Ohio Bureau of Employment Services v. Hodory

• Decision Date: 31 May 1977
• Docket Number: No. 75-1707,75-1707
• Parties: OHIO BUREAU OF EMPLOYMENT SERVICES et al., Appellants, v. Leonard Paul HODORY
• Court: U.S. Supreme Court

431 U.S. 471

97 S.Ct. 1898

52 L.Ed.2d 513

OHIO BUREAU OF EMPLOYMENT SERVICES et al., Appellants,

v Leonard Paul HODORY.

No. 75-1707.

Argued Feb. 28, 1977.

Decided May 31, 1977.

Syllabus

Appellee, an employee of United States Steel Corporation (USS) at a plant in Ohio, was furloughed when the plant was shut down because of a reduction in fuel supply resulting from a nationwide strike of workers at USS's coal mines. Appellee applied to appellant Ohio Bureau of Employment Services for unemployment benefits but his claim was disallowed under an Ohio statute that disqualified a worker from such benefits if his unemployment was "due to a labor dispute other than a lockout at any factory . . . owned or operated by the employer by which he is or was last employed." While appellee's request for reconsideration was pending before the Board of Review, he filed a class action in Federal District Court against appellants, the Bureau and its director, for declaratory and injunctive relief, asserting that the Ohio statute conflicted with certain provisions of the Social Security Act (SSA) and that, as applied, it was irrational and had no valid public purpose, in violation of the Due Process and Equal Protection Clauses of the fourteenth Amendment. Concluding that abstention was not proper, the District Court held that the statute, as applied to appellee and the class members, violated those Clauses. Held :

1. Abstention is not required under either Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669, or Railroad Comm'n v. Pullman Co., 312 U.S. 496, 61 S.Ct. 643, 85 L.Ed. 971. Pp. 477-481.

(a) Where Ohio has concluded to submit the constitutional issue to this Court for immediate resolution, Younger principles of equity and comity do not require this Court to refuse Ohio the immediate adjudication it seeks. Pp. 477-480.

(b) Nor is Pullman abstention appropriate, where the possible benefits of abstention have become too speculative to justify or require avoidance of the constitutional question. Pp. 480-481.

2. The Ohio statute is neither in conflict with, nor is it pre-empted by 42 U.S.C. § 503(a) (the provision of the SSA that precludes the Secretary of Labor from certifying payment of federal funds to state unemployment compensation programs unless state law provides for such methods of administration as the Secretary finds are "reasonably calculated to insure full payment of unemployment compensation when due"), or the Federal Unemployment Tax Act (FUTA). Pp. 489-493.

3. The Ohio statute, which has a rational relation to a legitimate state interest, is constitutional. Pp. 489-493.

(a) The statute does not involve any discernible fundamental interest or affect with particularity any protected class, and the test of constitutionality, therefore, is whether the statute has a rational relation to a legitimate state interest. P. 489.

(b) In considering the constitutionality of the statute, this Court must view its consequences, not only for the recipient of the benefits, but also for the contributors to the compensation fund, and, although the system may provide only "rough justice" and a rough form of state "neutrality" in labor disputes, the statute cannot be said to be irrational, and the need for limitation of the liability of the compensation fund is a legitimate state interest. Pp. 489-493.

408 F.Supp. 1016, reversed.

Richard A. Szilagyi, Columbus, Ohio, for appellants.

Thomas Patrick Lordeon, Youngstown, Ohio, for appellee.

Mr. Justice BLACKMUN delivered the opinion of the Court.

This case presents a challenge to Ohio Rev.Code Ann. § 4141.29(D)(1)(a) (1973). That statute, at the times rele- vant to this suit, imposed a disqualification for unemployment benefits when the claimant's unemployment was "due to a labor dispute other than a lockout at any factory . . . owned or operated by the employer by which he is or was last employed." The challenge is based on the Supremacy Clause and on the Due Process and Equal Protection Clauses of the Fourteenth Amendment. The case also raises questions concerning abstention.

I

In November 1974 plaintiff-appellee, Leonard Paul Hodory, was employed as a millwright apprentice with United States Steel Corporation (USS) at its works in Youngstown, Ohio. The United Mine Workers at that time were out on strike at coal mines owned by USS and by Republic Steel Corporation throughout the country. These company-owned mines supplied the fuel used in the operation of manufacturing facilities of USS and Republic. As a result of the strike, the fuel supply at the Youngstown plant was reduced. The plant eventually was shut down and appellee was furloughed on November 12, 1974.

Hodory applied to appellant Ohio Bureau of Employment Services for unemployment benefits. On January 3, 1975, he was notified by the Bureau that his claim was disallowed under Ohio Rev.Code Ann. § 4141.29(D)(1)(a) (1973). That statute then provided that a worker may not receive unemployment benefits if

"(h)is unemployment was due to a labor dispute other than a lockout at any factory, establishment, or other premises located in this or any other state and owned or operated by the employer by which he is or was last employed; and for so long as his unemployment is due to such labor dispute." ¹

The written notification to appellee recited: "A labor dispute started at coal mines owned and operated by U. S. Steel Corporation and claimant is unemployed because of this labor dispute." App. i. Other notifications to Hodory for subsequent unemployment weeks contained similar recitals. Id., at ii and iii. Appellee promptly filed a request for reconsideration. In accord with the provisions of Ohio Rev.Code Ann. § 4141.28(G) (1973), his request, along with a number of others, was referred on March 7 to the Board of Review. ²

Meanwhile, on January 27, Hodory filed a complaint in the United States District Court for the Northern District of Ohio against the Bureau and its director, Albert G. Giles. The complaint was based on 42 U.S.C. § 1983 and sought declaratory and injunctive relief on behalf of appellee and "all others similarly situated" who had been or in the future would be denied benefits under § 4141.29(D)(1)(a). Record, Doc. 3, pp. 1 and 3. Hodory asserted, among other things, that the Ohio statute was in conflict with §§ 303(a)(1) and (3) of the Social Security Act of 1935, as amended, 42 U.S.C. §§ 503(a)(1) and (3), and that the statute as applied was irrational and had no valid public purpose, in violation of the Due Process and Equal Protection Clauses of the Fourteenth Amendment.³ The gravamen of Hodory's complaint was the assertion that the State may not deny benefits to those who like him, are unemployed under circumstances where the unemployment is "not the fault of the employee." A three-judge court was requested.

Appellants in their answer asserted, among other things, that Hodory had failed to exhaust his state administrative remedies.

A three-judge court was convened. The case was tried on the pleadings and interrogatories. In its opinion filed March 5, 1976, 408 F.Supp. 1016, that court concluded that abstention was not required and would not be proper; that the action was properly maintained as a class action; ⁴ and that the appellants had failed to demonstrate a rational and legitimate interest in discriminating against "individuals who were unemployed through no fault of their own and neither participated in nor benefited from the labor dispute involving another union and their employer." Id., at 1022. The court then held that § 4141.29(D)(1)(a), as applied to Hodory and the class members, violated the Equal Protection and Due Process Clauses.

The Bureau and its director took a direct appeal here pursuant to 28 U.S.C. § 1253. In their jurisdictional statement appellants argued only that (1) the "labor dispute" disqualification provision is not unconstitutional as applied to appellee and the class; (2) the disqualification provision is not in conflict with the Social Security Act; (3) a state system of unemployment compensation may predicate disqualification upon any reasonable basis; and (4) USS and Republic, as employers of the class members, were denied substantive and procedural due process by the failure of the District Court to order them joined as parties defendant.⁵ Appellants made no claim therein based on abstention. We noted probable jurisdiction. 429 U.S. 814, 97 S.Ct. 53, 50 L.Ed.2d 73 (1976).

A claim that the District Court should have abstained from deciding the case has been raised, however, in the brief amicus curiae filed by the AFL-CIO. A like claim is at least sug- gesteds by Republic Steel. Brief as Amicus Curiae 16-17. We feel those claims merit consideration.

We follow the proper course for federal courts by considering first whether abstention is required, then whether there is a statutory ground of resolution, and finally, only if the challenge persists, whether the statute violates the Constitution.

II Abstention

There are, of course, two primary types of federal abstention. The first, usually referred to as Pullman abstention, involves an inquiry focused on the possibility that the state courts may interpret a challenged state statute so as to eliminate or at least to alter materially, the constitutional question presented. Railroad Comm'n v. Pullman Co., 312 U.S. 496, 61 S.Ct. 643, 85 L.Ed. 971 (1941). See Bellotti v. Baird, 428 U.S. 132, 96 S.Ct. 2857, 49 L.Ed.2d 844 (1976). The second type is Younger abstention, in which the court is primarily concerned, in an equitable setting, with considerations of comity and federalism, both as they relate to the State's interest in pursuing an ongoing state proceeding, and as they involve the ability of the state courts to consider federal constitutional claims in that context. Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971). See Huffman v. Pursue, Ltd., 420 U.S. 592, 95 S.Ct. 1200, 43...