state’s 11 administrative law judges are faced with some 1,500 appeal cases each year, and the process becomes so backlogged that, in many cases, Nesbitt says justice is never served. The other hitch is that when an administrative law judge rules against the state, 90 percent of the time the board or commission reverses the ruling, denying the appeal. Hobart might say they are correcting the judge’s mistake; but Nesbitt contends that they’re ignoring the judge’s evidence and, essentially, making their own ruling.

“The law says you’ve got to face your accusers and have a fair and impartial hearing,” argues Nesbitt. “Ultimately, you’ll have your day in court. Well, we found a system here that doesn’t work like that.”

He offers this frightening example. A blind, 13-year employee of the state Division of Blind Services was fired, Nesbitt says, because she refused to instruct another blind person, suffering from the late stages of AIDS, on how to use knives. “She had no training on how to do this. Two blind people using sharp objects.” After she was dismissed, she a filed a grievance and went through the appeals process. An administrative law judge reinstated her; the Employment Security Commission dismissed her again; and finally, the state Court of Appeals sided with the employee and reinstated her again. Meanwhile, throughout this lengthy process, someone had to keep driving the woman down to Raleigh.

“It’s about power,” charges Nesbitt. “You have state agencies that have free lawyers [who] have nothing better to do than pursue these cases against the little people, in a process that goes on and on, example after example.”

Hobart, however, counters with an example of his own, showing why the attorney general’s office believes it’s wrong to “let one single person override a board or commission composed of a number of knowledgeable people.” Somewhere in the eastern part of the state, a man who was robbing a convenience store was shot by the cashier. The wounded robber then filed a claim under the Victims’ Compensation Act, a state fund designed to help people hurt by someone committing a violent crime. His claim was denied — but he appealed, and the administrative judge sided with the robber. Nonetheless, the commission involved once again denied the claim. That decision went before the N.C. Court of Appeals, which backed the commission’s ruling.

But Nesbitt feels that, often, the commissions barely even consider the wealth of facts an administrative judge collects in such a case, siding instead with the original evidence provided by the state agency involved. These judges, says Nesbitt, are appointed by the state Supreme Court; they’re not exactly law-school flunkies. And the high court, he adds, has even written that the state’s appeals process is faulty.

But that kind of thinking put Nesbitt — who usually talks tough about pollution — at odds with environmentalists.

“This measure would likely result in weaker, less consistent enforcement of environmental laws,” said N.C. Sierra Club Director Molly Diggins. “Right now, the burden on taking it to court is on the industry. Under this bill, the burden would shift to DENR for going to court.”

Nesbitt says he’s not trying to put his friends at DENR at a disadvantage, but rather to defang them a bit, so “a person can get a fair fight.”

“Right now, the governor tends to vote in [environmentalists’] favor,” he continues. “The minute they don’t have a governor in their favor … they will be begging for a fair process.”

Then Nesbitt gets on the political stump. “We’ve got rivers that are dead from here to the coast, and the mountains are in nonattainment,” he proclaims. “Now exactly what is there that I need to preserve in this system? Maybe if we had a fair system, where you can be an advocate for a cleaner environment … [but] right now, we are held hostage to do what DENR will do.”

HB 968 passed the House convincingly last year (99-18), but it stalled in the short session, until the Senate worked out a compromise version and passed it. Nesbitt says he’d always expected a compromise anyway. Finally, on July 12, the rewritten bill snaked its way back to the House and passed.

In the reworded version, the judge’s recommendation isn’t final; the boards and commissions still get the last word. But now, before they can go against an administrative law judge’s decision, they first have to review the entire record of facts and find substantial evidence to support overturning the judge’s ruling.

“At least it’s not obviously unconstitutional, which the original version of the bill was,” commented Hobart, adding that the next step is waiting to see what happens when the law gets tested.

And state Sierra Club lobbyist David Knight said, “We got the best bill possible under the circumstances.”

In other words, most of the parties involved appear satisfied, and HB 968 seems destined to become law.

Gov. Hunt has until Aug. 7 to veto the bill, but that’s not likely to happen. According to his press secretary, Tad Boggs, Hunt has never vetoed a bill. And Hunt told a reporter in Raleigh last week that there is no current legislation he would have to veto. Boggs said that, after its 20-odd revisions over the last two years, HB 968 is now something Hunt “could live with.” The bill has come a long way since Nesbitt’s first version, added Boggs, noting that while the governor hasn’t indicated whether he will sign the bill, that isn’t necessary for it to become law.

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