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City of Philadelphia v. Fraternal Order of Police Lodge No. 5

December 29, 2009


Appeal from the Order of the Commonwealth Court dated July 30, 2007 at No. 44 CD 2007, vacating and remanding the Order entered on December 16, 2006 in the Court of Common Pleas of Philadelphia County, Civil Division, at No. 4908 October Term 2006.

The opinion of the court was delivered by: Mr. Justice Baer


ARGUED: October 21, 2008


We granted allowance of appeal in this case to consider whether the Commonwealth Court expanded improperly the limited scope of review applicable to an Act 111*fn1 grievance arbitration by holding that an arbitrator violated the City of Philadelphia's procedural due process rights when the arbitrator precluded the City from presenting any evidence because of the City's failure to comply with a duly issued subpoena. After careful consideration, we agree with the Commonwealth Court that the arbitrator violated the City's due process rights. Thus, the Commonwealth Court did not err when it overturned the Act 111 award at issue herein, and accordingly, we affirm.

This case involves a male police officer for the City of Philadelphia, Jason Breary (Grievant). In June of 2001, a female police officer reported to the department that Grievant had sexually assaulted her. After the female officer reported the incident, the Philadelphia Police Department Internal Affairs Division (IAD) commenced an investigation into the accusations and, in the course of doing so, interviewed several members of the police department. At the conclusion of the investigation, IAD referred the matter to the Philadelphia District Attorney's office, which subsequently filed criminal charges against Grievant.

Concurrent with the filing of the criminal charges, the police department formally notified Grievant of the charges against him, gave him an opportunity to respond (which he declined to do), informed him that he was suspended without pay for thirty days, and that the department intended to terminate his employment. This notification was provided in the presence of Grievant's immediate superiors, the IAD investigator, and a representative from Appellant, the Fraternal Order of Police Lodge Number 5 (FOP). Consistent therewith, Grievant was terminated on December 13, 2002. The FOP, on behalf of Grievant, and pursuant to the Collective Bargaining Agreement (CBA) between the City and the FOP, appealed the termination to a neutral arbitrator from the American Arbitration Association (AAA). The FOP contended that the termination was without cause and thus violative of the CBA. The grievance was then held in abeyance, pending final disposition of the criminal charges filed against Grievant.

The Philadelphia Municipal Court convicted Grievant of all charges filed against him on September 2, 2003. Grievant filed an appeal demanding a trial de novo in the Philadelphia County Court of Common Pleas. That court, on July 28, 2005, found Grievant not guilty on all charges, thus terminating all criminal action against him. Subsequently, a notice of hearing before the AAA was issued to both the FOP and City, setting the grievance arbitration hearing for July 10, 2006.*fn2 On May 18, 2006, the arbitrator, pursuant to a request by the FOP, issued a subpoena requiring the City to provide:

[A]ny and all documents relating to the discipline imposed upon [Grievant], including but not limited to, Forms 75-18, investigation reports, citizen complaints, witness statements, Notices of Disciplinary Action (Suspension, Intent to Dismiss and Dismissal), documents reflecting actions taken by and recommendations made by the Police Board of Inquiry ("PBI"), transcripts or tape recordings of proceedings before the PBI, and all other documents that refer or relate in any way to the aforementioned discipline.

The FOP demanded that the subpoenaed documents be produced by the July 10 hearing.*fn3

The City arrived at the hearing with eight witnesses to present during its case-in-chief, but without the demanded documents. Counsel for the FOP informed the arbitrator of the City's failure to honor the FOP's subpoena. The deputy City Solicitor representing the City responded that he was unaware of the document requests. The FOP then orally petitioned the arbitrator to sanction the City by precluding the presentation of any evidence that would have been provided pursuant to the subpoena.

The arbitrator sua sponte continued the matter until July 25, 2006, and indicated that he would hear oral arguments on the record, concerning the sanctions when the hearing resumed.*fn4 Meanwhile, counsel for the City discovered that the subpoena had not been complied with due to a clerical error, and immediately transmitted all of the subpoenaed documents in the City's possession to Grievant.*fn5 When the arbitration resumed on July 25, the arbitrator first heard oral arguments, on the record, concerning the FOP's motion for sanctions.

During arguments, the FOP averred that, given the internal nature of disciplinary proceedings in the Philadelphia Police Department, when a grievance is filed to challenge an officer's termination or suspension, the City, at least initially, retains sole and exclusive possession of the relevant documents, reports, and transcripts. The FOP submitted that, while prior practice had formerly been to request documents and the like informally through correspondence addressed to the City, the City had recently changed its stance regarding arbitration discovery, and was requiring subpoenas for all information. Despite the City's change in position, the FOP contended that, in this case, as well as other Act 111 arbitrations between the parties, the City had continuously refused to comply with formal discovery requests.

The FOP then argued that, given the finality of Act 111 arbitration, "it is absolutely and positively critical that the City comply with requests for documentation." Notes of Testimony (N.T.), Jul. 25, 2006, at 8. The FOP contended that its members suffer extreme prejudice when the FOP is forced to defend them without the discovery that is their right as a matter of basic due process. To stop these abuses from happening repeatedly, the FOP asserted, the arbitrator should preclude the City from presenting any testimony or evidence based on materials subject to the subpoena.

The City countered that, based upon the clerical error,*fn6 counsel had no knowledge of the subpoena until the July 10 hearing, and upon being told of it, immediately corrected the problem. The City further stated that there had been settlement negotiations in the weeks leading up to the July 10 hearing, and the FOP's counsel made no mention of the failure to comply with the subpoena. Moreover, the City argued the FOP could have filed a motion to enforce the subpoena with the Philadelphia Court of Common Pleas prior to the hearing, rather than waiting, then asserting prejudice, and requesting the imposition of severe sanctions. The City then noted that neither the FOP nor Grievant had been prejudiced by the error given that the FOP received the documents two weeks before the July 25 merits hearing, rather than on July 10, as it had originally requested. Accordingly, while acknowledging the error, the City contended that preclusion of all evidence subject to the subpoena would amount to a constructive dismissal of the arbitration, and was not a proper remedy.

The arbitrator disagreed and granted the FOP's request that the City be precluded from presenting any evidence that was subject to disclosure under the subpoena. While recognizing that the deputy City Solicitor was unaware of the subpoena until the July 10 hearing and that counsel diligently cured the problem immediately thereafter, the arbitrator found that the Grievant had sustained prejudice because he was seeking reinstatement to the police force and the delay in the proceedings had slowed this quest. Moreover and importantly, the arbitrator further faulted the City for alleged noncompliance in other Act 111 arbitrations before different arbitrators and involving different attorneys from the City Solicitor's office. The arbitrator did not find any bad faith on the City's part specific to this case, but nevertheless stated that in his experience, the FOP has had significant compliance problems with the City in the past, and that the City should not be permitted to ignore subpoenas, regardless of its good or bad faith. N.T., Jul. 25, 2006, at 30.

Prohibited from presenting any evidence that had been sought through the subpoena, the City had no case and was forced to rest. Grievant then rested, and the arbitrator, in a written opinion issued October 2, 2006, sustained the grievance and reinstated Grievant to the police force with all back pay, holding that the City had not met its burden of proving just cause for dismissal.

The City filed a Petition to Vacate Arbitration Award with the Philadelphia County Court of Common Pleas. In a one-sentence order, the court denied the petition. In a footnote to the order, the court indicated that because the arbitrator had not exceeded his authority, it possessed no authority to disturb the sanction order against the City, or the resulting arbitration award. Tr. Ct. Slip Op. at 1-2 n.1 (citing Pa. State Police v. Pa. State Troopers' Ass'n (Betancourt), 656 A.2d 83 (Pa. 1995), supra note 1). The City then appealed to the Commonwealth Court.

In a published opinion, City of Philadelphia v. Fraternal Order of Police Lodge No. 5 (Jason Breary), 932 A.2d 274 (Pa. Cmwlth. 2007), a panel of the Commonwealth Court unanimously vacated the order of the Court of Common Pleas and remanded for a full arbitration. Initially, the court determined that the ability of the arbitrator constructively to dismiss the City's case by precluding the subject evidence raised due process concerns, permitting substantive review within the limited confines of narrow certiorari. Id. at 280 (citing Betancourt, supra note 1). The court then examined whether a procedural due process violation actually occurred. In so doing, it found "troubling" that the arbitrator denied a full merits hearing, "in large measure, because of violations that have occurred in other cases." Id. at 286 (emphasis in original). Moreover, the court noted that, while Grievant (and the FOP) sustained some prejudice, it had been cured when the City provided the requested documents immediately following the July 10 hearing, providing Grievant and FOP two weeks to study the documents and prepare for the hearing, when the FOP had only sought the documents on the day of the originally scheduled hearing. In the end, the Commonwealth Court found that the sanction of complete preclusion of evidence equating to a dismissal of the City's case, was a violation of due process, and thus ordered the remand for a full arbitration hearing.

The FOP filed for allowance of appeal to this Court, requesting that we resolve whether the Commonwealth Court improperly expanded the limited scope of review in Act 111 grievance arbitrations, as articulated in Betancourt, when it vacated the arbitrator's determination and remanded for a hearing below. We granted review to decide this question, and concomitantly directed the parties to address whether Act 111 arbitrators, in the first instance, "can award such sanctions, and, if so, what is a reviewing court's role in reviewing sanctions under the Act 111 narrow certiorari scope of review?" See City of Phila. v. Fraternal Order of Police Lodge No. 5 (Jason Breary), 938 A.2d 986 (Pa. 2007) (per curiam).

Prior to 1968, police officers and firefighters in the Commonwealth had no legal ability to unionize or collectively bargain. In response to a number of illegal strikes throughout the Commonwealth, the General Assembly enacted Act 111 of 1968, see supra note 1, which gave police officers and firefighters the ability to unionize and collectively bargain, but at a price: the newly permitted unions would continue to possess no power to strike. The Legislature assured, however, that labor disputes between political subdivisions and the police and fire unions would be resolved quickly and with finality by providing no right of appeal from final disposition of an Act 111 arbitration. 43 P.S. § 217.7(a).

We have since recognized, however, that all decision-making tribunals, including arbitrators, must conduct proceedings in accordance with the mandates of due process under the Pennsylvania and United States Constitutions. The Washington Arbitration Case, 259 A.2d 437, 440 (Pa. 1969). Act 111 arbitration panels, however, are not administrative agencies or courts. Id. Rather, they are bodies of temporary jurisdiction convened to respond quickly and with absolute finality to a specific labor conflict, and then disperse. Id. Like trial courts, however, arbitration panels have the potential to affect the substantive and fundamental rights of parties. Thus, and notwithstanding Section 217.7(a), in an Act 111 interest arbitration case, an appeal of an award will lie in the nature of narrow certiorari, only to review: (1) a question of jurisdiction; (2) the regularity of the proceedings; (3) questions of excess in the exercise of powers; and (4) constitutional questions. Betancourt, 656 A.2d at 79-80; Washington Arbitration Case, 259 A.2d at 441. "Generally speaking, a plenary standard of review should govern the preliminary determination of whether the issue involved implicates one of the four areas of inquiry encompassed by narrow certiorari, thus allowing for non-deferential review." Town of McCandless v. McCandless Police Officers' Ass'n, 901 A.2d 991, 1000 (Pa. 2006). We are bound, however, by all determinations of fact and issues of law not encompassed by the standard of narrow certiorari, even if incorrect. Id. Only if we first determine that narrow certiorari is implicated, may we then examine the viability of the issued sanction.

Instantly, the FOP claims that the arbitrator's decision to preclude the City from presenting any evidence subject to the subpoena cannot be assailed on appeal because the decision constitutes a mere evidentiary ruling, not encompassed by narrow certiorari under Betancourt. Citing to Betancourt, The Washington Arbitration Case, and Act 111 itself, the FOP emphasizes that these arbitration hearings are to be swift, and result in the final resolution of all grievances. Thus, the FOP argues that to enable the City to challenge simple "evidentiary rulings," and, further, to permit the Commonwealth Court to overturn those rulings, disrupts the clear deference that Act 111 arbitrators are due. Indeed, the FOP argues that if the evidentiary decision of the arbitrator in this case is assailable, then any mundane, procedural decision of an arbitrator will be impermissibly subject to judicial scrutiny. In support of this point, the FOP points to a multitude of federal cases, including decisions from the National Labor Relations Board, for the proposition that an "arbitrator... has the responsibility and the authority to control the conduct of the proceedings and the admission of evidence." Brief of the FOP at 26 (quoting Int'l Union, United Automobile, Aerospace & Agric. Implement Workers of America v. Kraft Foods, 409 F.Supp. 559, 562 (E.D. Pa. 1976)). The FOP contends that, similar to federal arbitration proceedings, Act 111 arbitrators must inherently make certain evidentiary rulings, i.e., relevancy, hearsay, and the like, during the course of a hearing. It avers that the arbitrator's preclusion of the City from presenting evidence due to the discovery violation is no different. Therefore, the FOP argues that the arbitrator's imposition of the discovery sanction is not reviewable via narrow certiorari.

Should we find the imposition of the sanction reviewable, the FOP alternatively contends that the arbitrator's decision to prohibit the City from presenting the subject evidence fell within all bounds of due process, as all that transpired was that the City ignored a duly issued subpoena, and was sanctioned for the transgression. Further, the FOP avers that it and Grievant were significantly prejudiced by the City's noncompliance, in light of the inability to prepare for the July 10 hearing, and because any further delay in the proceedings delayed Grievant, whose criminal conviction had been overturned, from reclaiming his position on the police force. Indeed, the FOP and Grievant contend that such prejudice outweighed the prejudice the City suffered when it was precluded from adducing evidence, resulting in the constructive dismissal.*fn7

The City counters that by completely precluding it from presenting any argument or evidence at the July 25 hearing, the arbitrator unconstitutionally deprived it of its due process rights under the Pennsylvania and United States Constitutions, as well as the rules promulgated by the AAA.*fn8 The City takes umbrage with the FOP characterizing what occurred here as an evidentiary question, pointing out that within the context of the sanction, the arbitrator precluded the City from putting on the witness stand the eight witnesses it had prepared and brought to the hearing, and forced the dismissal of the City's case against the Grievant. The City protests that the hallmark of due process is a full and fair opportunity to be heard, and the dismissal of a case is such an extreme sanction as to violate due process. The City argues that the arbitrator should have "balance[d] the equities carefully and dismiss[ed] only when the violation of the discovery rules is willful and the opposing party has been prejudiced." Brief of the City at 34 (quoting Stewart v. Rossi, 681 A.2d 214, 217 (Pa. Super. 1996)). To that end, the City contends that the arbitrator did not find any willful misconduct on its part. The City further strongly objects to the FOP's and Grievant's contention that they were prejudiced. As noted above, the City believes that by receiving the subpoenaed materials two weeks prior to the hearing, Grievant and FOP were, in fact, benefitted. Thus, the City contends it properly raised a due process question cognizable under narrow certiorari, and that there was, in fact, a violation of due process. Thus, the City avers the Commonwealth Court properly reversed and remanded for a full hearing, and this Court should affirm.

First regarding the threshold inquiry of narrow certiorari, our review of the record reveals that the issue presently before us is one involving procedural due process such that Betancourt is satisfied, as this is a properly reviewable constitutional matter.*fn9 As discussed above, the FOP attempts to characterize the arbitrator's decision as nothing more than an "evidentiary ruling to exclude certain evidence," akin to a ruling concerning hearsay or relevancy. Brief of the FOP at 21. Moreover, the FOP continues, should we affirm the Commonwealth Court, we would be subjecting every Act 111 arbitrator's decisions and rulings to unfettered judicial review, in clear violation of Betancourt and narrow certiorari.

Initially, we recognize the FOP's concern: arbitrators must decide evidentiary questions such as hearsay and relevancy; and, the exclusion of evidence pursuant to such a ruling does not typically involve notions of due process. However, the instant case does not concern a simple "evidentiary ruling." Indeed, the FOP's characterization of the subject ruling as one involving evidence is inaccurate; the arbitrator did not rule upon a relevancy, best evidence, or hearsay objection. Rather, the arbitrator decided a technical discovery issue, and in the process, constructively precluded*fn10 the City from presenting a case-in-chief concerning the merits of Grievant's termination. While we recognize that dismissal of a civil action is, at times, a remedy available to rebuke those who violate discovery orders, see Fox v. Gabler, 626 A.2d 1141 (Pa. 1993),*fn11 here, the arbitrator found no willful misconduct or bad faith on the City's part, and further seemingly relied on evidence not of record in this specific arbitration to support his ruling. In our view, then, this posture raises a question in our minds as to whether the City was afforded a fair opportunity to be heard. See Logan v. Zimmerman Brush Co., 455 U.S. 422, 437 (1982) (holding that while due process is accorded when ...

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