Board of Ethics in the matter of Paul Anthony Bourgeois and Anthony's Feed and Farm Supply, Inc.
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NOT DESIGNATED FOR PUBLICATION STATE OF LOUISIANA COLiRT OP AFPEAL FIRST CIRCli T j(./ NiJ1 7BER 2013 CA 1602 LOUISIANA BOARD OF ETHICS IN TI MATTER OF PAUL ANTHONY BOURGEOIS AND ANTHONY' S FEED AND FARM SUPPLY, INC. Judgment Rendered: MAR 2 1 ' s Appealed from the Ethics Adjudicatory Board The Division of Adrriinistrative L,aw State of Louisiana Docket Number 2012- 8682- Ethics- A Administrative Law 7udges: John O. Koptmec, Alycia G. O'$ ear, and Suzanne K. Sasser Kathleen Allen Attortieys for Appellant Michael Dupree Louisiana Board of Ethics Baton Rouge, LA Nicholas A. Bellard Crowley, LA Attorney for Appellees Paul Anthony Bourgeois and Anthony' s Feed and Farm Supply, Inc. BEFORE: WHIPPLE, C. J,, WELCH, AND CRAIN, JJ. WELCH, J. The Louisiana Board of Ethics ( Ethics Board) appeals an order of the Louisiana Ethics Adjudicatory Board ( EABj granting a motion to dismiss based upon an exception of prescription filed by defendants, Paul Anthony B urgeois and Anthony' s Feed and Farm Ina ( Anthony' Supply, s). We affirm in part, reverse in part, and remand. BACKGROUND On May 18, 2012, the Ethics Board filed charges in the Division of Administrative Law against Mr. Bourgeois arid flnthony' s ( sometimes collectively referred to as " defendants"), assertin that they continuously violated La. R.S. 42: 11llC(2)( d) of the Louisiana Code of Governmental Ethics ( Ethics Code) during Mr. Bourgeois' tenure on the Louisiana State Racing Commission Commission). Specifically, the cl arges alleged that Mr. Bourgeois, a member of the Commission from August 1, 2008, through June 29, 2011, exercised control over Anthony' s during his entire tenure on the Commission. The Ethics Board charged that from August 1, 2008 through June 29, 2011, Anthony' s routinely sold Keith Bourgeois, a licensed horse trainer r gulated by the Commission, horse supplies and horse feed. Thus, the Ethics Board asserted that during his entire tenure on the Commission, NLr. Bourgeois and Anthony' s received a thing of economic value for services provided t or for Keith Bourgeois in violation of the Louisiana Code of Governmental Ethics. Mr. Bourgeois and Anthony' s fled a motion to dismiss the charges on the basis of prescription. Therein, they asserted thaY on November 17, 2008, the Ethics Board issued an advisory opinion regarding the exact charges that form the basis of this action after Mr. Bourgeois brought the issue of his ownership of a 37. 5% interest in Anthony' s to the Commission prior to his being sworn into office in 2008. They claimed that the Ethics Board knew about the alleged violations by 2 Mr. Bourgeois for a period of 3 years and 6 rnonths, well in excess of the two-year prescriptive period provided for in La. R.S. 42: 1163, which states that no action to enforce any provision of the Ethic CodE shall be cammenced after the expiration of two Y ears followin g the discove ry oPthe alle ed violation, or four Y ears after the occurrence of the alleged violati n, whiohevei pexicrd is shorter. In support of their exce tiori of prese:riptio,. defenciants submitted a copy of the charges filed by the Ethics Board on May 1. 9 2012, and a September 24, 2U08, letter from the Commission to the Ethics B ard requasting an advisory opinion on two issues pertaining to Mr. Boitrgeois. First, it asked the Ethics Board whether the Commission could adjudicate an alleged infraction by Keith Bourgeois, a horse trainer licensed by the Commission and Mr, Bourgeois' son, when Mr. Bourgeois was an appointed member of the Commission. Secondly, it asked the Ethics Board whether an appointed member of an agency may hold an economic interest in a business which is licensed and or appz aved by the agency to conduct business with other persons or entities licensed by the agenc.y. The advisory opiriion request sets forth the following facts: In Aug ust of 2Q08, Goe rriar° T3obt y Jindal appointed twelve to the Racing Cominissi n..,. Paul Anthony Bourgeois of Church Point is [ a] newlu appo= ted member At-Large of the new members Commission. Mr. Bourgeois Bourgeois holds is Keiih Bourgeois' father. Mr. 37. 5°% ant rest in Anthony' s ' eed and Farm Supply, Ine., a Louisiana Corporation. He is listed as a director and the registered agent for the corporation. with the Secretary of State. also a Anthony' s Feed and Farrn Supply ancU"or its owners, including Mr. Bourgeois, are or have been licensed by the Commission as vendors. By virtue of the vend r' s license, Anthony' s Feed and Farm Supply, or its employees, may access the backside of a racetrack for the purposes of transacting business with other Commission licensees, such as the racetrack, horse owners, irainers and the like. The percentage of business and sales by Elnthc nv' s Feed and Farm Supply, which is generated by persons licen ed by the Commission, cannot be readily determined. Economic Interest: Secondlv, the Commission seeks an advisory opinion regarding Anthony' s F'eed and Farnn Supply. May the Commission continue to license andlar approve the business andlor its operators to conduct business ivith other persoris or entities 3 licensed by the Commission? If permissible under the Code of Ethics, as amended, are there anyxestrictions on the approval? Mr. Bourgeois and Anthony' s also submitted documentary evidence demonstrating that at its November 13, 2008 meeting, the Ethics Board considered the request for an advisory opinion related to Mr. Bourgeois' recent appointment to the Commission and issued an advisory opinion onNovember 17, 2008. Therein, the Ethics Board concluded that Anthony' s was prohibited from doing business with persons licensed by the Commission while Mr. Bourgeois served on the Commission under Section 1ll1C(2)( d) of the Ethics Code, which prohibits a public servant and any legal entity in which the public servant exercises control or owns an interest in excess of 25% from providing compensated services to a person that has or is seeking a business, contractual, or financial relationship with his agency or who is regulated by his agency. In response to the exception of prescription, the Ethics Board urged that the issuance of the advisory opinion in 2008 is not the date which began the rumiing of the two- year prescriptive period set forth in La. R.S. 42: 1163. The Ethics Board argued that the mere issuance of an advisory opinion does not constitute knowledge" that a potential violation of the Ethics Code has occuned. It submitted that at the time it receives a request and renders an opinion, it has no way of knowing whether the requesting party has or will engage in the conduct described in the request. The Ethics Board insisted that the defendant' s contention that the matter was " discovered" by it on the date of the advisory opinion request from the Commission is flawed and would lead to absurd results, as the entire purpose of the advisory opinion is to provide advice to an individual concerning a future course of action he is anticipating. However, if an advisory opinion request 1 In their motifln to dismiss, defendants also argued that upon receipt of the advisory opinion by Mr. Bourgeois on November 24, 2008, Mr. Bourgeois immediately ended his exercise and control over Anthony' s, selling 30% of his company on December 1, 2008, only six days after discovering his possible violation, leaving him with only a 7. 5% interest in Anthony' s from that date to the present. 4 served as the date of discovery of pc ssible =rivla ions, the Ethics Board would be forced to initiate investigations to ensure that individuals requesting its advice were actually heeding it. Moreover, the Ethics Board asserted that the advisory opinion sought by the Commission in this case did not in olve the specif c allegations contained in its charges against defendants. ' I`he Ethics Board insisted khat the advisory opinion did not contain information that would suggest that the Board had knowledge of the existence of the facts that are the subject matter of its charges filed against defendants. Rather, the Ethies Board was nn rely asked whether Mr. Bourgeois would violate the Ethics Code if he engaged iri k usiness with persons regulated by the Commission while he had a controlling interest in Anthony' s. The Ethics Board urged that in connection with the iss ance f the advisory opinion, at no time did it consider, nor was it presented with actual knowledge, that defendants would actually engage in business with Keith Bourgeois, a person regulated by the Commission, while Mr. Bourgeois exercised control over Anthony' s, the subject matter of the instant charges filed againsY defendants. The Ethies Boar ¢ argued i1- at, th correct date n which presc: iption began to d run for the purpose of the two-year prescriptive F eriod set forth in La. R.S. 42: 1163 is March 2 1, 201 l, the date on whiuh it rec.ei-ved a c:onfidential agency report from the Commission concerning the aefendants. Lrnder this scenario, the Ethics Board had two years, or until March 24, 2i113, to initiate an action against the defendants to enforce any provision of the Ethics Code, making its filing of the charges in the Division of Administrative Law on May 18, 2012 timely. The Ethics Board also argued that the filing of the charges was timely under La. R.S. 42: ll41C(3)( c), which provides that the Ethics Board must issue charges within one year from the date it votes to consider a matter. It submitt a thai the issuance of the charges on May 18, 2012, less than one year from I lay 19, 2011, Yhe date on which it 5 considered the report, was within the one- year prescriptive period established by La. R.S. 42: 1141C( 3)( c) and therefare timely. In support of its opposition ta the prescription exception, the Ethics Board submitted the affidavit of Debarah Scatt Grier, its executive secretary, who attested that the Ethics Board' s records pertaining ic the charges brought against Mr. Bourgeois and Anthony' s indicate that it receivec a confidential agency head report from the Commission on March 24, 2011. She further attested that she reviewed the minutes of the Ethic Board' s May 19, 2011 meeting which indicate that after a review of the confidential agency head report received on March 24, 2011, the Ethics Board unanimously resolved to investigate whether Mr. Bourgeois and Anthony' s violated La. R.S. 42: 1111C( 2)( d).2 The EAB issued an order granting the exception of prescription and dismissing the charges against defendants. In written reasons, the EAB concluded that the Ethics Board discovered the occurrence, within the meaning of La. R.S. 42: 1163, of Mr. Bourgeois and AnYkiony' s alleged violations at the latest, on November 13, 2008, when the Ethics Board considered the Commission' s request for an advisory opinion. The EAB found that the facts in the advisory opinion gave rise to knowledge of actuai, not h.ypothetical conduct, and provided information regarding current, ongoing conduct by defendants. The EAB stressed that the opening paragraph of the advisory opinion request was far an opinion as to whether Anthony' s, a company in which Mr. Bourgeois owned a 37% interest, could continue to conduct business with other entities licensed by the Commission. This language, the EAB concluded; provided the Ethics Board with knowledge in 2008 that Mr. Bourgeois was an agen4 of Anthony' s and its operators conducted business with ind'aviduals licensed by the Commission. The EAB z After the hearing on the exception, but prior to the date on which the EAB ruled on it, the Ethics Board filed into the record a redacted copy of the agency report. 6 further stressed that the Et'tiics Board' s t prii 21 12 charges are based on Mr, Bour eois' exercise and c rrtrol c ver Anthorrv' s and Anthony' s sale of supplies to a licensed individual. Findin that the Ethics Board did not file aharges until after the expiration of two years from the datc of the discovery of defendants' alleged violations, the EAB granted the defe darats' pr the charges. The Etkiics Board szo cripai n exc ption and dismissed a} peals I at ruling, eontending triat the EAB erred as a matter of law in concluding that pr scription began to run ot1 its charges against defendants when it reviewed the 4 brn riission' s 2008 advisory opinion request and not the date on which it considerrea fih agency head report detailin; the defendants' alleged vialations. DISCiiSSION The Ethics Board is charged with er fore ing the Ethics Code. La. R.S. 42: 1132( Cj. The purpose of the Ethics C de is to further the public interest by ensuring that the law protects againsti conflicts of interest on the part of Louisiana' s public officials and state employees by establishing ethical standards to regulate the eonduct of those persons. La. R.S. 42; 11Q1( B); Duplantis vs Louisiana Board of Ethics, 2000- 1750 ( La. 3f23/ 01), 7 32 So.? d 58?, 586. To achieve this end, the Ethics Board is given the authority tc investigate and puxsue formal c$ rges against individual and entities for . 11eged S iolatiozis 42: 1134. f the Fthics Code. La. R. S. The Ethics Board is also authc riz d to render advisory opinions regarding interpretatio s of the Ethics Cotle. I,ae I2.S, 42,:1134( E}, In Duplantis; 782 S. 2d at 587- 590, tPn suprPme court noted the difference between advisory opinions issued pursuant to I,a. R.S. 42: 1134( E) and a finding of a violation by the Ethics Board issued pursuant to La. K.S. 42: 1141 as follows: An advisory opinion is usually sought by correspondence to the Board by an applicant. In the request, ihe applicant presents a set of facts upon which the Board bases its opinion, iuhich is usually researched and prepared There is no iby the Board' s staff. investigarion by the Board, nor::is th re arx adversary- hearing. The 7 applicant is placed in no different position after he receives the advisory opinion as he was before the issuance of advice. In fact, the resulting advice might have been much different had a full investigation and adversary hearing been held. By contrast, the procedures for instituting a complaint with the Board of Ethics are set out in La. R. S. 42: 1141. Upon receiving a swom complaint from a complainant, or voting to consider a matter which the Board believes may be a violation of any provision within its jurisdiction, the matter is assigned to a panel of the Board which then conducts a private investigation to elicit evidence in order to determine whether to recommend that the Board conduct a public hearing or to indicate that no violation has occurred.... I] n seeking an advisory opinion, the applicant is not adverse to to the Board.... An advisory opinion is simply advice to the status or conduct of that person or " It is not a ruling or some other person under the Code of Ethics. action by the Commission that will affect the person whose conduct or status is questioned, and it cannot be enforced by any person."... The the Board, nor is the Board adverse Board is a disinterested party merely giving advice to a party who has sought its advice pursuant to the Board' s authority under 42: 1134( E). This is in stark contrast to the posture of the°parties upon the filing of a sworn complaint by a " complainant" against a " defendant" or the consideration of a matter that the Board has reason to believe to be a violation, and in which a private investigation is undertaken, a public hearing is held at which parties are represented by counsel, parties testify under oath and present evidence and cross- examine witnesses, and then the Board votes as to whether a violation has occurred and, if so, imposes a penalty on the former or present governmental employee. Citations omitted in part.) Louisiana Revised Statute 42: 1163, upon which defendants rely in support of their prescription exception, provides that "[ n] o action to enforce any provision of this Chapter shall be commenced after the expiration of two years following the discovery of the occurrence of the alleged violation, or four years after the occurrence of the alleged violation, whichever period is shorter." At issue in this appeal is the date on which the Ethics Board discovered the occurrence of the alleged violations of the Ethics Code by defendants so as to start the running of the two- year prescriptive period set forth in La. RS. 42: 1163 to bring this action to enforce the provisions of the Ethics Code against them. Defendants contend that the Ethics Board discovered the occurrence of their potential violations and had actual knowledge of them when it considered the 8 request for an advisory opinion v xtie CUrr a iissi afl on November 13, 20UfS. They argue that the request for an dvisory- opini n stated that Mr. Bourgeois was a directar and registered agent for r r thony' s; he and the corporation were licensed by the Commission as vendors; and the percenta e of ntnony s business and sales generated by persons licensed by the Cammissiot could not be readily determined. Defendants maintain that the advisory opinion request gave the Ethics Board actual knowledge of current and ongoing acts by them that would violate the Ethics Code so as to trigger the running of the two-year prescriptive period. They further urge that the conduct complained of in the 2Q12 charges is the exact conduct deemed by the Ethics Board to violate the Ethics Code in u008. Defendants argue that public policy, fairness, and due process would dictate that the Ethics Board not be allowed to have knowledge of violations by individuals and knovvingly allow these violations to continue until it has the need or the desire to bring charges against them. The Ethics Board insists that the two- year prescriptive period for enforcing the provision of the Ethics Code did not start to run until either March 24, 2011, the date it received the confidential agency report detailing the conduct engaged in by defendants that served as the basis for the 2012 charges, or 1 1ay 19, 20ll, the date it reviewed the confidential report and voted to consider the charges. It contends that at the time it considered tne advisary opinion ree uest, it had no knowledge that defendants had or would violate thz Ethics Code. Rather, it was not until the Ethics Board reviewed the coniic zntial report frorn the Commission on May 19, 2011, which contained i iformation about defendants' conduct after the issuance of the advisory opznion, that it gained knowledge of potential violations of the Ethics Code. The Ethics Board submits that the EAB' s ruling leads to absurd consec uences because it holds that a prascriptive period begins to run against the Board for events that have 9 not yet occuned. It argues that no reasonable person, including the Board of Echics, could have any knowledge of violations of the Ethics Code which have not yet happened; that no constructive knowledge of violations in 2008, 2009, 2010; and 2011 was gained from reviewing the advisory opinion request; and that there was no n tice of such future events in the advisory opinion for the Ethics Board t ca11 foz ¢ an inquiry. The Ethics Board asserts that once it gained knowledge of the potential ialations of the Ethics Code by defendants, it timely acted to enfarce the charges on May 18, 2012, within the prescriptive periods established by law. We agree. Under La. R.S. 42: 1163, discovery of the occurrence of the alleged violation triggers the two-year prescriptive period for bringing an action to enforce the Ethics Code. Typically, knowledge sufficient to commence the running of a prescriptive period can be actual or constructive. In determining whether a party has constructive knowledge of a particular action, courts generally look to the reasonableness of the party' s action or inaction. See Bailey v. Khoury, 2004- 0620 La. 1/ 20/ OS), 891 So. 2d 1268, 1275- 76. Further, it is axiomatic that prescription cannot run against a cause of actiori that has nat accrue, . Bailey, 891 So.2d at d 1275. We find the EAB erred in concludin that the advisory opinion request gave the Ethics Board actual or constructiue la owledge of defendants' potential Ethics Code violations arising from Mr. Bourgeois' interest in Anthony' s that occurred after the issuance of the advisory opinion. The only knowledge the Ethics Board gleaned from reviewing the advisory opinion request was that Mr. Bourgeois, a recent appointee to the Commission, was seeking advice regarding whether he could continue to serve on the Commisszon if he aontinued to transact business with persons licensed by the Commission. The Ethics Board informed Mr. Bourgeois that his receipt of compensation from prohibited sources would violate the Ethics Code. Simply put, the Ethics Board had no way of knowing or 10 anticipating that defendants vcould' en age+ tz3 r l ibzted transactions with Keith Bourgeois; b ted a persorl regula. t::. om riis ion xTb the future, after it issued its opinion informing Mr. Bourge i that surh a[ ivi ies wc uld violate the Ethics Code. Thus, ccantrary to deferid. nts' lairri, t, e adz i, ory opinion d es not involve the same facts and circumstances c n 4 hich the: ciaarge issu d bv the Bthz s Board are based. Moreover, an advisory opinion issued by the Ethics Board is merely advice as to the conduct of a person under the Ethics Cc de; it is not a ruling or an action by the Board of Ethics that wili affect a person whose status or conduct is questioned, and it cannot be enfor.ced by any persori. Duplantis, 782 So.2d at 590. In giving this advice, the Ethics Board acts as a disinterested party. Id. If tt e Ethics Board' s revie v of every advisory o inion requesk constituted knoxvledge of future violations so as to commerice the tunnin; of the tyvo- year presoriptive period, the Ethies Board would be obligated to investigate every person who submits an advisory opinion request to detarmi ae whether its advice was in fact being heeded. As Duplantis establishes, the Ethics Board' s function in reviewing requests for advisory opinions and investigating persons for violations of the Ethics Code are entirely separate and distinct. However, we find that the September 24, 2 008 request for an advisnry opinion served to provide th Board with knowledg of defendants' violations of the Ethics Code ichat allegedly occurred prior tc the reeeipt of that request. Thus, prescription to enforce the Ethics Code on tk e alieged past violations commenced to run on September 24, 200$, to enforee tihe Ethias more than two y ars priar to the fZlirig of the acta n ode. Thet efore, the charges ior alleged violatic ns oecurring from August - 1, 2008, the date on whicri : Ir. Bourgeois vvas ap ointed as a l Commissioner, through September 24, 2008, the date ari which the Board acquired knowledge of the potential past violations, 11 are prescribed. Accordingly, we conclude that the trial court correctly maintained the exception of prescription as to the alleged violations occurring from August 1, 2008, through September 24, 2008. CONCLUSION For the above reasons, we find that the Ethics Adjudicatory Board erred in dismissing all of the charges filed against defendants on the basis that they are prescribed. We reverse that portion of the judgment sustaining the exception of prescription as to alleged violations occuning after September 24, 2008. We affirm that portion of the judgment sustaining the exception of prescription as to those charges for violations occurring prior to that date. The case is remanded to the Ethics Adjudicatory Board to conduct proceedings consistent with this opinion. All costs of this appeal are assessed to appellants, Paul Anthony Bourgeois and Anthony' s Feed and Farm Supply, Inc. AFFIRMED IN PART; REVERSED IN PART AND REMANDED. 12
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