Bereano v. State Ethics Commission
403 Md. 716, 944 A.2d 538, 2008 Md. LEXIS 122 (2008)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
An administrative agency misapplies the 'missing witness rule' and violates due process when it draws an adverse inference against a party for failing to call a witness who is equally available to both sides without giving prior notice or an opportunity to be heard. Additionally, a statute imposing sanctions for a prohibited ongoing lobbying engagement is not applied retroactively if the engagement continues after the statute's effective date.
Facts:
- In September 2001, lobbyist Bruce C. Bereano entered into a written agreement with Mercer Venture, Inc., represented by Mike Traína, to provide lobbying services.
- The agreement included a monthly retainer plus a provision for additional compensation of one percent of the first-year receivable for any government contract Bereano helped secure.
- On November 1, 2001, a new state law (§ 15-405) became effective, creating sanctions for violating the state's longstanding ban on such contingent-fee lobbying agreements.
- After the new law's effective date, Bereano registered as a lobbyist for Mercer and submitted invoices that included reimbursement requests for "legislative meals and expenses."
- The agreement with the contingent fee provision remained in effect until June 2002, when the parties amended it after learning of a press investigation.
- At a subsequent hearing before the State Ethics Commission, Bereano testified that his client, Traína, had provided the language for the prohibited contingent-fee provision.
- Although Bereano listed Traína on his witness list for the hearing, he did not call Traína to testify.
- Prior to the hearing, Traína had fully cooperated with the Commission's investigators, participating in an interview and providing requested documents.
Procedural Posture:
- The State Ethics Commission's staff initiated a complaint against Bruce C. Bereano for violating the state's prohibition on contingent-fee lobbying.
- Following a hearing, the State Ethics Commission found Bereano had knowingly and willfully violated the law and sanctioned him.
- Bereano filed a petition for judicial review in the Circuit Court for Howard County (a state trial court), which affirmed the Commission's decision.
- Bereano, as appellant, appealed to the Court of Special Appeals of Maryland (the state's intermediate appellate court).
- The Court of Special Appeals affirmed the circuit court's judgment, upholding the Commission's decision.
- Bereano, as petitioner, successfully petitioned the Court of Appeals of Maryland (the state's highest court) for a writ of certiorari.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does an administrative agency misapply the 'missing witness rule' and violate due process when it draws an adverse inference against a party for failing to call a witness who is equally available to both sides, without giving the party prior notice or an opportunity to be heard on the inference?
Opinions:
Majority - Harrell, J.
Yes, an administrative agency misapplies the 'missing witness rule' and violates due process when it draws an adverse inference against a party for failing to call a witness who is equally available to both sides, without giving the party prior notice or an opportunity to be heard on the inference. The 'missing witness rule' requires that the witness be 'peculiarly' within one party's power to produce. Here, the witness, Traína, was not peculiarly available to Bereano, as he had cooperated with the Commission's staff counsel and could have been subpoenaed by them. A mere professional relationship does not automatically establish peculiar availability. Furthermore, the Commission's surprise invocation of the rule in its final decision, without any prior notice, violated Bereano's due process rights to be apprised of the issues and have an opportunity to rebut the inference. This error impermissibly shifted the burden of proof, as an agency cannot treat its disbelief of testimony as substantive evidence of the contrary. Because the Commission's decision was predicated in part on this improper inference, the case must be remanded.
Concurring - Rodowsky, J.
I agree with the majority's judgment and its core reasoning that the missing witness rule was misapplied because Traína was not 'peculiarly' available to Bereano. However, I write separately to express concern that the majority opinion goes too far by suggesting a new procedural requirement for an advance ruling before any missing witness argument can be made, and by appearing to reject the harmless error doctrine in administrative appeals. In this specific case, the error was not harmless because the Commission may have relied on the adverse inference to find that Bereano's violation was 'knowingly and willfully,' a necessary element for the suspension sanction. Therefore, a remand is appropriate to clarify the basis for the Commission's decision on that element.
Dissenting - Thieme, J.
No, the Commission did not err in drawing a permissible inference from Bereano's failure to call Traína as a witness. The 'missing witness rule' is a common-sense principle that a fact-finder, including an administrative body, is entitled to use. Given the established professional and client relationship between Bereano and Traína, Traína was pragmatically unavailable to the Commission's staff counsel, making him peculiarly available to Bereano. The Commission was not required to provide advance notice of its intent to draw such a logical inference, and doing so did not shift the burden of proof. This inference was just one piece of evidence among many, including numerous contradictions in Bereano's own testimony, that supported the Commission's finding that he was not a credible witness.
Analysis:
This case establishes important due process limitations on the use of the 'missing witness rule' in Maryland administrative proceedings. By requiring that the witness be 'peculiarly available' and that the agency provide notice before drawing an adverse inference, the decision protects respondents from being blindsided and ensures that agency findings are based on record evidence. The holding prevents an agency from using the inference as a substitute for substantive proof or to improperly shift the burden of proof to the accused party. This precedent will force administrative bodies to be more transparent in their reasoning and may reduce their reliance on such inferences, encouraging them instead to call relevant witnesses themselves if they are available.
