LANIER, Judge.
This is a suit for declaratory judgment and preliminary and permanent injunctive relief filed by the Board of Commissioners of the Port of New Orleans (hereinafter referred to as the Dock Board) and its seven
I. FACTS
By letter dated December 17, 1979, the Louisiana Commission on Governmental Ethics (the predecessor of the present Commission on Ethics for Public Employees) advised the Executive Director and General Manager of the Dock Board of its rendition of Opinion No. 37 and transmitted a copy of this opinion.
II. EXCEPTION OF PREMATURITY
The Ethics Commission with its exception of prematurity claims that since it has only authorized the Executive Secretary to conduct a private investigation into possible violations of the Code, and has not made any formal findings or instituted disciplinary actions, that the plaintiffs have not exhausted their administrative remedies and these proceedings are premature, citing State Mineral Board v. Louisiana Commission on Governmental Ethics, 367 So.2d 1188 (La.App. 1st Cir. 1978), writs refused (1978). In the Mineral Board case, this court observed at page 1191 of the Southern Reporter, as follows:
The Dock Board members contend that the Code is not applicable to them and that the private investigations of them are not authorized by law. Article X, Section 21 of the Louisiana Constitution of 1974 mandates that "The legislature shall enact a code of ethics for all officials and employees of the state and its political subdivisions." (Emphasis added). Article VI, Section 44 of the Louisiana Constitution of 1974 defines a political subdivision as any "unit of local government, including a school board and a special district, authorized by law to perform governmental functions." In paragraph one of its petition in the instant case, the Dock Board alleges (and thus acknowledges) that it "is the instrument of local government of the State of Louisiana that is charged with the regulation and the maintenance and development of the commerce and traffic of the port and harbor of New Orleans, within the parishes of Orleans, Jefferson and St. Bernard." In the case of Board of Commissioners of Port of New Orleans v. Splendour Shipping & Enterprises Company, Inc., 273 So.2d 19 (La. 1973) the Dock Board alleged that it was an agency of the State of Louisiana and claimed sovereign immunity from suit in tort. At page 20 of the Southern Reporter, the Supreme Court of Louisiana defined the status of the Dock Board as follows:
The Code of Governmental Ethics, La.R.S. 42:1101, et seq., is specifically designed to establish a standard of ethical conduct for "officials and employees of this state and its political subdivisions, ..." A political subdivision is defined therein as "any unit of local government, including a special district, authorized by law to perform governmental functions." R.S. 42:1102(17). A governmental entity for purposes of the Code is "the state or any political subdivision which employs the public employee or employed the former public employee or to which the elected official is elected, as the case may be." R.S. 42:1102(12). A public employee is defined as "anyone, whether compensated or not, who is: (a) An administrative officer or official of a governmental entity who is not filling an elective office." or "(b) Appointed by any elected official when acting in an official capacity, and the appointment is to a post or position wherein the appointee is to serve the governmental entity or an agency thereof, either as a member of an agency, or as an employee thereof." or "(c) Engaged in the performance of a governmental function." R.S. 42:1102(18). An agency for purposes of the Code is defined as "a department, office, division, agency, commission, board, committee, or other organizational unit of a governmental entity." R.S. 42:1102(2). It is clear from these definitions contained in the constitutional and statutory law of Louisiana that the ethical standards for public servants contained in the Code are applicable to the Dock Board commissioners.
The Dock Board and its members argue that because it is a deep water port commission and because the definition of a deep water port commission is separately provided for in Article VI, Section 44(7) of the Louisiana Constitution of 1974 that it is not a political subdivision of the State of Louisiana as defined in Article VI, Section 44(2) and the Code. This argument is without merit. Deep water port commissions are defined in Article VI, Section 44(7) as those "within whose territorial jurisdiction exist facilities capable of accommodating vessels of at least twenty-five feet of draft and of engaging in foreign commerce." This definition has nothing to do with the Dock Board's status as a political subdivision of the State of Louisiana for purposes of the local government article. The purpose of this definition is to show which port commissions are entitled to the benefits of the special provisions on deep water ports contained in Article VI, Section 43 of the Louisiana Constitution of 1974, i.e., the requirement of a "super majority" two-thirds vote of each house of the legislature in order to modify, amend or abolish the structure and organization, powers and functions and jurisdiction of deep water ports.
The Dock Board and its members argue that it is not a political subdivision of the State and is autonomous because its organization and structure, powers and functions, jurisdiction and membership were ratified and confirmed in a separate part of the local government article in Article VI, Section 43.
The Dock Board and its members argue that since the language "Subject to and not inconsistent with any provision of this Constitution,..." was not attached to the provisions pertaining to deep water ports in Article VI, Section 43, and was specifically rejected by the Constitutional Convention, that deep water ports are not subject to the provisions of Article X, Section 21, mandating a Code of Governmental Ethics for all officials and employees of the State and its political subdivisions.
The Dock Board and its members contend that La.R.S. 34:2 is the exclusive procedure that can be used for the disciplining of individual Dock Board members and thus the Code is inapplicable. That provision of the law provides in pertinent part, as follows:
This provision applies when a Dock Board member is removed without consent from his position. By its own language the provision does not apply in a disciplinary situation where the contemplated action is something less than removal. This law can be construed compatibly with the Code very simply by holding that if just cause for removal exists under the Code, this is the procedure to follow. If the contemplated disciplinary action is something other than removal, the procedures in the Code are applicable. State in Interest of Sapia, 397 So.2d 469 (La.1981).
The Dock Board and its members argue that the Code is not applicable because any legislative act affecting the Dock Board membership must be passed by a two-thirds vote of the elected members of both houses of the Louisiana legislature. A review of the legislative history of Act 443 of 1979, R.S. 42:1101 et seq., shows that it was approved by a vote of 96-2 in the House of Representatives and 37-0 in the Senate.
The case of Louisiana Milk Commission v. Louisiana Commission on Governmental Ethics, 298 So.2d 285 (La.App. 1st Cir. 1974) is not applicable to the exception of prematurity. In that case the Ethics Commission had completed its private investigation and had issued a formal opinion mandating that the four industry members of the Milk Commission must either resign or divest themselves of any economic interest in the dairy industry, or face a formal public hearing to remove them from office. In the instant case, the Ethics Commission has only commenced a private investigation and has rendered no formal opinion nor mandated any corrective or disciplinary action. The Mineral Board case is controlling and this suit is premature.
For the reasons assigned above, it is our opinion that the Code of Governmental Ethics is applicable to the Dock Board members and that the trial judge was correct in sustaining the exception of prematurity. The judgment in that respect will be affirmed.
III. EXCEPTION OF NO RIGHT OF ACTION
La.R.S. 34:1(A) dealing with the membership of the Dock Board, in pertinent part,
It is our opinion that if rulings of the Ethics Commission make it impossible for a political subdivision of the State of Louisiana to secure members who have the statutory qualifications required by law, the political subdivision will be rendered incapable of performing the functions required of it by law. In such a circumstance, the political subdivision may have a right of action to contest these rulings. However, we are unable to make such a determination in this case at the present time because the Ethics Commission merely proposes to conduct a private investigation of the activities of the individual members of the Dock Board. It has not rendered any rulings with reference to these activities or instituted or recommended disciplinary action. In this posture, it is our opinion that the trial judge acted prematurely in sustaining the exception of no right of action and his judgment in this regard is reversed. We do not overrule the exception of no right of action, but merely reserve the right to the Dock Board and the Ethics Commission to relitigate this issue at some future time, should it be necessary.
IV. EVIDENTIARY RULINGS AT TRIAL OF EXCEPTIONS
During the trials of the exceptions of prematurity and no right of action, the trial judge refused to allow counsel for the plaintiffs to introduce evidence by way of sworn affidavit. The Dock Board alleges that since this was a suit for preliminary and permanent injunctions, that affidavits were authorized pursuant to Article 3609 of the Code of Civil Procedure. The trial judge ruled that since he was conducting the trial of the exceptions, and not the trial of the preliminary injunction, that the Dock Board was required to use only competent legal evidence and that since the affidavits were hearsay, they were inadmissible. Articles 930 and 931 of the Code of Civil Procedure concerning dilatory and peremptory exceptions, respectively, provide that evidence may be introduced at the trial of exceptions "when the grounds thereof do not appear from the petition." We interpret the word "evidence" as used in these articles to mean competent legal evidence. Hearsay has been defined in our law as "... written evidence, of a statement made out of court, the statement being offered as an assertion to show the truth of matters asserted therein, and thus resting for its value upon the credibility of the out-of-court asserter." State v. Martin, 356 So.2d 1370 (La.1978); State v. Dupree, 377 So.2d 328 (La.1979). A sworn affidavit is hearsay and is not competent evidence unless its use is specifically authorized by statute.
V. FRIVOLOUS APPEAL
In view of the fact that this case presents serious issues of law, and in view of the fact that we have reversed the ruling of the trial judge on the exception of no right of action, the appeal in this case was not frivolous. Accordingly, the request of the Ethics Commission in its answer to the appeal for damages for frivolous appeal is denied. Goad v. May, 376 So.2d 340 (La. App. 3rd Cir. 1979); Jackson v. East Baton Rouge School Board, 348 So.2d 739 (La.App. 1st Cir. 1977).
VI. CONCLUSION
For the reasons above assigned, we hold that the Code of Governmental Ethics of the State of Louisiana is applicable to the Board of Commissioners of the Port of New Orleans and the ruling of the trial court on the exception of prematurity is affirmed; the ruling of the trial court sustaining the exception of no right of action is reversed, reserving to the parties the right to relitigate that issue, should it become necessary; the evidentiary ruling of the trial judge refusing to allow sworn affidavits in evidence at the trial of the exceptions of prematurity and no right of action is affirmed; the request for damages for frivolous appeal is denied; and the Board of Commissioners of the Port of New Orleans is cast for all costs of these proceedings and the proceedings in the trial court, totaling $511.26.
AFFIRMED IN PART, REVERSED IN PART, AND RENDERED.
APPENDIX NO. 1
LOUISIANA COMMISSION ON GOVERNMENTAL ETHICS
DATED: December 17, 1979
FILED: December 17, 1979
RE: Propriety of members of State Boards and Commissions rendering goods and services on a contractual basis to firms doing business with or conducting operations governed by the board or commission upon which the member serves.
The Commission's investigation into charges that certain members of the Louisiana Mineral Board and certain state mineral lessees may have violated pertinent portions of the Code of Ethics was resolved without the necessity of a public hearing by the resignation from the Mineral Board of the individuals so charged and declarations by the state mineral lessees that no further contracts would be entered into between the mineral lessees and any individual serving on the Mineral Board.
The Commission has not previously interpreted the Code of Ethics within this context; and, in the past, persons of good faith and judgment may have differed over the construction of the Code as it pertains to this subject. It is therefore fitting and appropriate for the Commission to now interpret the Louisiana Code of Governmental Ethics as it relates to certain business relationships between members of the Louisiana Mineral Board and state mineral lessees, in particular, and as it relates to certain business relationships between any member of any state board or commission, and any firm or concern with whom that member may have business relationships.
The present Ethics Code
Illustrative of the purpose for the prohibitions contained in the above cited sections of the Code of Ethics, is the situation recently under investigation by this Commission and involving certain members of the State Mineral Board.
The Louisiana Mineral Board exercises discretionary authority over the affairs of state mineral lessees in several economically significant particulars. State mineral lessees, in the performance of their businesses, often seek and obtain goods and services from persons and companies providing such services. These service-oriented companies provide substantially similar services. The selection of those services is subject to the discretionary choice of the state mineral lessees on a call-out, job order, or straight contract basis. When a member of the Mineral Board who is engaged in such service-oriented companies does business with a state mineral lessee on such discretionary bases, the result is that a state mineral lessee is choosing to give valuable business to a member of the Mineral Board as opposed to giving it to some other company, which member exercises discretionary authority over the state mineral lessee. It is the opinion of the Commission that this creates the conflict of interest which the Code of Ethics prohibits notwithstanding the absence of evidence of actual moral impropriety on the part of either Mineral Board member or state mineral lessee.
Specifically, the Commission finds that the exercise of such discretionary business choices by a state mineral lessee is a prohibited "gift", "gratuity" or "favor" under Section 1114. Further the Commission finds that such business activities are prohibited "transactions" under Section 1117(D) and prohibited "financial interests" under Section 1117(F).
Similarly, members of other state boards and commissions may, in their business relationships with others, be affected by the provisions of the above cited sections of the Ethics Code. Generally, members of boards and commissions are proscribed by the provisions of the Code of Ethics quoted above from entering into contracts for the delivery of goods and services with any firm or other concern that either has or is seeking to obtain contractual or other business or
In addition, the Commission notes the legislative intent expressed by Act 443 of the Regular Session of the 1979 Louisiana Legislature, effective April 1, 1980. Section 1111(B)(2)(d) specifically provides that "no public servant shall receive any thing of economic value for or in consideration of services rendered, or to be rendered, to or for any person during his public service [if such services] are performed for or compensated by any person from whom such public servant would be prohibited by R.S. 42:1115
This more specific statement of the present law here interpreted by the Commission reinforces the Commission in its conclusion that business relationships between members of boards and commissions and firms either conducting operations subject to regulation by the board or commission or having or seeking to obtain contracts or other business relationships with the board or commission upon which the member serves are strictly prohibited.
A copy of this Opinion is being mailed to the members of all state boards and commissions; the provisions of this Opinion should be closely examined by each member in light of the member's present business practices, if any, with any firm doing business with or conducting operations governed by the board or commission upon which the member serves. Any activities of a member conflicting with the above cited provisions of the Ethics Commission must be terminated within thirty (30) days of the publishing of this Opinion. Thereafter, violations of the above cited sections of the Code of Ethics will result in immediate and appropriate disciplinary action.
FootNotes
"C. Payments for nonpublic service.
La.R.S. 42:1115 provides:
"A. No public servant shall solicit or accept, directly or indirectly, anything of economic value as a gift or gratuity from any person or from any officer, director, agent, or employee of such person, if such public servant knows or reasonably should know that such person has or is seeking to obtain contractual or other business or financial relationships with the public servant's agency.
"B. No public employee shall solicit or accept, directly or indirectly, anything of economic value as a gift or gratuity from any person or from any officer, director, agent, or employee of such person, if such public employee knows or reasonably should know that such person:
La.R.S. 42:1116 provides:
"No public servant shall use the authority of his office or position, directly or indirectly, in a manner intended to compel or coerce any person or other public servant to provide himself, any other public servant, or other person with anything of economic value. This Section shall not be construed to limit that authority authorized by law, statute, ordinance, or legislative rule in carrying out official duties."
§ 1115. Gifts
A. No public servant shall solicit or accept, directly or indirectly, anything of economic value as a gift or gratuity from any person or from any officer, director, agent, or employee of such person, if such public servant knows or reasonably should know that such person has or is seeking to obtain contractual or other business or financial relationships with the public servant's agency.
B. No public employee shall solicit or accept, directly or indirectly, anything of economic value as a gift or gratuity from any person or from any officer, director, agent, or employee of such person, if such public employee knows or reasonably should know that such person:
(1) Conducts operations or activities which are regulated by the public employee's agency.
(2) Has interests which may be substantially affected by the performance or nonperformance of the public employee's official duty.
Comment
User Comments