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Lister v. Hoover

decided: May 16, 1983.


Appeal from the United States District Court for the Western District of Wisconsin. No. 71-C-409 -- James E. Doyle, Judge.

Eschbach, Circuit Judge, Swygert, Senior Circuit Judge, and Campbell, Senior District Judge.*fn*

Author: Campbell

CAMPBELL, Senior District Judge.

This is an appeal from the district court's grant of summary judgment for the defendants in a case challenging the constitutionality of Wisconsin's procedures for determining the residency of individuals for tuition purposes at state universities. This case has been the subject of a state action, Lister v. Board of Regents, 72 Wis.2d 282, 240 N.W.2d 610 (1976); and two federal appeals, Lister v. Lucey, 575 F.2d 1325 (7th Cir.), cert. den. 439 U.S. 865, 99 S. Ct. 190, 58 L. Ed. 2d 175 (1978); Lister v. Hoover, 655 F.2d 123 (7th Cir. 1981). Based on the remand on the last appeal, the only issue before the district court was whether the Committee of Appeals at the University of Wisconsin (Madison) was required by the due process clause of the fourteenth amendment to give written reasons for its denial of a student's request to be classified as a state resident for tuition purposes. Upon cross motions for summary judgment, the district court answered the question in the negative and the plaintiffs appealed to this Court. We conclude that the district judge properly analyzed the issue raised and hereby affirm and adopt its opinion which is reprinted in the Appendix to this opinion.

SWYGERT, Senior Circuit Judge, dissenting.

The plaintiffs in this case are three former students of the University of Wisconsin at Madison who sought to be classified as Wisconsin residents for tuition purposes during 1971 and 1972, after residing in the state for more than one year. Wisconsin state law then in force established different tuition rates for residents and nonresidents, Wis. Stat. § 36.16 (1971) (current version at Wis. Stat. § 36.27 (1979-80)), and provided, with some exceptions, see id. § 36.16(1)(a)-(ak), that "any student who has not been a resident of the state for one year next preceding the beginning of any semester for which such student registers at the university" must pay the nonresident rate, id. § 36.16(1)(b). If nonresidency at the time of enrollment raised an irrebuttable presumption of continued nonresidency during a student's entire educational career, the statute would be unconstitutional as a denial of due process. See Vlandis v. Kline, 412 U.S. 441, 448, 37 L. Ed. 2d 63, 93 S. Ct. 2230 (1973). The Wisconsin statute, as interpreted by the district court, avoided this pitfall by providing students an opportunity to rebut the presumption of continued nonresidency by applying for reclassification. In particular, the statute provided:

In determining bona fide residence, filing of state income tax returns in Wisconsin, eligibility for voting in this state, motor vehicle registration in Wisconsin, and employment in Wisconsin shall be considered. Notwithstanding par. (1)(a), a student from another state who is in this state principally to obtain an education will not be considered to have established a residence in Wisconsin by virtue of attendance at educational institutions.

Wis. Stat. § 36.16(3) (1971) (current version at Wis. Stat. § 36.27(2)(e) (1979-80), making the rebuttability of the presumption explicit). The plaintiffs sought to show bona fide residence in accordance with this section by demonstrating that they met all or nearly all of the nonexclusive listed criteria, and by submitting additional evidence of bona fide residency such as local home ownership, membership in local organizations, or the reclassification of a spouse as a resident. Each plaintiff was at least initially denied reclassification, and each challenged the procedure by which residency determinations are made. On this appeal the only issue is whether the due process clause of the fourteenth amendment requires the Appeals Committee, which reviews determinations of residency by the Registrar, to provide to unsuccessful applicants a statement of reasons for denial. Because I disagree with the majority's conclusion that no statement of reasons is required, I dissent.

Analysis of every due process claim requires a two-part inquiry: first, the identification of a life, liberty, or property interest entitled to procedural protection, and second, the determination of what process is due before the government may take action affecting that interest. See Board of Regents v. Roth, 408 U.S. 564, 569-70, 33 L. Ed. 2d 548, 92 S. Ct. 2701 (1972). No one disputes that in the present case the plaintiffs' claimed entitlement to lower tuition constitutes a property interest; the sole question before the court is what process is due. Although the standards for identifying appropriate procedures are inexact, I believe that Supreme Court decisions requiring statements of reasons as the minimal degree of process necessary for determining factual issues control the result in this case.

The framework for determining the necessary level of procedures was explicated in Mathews v. Eldridge, 424 U.S. 319, 335, 47 L. Ed. 2d 18, 96 S. Ct. 893 (1976): a court must consider the nature and weight of the private and public interests involved, and the value of additional procedural safeguards. The individual interest in not paying the difference between nonresident and resident tuition rates, even if considered in one-semester increments (although I wonder whether the state could by this reasoning slice the plaintiffs' interest ever finer simply by allowing continuous reclassification requests), is weightier than the majority admits. Although the amount of money at issue may not be great on an absolute scale, the court must consider its importance to the individual. See id. at 341; Goldberg v. Kelly, 397 U.S. 254, 261-63, 25 L. Ed. 2d 287, 90 S. Ct. 1011 (1970). Requiring a resident student to pay the nonresident rate may delay or foreclose educational opportunities, which are an important interest even if not a "fundamental right." See Goss v. Lopez, 419 U.S. 565, 575, 576, 42 L. Ed. 2d 725, 95 S. Ct. 729 (1975). At the same time, the majority overstates the government's interest. Wisconsin's interest in maintaining the quality of its universities and preserving its financial resources by collecting higher tuition from nonresidents, although probably legitimate, see Vlandis v. Kline, 412 U.S. at 445, is not the interest at stake. Nor is Wisconsin's interest in controlling its treasury, out of which refunds may be paid to students whose classifications as nonresidents are reversed, at issue: if those students are determined to be residents, Wisconsin's interest in collecting higher tuition from them was disclaimed by the enactment of Wis. Stat. § 36.16 (1971), which permitted the tuition preference for residents. Cf. Vlandis v. Kline, 412 U.S. at 448-49. Wisconsin's only interest is in avoiding the administrative burden of providing statements of reasons. This interest is small because the Appeals Committee already conducts individualized hearings, at which it is obliged to make reasoned and nonarbitrary decisions. "It simply is not unduly 'burdensome to give reasons when reasons exist. Whenever an application . . . is denied . . . there should be some reason for the decision. It can scarcely be argued that government would be crippled by a requirement that the reason be communicated to the person most directly affected by the government's action.' . . . And an inability to provide any reasons suggests that the decision is, in fact, arbitrary." Greenholtz v. Inmates of the Nebraska Penal & Correctional Complex, 442 U.S. 1, 39-40, 99 S. Ct. 2100, 60 L. Ed. 2d 668 (1978) (Marshall, J., dissenting) (footnote omitted) (quoting Board of Regents v. Roth, 408 U.S. at 591 (Marshall, J., dissenting)). This deduction that the burden of stating existing reasons cannot be crushing is confirmed by the state's example in other cases. The Appeals Committee has in the past stated reasons for denials, see Zalucha v. Board of Regents, 99 Wis. 2d 806, 301 N.W. 2d 461, slip op. at 10 (Wis. Ct. App. 1980), and the Registrar has stated reasons for decisions granting reclassification, see letter from T. H. Hoover to James S. Thiel (Jan. 7, 1972), App. 19.

The defendants argue, however, that the state has a further interest in not providing statements of reasons: they fear that if the residency standards are made so explicit, students will be able to comply and thereby thwart the state's interest in charging them the nonresident rate. This argument raises the third Mathews v. Eldridge consideration, the value of the proposed procedure. The short answer to the argument would seem to be "so what?": if students do comply with the criteria for residency the state has no legitimate interest in classifying them as nonresidents, as Vlandis v. Kline, 412 U.S. at 448-49, demonstrates. Indeed, one of the benefits of statements of reasons generally is that they enable people to conform their conduct to the law's requirements. Cf. Mathews v. Eldridge, 424 U.S. at 346 (procedures that include a statement of reasons for the cutoff of disability benefits satisfy due process because they "enable the recipient to 'mold' his argument to respond to the precise issues which the decisionmaker regards as crucial"). But the defendants argue that this answer mistakes the object of the administrative inquiry: the Wisconsin statute focuses on the student's intent, which could be falsified if the Appeals Committee were required to evaluate it by a rigid list of objective indicia. The defendants stress that the inquiry demanded by the statute cannot be so confined because subjective intent is nebulous and not quantifiable.

I find this argument unpersuasive for several reasons. First, the defendants' assumption that a statement of reasons would have to specify objective criteria of intent and thereby attempt to quantify the unquantifiable is unwarranted. The decisionmaker need not build up a hypothetical successful case, but only specify the faults in the actual case that make it unsuccessful. The statute's list of four possible indicia of residency (payment of state income tax, voter registration, motor vehicle registration, and local employment) indicates that those criteria may be sufficient. If a student demonstrates that he satisfies those of other similar criteria and yet is classified as a nonresident, it must be because the decisionmaker perceived some positive reason to doubt the student's sincerity, not because the student failed to reach some unspecified prima facie threshold. If the decisionmaker cannot state those positive reasons we are left with the impression that the decision is either unreasoned or based on illegitimate reasons. Indeed, the statutory scheme of review under Wisconsin's Administrative Procedure Act ("APA"), Wis. Stat. §§ 227.01-227.26 (1979-80), appears to require the recordation of the facts that tarnished the positive evidence presented by the student. The APA makes decisions of the kind at issue here reviewable by the "substantial evidence" standard. Id. § 227.20. If the only evidence in the record is that presented by the student, and not the factual evaluations of credibility and the like made by the decisionmaker, review by the appropriate standard will be frustrated. Cf. Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 420, 28 L. Ed. 2d 136, 91 S. Ct. 814 (1971) ("Since the bare record may not disclose the factors that were considered or the Secretary's construction of the evidence it may be necessary . . . to require some explanation in order to determine if the Secretary acted within the scope of his authority and if the Secretary's action was justifiable under the applicable standard."). The value of reviewability has been recognized as a reason to impose the procedural requirement of a statement of reasons. See Wolff v. McDonnell, 418 U.S. 539, 564-65, 41 L. Ed. 2d 935, 94 S. Ct. 2963 (1974). See also Hewitt v. Helms, 459 U.S. 460, 103 S. Ct. 864, 74 L. Ed. 2d 675, 51 U.S.L.W. 4124, 4133 (U.S. Feb. 22, 1983) (Stevens, J., dissenting); Morgan, The Constitutional Right to Know Why, 17 Harv. C.R.-C.L. L. Rev. 297, 300-05 (1982). At the same time, the inability to conduct searching review caused by the lack of a statement of reasons demonstrates, for purposes of Mathews v. Eldridge balancing, that the existing review procedure does not constitute an independent safeguard against error. See Goss v. Lopez, 419 U.S. at 581 n.10.

Second, the object of the inquiry -- the student's intent -- is subjective only on the part of the student, not on the part of the decisionmaker; the issue is factual, not discretionary. In many cases involving similar kinds of factfinding the Supreme Court has held that statements of reasons are required as the skeletal level of process due. See id. at 581 (due process "requires at least [the] rudimentary precaution[]" of, inter alia, a statement of reasons before school discipline is imposed); Wolff v. McDonnell, 418 U.S. at 563 (revocation of prisoner's good-time credits); Gagnon v. Scarpelli, 411 U.S. 778, 782, 36 L. Ed. 2d 656, 93 S. Ct. 1756 (1973) (revocation of probation); Morrissey v. Brewer, 408 U.S. 471, 483-84, 489, 33 L. Ed. 2d 484, 92 S. Ct. 2593 (1972) (revocation of parole); Willner v. Committee on Character & Fitness, 373 U.S. 96, 105, 10 L. Ed. 2d 224, 83 S. Ct. 1175 (1963) (bar certification). See also Mathews v. Eldridge, 424 U.S. at 346 (procedure of providing statements of reasons satisfies minimal process due). The minimal nature of the process demanded in these cases is especially notable in those involving prisoners, because the Court has held their liberty interest to be so narrow as to require only abbreviated procedures. Hewitt v. Helms, 51 U.S.L.W. at 4127. See also 2 K. Davis, Administrative Law Treatise §§ 13.1-13.15 (2d ed. 1979) (urging a requirement of a statement of reasons even when very little process is due); Rabin, Job Security and Due Process: Monitoring Administrative Discretion Through a Reasons Requirement, 44 U. Chi. L. Rev. 60, 74-93 (1976) (same). In most of these cases the central factual inquiry was not crisp or quantifiable. See, e.g., Morrissey v. Brewer, 408 U.S. at 483-84 (distinguishing discretionary and factual elements of decisions to revoke parole). But only when the Court has characterized a decision as purely discretionary has it held that no statement of reasons is required, because then the value of that procedure is diminished. See Hewitt v. Helms, 51 U.S.L.W. at 4127 (transfer to administrative segregation pending investigation); Connecticut Board of Pardons v. Dumschat, 452 U.S. 458, 464-66, 69 L. Ed. 2d 158, 101 S. Ct. 2460 (1981) (commutation of sentence); Greenholtz v. Inmates of the Nebraska Penal & Correctional Complex, 442 U.S. 1, 15-16, 60 L. Ed. 2d 668, 99 S. Ct. 2100 (1978) (denial of parole); Baxter v. Palmigiano, 425 U.S. 308, 322-23, 47 L. Ed. 2d 810, 96 S. Ct. 1551 (1976) (disciplinary proceedings in prison). Indeed, the Court sometimes imposes reasons requirements as an administrative matter even when the decision at issue is reviewable only for abuse of discretion. See Dunlop v. Bachowski, 421 U.S. 560, 571-74, 44 L. Ed. 2d 377, 95 S. Ct. 1851 (1975); Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. at 420; see generally, 3 K. Davis, Administrative Law Treatise §§ 14.21-14.29 (2d ed. 1980). In the present case the state's power to reclassify students is not discretionary, but must be exercised in accordance with a specific statutory criterion. Rudimentary due process therefore requires that statements of reasons explaining particular exercises of that power be furnished.

Finally, statements of reasons have other social values that weigh in the Mathews v. Eldridge balance. In addition to the "instrumental values" of reviewability, clarity, and consistency, furnishing such statements would promote "process values" by fostering a sense of participation and fairness. In short,

this requirement would direct the decisionmaker's focus "to the relevant . . . criteria and promote more careful consideration of the evidence. It would also enable [students] to detect and correct inaccuracies that could have a decisive impact. And the obligation to justify a decision publicly would provide the assurance, critical to the appearance of fairness, that the [Appeals Committee's] decision is not capricious." . . . A written statement of reasons would facilitate administrative and judicial review and might give the [student] an opportunity to [alter] his conduct.

Hewitt v. Helms, 51 U.S.L.W. at 4133 (Stevens, J., dissenting) (footnote omitted) (quoting Greenholtz v. Inmates of the Nebraska Penal & Correctional Complex, 442 U.S. at 40 (Marshall, J., dissenting). See also Dunlop v. Bachowski, 421 U.S. at 572 ("a 'reasons' requirement promotes thought by the Secretary and compels him to cover the relevant points and eschew irrelevancies, and . . . assure[s] careful administrative consideration"); Wolff v. McDonnell, 418 U.S. at 565 ("the provision for a written record helps to insure that administrators, faced with possible scrutiny by state officials and the public, and perhaps even the courts, where fundamental constitutional rights have been abridged, will act fairly"); Joint Anti-Fascist Refugee Committee v. McGrath, 341 U.S. 123, 172, 95 L. Ed. 817, 71 S. Ct. 624 (1951) (Frankfurter, J., concurring) (noting "the feeling, so important to a popular government, that justice has been done") (footnote omitted); L. Tribe, American Constitutional Law 502-03, 554 (1978); Summers, Evaluating and Improving Legal Processes -- A Plea for "Process Values," 60 Cornell L. Rev. 1 (1974); Tribe, Structural Due Process, 10 Harv. C.R.-C.L. L. Rev. 270 (1975). See generally Morgan, The Constitutional Right To Know Why, 17 Harv. C.R-C.L. L. Rev. 297 (1982). These values are substantial enough to outweigh the defendants' interest in avoiding administrative expense and bother, because "'the Constitution recognizes higher values than speed and efficiency.'" Vlandis v. Kline, 412 U.S. at 451 (quoting Stanley v. Illinois, 405 U.S. 645, 656, 31 L. Ed. 2d 551, 92 S. Ct. 1208 (1972) (footnote omitted)), and the defendants' interest is modest.

For these reasons I respectfully dissent. Because the majority does not reach the defendants' contention that, apart from the merits, they enjoy qualified immunity from damage ...

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