Coleman v. Beshear

APPEAL FROM JEFFERSON CIRCUIT COURT HONORABLE A. C. MCKAY CHAUVIN, JUDGE ACTION NO. 22-CI-002228

BRIEFS FOR LEGISLATIVE RESEARCH COMMISSION

Gregory A. Woosley

Frankfort, Kentucky

BRIEFS FOR RUSSELL COLEMAN, ATTORNEY GENERAL:

Matthew F. Kuhn

Harrison Gray Kilgore

Frankfort, Kentucky

BRIEFS FOR MICHAEL ADAMS, SECRETARY OF STATE:

Jennifer Scutchfield

Michael R. Wilson

Frankfort, Kentucky

BRIEFS FOR JONATHAN SHELL, COMMISSIONER OF AGRICULTURE:

Joseph A. Bilby

Frankfort, Kentucky

BRIEFS FOR MARK METCALF, TREASURER:

Brittany J. Warford

Frankfort, Kentucky

BRIEFS FOR ALLISON BALL, AUDITOR:

Graham Gray

Frankfort, Kentucky

BRIEF FOR ANDY BESHEAR, GOVERNOR:

S. Travis Mayo

Taylor Payne

Frankfort, Kentucky

Mitchel T. Denham

Louisville, Kentucky

BRIEF FOR DAVID KAREM, MEMBER, EXECUTIVE BRANCH ETHICS COMMISSION

Mitchel T. Denham

Louisville, Kentucky

BRIEF FOR EXECUTIVE BRANCH ETHICS COMMISSION

Susan Stokley Clary

Frankfort, Kentucky

ORAL ARGUMENT FOR ANDY BESHEAR, GOVERNOR, AND DAVID KAREM, MEMBER, EXECUTIVE BRANCH ETHICS COMMISSION:

Mitchel T. Denham

Louisville, Kentucky

BEFORE: COMBS, ECKERLE, AND JONES, JUDGES.

OPINION AND ORDER

ECKERLE, JUDGE:

REVERSING AND REMANDING IN ALL APPEALS; DENYING THE GOVERNOR'S MOTION TO DISMISS IN NO. 2022-CA-0991-MR;

AND DENYING THE ATTORNEY GENERAL'S MOTION FOR LEAVE TO FILE AN AMICUS BRIEF IN NO. 2022-CA-0991-MR

The broad question before us is whether the General Assembly has the Constitutional authority to distribute among the Governor and the elected Constitutional Officers appointive and removal powers over inferior state officers and members of executive branch boards and commissions? The short answer is yes.

Our affirmative answer to that question then requires we further analyze whether a certain distribution is a legislative overreach in violation of Sections 27, 28, 69, and/or 81 of the Kentucky Constitution because the Governor does not possess the power to appoint the majority of members or to remove any member for cause. Pursuant to the analysis below, we ultimately find the complained-of House Bill contains no violation of the aforementioned Sections.

BACKGROUND

This case involves the General Assembly's reorganization of the membership board of an inferior state office, the Executive Branch Ethics Commission ("EBEC"), that exists to investigate potential ethical violations of the Executive Ethics Code ("Code") within the Executive Branch. Both the EBEC and the Code were codified in 1992 when KRS^[1] 11A.001 et seq. was enacted. The Code, and a later-adopted, similar code for the Legislative branch, were born from

the Commonwealth's interest "to eliminate the apparent/actual corruption from the political system." Associated Industries of Kentucky v. Commonwealth, 912 S.W.2d 947, 950 (Ky. 1995). The Code outlines the policy reasons for its existence:

(1) It is the public policy of this Commonwealth that a public servant shall work for the benefit of the people of the Commonwealth. The principles of ethical behavior contained in this chapter recognize that public office is a public trust and that the proper operation of democratic government requires that

(a) A public servant be independent and impartial

(b) Government policy and decisions be made through the established processes of government;

(c) A public servant not use public office to obtain private benefits; and

(d) The public has confidence in the integrity of its government and public servants.

(2) The principles of ethical behavior for public servants shall recognize that:

(a) Those who hold positions of public trust, and members of their families, also have certain business and financial interests;

(b) Those in government service are often involved in policy decisions that pose a potential conflict with some personal financial interest; and

(c) Standards of ethical conduct for the executive branch of state government are needed to determine those conflicts of interest which are

substantial and material or which, by the nature of the conflict of interest, tend to bring public servants into disrepute.

KRS 11A.005.

As the EBEC describes itself in its brief, it "is an independent agency of the Commonwealth which has been given the responsibility of administering and enforcing the provisions of the Code of Ethics." EBEC's Appellee's Brief, p. 2. To perform its functions, the EBEC is authorized to "employ an executive director and any other employees, agents, and consultants it considers necessary[.]" KRS 11A.070. It may engage outside counsel and "make use of the services and facilities of the office of the Attorney General or of any other state agency." Id. The EBEC "is granted statutory authority to enforce provisions of the [Code.]" Kentucky Executive Branch Ethics Comm'n v. Atkinson, 339 S.W.3d 472, 474 (Ky. App. 2010). The Code, with limited exceptions, applies to all "public servants," which is a broadly-defined term including the Governor, all Constitutional Officers elected pursuant to Section 91 of the Kentucky Constitution ("Constitutional Officers"), all employees in the executive branch, all officers in the executive branch, merit employees in the executive branch, and certain government contractors. KRS 11A.010(9); KRS 11A.040.

Pursuant to the Code, "KRS 11A.080 mandates that the [EBEC] shall investigate any alleged violation of KRS Chapter 11A." Atkinson, 339 S.W.3d at 474.

The EBEC maintains subpoena power to carry out its investigations. KRS 11A.090. It may hold administrative hearings pursuant to the provisions of KRS Chapter 13B and issue orders of reprimand, cease-and-desist orders, orders for removal or suspension from office or employment, or issue civil penalties of not more than $5,000, should those hearings show clear and convincing proof of a violation of KRS Chapter 11A. KRS 11A.100; Turbyfill v. Executive Branch Ethics Comm'n, 303 S.W.3d 124, 129-30 (Ky. App. 2009).

Importantly, though, the EBEC has no authority to pursue criminal prosecutions. "The EBEC is not empowered to impose any criminal sanctions, leaving any criminal penalties to be pursued by the Office of the Attorney General." Turbyfill, 303 S.W.3d at 129. See also KRS 11A.100(5) ("The commission shall refer to the Attorney General evidence of violations of KRS 11A.040 for prosecution. The Attorney General shall have responsibility for all prosecutions under the law and may request from the commission all evidence collected in its investigation . . . .").

When first enacted, the EBEC's board was composed of five members, all appointed by the Governor to serve staggered, four-year terms. KRS 11A.060. The Governor also had the power to remove any of the members for cause. Id. The statute was amended four times over the years. One of those changes involved detaching the EBEC from the office of the Governor and

attaching it to the Finance and Administration Cabinet for administrative purposes. KRS 11A.060(10). Two other changes were minor and not relevant to the instant challenge.

The latest change, and the subject of the instant constitutional challenge, occurred via House Bill 334 of the 2022 Regular Session of the General Assembly ("HB 334").^[2] The contents of HB 334, among other actions, terminated the unexpired terms of the current members and changed the composition of the EBEC's board such that it would now consist of seven total members. The Governor would appoint two of the members, the Lieutenant Governor would appoint zero members, and the Secretary of State, Attorney General, Treasurer, Commissioner of Agriculture, and Auditor of Public Accounts would each appoint a member. HB 334 included some shorter terms of certain initial members so that members of the EBEC would ultimately have staggered, four-year terms. Additionally, the removal-for-cause provision was amended such that only the "appointing authority who appointed" the particular member had the power to remove him or her for cause. KRS 11A.060(7). A subsection was also added prohibiting reorganization of the EBEC "except by statute." KRS 11A.060(11).

Believing HB 334 violated multiple provisions of the Kentucky...