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3-1011-16696-2 |
STATE OF
OFFICE OF ADMINISTRATIVE HEARINGS
FOR THE COMMISSIONER OF COMMERCE
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In
the Matter of Midwest Oil of |
ORDER ON MOTION TO STAY PROCEEDINGS; ORDER ON
DISCOVERY ISSUES |
This matter is before Administrative Law Judge Kathleen D. Sheehy on the Respondent’s motion for a stay of administrative proceedings, and on the Department’s motion regarding discovery issues. A prehearing conference took place at the Office of Administrative Hearings on September 13, 2005, to discuss issues raised by the motions. The motion record closed that day.
Christopher M. Kaisershot,
Assistant Attorney General,
Christopher K. Sandberg, Esq.,
Lockridge Grindal Nauen PLLP,
Based upon all of the files, records, and proceedings herein, and for the reasons set forth in the accompanying Memorandum, the Administrative Law Judge makes the following:
ORDER
IT
IS HEREBY ORDERED:
1. That
the Respondent’s motion to stay this proceeding indefinitely pending the
outcome of a declaratory judgment action in Ramsey County District Court is DENIED;
2. That
the Department’s motion to preclude the Respondent from supporting defenses or
opposing the Department’s claims with evidence responsive to the Department’s
discovery requests is DENIED; however, the Respondent shall
respond to the pending discovery requests by September 16, 2005, or it may be
subject to evidentiary sanctions for noncompliance with this Order; and
3.
The prehearing schedule is modified as follows:
September 19, 2005: Deadline for the Department to serve
any Amended Notice of Hearing or Statement of Charges.
September 26, 2005: Dispositive motion deadline.
September 30, 2005: Prehearing telephone conference, 1:30
p.m., to discuss the status of this matter.
The telephone conference previously scheduled for September 15, 2005 is
canceled.
October 3, 2005: Deadline for responding to any
dispositive motion.
October 10-11, 2005: Hearing, beginning at 9:30 a.m. at the
Office of Administrative Hearings.
Dated this 14th day of September, 2005.
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s/Kathleen D. Sheehy |
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KATHLEEN D. SHEEHY |
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Administrative Law Judge |
MEMORANDUM
Midwest
Oil of Minnesota, LLC, began operating retail gasoline stations in
The Department of Commerce commenced this proceeding by issuing a Notice and Order for Hearing and a Statement of Charges, and a Cease and Desist Order dated June 27, 2005. The Notice and Order for Hearing alleges that each of the Respondent’s three gasoline stations has sold and/or advertised to sell gasoline below cost, in violation of Minn. Stat. §§ 325D.04 and 325D.71, on numerous occasions between March and June 2005. The Department seeks penalties for these violations pursuant to Minn. Stat. § 45.027.
On August 29, 2005, the Respondent commenced a declaratory judgment action against the Department in Ramsey County District Court, alleging that Minn. Stat. §§ 325D.04 and 325D.71 are facially unconstitutional and deny due process and equal protection of the law. The Respondent then moved for a stay of the administrative proceedings, pending a determination of the constitutional issues in Ramsey County District Court. The Department opposed the motion for a stay. The Department also moved for an order precluding the Respondent from offering evidence that would be responsive to the Department’s discovery requests, as a sanction for the Respondent’s failure to respond to the Department’s discovery requests.
The rules of the Office of Administrative Hearings provide that requests for a continuance of a hearing shall be granted upon a showing of good cause. “Good cause” includes: death or incapacitating illness of a party, representative, or attorney of a party; a court order requiring a continuance; lack of proper notice of the hearing; a substitution of the representative or attorney of a party if the substitution is shown to be required; a change in the parties or pleadings requiring postponement; and agreement for a continuance by all parties provided that it is shown that more time is clearly necessary to complete authorized discovery or other mandatory preparation for the case and the parties and the judge have agreed to a new hearing date, or, the parties are engaged in serious settlement negotiations or have agreed to a settlement of the case which has been or will likely be approved by the final decision maker.[1]
The cases
cited by Respondent in which Administrative Law Judges have granted stays are
consistent with Minn. R. 1400.7500, particularly the provision authorizing a
continuance if a court order requires it or if the stay would be of short
duration and otherwise promote judicial economy.[2] The Respondent also cites Oak Ridge Care
Center v. Minnesota Department of Human Services, 452 N.W.2d 703 (Minn.
App. 1990), rev’d, 460 N.W.2d 21 (
The Department relies on the analysis a district court would use in determining whether to enjoin administrative proceedings, and the Administrative Law Judge finds this authority instructive. In Thomas v. Ramberg, the Minnesota Supreme Court affirmed the denial of an injunction to preclude an administrative agency from taking action to set minimum wages in the retail merchandising business. The plaintiff had challenged the proposed action, claiming the industrial commission lacked jurisdiction to set minimum wages. The Supreme Court affirmed, noting that, in general, an administrative action that is not final cannot be enjoined on either jurisdictional or constitutional grounds, the reason being that absent a final order or decision there usually can be no irreparable harm. It is only when a plaintiff can show that a continuance of an administrative agency’s proceedings to completion will result in substantial injury of an irreparable nature—as distinguished from a mere apprehension of injury to result from a possible entry of a final order—that the requirement for finality is relaxed.[4] The court specifically concluded that the time and expense saved by halting administrative proceedings pending a determination as to the agency’s authority in the face of a jurisdictional or constitutional challenge does not amount to irreparable injury.[5] The court held that, in the interest of orderly and uninterrupted administrative action, an injunction should not issue to interfere with administrative proceedings, because otherwise agencies would be harassed and prevented from performing their functions through frequent attacks on their jurisdiction.[6]
The Respondent does not claim that the Department is proceeding here without jurisdiction or authority to enforce compliance with the statute. Its argument is limited to a challenge to the facial constitutionality of Minn. Stat. §§ 325D.04 and 325D.71. It has not articulated why the statute violates due process or equal protection of the law, and there is no prospect of an imminent ruling by the district court. The mere filing of a declaratory judgment action challenging the constitutionality of the statute is not sufficient to constitute good cause for an indefinite continuance of the contested case hearing. In addition, requiring Respondent to go through a contested case hearing is not the type of harm that would likely constitute irreparable injury. The Respondent is free to pursue its constitutional challenge in the district court and appellate courts, if necessary; in the meantime, however, the administrative process should continue as scheduled so that the Commissioner of Commerce can make a final order or decision in the matter. If circumstances should change, the Respondent is free to renew its request for a stay.
After the Department filed its discovery motion, counsel for the parties conferred and reached agreement on one further extension of time, until September 16, 2005, for the Respondent to provide discovery responses. In addition, the Department agreed to answer discovery served by the Respondent, and to make a witness available for a deposition, even though the discovery deadline set in the First Prehearing Order had expired. Based on these agreements, the Department’s motion to preclude the Respondent from offering evidence that would be responsive to these requests is denied as being premature; however, the Respondent shall respond to the pending discovery requests by September 16, 2005, or it may be subject to evidentiary sanctions for noncompliance with this Order.
Based on the parties’ agreements concerning additional discovery, the prehearing schedule is modified as indicated above.
K.D.S.
[1]
[2] See In the Matter of the Mortgage Originator License of BlackDiamond Mortgage & Real Estate Consultants Corp., OAH No. 1005-15202 (July 16, 2003) (indefinite stay granted because the matter had been removed to U.S. District Court); In the Matter of Dunninck Bros., Inc., OAH No. 3000-11969 (Feb. 24, 1999) (short stay granted where there was a district court order in a related case finding the agency in constructive willful contempt of earlier court orders for initiating administrative enforcement proceedings without defining its rules through the rulemaking process, and the district court was expected to rule soon as to whether it intended to preclude all such enforcement proceedings); and State v. SpeeDee Delivery Service, OAH No. 1700-10317 (July 1996) (stay granted because a decision on the controlling legal issue interpreting the Minnesota Human Rights Act was pending in the Minnesota Court of Appeals).
[3] In the Matter of Beverly Enterprises, Inc., OAH No. 1800-969 (Jan. 21, 1987).
[4] Thomas
v. Ramberg, 240
[5]
[6]