SC Administrative Law Court Decisions

On March 7, 2002, Respondent Department of Labor, Licensing and Regulation, Division of Labor (Department) cited the Petitioner in this matter for violations of the South Carolina Payment of Wages Act, S.C. Code Ann. §§ 41-10-10 et seq. (1986 & Supp. 2001). The Citation and Notification of Penalty informed the Petitioner that he had thirty (30) days in which to appeal the penalty. However, the Department's notification did not give the Petitioner notice of the Division's $70.00 filing fee. On March 12, 2002, the Petitioner notified the Department that it was requesting review of the Department's decision with the Administrative Law Judge Division (ALJD or Division), pursuant to S.C. Code Ann. § 1-23-310 et seq. (1986 & Supp. 2001). On March 19, 2002, the Department filed an Agency Transmittal with the Division and served a copy on the Petitioner, pursuant to ALJD Rule 12. On March 20, 2002, the Division sent the Petitioner a Memorandum notifying him of the Division's $70.00 filing fee and instructing him to submit the fee within ten (10) days. On April 19, 2002, after the Petitioner failed to pay the fee, the Division sent him a "Notice of Case Returned Unprocessed" which set forth that "[a]ny document(s) submitted by the Petitioner(s) or Respondent(s) will be returned with a copy of this Notice." Thereafter, on April 29, 2002, the Petitioner again submitted a request for relief from the Department's March 7, 2002 decision, accompanied with a check for $70.00. The Division processed this request as a Motion to Restore this case to the Division's docket and a hearing was held concerning that matter on Tuesday, September 24, 2002, at the offices of the Division in Columbia, South Carolina.

The Department contends that the Petitioner's failure to timely pay a filing fee divests the Division of subject matter jurisdiction to hear this case. Rule 11 of the Rules of Procedure for the Administrative Law Judge Division provides, in part, that "[t]he request for a contested case hearing shall be filed with the affected agency within the time frame authorized by that agency." "Subject matter jurisdiction of a court depends upon the authority granted to the court by the constitution and laws of the state." Paschal v. Causey, 309 S.C. 206, 209, 420 S.E. 2d 863, 865 (Ct. App.1992). It "refers to [the] court's power to hear and determine cases of the general class or category to which [the] proceedings in question belong . . . ." Black's Law Dictionary 1425 (6th ed. 1990).

S.C. Code Ann. § 1-23-600 (1986 & Supp. 2001) grants jurisdiction to the Division to hear contested cases under the Administrative Procedures Act. See also S.C. Code Ann. §41-10-80 (1986 & Supp. 2001); 26 S.C. Code Ann. Regs. 71-6000 (Supp. 2001). Therefore, the ALJD has subject matter jurisdiction over contested cases arising from the Department and, accordingly, over this case. Filing Fee

The courts have addressed the filing fee issue from several perspectives. "Under some statutes, a court clerk has no discretion to accept documents for filing without a filing fee, and in other jurisdictions, a case cannot proceed to the determination of the issues without the payment of required fees." Am. Jur. 2d Clerks of Ct. § 18 (2000). Several jurisdictions have held that the untimely payment of a filing fee does not vitiate the validity of an action before the court. See Wrenn v. American Cast Iron Pipe Co., 575 F.2d 544, 547 (5th Cir. 1978); Magnesium Corp. of America v. U.S., 24 F. Supp.2d 293 (1998); Ray v. Douglas County, 914 P.2d 26, 27 (1996) ("[N]either the statute nor the rules treat the timely tender of a negotiable payment, as distinct from the timely filing of the notice itself, as a jurisdictional requirement.); Advance Imports, Inc. v. Gibson Products Co., Inc. of Sherman, 533 S.W.2d 168, 169-170 (Tex. Civ. App. 1976) ("We find no indication in this statute of a legislative intent to make payment of this fee, or any other fee prescribed, a prerequisite to jurisdiction."). In Wrenn, the court held that untimely payment of a filing fee does not invalidate a complaint. The court later held in Rodgers on Behalf of Jones v. Bowen, 790 F.2d 1550, 1552 (11^th Cir.1986), that a complaint is "filed" for statute of limitations purposes when it is in the actual or constructive possession of the clerk, regardless of the untimely payment of the required filing fee. Furthermore, the court explained in Magnesium Corp that:

Whether a filing fee is paid to the Court does not implicate the same policy considerations. Unlike establishing a rigid time frame in which a party may sue the government, the time of payment or the amount of a filing fee is not the same as the timely filing of the case itself.

Id. at 295. However, each of the above decisions were based upon the courts interpretation that the statute requiring the filing fee did not require that the filing of the fee was a prerequisite to establish jurisdiction.

The courts have also addressed the filing fee issue concerning cases under appeal. The greater weight of authority in appellate tribunals have held that "the validity of a notice of appeal . . . is not affected by the fact that the filing fee was not promptly paid to the clerk." Am. Jur. 2d Appellate § 348 (2000). The reasoning of the courts in finding that the filing of the fee is not a prerequisite to jurisdiction is based also upon the language of the particular law requiring the filing fee. De-Gas, Inc. v. Midland Resources, 470 So.2d 1218 (Ala. 1985); Rubin v. Department of Indus. Relations, 469 So.2d 657 (Ala. Civ. App. 1985). Moreover, in De-Gas, the court distinguished the payment of the filing fee for perfecting an appeal from a fee paid at the initiation of the litigation. The court held that: "Where an appeal is involved, the non-appealing party is already well aware of the existence of the action." DeGas at 1222.

Several courts also follow the "constructive filing." However, these cases deal with cases in which the litigant has filed an action along with a motion to proceed in forma pauperis (IFP). See Rodgers on Behalf of Jones v. Bowen, 790 F.2d 1550 (11^th Cir.1986); Jarrett v. US Sprint Communications Co., 22 F.3d 256 (10^th Cir. 1994), cert. denied, Jarrett v. US Sprint Communications Co., 513 U.S. 951, 115 S. Ct. 368 (1994). See also Martin v. State, 321 S.C. 533, 471 S.E.2d 134 (1995) (uses the theory of "constructive filing). Moreover, "the fiction of 'constructive filing' only exists until the IFP motion is ruled upon." Jarrett at 259.

Finally, several courts have held that payment of the filing fee is mandatory to invoke the court's jurisdiction. In making that determination, the courts have looked to the language of the law requiring the filing fee. Margetan v. Superior Chair Craft Co., 92 Wash. App. 240, 963 P.2d 907 (1998) (A document is not filed for recording until the filing fee is paid.); De-Gas, Inc. v. Midland Resources, 470 So.2d 1218 (1985) (The use of the term 'shall' in the statute makes the payment of the filing fee mandatory.). The courts which have held that the payment of the filing fee is a prerequisite to jurisdiction have also cited reasons apart from the mere construction of the statutes. In De-Gas, the court held that "unless the filing fees are paid at the time a complaint is filed, there is absolutely no judicial notice to a defendant that an action has been filed against him." Moreover, in Wanamaker v. Columbian Rope Co., 713 F. Supp. 533, 538 (1989), the court held that:

Authorizing the commencement of [an] action without the required fee would breed countless administrative and procedural woes, and give to the Clerk's Office an element of discretion where none was intended. The Clerk's Office would be converted into a part-time credit institution, spending significant energy collecting fees as well as extending credit.

See also De-Gas, supra. at 1220. ("No doubt the purpose behind the passage of this provision was to discourage the filing of frivolous suits and to insure that the clerks of the circuit courts do not become 'credit men.'"); Margetan, supra. at 910. (The clerk of the court has no discretion in this regard. The clerk may not file a document without the filing fee or refuse to file a document accompanied by the proper filing fee. If the clerk could accept filing of an action without payment of a required filing fee, the clerk would have a degree of discretion contrary to the Legislature's intent. . . .).

In this case, the Petitioner must file a request for a contested case hearing with the Department. See S.C. Code Ann. §41-10-80 (1986 & Supp. 2001); 26 S.C. Code Ann. Regs. 71-6000 (Supp. 2001). Upon filing the notice of its request for a contested case hearing, the Department is required to notify the ALJD. S.C. Code Ann. § 1-23-600 (D) (1986 & Supp. 2001). ALJD Rule 12 provides that: "The agency . . . receiving a notice of a contested case from a party shall notify the Division within five (5) working days of the receipt of the request for a contested case hearing by completing and forwarding to the Division a transmittal form, and serving a copy on all parties . . . ." Act No. 66 (R147, H3687), Appropriations Bill, 2001-2002, Part 1B, Section 55.3 provides that: "Each request for a contested case hearing. . . before the Division must be accompanied by a filing fee equal to that charged in circuit court for filing a summons and complaint." See also ALJD Rule 71.

The ALJD Clerk's Office received the Agency Transmittal in this case without the filing fee, and sought to collect the fee. However, the case was never given a docket number or assigned to an Administrative Law Judge. When the filing fee was not paid, the paperwork was returned to the party who had filed the paperwork as unprocessed. However, following the reasoning above, though the filing fee was not properly paid, the ALJD is not divested of jurisdiction to hear this case because the Petitioner failed to pay the fee. Therefore, if the facts warrant, this case can be reinstated with the Division. ⁽¹⁾

Reinstatement of the Case

Though at this point in the case I do not find that failure to pay the filing fee to the ALJD vacates the filing of the request for a contested case hearing, there still remains the issue of whether reinstatement of the Petitioner's case before the ALJD should be allowed. In other words, although a failure to promptly pay a filing fee does not deprive the ALJD of jurisdiction to hear a contested case, the ALJD nevertheless has the authority to dismiss the case on the ground that the fee was not timely paid. Marathon Corp., supra.; Rubin, supra. However, where the delay in payment is not willful or where the late payment of a fee does not delay the progress of a contested case, the case will generally not be dismissed. See Am. Jur.2d Appellate § 348 (2000).

At the hearing into this matter, the Petitioner acknowledged that his office was in the middle of changing secretaries and that he had instructed his assistant to mail a check to the Division. However, he also admitted that he did not follow up to make sure this had been handled. Furthermore, at the hearing, the Department respectfully acknowledged that it did not inform the Petitioner of the Division's filing fee in The Citation and Notification of Penalty. Therefore, though it certainly appears that the Petitioner had sufficient opportunity to pay the fee, based on the facts of this case and the Department's acknowledgment that the Petitioner was not initially informed of the filing fee, I find that this case should be processed by the ALJD Clerk's Office in accordance with the language set forth below.

Based upon the above, it is hereby:

ORDERED that the Petitioner pay a $100.00 filing fee to the Division within ten (10) days of the date of this Order and copy the Department with notification of that payment. ⁽²⁾

IT IS FURTHER ORDERED that upon notification of the payment of the filing fee to the Division, the Department shall immediately forward an Agency Transmittal to the ALJD.

AND IT IS SO ORDERED.

____________________________

Ralph King Anderson III

Administrative Law Judge

October 15, 2002

Columbia, South Carolina

1. The holding in this case is limited to matters involving contested cases.

2. Pursuant to Proviso 55.3 of the 2001-2002 Appropriations Act, the Division is authorized under certain circumstances to collect a filing fee equal to that charged in circuit court for filing a summons and complaint. Prior to July 1, 2001 the fee was $70.00; however, S.C. Code Ann. § 8-21-310(11)(a) was amended on June 29, 2002 and as of July 1, 2002 the new fee is $100.00.