HomeMy WebLinkAbout83-009 HahalisSTATE ETHICS COMMISSION
308 FINANCE BUILDING
HARRISBURG, PENNSYLVANIA 17120
June 17, 1983
OPINION OF THE COMMISSION
George A. Hahalis, Esquire
531 Main Street
Suite 201
Bethlehem, PA 18018
RE: Conflict of Interest; Quorum; "Rule of Necessity"
Dear Mr. Hahalis:
I. Issue:
83 -009
You have requested a ruling as to whether the employees of a corporation
who also serve on the Township Board of Supervisors, may vote as Supervisors
on matters of interest to the corporation when the Board would be unable to
form a quorum or to obtain a majority vote without the participation of such
employees /Supervisors.
II. Factual Basis for Determination:
•
You serve as Solicitor for the Township of Lower Saucon, hereinafter, the
Township. The Township is a second -class Township with a Board of Supervisors
(Board) consisting of five members. Four members of the elected Board are
employees of Bethlehem Steel Corporation (Bethlehem).
Bethlehem owns approximately 1185 acres of land in the Township.' In the
past, Bethlehem has pursued matters before the Board arising under the
Township's subdivision and zoning ordinances, and it is anticipated that
Bethlenem will have occasion to present other similar matters in the future.
We note that we assume and you have confirmed, for purposes of this Opinion,
that none of the Supervisors currently employed by Bethlehem is involved with
or responsible for planning, preparation or presentation of the zoning or
subdivision requests of Bethlehem to the Township.
III. Applicable Law:
The law to be applied in this situation includes the following:
George A. Hahalis, Esquire
June 17, 1983
Page 2
Section 1. Purpose
The Legislature hereby declares that public office is a
public trust and that a.iy effort to realize personal
financial gain through public office other than
compensation provided by law is a violation of that trust.
In order t'; strengthen the faith and confidence of the
people of the State in their government, the Legislature
further declares that the people have a right to be
assured that the financial interests of holders of or
candidates for public'office present neither a conflict
nor the appearance of a conflict with the public trust.
Because public confidence in government can best be
sustained by assuring the people of the impartiality and
honesty of public officials, this act shall be liberally
construed to promote complete disclosure. 65 P,S. 401.
Section 3(a) and (b) Restricted Activities
(a) No public official or public employee shall use his
public office or any confidential information received
through his holding public office to obtain financial gain
other than compensation provided by law for himself, a
member of his immediate family, or a business with which
he is associated. 65 P.S. 403(a).
(b) No person shall offeror give to a public official or
public employee or candidate for public office or a member
of his immediate family or a business with which he is
associated, and no public official or public employee or
candidate for public office shall solicit or accept,
anything of value, including a gift, loan, political
contribution, reward, or promise of future employment
based on any understanding that the vote, official action,
or judgment of the public official'or public employee or
candidate for public office would be influenced thereby.
65 P.S. 403(b).
Section 2 Definitions
"Business with which he is associated." Any business in
which the person or a member of the person's immediate
family is a director, officer, owner, employee or holder
of stock. 65 P.S. 402.
George A. Hahalis, Esquire
June 17, 1983
Page 3
IV. Discussion:
The Ethics Act applies generally to elected and appointed officials, and
these township supervisors are "public officials" as defined by the Ethics
Act. 65 P.S. 402. As public officials, supervisors' conduct must present
"neither a conflict nor the appearance of a conflict with the public trust."
65 P.S. 401.
Under the restrictions of Section 3(a), a township supervisor could not
generally use his office or any confidential information obtained therefrom to
obtain financial gain other than compensation provided by law for himself, a
member of his immediate family, or a business with which he is associated, in
this case the business with which he is employed, Bethlehem Steel. Likewise,
under Section 3(b), a township supervisor could not accept any thing of value,
including the promise of future or continued employment, based on the
understanding that his official action would be influenced thereby. We assume
no such circumstances are present for the purposes of this response. Thus, we
mainly address the propriety of the Supervisor Bethlehem - employee voting on
Bethlehem submissions under Section 1 of the Ethics Act.
With regard to this issue the Ethics Commission has ruled that it is the .
duty of a public official to abstain from participation in a matter submitted
by a present employer of the official and to make public the reason for such
abstention because such participation would present a conflict or the
appearance of a conflict with the public trust as prohibited by Section 1 of
the Ethics Act, 65 P.S. 401. See Knox, 81 -009; Boyle, 80 -020; and Ransavage,
79 -028. The question arises however, when, as here, a public a public body is
prevented from obtaining a quorum or a majority vote on a subject by virtue of
the fact that four out of its five members are precluded from participation
because of this employment and personal interest. Abstention would result in
depriving a party of a forum in which to be heard or decide the matter, and
because the Ethics Commission does not have any precedent governing such a
situation, we must turn to the analogous case law of federal and state
courts.
In instances where a party, such as Bethlehem, would be deprived of a
forum in which to be heard, the federal courts and courts of several states
have applied the common law "rule of necessity." The rule of necessity
generally applies to allow a person in a judicial or quasi - judicial capacity
to act on matters with respect to which he would otherwise be disqualified if
the following elements are present:
George A. Hahalis, Esquire
June 17, 1983
Page 4
1) Administrative action is required; and
2) Disqualification would result in a continuation of existing
conditions; and
3) The body with which he is associated has exclusive jurisdiction over
the matter and there is no legal provision for substitution of the
tribunal or tribunal personnel; and
4) The reason for possible bias or prejudice are disclosed prior to the
official's acting.
In the leading case of Evans v. Gore, 253 U.S. 245 (1920), where a judge
brought a class action for additional compensation, the Court dealt with the
rule of necessity by implication, stating:
Because of the individual relation of the members of this
Court to the question ..., we cannot but regret that its
solution falls to us .... But, jurisdiction of the
present case cannot be declined or renounced. The
plaintiff was entitled by law to invoke our decision on
the question ...; and there was no other appellate
tribunal to which, under the law, he could go. Id. at
247 -248.
Citing this rationale with approval, the U.S. Court again took up the
question in U.S. v. Will,;449 U.S. 200 (1980). There the Court held that the
Federal Judicial Disqualification Statute, 28 U.S.C. 455, was not intended by
Congress to alter or modify the rule of necessity, which prevailed over the
455 standards requiring judges to disqualify themselves in proceedings where
the impartiality may be questioned, they have a financial interest in the
subject matter, or are a party to the proceeding. The Court enumerated
several elements which call the rule of necessity into play, including the
duty to hear a case which cannot be heard otherwise, the denial to litigants
of their due process rights through denial of a right to a forum, and denial
to the public of resolution of an important issue. Id. at 216 -217. See also
Atkins v. U.S., 556 F.2d 1028 (Ct. Cl. 1977), cert. denied, 434 U.S. 1009,
(1978), where Court of Claims was the only forum for an action brought by
federal judges under the Tucker Act and the compensation clause of the U.S.
Constitution, Court of Claims judges were not disqualified from deciding the
case even though they had a personal financial interest in the outcome; and
Schwab v. Ariyeshi, 57 Haw. 348, 555 P.2d 1329 (1976), aff'd., 58 Haw. 25, 564
P.2d 135 (197/), a judge may participate in a case notwithstanding his
financial interest in the outcome.
George A. Hahalis, Esquire
June 17, 1983
Page 5
Perhaps the most succinct statement of the rule of necessity is found in
Turner v. American Bar Association, 407 F. Supp. 451 (1975), where the Court
dismissed actions brought against members of the federal judiciary and others
by plaintiffs who claimed they had a constitutional right to have unlicensed
lay counsel assist them in court proceedings. In its discussion, the Court
noted, there is a maxim of law to the effect that where all are disqualified,
none are disqualified." Id. at 483, citing Evans v. Gore, 253 U.S. 245
(1920). The Court continued, stating the theory supporting this maxim is .
that if disqualification operates so as to bar justice to the parties and no
other tribunal is available, the disqualified judge or judges may by necessity
proceed to judgment." Id. at 483.
The rule of necessity has also been found to be applicable in the
administrative setting. In the case of Brinkley v. Hassig, 83 F.2d 351 (10th
Cir. 1936), where Dr. Brinkley sued to enjoin enforcement of the Kansas State
Medical Board's revocation of his license to practice medicine, the Court
stated:
From the very necessity of the case has grown the rule
that disqualification will not be permitted to destroy the
only tribunal with power in the premises. If the law
provides for a substitution of personnel on a board or
court, or if another tribunal exists to which resort may
be had, a disqualified member may not act. But when no
such provision is made, the law cannot be nullified or the
doors to justice barred because of prejudice or
disqualification of a member of a court or a
administrative tribunal. Id. at 357.
In Kennett v. Levine, 50 Wash. 2d 212, 310 P.2d 244 (1957), the Court
held that the rule of necessity applied where a public body is given exclusive
jurisdiction over a matter and no substitute tribunal is provided by law. See
also Loughran v. F.T.C., 143 F.2d 431 (C.C.A. 8th 1944), where only one
tribunal is provided by law, that tribunal must be permitted to act under the
rule of necessity.
It is important to note that the rule of necessity is entirely
inapplicable when there exists, as stated above, a method of providing a
qualified tribunal, such as by exclusion from the tribunal of disqualified
members. See Pyatt v. Mayor and Council, 9 N.J. 548, 89 A.2d 1 (1952);
appointing a different membership, see Smith v. Dept. of Registration, 412
Ill. 332, 106 N.E.2d 722 (1952); counting only the votes of the qualified
members, see Thompson v. City of Lonq.Beach, 41 Cal. 2d 235, 259 P.2d 649
(1953); or resorting to another available tribunal, see Tumey.v. Ohio, 273
George A. Hahalis, Esquire
June 17, 1983
Page 6
U.S. 510 (1927). For the purposes of this Opinion, the Commission assumes
that none of the alternatives enumerated above exists by which the Board of
Supervisors may form a quorum or obtain a majority vote and to take official
action, and we hold that the rule of necessity, under these appropriate
circumstances, could apply to allow paticipation /voting by an otherwise
disqualified official.
In this light, we must discuss what constitutes a quorum, because for
purposes of invoking the rule of necessity, a sufficient number of Supervisors
must be disqualified under the Ethics Act for the rule to apply. Unless
otherwise specified, under Pennsylvania and common law a quorum of the Lower
Saucon Board of Supervisors would be constituted by a majority if its members,
that is, at least three out of five members, and official action could be
taken by a positive vote of the majority of the quorum, for example, two out
of three, three out of five, or four out of five. See DiGiacinto v. City of
Allentown, 486 Pa. 436, 406 A.2d 520, 522 (1979).
Unrestricted application of the rule of necessity, however, could result
in a situation where all of the three or four members who constitute a quorum
would normally be disqualified while the one member not normally disqualified
is not present. While such a result might generally be permissible, the
Ethics Commission believes that in keeping with the letter and spirit of the
Ethics Act, the votes of the normally disqualified members must be tempered by
the vote or possible votes of members who have no conflict of interest and,
therefore, are not disqualified with respect to subject matter. In this
regard, the Commission believes that application of the rule of necessity must
be limited to situations where obtaining a quorum is possible only when
normally disqualified members are allowed to vote in addition to members not
disqualified and who do not have a conflict of interest in the matter at
hand.
To illustrate, in the present situation in Lower Saucon, at least three
members of the Board of Supervisors would constitute a quorum. Where four out
of five members of the Board would normally be disqualified from
participating, the one member without a conflict of interest must be one of
those members constituting the voting quorum. Similarly, if three members
were normally disqualified, the other two memhers must be part of the quorum,
whether the quorum consists at that meeting of three, four, or five members.
Where only two members would be disqualified, the rule of necessity is
inapplicable because a quorum of three qualified non - disqualified members can
be had, and the presence of the disqualified members could be counted for
quorum purposes and not counted for voting purposes, thus, enabling the body
to transact official business.
George A. Hahalis, Esquire
June 17, 1983
Page 7
Thus, where there are one or some Board members who do not have a
conflict of interest, those members must be included in a quorum of at least
three out of five members of the Board, and the rule of necessity may be
applied to allow the other normally disqualified members to vote in addition
to normally qualified members so that body may transact official business.
V. Conclusion:
Under the Ethics Act, members of the Lower Saucon Board of Supervisors
must adhere to the guidelines and restrictions of the Ethics Act, notably
Sections 1 and 3(a) and (b). They must, therefore, normally abstain from
participation in matters before the Board which present a conflict of
interest, in this case, matters presented by the current employer of four of
the Board members, Bethlehem Steel.
Where, however, there is no alternative forum, membership, or personnel
to decide the issue and where such abstention effectively deprives Bethlehem
of a forum in which to be heard, a limited application of the common law rule
of necessity is reasonable and may be adopted. Such an application will allow
normally disqualified members to participate in forming a quorum and voting
in addition to normally qualified members. In this case, where four out of
five supervisors are normally disqualified, a quorum may be formed under this
application of the rule of necessity and normally disqualified members may
vote so long as the one qualified member is present as part of the quorum and
votes. In such a situation, the Township should give advance notice to the
public that Bethlehem matters will be considered requiring the application of
the rule of necessity and: the public record should show the reasons for the
application of this rule.
Pursuant to Section 7(9)(i), this opinion is a complete defense in any
enforcement proceeding initiated by the Commission, and evidence of good faith
conduct in any civil or criminal proceeding, providing the requestor has
disclosed truthfully all the material facts and committed the acts complained
of in reliance of the advice given.
This letter is a public record and will be made available as such.
CW /rdp
George A. Hahalis, Esquire
June 17, 1983
Page 8 .'.
Finally, any person may request within 15 days of service of the opinion
that the Commission reconsider its opinion. The person requesting
reconsideration should present a detailed explanation setting forth the
reasons why the opinion requires reconsideration.
By the Commission,
AUL J. ,III Fi
Chairma