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Freeman & Bass v. New Jersey

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT


decided: October 1, 1973.

FREEMAN & BASS, SAMUEL E. BASS AND SAM FREEMAN, APPELLEES,
v.
STATE OF NEW JERSEY COMMISSION OF INVESTIGATION, JOHN F. MCCARTHY, JR., CHARLES L. BERTINI, WILFRED P. DIANA, RONALD S. DIANA AND MARTIN G. HOLLERAN, APPELLANTS

September 7, 1973, Reargued D.C. Civil Action No. 202-73 APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

Van Dusen, and Hunter, Circuit Judges. On Reargument: Van Dusen, Adams and Hunter, Circuit Judges.

Author: Per Curiam

Opinion OF THE COURT

Appellant, the State of New Jersey Commission of Investigation (hereinafter "SCI") appeals, pursuant to 28 U.S.C. § 1292(a)(1), from an interlocutory order entered by the district court on May 14, 1973,*fn1 restraining the SCI from referring by name to appellees and others during public hearings conducted by the SCI in its investigation of possible abusive practices and procedures in the New Jersey Workmen's Compensation program.

This appeal arises out of appellees' civil rights suit under 42 U.S.C. § 1983*fn2 charging the SCI, among other things, with having conducted an unconstitutionally broad investigation for the purpose of harassing and intimidating appellees and their clients, resulting in serious impairment of appellees' professional reputation as well as deprivation of appellees' right to petition for the redress of grievances on behalf of their clients.

The Supreme Court of New Jersey in 1969 and this court in 1972 had occasion to examine the nature and function of the SCI and to assess the constitutional sufficiency of the procedural safeguards it accords those whom it investigates. Zicarelli v. New Jersey State Commission of Investigation, 55 N.J. 249, 261 A.2d 129 (1969); United States ex rel. Catena v. Elias, 465 F.2d 765 (3d Cir. 1972). In Zicarelli, the Supreme Court of New Jersey, after reviewing the enabling legislation,*fn3 held that the statute created a commission with investigatory powers "to the end that helpful legislation may be proposed and receive needed public support."*fn4 Furthermore, the court stressed that the SCI "is in no sense an 'accusatory' body" and is not empowered "to make and publicize findings with respect to the guilt of specific individuals."*fn5 Thus, it was because of this essentially investigatory character of the SCI that we held in Catena that the statutorily prescribed procedures of the SCI, while not providing for the full panoply of procedures accorded a criminal defendant, comports with due process as that concept was interpreted in Hannah v. Larche, 363 U.S. 420, 4 L. Ed. 2d 1307, 80 S. Ct. 1502 (1960).

In view of Catena, which we reaffirm, we disagree with the apparent position of the district court that due process requires that any individual referred to adversely in SCI hearings must remain anonymous so long as no legislative purpose can be shown for divulging his name. As noted in Catena, any person who feels adversely affected by evidence submitted at a public hearing, has at minimum an absolute right under the rules of the SCI to file a personal statement for incorporation into the record.*fn6 Moreover, merely because evidence received by the SCI at public hearings may adversely affect certain individuals, may disclose wrongdoing or may be used in a criminal prosecution, neither alters the essentially investigatory nature of the SCI nor requires judicial imposition of anonymity of those being investigated. Doe v. McMillan, 412 U.S. 306, 93 S. Ct. 2018, 36 L. Ed. 2d 912, 41 U.S.L.W. 4752, 4754-55 (1973); Hannah v. Larche, 363 U.S. 420, 443, 4 L. Ed. 2d 1307, 80 S. Ct. 1502 (1960); Sinclair v. United States, 279 U.S. 263, 295, 73 L. Ed. 692, 49 S. Ct. 268 (1929); McGrain v. Daugherty, 273 U.S. 135, 179-80, 71 L. Ed. 580, 47 S. Ct. 319 (1927). Cf. Anonymous v. Baker, 360 U.S. 287, 3 L. Ed. 2d 1234, 79 S. Ct. 1157 (1959); In re Groban, 352 U.S. 330, 1 L. Ed. 2d 376, 77 S. Ct. 510 (1957). Nor does it offend due process for the New Jersey legislature to empower the SCI Commissioners to determine whether testimony received in executive session should be heard at a public hearing.*fn7

Insomuch therefore as the order of the district court applies to the adverse public reference to named individuals not parties to this action, it is without basis in law.

As to appellees, Freeman and Bass, however, we are keenly aware that in any investigation of this kind there is potential for abuse and harm to one's reputation, since the informing function of a commission presupposes the possibility of its uncovering improprieties, abuses or wrongdoing. Few commissions such as the SCI would be established if there were not reason to believe that state programs have been functioning inadequately or improperly. The very purpose of the SCI is to ascertain the state of affairs in New Jersey's Workmen's Compensation program to the end that the public and the legislature might be awakened to possible needs for reform. The resulting conflict between private rights and the public interest is precisely what confronted the Supreme Court in Hannah and again in Jenkins v. McKeithen, 395 U.S. 411, 23 L. Ed. 2d 404, 89 S. Ct. 1843 (1969), where the Court, while reaffirming Hannah, held that when an inquiry goes beyond an investigation in aid of a valid legislative function and becomes "accusatory" in nature, due process requires certain procedural safeguards.

Conceivably, a commission such as the SCI might conduct its inquiry vis-a-vis an individual or association in bad faith with the purpose of harassment and of ultimately making and publicizing findings with respect to the guilt of such individual in transgression of its statutory mandate and in violation of 42 U.S.C. § 1983. In such event, a court is not without power to protect a person whose civil rights are being violated. Jenkins, supra.

On the record before us, however, it is difficult to discern the basis for the district court's order of May 14, 1973. In numerous colloquies before the bench with counsel for appellants, the district court sought in vain to be persuaded of a legislative purpose for allowing adverse public disclosures with respect to named individuals. Yet a court must first focus its inquiry on whether the SCI has transgressed its investigatory function and become accusatory*fn8 and then shape its relief in response to what due process requires.*fn9

Although appellees have alleged several incidents from which the district court may have concluded that the inquiry had been transformed into an accusatory proceeding against appellees, no findings of fact and conclusions of law were made in support of its order as required under Fed. R. Civ. P. 52(a)*fn10 and 65(d). Nor did either party present any testimony or evidence on this critical issue on either May 14 or May 22, when appellant's motion for a stay of the order was denied.

It is true that the district court, on April 9, 1973, characterized certain actions by the SCI as "Gestapo-like tactics"*fn11 and on May 22 alluded to "witch-hunting"*fn12 by the SCI. Moreover, the district court on May 22 very carefully and quite properly provided both parties the opportunity to adduce any evidence in their support.*fn13 Though neither party availed themselves of this opportunity, we nevertheless cannot justify continuance of the order without a more sufficient record*fn14 to support a showing of irreparable harm and probability of success and without the clarity afforded by specific findings.

Paragraphs 1, 2, and 3 of the order of the district court of May 14, 1973 will be vacated, and the cause remanded for further proceedings not inconsistent with this opinion. Insofar as paragraphs 4 and 5 are concerned, the appeal is moot.


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