Payne v. Muskegon

514 N.W.2d 121, 444 Mich. 679

Opinions

Boyle, J.

This case presents the question of the standard of review of the factual findings of a municipal civil service commission. We hold that a reviewing court should accept findings supported by substantial evidence. Because the common-law substantial evidence test satisfies the minimum constitutional requirements for judicial review of administrative agency findings, we need not reach the question whether Const 1963, art 6, § 28 applies.¹ The decision of the Muskegon Civil Service Commission was supported by substantial evidence. Accordingly, we remand the case to the circuit court for entry of judgment in favor of the defendant.

i

The appellant, Marcia Payne, worked for the City of Muskegon in several clerical and administrative positions. In December, 1988, she transferred to the position of administrative secretary for the city’s personnel director, Truman Forest, at the request of Mr. Forest.

The personnel department records information about city employees and their status in four cross-referenced files, each having a different purpose: the employee’s personnel file; a quick-reference index consisting of a 3 by 5 card for each employee that does not contain all the information from the personnel file; the "brown book,” organizing collective personnel actions taken by date; and the "grey book,” containing special lists, such as department lists and equal opportunity lists. For example, the brown book would be consulted to respond to an inquiry regarding the number of employees who would be on vacation on a certain day, and the quick-reference index would be used to learn an employee’s telephone number. In February, 1989, Forest gave Payne a document confirming that each new hiring or status change must be recorded in all four indexes.

On Friday, June 3, 1989, Forest returned to the office to discover several things amiss: promotional announcements that should have been posted on the bulletin board were not, a number of completed employment applications remained on Payne’s desk rather than being locked away to protect their confidentiality, and a number of items from the April and May Muskegon Civil Service Commission meetings had not been filed and recorded. In an effort to correct these problems, Forest wrote the plaintiff a letter of reprimand detailing the assignments she had not completed, including the specific items from the minutes of the April and May commission meetings that had not been recorded. The letter cited the plaintiff for violating Rule X, § 3(i) of the Mus-kegon Civil Service Rules, and instructed her to schedule her work so that she could record the information from the minutes within seventy-two hours of each meeting.

Approximately a week later, under the assumption that the plaintiff had completed the assignments detailed in the June 5 letter, Forest decided that she had passed her probation period. In an addendum to her performance evaluation, he wrote that although Payne had been "quick to grasp the overall 'flow’ of the operation,” and thus received satisfactory marks in most categories, her performance was lacking in two areas: proofreading and filing. Regarding the latter, Forest explained that "[p]roperly securing the records of the Civil Service department is our single most important task. The employees of the city must have confidence in our system and believe that our records are accurate and secure. You must commit yourself to doing this less-than-glamorous task in a timely and accurate manner.”

Upon returning from vacation on July 10, Forest discovered several employment applications on Payne’s desk. This discovery prompted him to check whether the plaintiff had completed filing the items listed in the June 5 warning letter. She had not. In addition, the plaintiff had not yet recorded many items from the June 26 meeting.

Payne returned from her own vacation on July 17, and told Forest that part-time employee Larry Townsend, not herself, was responsible for leaving the applications unsecured. After considering the entire situation, Forest decided to terminate the plaintiff’s employment.

Payne appealed to the Muskegon Civil Service Commission. At the hearing, plaintiff submitted that termination was too harsh a penalty, but admitted that, as of July 17, she still had not performed some of the work she was warned about failing to complete in the June 5 letter. Specifically, plaintiff acknowledged that she had failed to enter items from April and May in the record reflecting collective personnel action by date and had not entered items from the June meeting in either that record or the employee quick reference index. The rules of the Muskegon Civil Service Commission provide that failure to perform work after being warned is a "Group 3 Offense,” which is grounds for immediate discharge.² The commission denied the plaintiff’s appeal.

The plaintiff then petitioned the Muskegon Circuit Court for an order of superintending control. The circuit court reviewed the record of the hearing for competent, material, and substantial evidence, and ruled that there was insufficient evidence to support the plaintiff’s termination. The court set aside the plaintiff’s discharge and remanded the case to the commission to impose a less severe penalty.

The city appealed, arguing among other things that the circuit court applied the wrong standard of review. The Court of Appeals agreed and reversed in a per curiam opinion, holding that the proper standard was "any competent evidence to support the findings made below.” 193 Mich App 620, 623; 484 NW2d 759 (1992). The Court remanded the case, instructing the circuit court not to substitute its judgment for the civil service commissioners’ "[i]f there is any competent evidence on the record that the plaintiff, after a warning, failed to perform her work completely . . . .” Id. We granted leave. 442 Mich 925 (1993).

II

Decisions of municipal civil service commissions are reviewed through original actions for superintending control. See, e.g., Beer v Frazier Civil Service Comm, 127 Mich App 239, 243; 338 NW2d 197 (1983); Rinaldi v Livonia, 69 Mich App 58, 69; 244 NW2d 609 (1976). Superintending control is available only where the party seeking the order does not have another adequate remedy. MCR 3.302(B). An appeal would be an adequate remedy, and a complaint for superintending control must be dismissed when one is available. MCR 3.302(D)(2). Because the Legislature has not provided for appeal from municipal civil service boards, Robertson v Detroit, 131 Mich App 594, 597; 345 NW2d 695 (1983), review is by complaint for superintending control.

A

The standard for issuing an order of superintending control depends on the type of suit involved. Superintending control replaced the common-law extraordinary writs — "the writs of certiorari and prohibition and the writ of mandamus when directed to a lower court or tribunal.”³ MCR 3.302(C). See also Const 1963, art 6, § 13 ("The circuit court shall have . . . power to issue, hear and determine prerogative and remedial writs”). These writs were issued in different circumstances and according to different standards.⁴ We agree with the plaintiff that the common-law standard of review of the factual findings of municipal civil service agencies is the substantial evidence test.

Prior to the creation of superintending control, Michigan courts reviewed the decisions of municipal civil service boards through certiorari. See Detroit Public Welfare Comm v Detroit Civil Service Comm, 289 Mich 101, 106-107; 286 NW 173 (1939); Schubert v Dearborn Civil Service Bd, 311 Mich 553, 561; 19 NW2d 96 (1945); O’Dell v Flint Civil Service Comm, 328 Mich 631, 636-637; 44 NW2d 157 (1950). Certiorari was the common-law method of correcting errors of administrative agencies. See, generally, Town of Reading v Attorney General, 362 Mass 266; 285 NE2d 429 (1972); Rhodes v Woodstock, 132 Vt 323; 318 A2d 170 (1974); Park Hosp Dist v Larimer Co Dist Court, 192 Colo 69; 555 P2d 984 (1976).

The writs were issued less frequently in criminal cases than in civil cases. "A jurisdiction may ordinarily treat the writs as flexible devices allowing review of a wide range of nonappealable orders, but sharply restrict that flexibility in the context of criminal cases.” 3 LaFave & Israel, Criminal Procedure, § 26.4(c), p 228. This principle is reflected in In re People v Burton, 429 Mich 133, 139; 413 NW2d 413 (1987), and Genesee Prosecutor v Genesee Circuit Judge, 386 Mich 672; 194 NW2d 693 (1972). The trial court in Burton had granted the defendant a new trial. The prosecutor sought interlocutory review by asking the Court of Appeals to issue a writ of certiorari. This Court, in determining whether to intervene, instead applied the standard traditionally associated with mandamus:⁵ the writ should be issued only " 'if the inferior tribunal, upon the record made, had jurisdiction, whether or not it exceeded that jurisdiction and proceeded according to law.’ ” 429 Mich 139.

Unification of the writs under superintending control did not change the scope of review.⁶ Drouillard v Roseville, 9 Mich App 239, 243; 156 NW2d 628 (1967); Scallen v State Health Comm’r, 376 Mich 64, 71; 135 NW2d 426 (1965) (Souris, J., dissenting). Instead, the purpose , of acts that abolished these classifications was, as eloquently explained by the Court of Appeals of New York, "to wipe out technical distinctions which had been a snare for suitors approaching the court for relief and which, at times, hampered the court in granting relief for proven grievances.” Newbrand v Yonkers, 285 NY 164, 174; 33 NE2d 75 (1941). In Michigan, the unification of these writs was likewise intended to "eliminate frequent mistakes in the choice of remedies.” Lorland Civic Ass’n v DiMatteo, 10 Mich App 129, 137; 157 NW2d 1 (1968).

B

Given that the scope of review in complaints for superintending control was not altered by changing the name of the pleading, circuit courts should assume superintending control over a municipal civil service board in the same circumstances that the writ of certiorari traditionally would have issued — when the record of the adjudicative hearing does not contain substantial evidence to support the finding.⁷

Review by certiorari involved more than asking whether the lower court or tribunal clearly abused its power. The standard Michigan formulation of this principle is found in Jackson v People, 9 Mich 111, 119 (1860). After an extensive review of common-law authority, Justice Campbell, with Justice Christiancy concurring, concluded "that the usual office of the common law writ is to inquire into something more than jurisdiction.” While the reviewing court addresses only questions of law, these questions include whether the record support the findings of the lower court:

[I]n examining into the evidence the appellate court does so not to determine whether the probabilities preponderate one way or the other but simply to determine whether the evidence is such that it will justify the finding as a legitimate inference from the facts proved, whether that inference would or would not have been drawn by the appellate tribunal. . . . "[A]ll the facts necessary to subject the party to the penalty imposed by the act of parliament must appear upon the information, and must be established by proof.” [Id. at 120.[⁸]

See also In re Fredericks, 285 Mich 262, 267; 280 NW 464 (1938) (on certiorari, the court will " 'review the evidence to ascertain only whether there was reasonable ground for the decision made’ ”); Erlandson v Genesee Co Employees’ Retirement Comm, 337 Mich 195, 202; 59 NW2d 389 (1953); State Bar Grievance Administrator v Estes, 390 Mich 585, 601-602; 212 NW2d 903 (1973) (Levin, J., concurring).

Review in the nature of certiorari meets the requirements for review of certain administrative agency decisions set forth in the Constitution of 1963, art 6, § 28. See Estes at 591-592. In Estes, we held that we would not substitute our judgment for that of the State Bar Grievance Board if its findings were supported by substantial evidence on the record. Id. at 593, 597. We have further recognized, as has the Court of Appeals, that the state and federal definitions of substantial evidence both set forth the same principle. See Soto v Director, Dep’t of Social Services, 73 Mich App 263, 271; 251 NW2d 292 (1977), and Russo v Dep’t of Licensing & Regulation, 119 Mich App 624, 631; 326 NW2d 583 (1982), adopted by this Court in Turner v Washtenaw Co Rd Comm, 437 Mich 35, 37; 467 NW2d 4 (1991); see also MERC v Detroit Symphony Orchestra, Inc, 393 Mich 116, 127; 223 NW2d 283 (1974).

iii

The plaintiff argues that we should affirm the circuit court’s decision because the record of the commission’s hearing did not contain sufficient evidence to support her discharge. We disagree.

When reviewing the decision of an administrative agency for substantial evidence, a court should accept the agency’s findings of fact if they are supported by that quantum of evidence. A court will not set aside findings merely because alternative findings also could have been supported by substantial evidence on the record. See Arkansas v Oklahoma, 503 US —, —; 112 S Ct 1046; 117 L Ed 2d 239, 259 (1992).

"Substantial evidence” has a classic definition: the amount of evidence that a reasonable mind would accept as sufficient to support a conclusion. While it consists of more than a scintilla of evidence, it may be substantially less than a preponderance. Tomczik v State Tenure Comm, 175 Mich App 495, 499; 438 NW2d 642 (1989); Detroit Symphony Orchestra at 122. Although we do not reach the constitutional question, the substantial evidence standard found in Const 1963, art 6, § 28, does not depart from this definition, at least according to its drafters.⁹ In Detroit Symphony Orchestra, the Court explained that review under the constitutional substantial evidence standard is not de novo review:

The cross-fire of debate at the Constitutional Convention imports meaning to the "substantial evidence” standard in Michigan jurisprudence. What the drafters of the Constitution intended was a thorough judicial review of administrative decision, a review which considers the whole record — that is, both sides of the record — not just those portions of the record supporting the findings of the administrative agency. Although such a review does not attain the status of de novo review, it necessarily entails a degree of qualitative and quantitative evaluation of evidence considered by an agency. Such review must be undertaken with considerable sensitivity in order that the courts accord due deference to administrative expertise and not invade the province of exclusive administrative fact-finding by displacing an agency’s choice between two reasonably differing views. Cognizant of these concerns, the courts must walk the tightrope of duty which requires judges to provide the prescribed meaningful review. [Id. at 124.]

In practice, as Professor Davis illustrates, the scope of review depends on factors other than judicial fidelity to a verbal formula. 5 Davis, Administrative Law (2d ed), § 29.3, pp 340-344. In the words of Justice Frankfurter, the substantial evidence requirement "does not furnish a calculus of value by which a reviewing court can assess the evidence.” Universal Camera Corp v NLRB, 340 US 474, 488; 71 S Ct 456; 95 L Ed 456 (1951). Substantial evidence review, like standing requirements in Article III of the United States Constitution, "cannot be defined so as to make application ... a mechanical exercise.” Allen v Wright, 468 US 737, 751; 104 S Ct 3315; 82 L Ed 2d 556 (1984).

Attempts to clarify the standard of review by embroidering the formula with more elaborate verbalisms may be more harmful than helpful. According to Professor Davis, the formula "alone is not harmful, but it becomes harmful when it takes the place of analysis that shows why the court reviews in a particular manner or degree . ...” 5 Davis, supra at 340. An understanding of the reasons behind judicial review of administrative decisions is the base line for determining the scope of judicial inquiry.

The underlying purpose of judicial review of the factual findings of administrative agencies relates to the comparative expertise of the two institutions. A court is expert at adjudication — determining disputed facts by holding hearings. A municipal civil service board, on the other hand, the administrative agency in this case, is expert at determining job requirements for a city employee. To this end, the agency may establish qualifications and rules for employee conduct on the job. These rules might be considered promises to employees that their jobs will be secure as long as they perform them acceptably, and that this security is not subject to, in Professor Nozick’s words, "[t]he [z]igzag of [pjolitics.”¹⁰ In that sense, the province of a city’s civil service commission, should it choose to have one at all, is to decide what qualifications and behavior the city will require of its employees and how much security it will promise them. The role of the reviewing court is to ensure that the city’s employees receive what they have been promised by reviewing whether there was substantial evidence to support the agency’s factual determinations.

In this case, the rules of the Muskegon Civil Service Commission provide that an employee who fails to perform work after being warned may be terminated. See ante, p 686, n 2. The agency found¹¹ that the plaintiff violated this rule. The circuit court should have accepted this finding because the plaintiff concedes that as of July 17 she had not performed some of the very work she was warned about failing to complete in the letter of June 5. As a result of her failure, some of the items from April and May had not yet been properly recorded.

The plaintiff also complains, as she has throughout this matter, that the Muskegon Civil Service Commission should have imposed a less severe penalty. She notes that her actions could have been characterized as a Group 1 or Group 2 offense, which would not be grounds for termination.

The determination of the appropriate penalty did not involve any questions of fact because the commission’s rules allow it to terminate the plaintiff under the facts she conceded.¹² Consequently, this determination is not subject to substantial evidence review. Cf. NLRB v Curtin Matheson Scientific, Inc, 494 US 775, 778, n 2; 110 S Ct 1542; 108 L Ed 2d 801 (1990) (substantial evidence review applies only to evidentiary questions); Deering v Unionville-Sebewaing Area Schools, 97 Mich App 629, 631; 296 NW2d 131 (1980) (factual findings must be supported by substantial evidence). The only issue is the legal question whether a city may terminate an employee who failed to perform work after being warned. We hold that nothing in Michigan law requires a city to retain such an employee.

The rule-making authority of municipal civil service commissions, unlike other administrative agencies, is not restricted. Most administrative agencies, for example the Teacher Tenure Commission, see MCL 38.71 et seq.; MSA 15.1971 et seq., must follow the commands of the statute that created them. A city civil service commission, on the other hand, is free from statutory restrictions. In fact, a city need not have a civil service system at all. See Const 1963, art 11, § 6; MCL 117.4i(h); MSA 5.2082(h).

City employees, like other employees, may be terminated at will unless distinguishing circumstances dictate otherwise. See Rowe v Montgomery Ward & Co, Inc, 437 Mich 627; 473 NW2d 268 (1991). To the extent that a civil service system presents distinguishing circumstances, employees can expect to retain their jobs as long as they follow the rules of the civil service commission.¹³ In this case, our review for substantial evidence reveals that the commission followed its own rules.

Contrary to the assertion in the dissenting opinion, we do not evaluate the employment policies of defendant unless they are alleged to violate the law. There has been no such allegation in this case. Hence, this Court must only determine whether sufficient factual evidence supported the defendant’s charges of misconduct. While some sympathetic evidence existed to support the circuit court’s resolution of the case, that court erred by substituting its judgment for that of an employer.

IV

We remand the case to the circuit court for entry of judgment in favor of the defendant.

Cavanagh, C.J., and Brickley, J., concurred with Boyle, J.

1 See Lissee v Secretary of State, 388 Mich 32, 40-41; 199 NW2d 188 (1972). The wisdom of this rule is underscored by the unique conclusion of the concurring opinion that "[t]he failure of the Legislature to implement the program is simply unconstitutional inaction.” Post at 717. There may be cases in which this Court has so held. However, no authority is cited for the proposition. If the Legislature exempted an agency from the coverage of art 6, §28, the constitutional question would be presented. However, given that it is unnecessary to answer this question and that neither party has argued this position, to decide that this Court may require legislators to vote for bills and the governor to sign them is inconsistent with our historic sensitivity to issues of separation of power. See, e.g., Shavers v Attorney General, 402 Mich 554, 638; 267 NW2d 72 (1978) (delaying the entry of an order for eighteen months so that the Legislature could correct constitutional defects in the no-fault act).

2 The pertinent part of Rule X, § 3 reads:

The following, by way of example only and not as an exclusive list, are declared to be causes for disciplinary action or removal from the classified service of the City of Muskegon. Disciplinary action shall be imposed with respect to each of the groups of offenses listed:

Group 3 Offenses

i) After warning, incompetence, failure to perform work or duties completely and efficiently, or failure or inability to do the work fixed by the work standard in force.

The disciplinary action in this group shall be grounds for immediate discharge.

3 For this reason, orders of superintending control granted pursuant to MCR 3.302 should not be confused with "the general supervisory superintending control over all courts given to the Supreme Court by art 6, §4 of the 1963 Constitution or the supervisory and general control over inferior courts and tribunals within their respective jurisdictions in accordance with rules of the Supreme Court, given the circuit courts by art 6, § 13 of the 1963 Constitution.” Genesee Prosecutor v Genesee Circuit Judge, 386 Mich 672, 680-681; 194 NW2d 693 (1972).

4 The standard for mandamus is discussed in Wiley v Allegan Circuit Judge, 29 Mich 487 (1874), and Taylor v Ottawa Circuit Judge, 343 Mich 440, 443-444; 72 NW2d 146 (1955). Prohibition is differentiated from mandamus in State ex rel Cincinnati Post v Hamilton Co Court of Common Pleas, 59 Ohio St 3d 103, 107; 570 NE2d 1101 (1991).

5 The traditional standards for issuing mandamus are discussed in note, Supervisory and advisory mandamus under the all writs act, 86 Harv LR 595, 598-599 (1973).

6 The law would be simpler and easier to apply if this were not the case. The Michigan Law Revision Commission has called for reform of current practice because of "the confusion, inconsistency, complexity and potential pitfalls which bedevil this area.” Michigan Law Revision Commission, 25th Annual Report (1990), Report & Recommendations on Judicial Review of Administrative Action, pp 19-20. The commission has proposed amendment of the Revised Judicature Act to provide for appeals from local agencies using the substantial evidence standard of the Administrative Procedures Act.

7 The substantial evidence test is consistent with the autonomy granted home rule cities. Cf. Const 1963, art 7, § 22.

8 We understand this to be precisely the same mechanism as the substantial evidence test. Under each rule, it does not matter whether a different position is supported by more evidence — that is, which way the evidence preponderates — but only whether the position taken by the administrative agency was supported by substantial evidence— that is, whether the inferences made were legitimate and supportable. Contrary to the suggestion of Justice Riley, see post at 704, the substantial evidence test does not require a court to weigh the evidence. "A court will not set aside findings merely because alternative findings also could have been supported by substantial evidence on the record.” See infra, p 692.

Cases applying the writ of certiorari with differential standards are explained by the fact that the writ was granted in different circumstances. For example, where the question was sufficiency of the evidence in a criminal case, this Court would grant the writ only if there were "a total absence of testimony upon a material fact . . . .” People v Swanson, 217 Mich 103, 106; 185 NW 844 (1921). On the other hand, where the question was the propriety of an action by a civil service commission, this Court would grant this writ if there was not "substantial evidence to support the finding of the commission.” Detroit Public Welfare Comm v Detroit Civil Service Comm, 289 Mich 101, 108; 286 NW 173 (1939). The concurrence dismisses no less than four cases that contradict Justice Riley’s view of the proper scope of certiorari. See post at 703-704, 705.

9 Specific comments made at the 1961 convention indicate that the delegates did not think that the substantial evidence test required that a preponderance of the evidence support the decision of the agency, because such a standard would "completely emasculare] all of the advantages of administrative tribunals.” 1 Official Record, Constitutional Convention 1961, p 1449 (comments of Danhof). Nor does art 6, § 28 "provide for a new trial; [it] does not require the presentation of witnesses. The complete process of review under this proposal is simply a review on the record made before the board of review or commission below. It is a summary proceeding . . . .” Id. at 1466 (comments of Leibrand). The provision was intended only to ensure “minimum rights so far as appeals are concerned. . . . [TJhere’s no attempt to hamstring any department.” Id. at 1467 (comments of Iverson).

10 Nozick, The Examined Life: Philosophical Meditations (New York: Simon & Schuster, 1989), ch 25, p 286.

11 An agency subject to substantial evidence review, in order to facilitate that process, is ordinarily required to enter findings of fact. The Administrative Procedures Act, for example, requires that a person "who conducted the hearing or who has read the record” prepare "a statement of the reasons therefor and of each issue of fact and law necessary to the proposed decision . . . .” MCL 24.281(2); MSA 3.560{181)(2). When a commission enters such findings, a court must review those findings.

In this case, the commission did not enter formal findings of fact, but the facts are undisputed. In a more factually complicated case, a circuit court could order an agency that has not already done so to enter formal findings.

12 The dissenting opinion asserts that "federal courts do review an agency’s decision discharging an employee to determine whether the punishment was proportionate.” Post at 732. The dissent fails to mention, however, that the cases it cites apply a federal statute that appears to have no Michigan counterpart. See 5 USC 7703(c), as amended April 2, 1982 (cited in Brown v United States Postal Service, 860 F2d 884, 888 [CA 9, 1988]). If anything, the Brown decision confirms that the determination of the appropriate penalty is not subject to substantial evidence review, because the court also reviewed the factual findings of the agency, and only those findings, for substantial evidence. 860 F2d 887-888. It did not, however, review the proportionality of the punishment for substantial evidence. Id. at 888-889.

Moreover, the cases cited by the dissent do not support the proposition that this Court "reversed decisions of a municipal civil service commission sustaining the discharge of employees because this Court found that the penalty of discharge was disproportionate to the offense.” Post at 734. In those cases, the civil service commissions violated their own rules.

In Brown v Dep’t of State Police, 392 Mich 811 (1974), we "set[ ] aside the order of discharge of the Civil Service Commission in light of the failure to follow departmental rules and regulations and the appearance of resulting prejudice for Brown.” The reason for reversal appears to have been the "resulting prejudice,” and not "excessive and arbitrary discipline.”

Similarly, in Konyha v Mt Clemens Civil Service Comm, 393 Mich 422, 427; 224 NW2d 833 (1975), the decision indicates that the Court reversed the decision to discharge because

the chief’s discharge of Konyha was predicated not only on this particular missed roll call and the earlier infraction, but rather was motivated by a general dissatisfaction — not charged — with Konyha’s performance.

These other charges, however, were not brought within ninety days of the date of violation, contrary to MCL 38.514; MSA 5.3364. 393 Mich 428.

Finally, in Fannon v Southfield, 405 Mich 558, 560; 275 NW2d 256 (1979), the Court remanded for reconsideration of the penalty imposed because it had dismissed four of the five charges alleged by the city.

13 A civil service commission’s rule might be illegal because it is not "authorized by law.” Const 1963, art 6, § 28. For example, even at-will employees may not be discharged because of their race or gender, see, e.g., MCL 37.2101 et seq.; MSA 3.548(101) et seq., and may not be required to work at less than the minimum wage, see, e.g., MCL 408.384; MSA 17.255(4).