UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA
June 13, 2011
THE OHIO HEMPERY, INC., ET AL.
The opinion of the court was delivered by: Sarah S. Vance United States District Judge
ORDER AND REASONS
In this products liability case, defendants Oakmont Investment Company, Inc., American Employers' Insurance Company, and Commercial Union Insurance Company have moved for judgment on the pleadings.*fn1 Because the Court is collaterally estopped from reconsidering the question of whether the plaintiff's positive drug test was caused by drinking the defendants' hemp oil product without knowing that it contained THC rather than by using marijuana, the Court GRANTS defendants' motion.
Plaintiff was a United States Coast Guard-licensed vessel engineer. Before taking a Coast Guard drug test, he allegedly ingested "Hemp Liquid Gold," a product manufactured and distributed by defendant Oakmont Investment, and other similar products. Plaintiff contends that he believed that the products were healthful and free of any ingredients that produce any of the risks associated with marijuana use. Plaintiff later tested positive for THC, the active ingredient in marijuana. As a result of the positive test result, the Coast Guard charged plaintiff with use of a dangerous drug and sought to have his license revoked. A Coast Guard Administrative Law Judge ("ALJ") held hearings on the charges against Dresser in April and June of 1998. On August 17, 1998, plaintiff sued defendants in this Court as manufacturers, markets, distributers, and sellers of certain hemp oil products, the consumption of which caused a "false positive" on the drug test. Plaintiff seeks damages for loss of earnings, job-related benefits, and emotional distress.
In a written opinion dated February 4, 1999, ALJ Boggs ordered plaintiff's license revoked. Dresser appealed that decision to the Commandant of the Coast Guard. The Court stayed this matter on February 28, 2000 while the Coast Guard proceedings against Dresser were ongoing.*fn2 The Court reasoned that if the administrative proceedings resulted in a finding that plaintiff used marijuana, he could be collaterally estopped from arguing otherwise in this case. The Commandant affirmed the ALJ's decision in June of 2002, but the National Transportation Safety Board ("NTSB") reversed the Coast Guard's decision in June of 2003 due to the appearance of a conflict of interest on the part of ALJ Boggs.*fn3 Dresser then moved to reopen this case because there was no longer an administrative opinion to form the basis of a collateral estoppel argument.
The Court reopened this case on July 2, 2003 but reissued the stay on March 8, 2004.*fn4 Plaintiff argued, in opposition to the stay, that he would not be able to fully and fairly litigate his hemp oil defense before the ALJ. The relevant Coast Guard regulation states: "If an individual fails a chemical test for dangerous drugs under this part, the individual will be presumed to be a user of dangerous drugs." 46 C.F.R. § 16.201(b). Dresser argued that he would not be able to rebut this presumption due to a policy memorandum issued to all Coast Guard ALJs by Chief Coast Guard ALJ Ingolia indicating that "accidental or inadvertent ingestion of a food product containing THC will only serve as a valid defense to a charge of use of dangerous drug if the Respondent produces reliable and credible evidence."*fn5
The Court ruled that this policy memorandum, even if it has binding
legal effect, does not foreclose Dresser's defense that he ingested
the hemp oil product without knowing that it contained THC.*fn6
The same issue arises in both this case and the
administrative proceeding: whether Dresser inadvertently consumed THC
by ingesting defendant's hemp oil product. If Dresser tested positive
because he used marijuana or because he ingested hemp oil knowing that
it contained THC, then his license was properly revoked and he cannot
sustain this products liability case. The Court further ruled that the
legal standard that Dresser must meet in the administrative proceeding
to rebut the presumption that he used a dangerous drug is identical to
the "preponderance of the evidence" standard he has to meet in this
case. Thus, the Court stayed these proceedings in the interest of
economy. The Fifth Circuit dismissed Dresser's attempt to appeal the
In the meantime, the Coast Guard revocation proceeding had been reassigned to ALJ Brudzinski. On December 7, 2004, Brudzinski held a hearing in which both sides presented additional witness testimony. Then, on June 14, 2005, ALJ Brudzinski revoked Dresser's Coast Guard license and merchant mariner's document.*fn8 Brudzinski held that Dresser failed to rebut the presumption that he knowingly ingested THC because, among other reasons, Dresser did not support his testimony that he used hemp oil with credible evidence. Dresser appealed that decision to the Commandant of the Coast Guard, who affirmed ALJ Brudzinski's decision.*fn9
Dresser also filed a separate suit against various Coast Guard ALJs, their clerks and administrative staff, and the Commandant and his legal staff for declaratory and injunctive relief, writs of mandamus, and Bivens actions. Dresser maintained that ALJ Brudzinski's decision was unconstitutional because of (1) ex parte communications among ALJ Brudzinski, Chief ALJ Ingolia, and other named defendants, and (2) an institutionalized ALJ policy to rule in favor of the Coast Guard regarding hemp seed oil defenses to positive toxicology tests. In that action, Judge Berrigan ruled that she could not hear Dresser's claims under the Administrative Procedures Act because there was no "final agency action" at that time, as the Commandant had not yet decided Dresser's appeal of ALJ Brudzinski's decision.*fn10 The Fifth Circuit affirmed that ruling.*fn11 The Fifth Circuit also ruled that the court lacked jurisdiction to hear plaintiff's Bivens claims because those claims were "inescapably intertwined" with a review of the ALJ's decision.*fn12
After the Commandant ruled against Dresser, he filed suit again, urging the same APA and Bivens claims. Judge Berrigan held again that she lacked jurisdiction over Dresser's APA claims, despite the Commandant's decision in the interim, because Dresser failed to appeal the decision of the Commandant first to the NTSB and then to the Court of Appeals as required under 49 U.S.C. §§ 1133 and 1153.*fn13 The court also held that Dresser's Bivens claims remained inescapably intertwined with a review of the ALJ's decision, which could not occur without following the appeals process mandated by statute. Dresser appealed that decision to the Fifth Circuit.
Dresser then moved that this civil case be reopened and that the stay be lifted, but the Court denied that motion on September 13, 2010.*fn14 The Court noted that Dresser's appeal of Judge Berrigan's decision denying his APA and Bivens claims was still pending before the Fifth Circuit. If Dresser had won that appeal, he would be able to challenge the Coast Guard's administrative proceedings directly. The Court ruled that such an action, if allowed to proceed, would be a more appropriate vehicle for challenging the fairness of the administrative proceedings than this collateral action.
On December 22, 2010, the Fifth Circuit affirmed Judge Berrigan's
second opinion and held that Dresser's failure to appeal the
Commandant's decision to the NTSB precluded his APA
and Bivens claims.*fn15 This Court then granted
Dresser's unopposed motion to lift the stay in this case.*fn16
Defendants now move for judgment on the pleadings on
collateral estoppel grounds.
Defendants move for judgment on the pleadings under Fed. R. Civ. P. 12(c). Both plaintiff and defendants, however, present evidence outside the pleadings, including an affidavit by a former Coast Guard ALJ and a report by the Office of Inspector General for the Department of Homeland Security. Both parties have had a reasonable opportunity to present any material that is pertinent to the motion. Therefore, in accordance with Fed. R. Civ. P. 12(d), the Court will treat defendants' motion as one for summary judgment under Fed. R. Civ. P. 56.
Summary judgment is appropriate when "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law."
Fed. R. Civ. P. 56(c)(2); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994). When assessing whether a dispute as to any material fact exists, the Court considers "all of the evidence in the record but refrains from making credibility determinations or weighing the evidence." Delta & Pine Land Co. v. Nationwide Agribusiness Ins. Co., 530 F.3d 395, 398 (5th Cir. 2008). All reasonable inferences are drawn in favor of the nonmoving party, but "unsupported allegations or affidavits setting forth 'ultimate or conclusory facts and conclusions of law' are insufficient to either support or defeat a motion for summary judgment." Galindo v. Precision Am. Corp., 754 F.2d 1212, 1216 (5th Cir. 1985); Little, 37 F.3d at 1075.
If the dispositive issue is one on which the moving party will bear the burden of proof at trial, the moving party "must come forward with evidence which would 'entitle it to a directed verdict if the evidence went uncontroverted at trial.'" Int'l Shortstop, Inc. v. Rally's, Inc., 939 F.2d 1257, 1263-64 (5th Cir. 1991). The nonmoving party can then defeat the motion by either countering with sufficient evidence of its own, or "showing that the moving party's evidence is so sheer that it may not persuade the reasonable fact-finder to return a verdict in favor of the moving party." Id. at 1265.
If the dispositive issue is one on which the nonmoving party will bear the burden of proof at trial, the moving party may satisfy its burden by merely pointing out that the evidence in the record is insufficient with respect to an essential element of the nonmoving party's claim. See Celotex, 477 U.S. at 325. The burden then shifts to the nonmoving party, who must, by submitting or referring to evidence, set out specific facts showing that a genuine issue exists. See id. at 324. The non-movant may not rest upon the pleadings, but must identify specific facts that establish a genuine issue for trial. See, e.g., id. at 325; Little, 37 F.3d at 1075; Isquith for and on Behalf of Isquith v. Middle South Utils., Inc., 847 F.2d 186, 198 (5th Cir. 1988), cert. denied, 488 U.S. 926 (1988).
Defendants contend that ALJ Brudzinski, in his June 14, 2005 decision, definitively ruled that Dresser has not shown by a preponderance of the evidence that he inadvertently consumed THC by ingesting Hemp Liquid Gold. Therefore, defendants argue, Dresser is collaterally estopped from asserting that Hemp Liquid Gold rather than marijuana caused the positive drug test. Dresser responds by arguing that he did not have a full and fair opportunity to litigate that issue in the Coast Guard's administrative system. Dresser presents a sworn statement by a former Coast Guard ALJ which, he argues, demonstrates that ALJ Brudzinski's decision was essentially predetermined and did not result from a fair process. For the following reasons, the Court finds that Dresser has not demonstrated that he did not have a full and fair opportunity to litigate his hemp oil defense in the Coast Guard proceedings. Therefore, collateral estoppel bars Dresser from arguing that he inadvertently consumed THC by ingesting Hemp Liquid Gold, and he cannot sustain this suit.
A. Collateral Estoppel Doctrine
A final judgment in a federal administrative proceeding has preclusive effect when that proceeding is "judicial" in nature and the elements of collateral estoppel are met. See Grace v. Keystone Shipping Co., 805 F.Supp. 436, 441 (E.D. Tex. 1992) (Coast Guard ALJ's finding that marijuana belonged to seaman was "judicial" and had preclusive effect in later maritime action) (citing Astoria Fed. Sav. & Loan Ass'n v. Solimino, 501 U.S. 104, 107 (1991) and United States v. Utah Constr. & Mining Co., 384 U.S. 394, 422 (1966)); see also Castillo v. Railroad Retirement Bd., 725 F.2d 1012, 1014 (5th Cir. 1984) (administrative determination that employee was not disabled precluded relitigation in later proceeding); Painters District Council No. 38 v. Edgewood Contracting Co., 416 F.2d 1081, 1083-84 (5th Cir. 1969) (N.L.R.B. finding that union had engaged in an unfair labor practice had preclusive effect in subsequent litigation).
Collateral estoppel bars "'successive litigation of an issue of fact or law actually litigated and resolved in a valid court determination essential to the prior judgment,' even if the issue recurs in the context of a different claim." Taylor v. Sturgell, 553 U.S. 880, 892 (2008) (quoting New Hampshire v. Maine, 532 U.S. 742, 748 (2001)). The purposes of collateral estoppel are to protect parties from multiple lawsuits, to avoid the possibility of inconsistent decisions, and to conserve judicial resources. Lytle v. Household Mfg., Inc., 494 U.S. 545, 553 (1990). To establish collateral estoppel, a party must show: "(1) that the issue at stake [is] identical to the one involved in the prior litigation; (2) that the issue has been actually litigated in the prior litigation; and (3) that the determination of the issue in the prior litigation has been a critical and necessary part of the judgment in that earlier action." Rabo Agrifinance, Inc. v. Terra XXI, Ltd., 583 F.3d 348, 353 (5th Cir. 2009).
ALJ Brudzinski's decision is undoubtedly judicial in nature. Moreover, the question at issue in this case - whether Dresser inadvertently consumed THC by ingesting the hemp oil product rather than by using marijuana - is identical to the issue decided by ALJ Brudzinski. That issue was actually litigated before the ALJ, and the ALJ's determination of that issue was a critical and necessary part of his decision.
Collateral estoppel applies, however, only if the party against whom the earlier decision was made had a "full and fair opportunity" to litigate the issue in those proceedings. Kremer v. Chemical Const. Corp., 456 U.S. 461, 480-81 (1982); Utah Constr. & Mining Co., 384 U.S. at 422; Rabo Agrifinance, Inc. 583 F.3d 348 at 353. "Redetermination of issues is warranted if there is reason to doubt the quality, extensiveness, or fairness of procedures followed in prior litigation." Kremer, 456 U.S. at 481 (quoting Montana v. United States, 440 U.S. 147, 164 n.11 (1979)); see also Griffen v. Big Spring Independent School Dist., 706 F.2d 645, 654 (5th Cir. 1983) (same). A party must meet a substantial burden in order to show that he or she did not have a full and fair opportunity to litigate an issue in an earlier proceeding. According to the Restatement of Judgments, relitigation of an issue is not precluded when "[t]here is a clear and convincing need for a new determination of the issue . . . (c) because the party sought to be precluded, as a result of the conduct of his adversary or other special circumstances, did not have an adequate opportunity or incentive to obtain a full and fair adjudication in the initial action." Restatement (Second) of Judgments § 28. A "refusal to give the first judgment preclusive effect should not occur without a compelling showing of unfairness[.]" Id. cmt. j (1982). Further, "such instances must be the rare exception, and litigation to establish an exception in a particular case should not be encouraged." Id. cmt. g. Courts have followed the Restatement's approach and have strictly limited the situations in which parties may relitigate issues under the full-and-fair opportunity test. See Montana, 440 U.S. at 164 n.11 (citing Restatement in setting out full-and-fair opportunity test); Otherson v. Department of Justice, I.N.S., 711 F.2d 267, 277 (D.C. Cir. 1983) (citing Restatement for proposition that "compelling showing of unfairness" is required); Piggly Wiggly Clarksville, Inc. v. Interstate Brands Corp., 83 F.Supp.2d 781, 796 (E.D. Tex. 2000) (finding "no compelling showing of unfairness warranting the application of an exception to the doctrine of collateral estoppel" despite alleged discovery abuses in first case); Shepard v. City of Batesville, Mississippi, No. 2:04CV330-D-B, 2007 WL 108288, at *5 (N.D. Miss. Jan. 8, 2007) (requiring "compelling showing of unfairness or inadequacy in the prior litigation"); see also Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, 18 Fed. Prac. & Proc. Juris. § 4423 (2d ed.) (full-and-fair-opportunity test should not be transformed, "by sheer familiarity, into a new doctrine that threatens serious corrosion of general issue preclusion values").
Litigants who were not parties to the earlier proceeding, such defendants in this case, may nonetheless assert collateral estoppel based on that proceeding. See Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, 402 U.S. 313 (1971) (permitting non-mutual defensive collateral estoppel). The full-and-fair opportunity test still applies in such a situation. Restatement (Second) of Judgments § 29. That said, "[w]hen a non-party invokes issue preclusion . . . greater weight may be given to the factors stated in § 28 and additional considerations may indicate the inappropriateness of imposing preclusion." Id. cmt. b; see also Otherson, 711 F.2d at 277 (citing Restatement for this proposition).
Circumstances that courts often look to in determining whether a party had a full and fair opportunity to litigate an issue include: "(1) whether there were significant procedural limitations in the prior proceeding, (2) whether the party had an incentive to litigate fully the issue, and (3) whether effective litigation was limited by the nature or relationship of the parties." Banner v. United States, 238 F.3d 1348, 1354 (Fed. Cir. 2001). Dresser does not argue that any such circumstances were present in the Coast Guard revocation proceeding. ALJ Brudzinski's decision came after a hearing which in which Dresser was represented by counsel, called and cross-examined witnesses, introduced exhibits, received findings of fact and law on the record, and was entitled to and did appeal. Such procedures are sufficient for collateral estoppel purposes. See Grace, 805 F.Supp. at 441 (characterizing a Coast Guard license revocation procedure as "elaborate" and holding that an ALJ's decision had preclusive effect).
Rather, Dresser contends that ALJ Brudzinski's decision was essentially predetermined because Brudzinski was not an impartial adjudicator. The Supreme Court has stated that "what a full and fair opportunity to litigate entails is the procedural requirements of due process." Kremer v. Chemical Const. Corp., 456 U.S. 461, 483 n.24 (1982) (state court decision has preclusive effect if it meets due process); see also Phelps v. Hamilton, 122 F.3d 1309, 1323 (10th Cir. 1997) (applying due process standard in deciding whether party had full and fair opportunity to litigate claim in prior state court proceeding in spite of alleged judicial bias); Dash, Inc. v. Alcoholic Beverage Control Appeals Bd., 683 F.2d 1229, 1232-33 (9th Cir. 1982) (whether state administrative proceedings provided full and fair opportunity to litigate "merges" with the question of whether those proceedings satisfy due process). Therefore, in determining whether Dresser had a full and fair opportunity to litigate the relevant issue in the Coast Guard proceeding, the Court will apply the standard for evaluating allegations of judicial bias that applies in the due process context.
Due process requires "a fair and impartial tribunal, whether at the hands of a court, an administrative agency or a government hearing officer." Valley v. Rapides Parish Sch. Bd., 118 F.3d 1047, 1052 (5th Cir. 1997) (citing Gibson v. Berryhill, 411 U.S. 564, 569 (1973)); see also Withrow v. Larkin, 421 U.S. 35, 46 (1975) (basic principle that decisionmaker must be neutral "applies to administrative agencies which adjudicate as well as to courts"). Due process is violated if the situation "would offer a possible temptation to the average man as a judge to forget [the proper legal standard], or which might lead him not to hold the balance nice, clear, and true[.]" Ward v. Village of Monroeville, Ohio, 409 U.S. 57 (1972) (quoting Tumey v. Ohio, 273 U.S. 510, 532 (1927)). Bias claims are "not lightly established" because they must overcome "two strong presumptions: (1) the presumption of honesty and integrity of the adjudicators; and (2) the presumption that those making decisions affecting the public are doing so in the public interest." Bigby v. Dretke, 402 F.3d 551, 558 (5th Cir. 2005) (quoting Valley, 118 F.3d at 1052-53). There is no violation of due process when the biasing influence is "too remote and insubstantial[.]" Marshall v. Jerrico, Inc., 446 U.S. 238, 243 (1980). Courts have found due process violations in the following circumstances: "(1) where the decision maker has a direct personal, substantial, and pecuniary interest in the outcome of the case; (2) where an adjudicator has been the target of personal abuse or criticism from the party before him; and (3) when a judicial or quasi-judicial decision maker has the dual role of investigating and adjudicating disputes and complaints." Bigby, 402 F.3d 551, 558-59 (citing Valley, 118 F.3d at 1052).
B. Allegations of Bias
Dresser's primary evidence in support of the position that ALJ Brudzinski did not decide his case impartially is the sworn statement of Jeffie J. Massey, a former Coast Guard ALJ.*fn17
Massey became the Coast Guard ALJ for New Orleans in July of
2004.*fn18 Shortly after she accepted the position,
Massey attended a three or four day training program along with the
other active Coast Guard ALJs and other attorneys.*fn19
The program included
presentations by speakers from the National Oceanic and Atmospheric
Administration and the Bureau of Industry and Security, as well as a
presentation about drug testing. According to Massey, the hemp seed
oil defense, and the policy memorandum on that topic issued by Chief
ALJ Ingolia, were also discussed. Massey concluded from the training
program that the hemp seed oil defense "just wasn't a valid defense
under any circumstances."*fn20 Massey also asserts
that, by the end of the week of training, it was clear that the Chief
Judge's position was that "there just shouldn't ever be a circumstance
under which you would find inadvertent use credible
Massey also attended the December 7, 2004 hearing in Dresser's
administrative case that was held in front of ALJ Brudzinski. Massey
asserts that during a lunch break, Brudzinski "mentioned . . . the
effect a ruling in favor of [Dresser] would have on the products
liability case."*fn22 She also asserts that Brudzinski
"said something to the effect of, If I ruled that way, the Chief Judge
would have my job."*fn23 Massey wrote a
at the time in which she recorded that Brudzinski said, regarding the
possibility of ruling in favor of Dresser: "'Igolia [sic] would have
my job if I ruled that way' . . . He was not saying this in a kidding
way; he then repeated the same thing, shaking his head. . .
."*fn24 In Massey's view, Brudzinski "was not an
independent fact finder,"*fn25 and the outcome of the
case was "predetermined" before any evidence was put on.*fn26
Massey also states that Brudzinski's statement led her to
conclude that there had been improper ex parte communications between
the Chief Judge and ALJ Brudzinski in which the Chief Judge "directed"
an outcome in favor of the Coast Guard.*fn27
Massey had a long-standing conflict with Chief ALJ Ingolia and
believed that the Chief ALJ had improperly communicated with her about
her cases. Massey later left the Coast Guard ALJ program because of
what she describes as a "hostile work environment."*fn28
Massey claims that at one meeting, "the Chief Judge started
in on me about how I obviously didn't understand
what the program was about and that my rulings were causing problems
for his big happy family and that I needed to stop."*fn29
Massey asserts that the Chief Judge told her that she "should never ever make a ruling that caused the Coast Guard to do one more minute's work than they wanted to do[.]"*fn30 Further, the Chief Judge allegedly told Massey that she "was the only person making trouble for him . . . and that it had to stop."*fn31
Massey's statement, Dresser argues, demonstrates that ALJ Brudzinski was biased and did not conduct a full and fair hearing.*fn32
C. Failure to Appeal
Defendants argue that notwithstanding Massey's statement, Dresser is precluded from arguing that he did not have a full and fair opportunity to present his case in front of ALJ Brudzinski because he failed to appeal the Commandant's decision, which affirmed ALJ Brudzinski's decision, to the NTSB. As the Fifth Circuit ruled, such an appeal was the only way for Dresser to challenge the revocation of his license.*fn33
Dresser's failure to appeal the Commandant's decision to the NTSB does not necessarily mean, however, that the Court must give preclusive effect to that decision in this products liability case. The Supreme Court has made clear that "due process requires a 'neutral and detached judge in the first instance[.]'" Concrete Pipe and Products of California, Inc. v. Construction Laborers Pension Trust for Southern California, 508 U.S. 602, 617 (1993) (quoting Ward v. Village of Monroeville, 409 U.S. 57, 61-62 (1972)). Therefore, "the possibility of reversal on appeal" does not suffice to satisfy due process. Ward, 409 U.S. at 61-62. If ALJ Brudzinski was not a fair and impartial adjudicator, then the administrative proceedings violated the due process standard, and the result of those proceedings does not bind this Court.
Additionally, the Commandant did not preclusively rule that ALJ Brudzinski was a fair and impartial adjudicator. The Commandant affirmed the ALJ's decision but did not address the fairness concerns that Dresser now raises. Thus, the Court is not collaterally estopped from ruling on the issue of collateral estoppel itself.
D. Inspector General's Report
Defendants also point to an August 2010 report by the Office of Inspector General for the Department of Homeland Security entitled "Allegations of Misconduct within the Coast Guard Administrative Law Judge Program."*fn34 The report was undertaken at the request of the Vice Commandant of the Coast Guard "to assess the validity of allegations of bias in the Coast Guard ALJ program."*fn35 The report focuses on former ALJ Massey's allegations concerning the Dresser case, and it also discusses her other allegations of bias within the Coast Guard ALJ program. In creating the report, the Inspector General's Office interviewed Chief ALJ Ingolia, ALJs Massey and Brudzinski, other ALJs, and senior staff members and employees.*fn36 The report that has been provided is redacted, with some portions blacked out.*fn37
In the report, the Inspector General concludes that ALJ Massey's allegations are not substantiated. First, the report finds that the Chief ALJ did not direct subordinate ALJs to rule in favor of the Coast Guard.*fn38 Rather, according to the report, notes taken at an April 8, 2005 meeting and interviews with participants in that meeting confirm that the Chief ALJ simply instructed ALJ Massey to follow Coast Guard regulations.
Second, the report finds that ALJ Brudzinski did not prejudge the Dresser case. Based on interviews with Brudzinski and other participants in the December 7, 2004 lunch, the report finds that Brudzinski's alleged remark that Chief ALJ Ingolia would "have [his] job" if he were to rule in favor of Dresser, if made at all, was not meant to be taken literally.*fn39 In
particular, Brudzinski told the investigator that he could not specifically recall his statements at the lunch but that "had he made the alleged statement or a similar remark, he was not and could not have been serious[.]"*fn40 Coast Guard ALJ program staff members present at the lunch also stated that they did not remember Brudzinski's alleged comments but that he could not have meant any such comments to be taken literally.*fn41 Additionally, the report notes that Brudzinski's law clerk stated that she and the ALJ spent a long time reviewing the facts in the Dresser matter and that the ALJ did not issue his opinion until six months after the hearing.*fn42 The report also notes that ALJs enjoy career protections, making it unlikely that ALJ Brudzinski believed that his job was in jeopardy.*fn43 The report also finds, among other things, that ALJ Massey's failure to report ALJ Brudzinski's alleged bias in the Dresser case for two years, her reporting of those allegations in this civil case rather than to the appropriate authorities, and her failure to follow Coast Guard law on multiple occasions undermines the credibility of her allegations.*fn44
Dresser argues that the report should not be admitted into evidence because it is hearsay. Federal Rule of Evidence 803(8)(C) sets out a hearsay exception for public records and reports but specifies that the exception does not apply if "the sources of information or other circumstances indicate lack of trustworthiness." The party opposing the admission of a government report has the burden of proving lack of trustworthiness. Moss v. Ole South Real Estate, Inc., 933 F.2d 1300, 1305 (5th Cir. 1991). Factors that may be useful in assessing trustworthiness include "(1) the timeliness of the investigation; (2) the special skill or expertise of the official; (3) whether a hearing was held and at what level; and (4) possible motivational problems[.]" Id. (citing Advisory Committee Note, Fed. R. Evid. 803(8)(C)).
These factors are mixed as they apply to the Inspector General's report. First, the Inspector General undertook the investigation years after the alleged events. The report was published in August 2010, nearly six years after the December 7, 2004 hearing. Although this lack of timeliness was caused in part by Massey's delay in making her allegations, the report was nonetheless published over three years after Massey's March 13, 2007 statement and a June 24, 2007 article in the Baltimore Sun detailing her allegations.*fn45 By the time the report was published, ALJ Brudzinski could not recall whether he had made the comments at issue.*fn46 Further, the Inspector General's investigation did not require a great deal of expertise, though it did require familiarity with the Coast Guard ALJ program. Compare Smith v. Ithaca Corp., 612 F.2d 215, 222 (5th Cir. 1980) (abrogated on other grounds, Beech Aircraft Corp. v. Rainey, 488 U.S. 153 (1988)) (Coast Guard marine disaster investigation report required special expertise and was not hearsay). Additionally, there is no indication that the Inspector General held a hearing in this matter. But see Bank of Lexington & Trust Co. v. Vining-Sparks Securities, Inc., 959 F.2d 606, 617 (6th Cir. 1992) (lack of hearing is not dispositive). The record, however, reveals no reason to suspect the motivation of the Inspector General of the Department of Homeland Security, under which the Coast Guard falls. See Perrin v. Anderson, 784 F.2d 1040, 1047 (10th Cir. 1986) ("we are unwilling to conclude that an internal investigation is necessarily biased, absent specific evidence. That an investigation was conducted internally should affect the weight to be given the report, not its admissibility.").
The report also contains numerous double hearsay statements, such as ALJ Brudzinski's statement that he could not have been serious if he said that the Chief ALJ would have his job if he ruled in favor of Dresser.*fn47 Such "hearsay within hearsay" is not admissible unless it falls within a separate hearsay exception. Federal Deposit Ins. Corp. v. Mmahat, 907 F.2d 546, 551 n.6 (5th Cir. 1990). Brudzinski's statement does not fall within any such exception and must be excluded.*fn48 Likewise, statements by staff members present at the lunch, and a statement by Brudzinski's law clerk that she and the ALJ spent months reviewing the record in the Dresser case, must be excluded.
The question is what effect this "hearsay within hearsay" has on the admissibility of the report as a whole. See Moss v. Ole South Real Estate, Inc., 933 F.2d 1300, 1310 (5th Cir. 1991) (government report may be partially admitted and partially excluded). It is common for government reports to rely on interviews -- and, therefore, on hearsay -- and such reliance does not necessarily render a report untrustworthy. See Moss, 933 F.2d at 1309 (admitting report despite its reliance on hearsay evidence). At the same time, "the fact that the report is based upon hearsay, particularly of an unreliable sort, is a factor cutting against admission." 2 McCormick On Evid. § 296 n.17 (6th ed.); see also Moss, 933 F.2d at 1307, n.3 ("We do not suggest that bias may never render a report unreliable under Rule 803(8)(C)."); Barlow v. Connecticut, 319 F.Supp.2d 250, 258 (D. Conn. 2004) (not admitting report when its conclusions were "based largely on unreliable hearsay" and ignored significant evidence); Coughlin v. Tailhook Ass'n, Inc., No. CV-S-93-044-PMP, 1994 WL 780904, at *1 (D. Nev. Sept. 2, 1994) (Inspector General's report was "replete with double hearsay" and was inadmissible).
In reaching the conclusion that ALJ Massey's allegations are not substantiated, the Inspector General's report relies in part on hearsay statements of uncertain reliability. ALJ Brudzinski and his staff certainly had every reason to give the Inspector General the impression that the Dresser case was decided impartially. The Inspector General also relies on non-hearsay information, such as the career protections that ALJs enjoy and the two-year gap in which ALJ Massey did not report her allegations of bias. Those non-hearsay sources of information are also available to the Court, in the form of ALJ Massey's affidavit and the laws protecting ALJs from reprisal. The Inspector General's report has helpfully pointed the Court to some of these non-hearsay sources. Nevertheless, the report is not sufficiently trustworthy to the extent that it contains relevant information beyond that which is already available to the Court. See Barlow, 319 F.Supp.2d at 258 (excluding report when the relevant evidence was before the Court). It is also telling that defendants point to the report but do not defend its admissibility, stating only that their purpose in presenting the report is "to show that enough time and resources have been spent on this issue; it would simply be a waste to start the process all over again in this Court."*fn49 That is not the collateral estoppel standard. The Court concludes that the Inspector General's report, to the extent that it includes information beyond that which is otherwise available to the Court, is inadmissible hearsay and does not fall within the exception for public records and reports.
E. Application of Full-and-Fair Opportunity Test
After reviewing Massey's affidavit and the other evidence Dresser has presented, the Court finds that Dresser has not made a compelling showing that he lacked a full and fair opportunity to present his case in front of ALJ Brudzinski. Dresser has not overcome the presumption that ALJ Brudzinski was an honest adjudicator, and he has failed in his attempt to show that the ALJ had a direct, personal, substantial, and pecuniary interest in the outcome of the case. Therefore, the Court is collaterally estopped from reconsidering the question of whether Dresser's positive drug test was caused by ingesting the liquid hemp product without knowing that it contained THC rather than by using marijuana.
Dresser asserts that ALJ Brudzinski was biased, but he has not pointed to any objective flaws in the ALJ's decision that would make that purported bias apparent. The ALJ issued his opinion over six months after the December 7, 2004 hearing, and his decision is comprehensive and reasoned.*fn50 ALJ Brudzinski's finding that Dresser failed to overcome the presumption that he knowingly ingested THC is fully supported by the record. First, the ALJ found that Dresser did not provide support for his testimony that he used the liquid hemp product before the drug test. There were no witnesses who testified that they saw Dresser drink hemp oil in the six weeks before his positive drug test.*fn51 Dresser's mother testified at the 2004 hearing that she saw Dresser drink hemp oil on one occasion before the drug test, but she apparently could not pinpoint when this occurred. Further, ALJ Brudzinski did not find her testimony credible.*fn52
Indeed, Massey notes in her statement that Brudzinski told her at the December 7, 2004 lunch that he did not believe Dresser's mother because she did not come forward at the earlier hearing in front of ALJ Boggs.*fn53 ALJ Brudzinski also found that Dresser's mother's testimony, whether credible or not, was only a one-time observation and did not establish that hemp oil was the sole cause of Dresser's positive drug test.*fn54
ALJ Brudzinski also carefully analyzed the expert testimony that both sides presented. That testimony indicated that THC metabolizes at different rates in different people. Dresser failed, however, to introduce evidence of his own metabolism rate or other relevant biological factors.*fn55 Brudzinski also found that the testimony of Dresser's expert witnesses, though credible in some respects, did not demonstrate that Dresser innocently ingested hemp oil. Further, Brudzinski noted that certain of Dresser's experts inappropriately used themselves as test subjects, which undermined the reliability of their conclusions.
ALJ Brudzinski also found that inconsistencies in Dresser's testimony
cast doubt on his credibility. For example, Dresser could not remember
whether he stored his hemp oil supply in an ice chest or a
refrigerator,*fn56 and he did not attempt to explain
why he may have chosen to keep the hemp oil in an ice chest, which
would have required regular refills.*fn57 Dresser also
stated that he used hemp oil to lower his risk of heart disease, but
he failed to consult a physician, change his diet, or quit
smoking.*fn58 Rather, Dresser purportedly sought out
hemp oil even though other fatty acid supplements are more readily
available. Brudzinski also noted that Dresser had previously tested
positive for marijuana and observed that if Dresser did consume hemp
he likely would have been aware that it may contain THC.*fn59
For these reasons, among others, ALJ Brudzinski held that
Dresser failed to rebut the presumption that he used a dangerous
Against ALJ Brudzinski's thorough, reasoned decision, Dresser presents former ALJ Massey's affidavit.*fn60 As discussed supra, Dresser must meet a high standard in order to make a compelling showing that he was denied a full and fair hearing in the Coast Guard proceeding and to overcome the presumption that Brudzinski was an unbiased adjudicator. In particular, courts are reluctant to impute bias from judges' stray comments. In United States v. Gambino-Zavala, 539 F.3d 1221 (10th Cir. 2008), for example, the judge directly told the prosecutor that he "wanted more testimony before he could give the defendant the enhancements he wanted to give him." Id. at 1228. The court held that "[t]hese stray comments do not amount to actual bias" and that any appearance of bias was countered by the judge's thoughtful decision. Id. In this case, Massey's actual evidence that ALJ Brudzinski was biased is limited to a single conversation in which she recalls one potentially biased comment.
The principle that a stray comment is unlikely to demonstrate bias applies here, particularly in light of ALJ Brudzinski's thoughtful and thorough decision in this matter.
Under this standard, ALJ Massey's statement is not compelling evidence that Dresser lacked a full and fair hearing. Massey's first set of allegations is not specific to the Dresser case, but rather concerns the procedures in place for all Coast Guard mariners facing marijuana charges. After attending a training session along with the other Coast Guard ALJs and speakers from other agencies, Massey concluded that hemp oil defenses to marijuana charges would never prevail.*fn61 Massey's recollection of what she and the other ALJs were told at this training session is inadmissible hearsay, however, to the extent that Dresser seeks to introduce that recollection to prove the truth of whether a policy that hemp oil defenses would never prevail was in place.
Further, the specific subject of the training session was the Chief ALJ's policy memorandum on the subject of hemp oil defenses.*fn62 As the Court has previously determined, this policy memorandum states that a mariner facing marijuana charges may argue that he or she ingested a product such as hemp oil without knowing that it contained THC.*fn63 The memorandum simply requires that a litigant provide "reliable and credible evidence" of such inadvertent consumption of THC.*fn64 Massey does not point to any specific statement made at the training session that the portion of the policy memorandum allowing this defense should be totally disregarded. Such a statement would be most unusual, and indeed implausible, in the context of a government-sponsored training session with numerous judges, attorneys, and other speakers. Rather, Massey drew the conclusion that, in her opinion, the hemp oil defense was no longer viable in Coast Guard proceedings. Massey's statement does not provide compelling grounds for the Court to reconsider its conclusion that the Chief ALJ's policy memorandum, even if legally effective, did not foreclose that defense. Dresser's attorney emphasized at oral argument that the policy memorandum was in effect at the time of Dresser's hearing and that the memorandum meant what it said. That meaning, however, is not helpful to Dresser's argument that he could not fully and fairly litigate his hemp oil defense. Indeed, Dresser raised the hemp oil defense in front of ALJ Brudzinski, and the ALJ carefully considered that defense before ultimately rejecting it. Thus, the Court cannot conclude that the Chief ALJ's general policy as to the hemp oil defense deprived Dresser of a full and fair opportunity to litigate the issue.
ALJ Massey also asserts that ALJ Brudzinski told her at the December 7, 2004 lunch that Chief ALJ Ingolia would "have [his] job" if he ruled in favor of Dresser. Massey concluded from this statement that there had been an actual conversation in which Ingolia instructed Brudzinski to rule against Dresser. It appears that Dresser is offering Massey's recollection of Brudzinski's statement for the truth of the matter asserted, given the conclusions that Dresser asks the Court to draw from the statement. Nevertheless, the proffered statement by ALJ Brudzinski could be used to show Brudzinski's state of mind. See United States v. Webster, 750 F.2d 307, 330 (5th Cir. 1984) (quoting United States v. Parry, 649 F.2d 292, 295 (5th Cir. 1981)) (circumstantial evidence of declarant's state of mind is not hearsay and is admissible); see also Fed. R. Evid. 803(3) (hearsay exception for statement of declarant's then existing state of mind). Thus, the Court will not exclude this statement as inadmissible hearsay. Nonetheless, this stray and perhaps non-serious comment is not compelling evidence that ALJ Brudzinski was biased against Dresser.
First, ALJ Brudzinski's alleged comment is ambiguous. Brudzinski could not have literally meant that he would be fired if he ruled in favor of Dresser because ALJs enjoy strong career protections. Under 5 U.S.C. § 7521(a), an action may be taken against an ALJ "only for good cause established and determined by the Merit Systems Protection Board [MSPB] on the record after opportunity for hearing before the Board." Good cause may include such reasons as financial irresponsibility, physical incapacitation, and refusal to comply with administrative procedures. Brennan v. Department of Health and Human Services, 787 F.2d 1559, 1562-63 (Fed. Cir. 1986) (good cause existed when ALJ refused to comply with standardized office procedures). A high rate of significant adjudicatory error may also constitute good cause under this provision. Social Sec. Admin., Office of Hearing and Appeals v. Anyel, 58 M.S.P.R. 261, 267 (MSPB 1993) (good cause could exist for 90-day suspension when Social Security ALJ committed reversible error in 74 percent of decisions). The law is clear, however, that "reasons which constitute an improper interference with the ALJ's performance of his quasi-judicial functions" cannot constitute good cause in an action in front of the MSPB. Brennan, 787 F.2d at 1563. Further, agencies are prohibited from rating the job performance of ALJs or granting monetary or honorary awards or incentives. C.F.R. § 930.206. In light of these statutes, the assertion that ALJ Brudzinski seriously felt that his job was in imminent danger if he ruled in favor of Dresser is implausible.
Further, Massey's conclusion that Chief ALJ Ingolia directed ALJ Brudzinski's decision against Dresser is unsupported by evidence. After asserting that ALJ Brudzinski "said something to the effect of, If I ruled [in favor of Dresser], the Chief Judge would have my job,"*fn65 Massey goes on to state:
Judge Brudzinski never said, "The Chief Judge told me how to rule in this case," but the gist of the conversation was, in my professional opinion, that there had been conversations and the Chief Judge had indicated to him how the case needed to come out. . . . I can't draw any other conclusion from those remarks.*fn66
ALJ Massey's opinion that she could reach no conclusion but that Chief ALJ Ingolia gave ALJ Brudzinski instructions in the Dresser case is pure speculation. Massey admits that Brudzinski never said that the Chief ALJ actually told him how to rule, and Brudzinski's alleged comment that the Chief ALJ would have his job does not purport to be a statement of what the Chief ALJ actually told him. It is obvious that other conclusions could be drawn from Brudzinski's alleged statement. For example, Brudzinski could have made the comment without meaning it seriously. Even if Brudzinski was serious, the statement does not indicate that Ingolia directed Brudzinski how to rule, and Massey's conclusion that such direction took place is mere speculation. On summary judgment, the Court is not required to accept "conclusory allegations, speculation, and unsubstantiated assertions which are either entirely unsupported, or supported by a mere scintilla of evidence." Chaney v. Dreyfus Service Corp., 595 F.3d 219, 229 (5th Cir. 2010) (citing Reaves Brokerage Co., Inc. v. Sunbelt Fruit & Vegetable Co., Inc., 336 F.3d 410, 413 (5th Cir. 2003)). Massey's assertion that Chief ALJ Ingolia instructed Brudzinski to rule against Dresser falls into this category, and the Court does not accept it for summary judgment purposes.
Further, even if ALJ Brudzinski did discuss the Dresser case with the Chief ALJ, the ABA Model Code of Judicial Conduct specifically permits judges to consult with other judges in carrying out their adjudicative responsibilities. Model Code of Judicial Conduct, Canon 3(B)(7)(c). Massey's opinion that such contacts are never appropriate is both irrelevant and incorrect.
Moreover, Massey's conclusion that the outcome of the Dresser case was predetermined is contradicted by her own statement. In the same December 7, 2004 lunch conversation in which Brudzinski allegedly made comments that demonstrated his bias, Massey recounts that Brudzinski weighed the evidence with the other staff members who were present.*fn67 According to Massey, Brudzinski said that he found some of Dresser's evidence to be credible but that he did not find Dresser's mother to be a credible witness because she did not come forward at the earlier hearing in front of ALJ Boggs. Massey's conclusion that the outcome of the case was predetermined is not consistent with aspects of her own recollection of the December 7, 2004 conversation. Thus, Massey's statement is not compelling evidence that Brudzinski did not provide Dresser with a full and fair hearing.
The deficiencies in Dresser's evidence contrast sharply with the evidence of unfairness found in Patrick v. Miller, 953 F.2d 1240 (10th Cir. 1992). In that case, a former city employee brought a due process claim against the government officials who terminated his employment. The City Personnel Director who served as the hearing officer at the plaintiff's pre-termination hearing testified that he had been instructed before the hearing took place to advertise for the plaintiff's replacement. Id. at 1245. He also testified that he was given a prepared memorandum finding that the plaintiff should be terminated. Id. The hearing officer stated that he "felt coerced into approving [plaintiff's] termination because he thought his own job might be jeopardized by finding in [plaintiff's] favor," and he ultimately "approved the termination although he disagreed with it." Id. The court found that the plaintiff may have been denied an unbiased tribunal and that defendants therefore were not entitled to qualified immunity. Id. at 1246.
Here, by contrast, Dresser has not shown that ALJ Brudzinski had a direct, personal, substantial, and pecuniary interest in the outcome of the case, or that he was biased in any other significant respect. The admissible parts of Massey's statement do not constitute compelling evidence that Dresser did not receive a full and fair hearing.
Although not necessary to the decision, the Court would be remiss not to point out that ALJ Massey had a hostile relationship with Chief ALJ Ingolia. Indeed, Massey states that as she considered Brudzinski's comments, she "couldn't help but think about that in relation to some other problems [she] had been having with the Chief Judge[.]"*fn68 Further, in at least two cases, the Vice Commandant reversed Massey's decisions and had to address the possibility that Massey was biased against the Coast Guard. United States Coast Guard v. Rogers, U.S. Coast Guard 2681, 2008 WL 5765850 (Apr. 30, 2008); United States Coast Guard v. Elsik, U.S. Coast Guard 2658, 2006 WL 1519584 (May 17, 2006). Neither case was ultimately reassigned to another ALJ, but in both cases, the Vice Commandant found that Massey committed reversible error by ignoring clear Coast Guard law. See Rogers at 1 (Massey's dismissal of case because of Coast Guard's failure to comply with subpoena was "unprecedented"); Elsik at 9-12 (Massey's dismissal of case with prejudice was error because "[t]here can be no question but that the Coast Guard may initiate suspension and revocation proceedings for actions that violate statutes which provide for criminal penalties").
The Court does not need to reach these additional reasons to find that Massey's statement is insufficient. Nor is there any need to reach Massey's accusations against the Chief ALJ and her statements concerning the circumstances of her own departure. Those statements, whether true or not, do not illuminate the ultimate issue before the Court, which is whether ALJ Brudzinski provided Dresser with a full and fair hearing. On that issue, as discussed, Massey's statement does not provide compelling evidence of unfairness.
Thus, Dresser has not overcome the presumption that ALJ Brudzinski was a neutral adjudicator, and he has not come forward with compelling evidence that he did not receive a full and fair hearing in front of the ALJ. Dresser is collaterally estopped from arguing that his positive drug test was caused by drinking the defendants' hemp oil product without knowing that it contained THC rather than by using marijuana. Therefore, Dresser cannot prevail in this products liability case.
For the foregoing reasons, the Court GRANTS defendants' motion and dismisses this case.