Judge: City violates state law

Sioux Falls can't offer appeal, then argue against that right, Srstka says
By Josh Verges
Published: January 29, 2007

In a ruling that will affect everything from red-light camera tickets to messy lawns, a circuit judge said this month that the city of Sioux Falls is violating the state constitution by denying residents their right to appeal.

Judge Bill Srstka's ruling came out of a dispute involving Daniels Construction, which is fighting an $8,100 city fine for its late completion of the Falls Overlook Cafe renovation project.

After company officials were told of the penalty, they went before Peter Gregory, a city hearing officer, to challenge the ruling.

As he ruled for the city, the hearing officer told Daniels they had a right to appeal his decision. But when Daniels went to circuit court, the city argued that under state law, circuit courts have no jurisdiction over charter cities' decisions.

Srstka agreed.

When Daniels tried again in another circuit court hearing, Srstka began to see the inconsistencies between South Dakota and Sioux Falls laws and the city's promises.

"At the hearing, I learned that the city consistently takes the position that a party does not have a right to appeal, even though the city provides a right to appeal under (its ordinance). The city advises of the right to appeal, and then shows up in court to oppose that right," Srstka wrote in a seven-page ruling.

"The city is guaranteeing a right to appeal that does not exist."

The ruling goes into effect July 1. In the meantime, Srstka provided four options for the city to come into compliance:

# Change the ordinance.

# Go to the Legislature to lobby for a change in the constitution.

# Create a board of directors.

# Change the ordinance to clearly define the public's options.
Interim plan

Not every one is in agreement about what the best option would be.

The July 1 effective date would give the Legislature time to rewrite its statute to give the circuit court jurisdiction to hear administrative appeals, if they so choose.

In the interim, the city has stopped advising of the right to circuit court appeals and is acting as though the ordinance has been changed to guarantee not an appeal, but the more limited "judicial review."

City Attorney R. Shawn Tornow said the issue is "a matter of semantics."

The 1996 ordinance in question states, "The decision of the board or hearing examiner may be appealed to circuit court as provided by law."

Tornow said simply replacing "circuit court" with "judicial review" will fix the problem. He will recommend the City Council make that change in the coming weeks.

Paul Linde, lawyer for Daniels Construction, said such a change would not give people an appeal as meaningful as the existing ordinance apparently attempts to do.

Under a true appeal in circuit court, a judge re-examines the facts of the dispute and might overturn a city decision.

Options under Tornow's preferred "judicial review" give the judge only a narrow look at the decision to make sure the city followed the law in making its decision.

"I don't agree with that if that's the fix. I think it's way bigger than that," Linde said.

The hearing officer system helps keep city decisions out of court. Linde said it would be better for the public to change either the constitution or state law to clearly route appeals to circuit court, where residents would get an impartial appeal.

"They (the city) hire the hearing examiner, they pay the hearing examiner, and the hearing examiner typically rules in their favor," Linde said. "What they want is all the administrative appeals to go to the hearing examiners, and then you get a rubber stamp on their ruling."

Tornow, the city attorney, said that last year, hearing examiners ruled on 120 cases. They involved nuisance property conditions, building condemnations, red-light camera tickets and Board of Adjustment rulings on variances such as too-tall fences, among others.

About a dozen of those were taken to circuit court and subsequently dismissed at the city's request because there is no jurisdiction.
Examiners questioned

A less common method for contested decisions is a hearing before a board of directors from city departments. Tornow said that to avoid the appearance of bias, the city prefers to hire hearing examiners - they are typically private practice lawyers, though Gregory, who ruled against Daniels, is a retired judge.

"It's an opportunity for the city as a governmental body to have a decision reviewed by an independent officer," he said.

Keeping those decisions out of the courts is good for the judges who "are not overly anxious" to take on the extra work, Tornow said.

Linde dismissed that claim, saying, "The judges don't consider that a burden at all."

The validity of the hearing examiners has come up before.

In I.L. Wiedermann's class-action lawsuit against Sioux Falls regarding the red-light camera citations, one of the arguments is that the hearing officers are partial. His lawyers maintain that statistics have shown those who rule against the city get less work.

Aaron Eiesland, a lawyer representing Wiedermann, argued that if the court rules the city has violated the due process right to appeal, every ticket issued is invalid.

"Any change the city makes now is going to be too late for anyone who has been found in violation of this," he said.

Linde, the Daniels Construction lawyer, echoed that point.

"I don't think those guys (hearing examiners) can act because I don't think their ordinance is constitutional. How can you act when there is no right to appeal?" he said.

Tornow said no date has been set for the council to actually make that or some other change.

"The city has acknowledged the judge's ruling, and we're taking steps to address it," Tornow said. "We're hopeful that people understand what their rights are when their hearing is over."

Linde questions why the change wasn't made long ago. The disputed ordinance is 10 years old, and the same concerns were made well-known in 2004 when Circuit Judge Joseph Neiles refused to hear an appeal of the city's decision to take away the massage parlor license from the Hong Kong Massage owner charged with prostitution.

"I think they've known about this problem for a while," Linde said.