Ancheta v. Daly

• Decision Date: 20 November 1969
• Docket Number: No. 40508,40508
• Citation: 461 P.2d 531,77 Wn.2d 255
• Parties: Nick D. ANCHETA, James L. Anderson, Johnie V. Andrada, et al., Respondents, v. Maxine E. DALY, Commissioner, Employment Security Department, Appellant.
• Court: Washington Supreme Court

Page 255

77 Wn.2d 255

461 P.2d 531

Nick D. ANCHETA, James L. Anderson, Johnie V. Andrada, et al., Respondents, v. Maxine E. DALY, Commissioner, Employment Security Department, Appellant.

No. 40508.

Supreme Court of Washington, En Banc.

Nov. 20, 1969.

Slade Gorton Atty. Gen., Richard M. Montecucco, Joseph M. Littlemore, Asst. Attys. Gen., Olympia, for appellant.

Bassett, Donaldson & Hafer, M. Lee Price, Vance, Davies, Roberts & Bettis, William A. Roberts, Thomas M. Geisness, John R. Stair, Seattle, for respondents.

FINLEY, Judge.

This is an appeal from a judgment of the superior court reversing decisions of the commissioner and the appeal tribunal of the Employment Security Department which had disqualified claimants for unemployment compensation benefits on the ground their unemployment was due 'to a stoppage of work which exists because of a labor dispute * * *.' RCW 50.20.090.

In the summer of 1965 a coast-wide strike occurred involving about 75 shipyards and the Western Regional Machinists' Union. On the afternoon of July 2, 1965, members of Local 79 of the Machinists' Union, employed at Foss Launch and Tug Company, Lake Union Dry Dock, Lockheed Shipbuilding and Construction Company and Todd Shipyards Corporation did not return to work after a union 'stopwork' meeting. Not only machinists but members of other trade unions who had been employed at the aforementioned Washington shipyards were unemployed for most of the seven weeks' duration of the subsequent strike. A number of these claimed unemployment compensation. The department and the commissioner found that the claimants had been unemployed as a result of a stoppage of work due to a labor dispute and ruled they were thus ineligible for compensation under section 77 of the Washington Employment Security Act (codified as RCW 50.20.090). ¹ When the Superior Court of King County set aside the commissioner's action and directed him to award benefits, this appeal followed.

The assignments of error center around five issues: (1) the court erred in its application of standards of review of administrative proceedings; (2) the court erred in finding there was a lay-off which was not the result of a labor dispute work stoppage; (3) the court erred in reversing the commissioner's decision that the claimants were participants and directly interested in the labor dispute; (4) the court erred in finding that even if other claimants were ineligible for benefits, respondents Blouin and Wiley were eligible and would not be precluded from receiving benefits by the 'Mark Hopkins' doctrine; ² (5) the court erred in granting legal fees which reflected work performed by counsel during the administrative proceedings.

Before proceeding further, it should be noted that the review of the commissioner's decision was governed by the provisions of RCW 34.04.130 and that the statute was amended by the 1967 legislature, changing the standards for judicial review of administrative action. The standards which were previously applied were found in RCW 34.04.130(6) which read:

(6) The court may affirm the decision of the agency or remand the case for further proceedings; or it may reverse the decision if the substantial rights of the petitioners may have been prejudiced because the administrative findings, inferences, conclusions, or decisions are:

(a) in violation of constitutional provisions; or

(b) in excess of the statutory authority or jurisdiction of the agency; or

(c) made upon unlawful procedure; or

(d) affected by other error of law; or

(e) unsupported by material and substantial evidence in view of the entire record as submitted; or

(f) arbitrary or capricious.

Prior to its amendment the statute had been frequently interpreted by this court. See, e.g., Northern Pacific Transport Co. v. Washington Util. and Transp. Comm., 69 W.2d 472, 418 P.2d 735 (1966). State ex rel. Gunstone v. State Highway Comm., 72 W.2d 673, 434 P.2d 734 (1967). We noted in the Northern Pacific case that 'these so-called standards are somewhat less than all-encompassing and definitive. Case-by-case amplification and clarification are necessary.' Supra, 69 Wash.2d at 478, 418 P.2d at 739. Since the time of that decision, and before the decision of the superior court here involved, subsection (e) as indicated above was amended and now reads: 'clearly erroneous in view of the entire record as submitted and the public policy contained in the act of the legislature authorizing the decision or order; * * *.' The commissioner contends that this provision must be interpreted in view of our past decisions on the scope of review of awards of unemployment compensation. If this position were adopted, the review by the superior court would be limited to a determination of whether there is substantial evidence to show that the commissioner did not act in an arbitrary and capricious manner. We take a different view of this matter.

The legislature was not doing a futile thing in amending the act, and intended to change the scope or basis of judicial review of administrative action. In providing (1) that judicial review was under the provisions of the Administrative Procedure Act (RCW 34.04.130(1) and (2) in changing subsection (e) conditioning judicial review upon a finding by the court that administrative action was 'clearly erroneous in view of the entire record as submitted and the public policy contained in the act * * *.' the legislature clearly intended a broader review of all of the evidence. ³ Perhaps the best description of the 'clearly erroneous' test was set forth by the United States Supreme Court in United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746, 766 (1948): 'A finding is 'clearly erroneous' when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.' See also United States v. Oregon State Medical Society, 343 U.S. 326, 72 S.Ct. 690, 96 L.Ed. 978 (1952).

It is true that both of the cases cited above involved the standards of review used by an appellate court in reviewing the findings of fact by a trial court. But just as we do not substitute our judgment for that of the trial court, we do not expect that the superior court will substitute its judgment for that of the administrative body. Just as we give deference to the trial court's observation of the demeanor and testimony of witnesses, we expect that the superior court will give deference to the expertise of the administrative tribunal. In the instant case we are convinced that there was no substitution of judgment, no failure to give deference to the expertise of the administrative tribunal, but that the trial court, with good reason therefor, had a 'definite and firm conviction that a mistake' of fact had been committed.

The superior court expressed this conviction in terms of the previously applicable statutory standard regarding review of administrative action. The court's first conclusion of law read:

That as there is no substantial evidence of record to support the commissioner's finding that there was a stoppage of work then in existence at the employers' premises when the appellants and each of them were laid off, such finding is arbitrary and capricious.

The trial court clearly applied the wrong test in reviewing the evidence. In addition, the court amalgamated old subsections (e) and (f) of RCW 34.04.130(6), a practice which we have disapproved. Northern Pacific Transport Co. v. Washington Util. and Transp. Comm., 69 W.2d 472, 418 P.2d 735 (1966). But because the trial court articulated the decision under the older, more narrow test does not mean that it cannot be sustained under the broader test which should have been used. We hold that the superior court correctly reversed the factual determination of the appellate tribunal and the commissioner as clearly erroneous in view of the entire record as submitted and the public policy contained in the act. We do not imply that the court was entirely correct in applying the law to the facts.

Even if respondent's interpretation of the facts is accepted in its entirety and we find that there was a layoff instigated by the various companies involved, it does not follow that this was not unemployment 'due to a stoppage of work which exists because of a labor dispute * * *.' RCW 50.20.090. ⁴ In order to determine the correct legal characterization of the unemployment, it is necessary to analyze carefully the Employment Security Statute and in particular the labor dispute disqualification.

The disqualification provisions of the Employment Security Act are in large part based upon the fault principle. The preamble to the act itself speaks of aiding 'persons unemployed through no fault of their own, * * *' and the need to alleviate 'involuntary unemployment.' RCW 50.01.010.

This fault principle underlies at least four of the grounds for disqualification. Voluntary quit, ⁵ misconduct, ⁶ misrepresentation ⁷ and refusal to work ⁸ are all predicated on the individual worker's action, in a sense his blameworthiness. The labor dispute disqualification is clearly different in that it applies regardless of fault.

The policy behind the labor dispute provision has been the subject of extensive commentary. It has been called a reflection of the 'neutrality' of the state in labor disputes, ⁹ a way to prevent the use of unemployment compensation funds as a means of financing strikes, ¹⁰ and a risk of unemployment outside the insurance principle underlying the act. ¹¹ Although there are problems with all of these characterizations, the commissioner is not required to determine which party was responsible for the work stoppage at this point in the application of the statute. All he need apply is a simple causation test: does the work stoppage exist 'because of a labor dispute,' I.e., would it not have existed but for that dispute. ¹²

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