Demarinis v. Donovan, 83-7489

Citation728 F.2d 1266
Decision Date21 March 1984
Docket NumberNo. 83-7489,83-7489
PartiesJohn E. DEMARINIS, Petitioner, v. Raymond J. DONOVAN, Secretary of Labor, Respondent.
CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)

John William Cumming, Eureka, Cal., for petitioner.

Dennis A. Paquette, Dept. of Labor, Washington, D.C., for respondent.

Petition For Review Of A Final Determination Of The Secretary Of Labor.

Before GOODWIN, SCHROEDER and FARRIS, Circuit Judges.

GOODWIN, Circuit Judge:

John E. Demarinis appeals from the Assistant Secretary of Labor's decision that he is ineligible for Redwood Employee Protection Program (REPP) benefits under Title II of the Redwood National Park Expansion Act of 1978, Pub.L. No. 95-250, Secs. 201-13, 92 Stat. 163, 172-82.

Demarinis was employed as a lab technician for over nine years with the Samoa Lumber Mill of the Louisiana-Pacific Corporation. In early November, 1978, the hourly employees went on strike, and Demarinis was temporarily assigned to an eight-hour graveyard shift tending the boiler. During this period he worked overtime to complete his regular duties as a lab technician. On November 8, 1978, he refused to work a twelve-hour graveyard shift tending the boiler, and was discharged from his position as a lab technician. Demarinis testified before the administrative law judge that he did not refuse to work, but rather sought to be reassigned away from the graveyard shift.

The California Employment Development Department (EDD) found Demarinis eligible for both State unemployment compensation benefits and REPP benefits. An administrative law judge affirmed on the grounds that the refusal to work constituted a voluntary leaving with "good cause" as defined in Cal.Unemp.Ins.Code Sec. 1256. Demarinis began collecting his benefits.

Several months later, the EDD changed its eligibility policy and decided that a voluntary leaving with good cause did not constitute a qualifying layoff as defined in the Redwood Act. Demarinis was issued a notice that because he voluntarily left his employment and therefore was not "laid off", he was not an eligible employee under the Redwood Act. An ALJ and the Secretary affirmed the EDD's new determination of ineligibility.

This appeal presents a question of statutory interpretation. Title II of the Act, section 213(f), provides that where there is more than one reasonable interpretation of the Act, the Secretary shall adopt the construction which is the most favorable to employees. See Local 3-98, International Woodworkers of America v. Donovan, 713 F.2d 436, 439 (9th Cir.1983). This rule also applies to the interpretation of Redwood Act regulations. David v. Donovan, 698 F.2d 1057 (9th Cir.1983).

In this case the Secretary's own regulations preclude him from reconsidering Demarinis' eligibility for REPP benefits. 29 C.F.R. Sec. 92.50(c) provides that the EDD may reconsider determinations of eligibility on the same terms and under the same conditions as it may reconsider its own determinations made under California unemployment insurance statutes and regulations.

The California Unemployment Insurance Code, Sec. 1332(a), provides that a determination may be reconsidered within twenty days after mailing or service of the notice of determination. The Secretary clearly has not met this time limit. The Secretary claims that California unemployment insurance regulations permit him to reconsider Demarinis' claim, citing 22 Cal.Adm.Code Secs. 1326-1 through 1326-6. Section 1326-1(b)(4), which describes the "usual procedures" followed in handling a claim, see Sec. 1326-1(b), comes closest to supporting the Secretary. This subsection says that the claimant reports periodically to the EDD for an interview concerning his or her efforts to find work, and states that the interview "is designed to discover any potential eligibility issue." This language at most authorizes the Secretary to redetermine a claimant's eligibility if the factual situation changes, e.g., if he or she finds another job. It does not authorize him to reconsider eligibility when he changes his interpretation of the applicable law, because the interviews are not designed to discover changes in the law.

The Secretary is bound by his own regulations. United States v. Nixon, 418 U.S. 683, 696, 94 S.Ct. 3090, 3101, 41 L.Ed.2d 1039 (1974); 2 K. Davis, Administrative Law Treatise Sec. 7:21 (2d ed. 1979). He is not permitted to redetermine whether Demarinis quit or was laid off now that the 20 day period has expired.

In a somewhat similar case we held on equitable grounds that the Secretary was not free to redetermine whether an employee had been laid off before or after the effective date of the Act many months after the state agency had found the worker to be eligible. See Egbert v. Donovan, 720 F.2d 1122 (9th Cir.1983).

Construing the statutory scheme as a whole, we hold that the Secretary was time barred from redetermining Demarinis' eligibility and that the petition must be allowed.

Judgment for Petitioner.

FARRIS, Circuit Judge, dissenting:

I respectfully dissent. I would affirm the Assistant Secretary of Labor's decision that Demarinis is ineligible for REPP benefits on the grounds that Demarinis was not "laid off" and therefore not eligible for REPP benefits, and that 29 C.F.R. 92.50(c) does not prevent the EDD from correcting its erroneous interpretation of the Act.

Twenty-nine C.F.R. 92.50(c) and Cal.Unemp.Ins.Code Sec. 1332 provide that the EDD may, for good cause, reconsider any determination within twenty days after notice of the determination. This reconsideration provision was intended to allow supervisors to correct errors in the vast number of eligibility determinations made by interviewers, and thus to facilitate the EDD's duty to pay or deny benefits promptly. See Cal.Unemp.Ins.Code Sec. 1326; Miranda v. California Unemployment Insurance Appeals Board, 36 Cal.App.3d 213, 218-20, 111 Cal.Rptr. 419, 422-23 (1973).

While this provision prevents the EDD from correcting erroneous eligibility determinations, it should not be applied to prevent the agency from correcting its erroneous interpretations of law. An agency's power to correct its mistakes of law and apply new interpretations prospectively is fundamental to agency decision-making.

When either a court or an agency decides that law it has previously declared is unsound and ought not to be followed, neither estoppel nor stare decisis nor any other doctrine should prevent it from creating new law and applying it prospectively.

Davis, Administrative Law Text Sec. 17.07 (1972). "The making of an error in one case, if error it was, gives ... no right to its perpetuation." Sirbo Holdings, Inc. v. C.I.R., 509 F.2d 1220, 1222 (2d Cir.1975).

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