Burtton v. Johnson, s. 75-2024
| Decision Date | 30 July 1976 |
| Docket Number | 75-2025,Nos. 75-2024,s. 75-2024 |
| Citation | 538 F.2d 765 |
| Parties | Sylvester BURTTON et al., Plaintiff-Appellants, Cross-Appellees, v. Donald A. JOHNSON et al., Defendants-Appellees, Cross-Appellants, and John T. Dunlop et al., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Seventh Circuit |
William J. Scott, Atty. Gen., Herbert Caplan, Asst. Atty. Gen., Chicago, Ill., for Johnson.
Samuel K. Skinner, U. S. Atty., Chicago, Ill., William Kanter, App. Section, Civ. Div., Dept. of Justice, Charles D. Raymond, Dept. of Labor, Washington, D. C., for Dunlop.
Sheldon Roodman, Kalman Resnick, Chicago, Ill., for Burtton.
Before CUMMINGS, SPRECHER, Circuit Judges, and STECKLER, District Judge. *
This appeal concerns the propriety of granting a preliminary injunction requiring the prompt payment of unemployment compensation to claimants in Illinois in a situation whereby a substantial percentage of payments are delayed.
Under Illinois law, Ill.Rev.Stat. ch. 48, § 420, unemployment compensation benefits do not begin to accrue until a claimant has been unemployed for a one-week waiting period. The second week of unemployment, then, is the first week of eligibility. Under optimum circumstances, the initial unemployment compensation payment is made within 14 days after this first week of eligibility. This means that under the best of circumstances, an unemployed individual will receive his first payment within 28 days of becoming unemployed. Continued payments are made on a bi-weekly basis, contingent upon receipt from the claimant of a form certifying that the claimant remains unemployed and that he continues to look for work.
The record below establishes, and the defendants do not deny, that Illinois claimants have experienced significant delays in receiving their initial unemployment compensation payments running anywhere from two to six months, and that such claimants have also experienced delays in receiving their continued payments. Since at least 1968, Illinois has experienced problems in making unemployment payments promptly. In the July to September quarter of 1968, the state made only 76.9% of its initial payments within the 14 days after the first week of eligibility. Thus, nearly one-quarter of the claimants during this period received their initial unemployment compensation payments more than four weeks after the claimant had become unemployed. The state's record improved slightly in 1969, but deteriorated during 1970 and 1971, reaching quarterly lows during those years of 64.7% and 59.5% respectively of initial payments being made within 14 days after the first compensable week. For 1972 and 1973, the rate of initial payments made within the 14 day period ranged around 74%. When unemployment increased in 1974 and 1975, the state's record again deteriorated to the point that in March of 1975, the state made only 47.5% of its initial payments within the 14 day limit. No similar data appears in the record regarding delays in the payment of continuing unemployment compensation benefits.
On the basis of this, and other evidence, the district court found that:
The State defendants have failed to provide such methods of administration as are reasonably calculated to ensure the full payment of unemployment compensation within four weeks of an application since at least 1969.
During all of 1974 and 1975, there have been substantial backlogs in local unemployment compensation offices which have resulted in the failure to issue both initial and continuing unemployment compensation benefits when due. The State defendants' Chicago offices were 50% current and downstate offices 88% current at the time of the hearing. There is no reason to believe that the volume of unemployment compensation checks will decrease in the foreseeable future to alleviate the defendants' problems. On the contrary, recent legislation has extended the benefit period and thus increased the administrative load.
Not all of the excessive delays are attributable to the State defendants. Some of the delays were undoubtedly attributable to the fault of the claimants and other factors beyond said defendants' control, but a substantial portion of the delays were attributable to the defendants, at least during 1974 and 1975. None of the named plaintiffs received their unemployment benefits when due and thereby sustained irreparable damage.
The State defendants . . . have the responsibility to ascertain claimant's earnings (and hence his eligibility for unemployment compensation benefits) by reviewing their records of contacting the employer. If an employer has erroneously reported or failed to report the earnings of a claimant, the State defendants will not accept the sworn statement of a claimant, W-2 forms, pay stubs, or other such evidence of earnings, but instead have established a policy requiring an investigation at the employer level, prior to the issuance of a revised finding and unemployment compensation benefits. This procedure often causes long delays and defendants will be required to justify or change it in the course of this litigation.
Approximately 80% of all continued claims involve no contest and merely require (a) ministerial step . . . to trigger the mailing of unemployment compensation benefits. The Division of Unemployment Compensation has no maximum time requirements by which continued claim payments must be processed and mailed. After receiving their first unemployment compensation check, many eligible claimants have not been mailed their unemployment compensation benefits for successive weeks when due, notwithstanding their timely certification of their continuing eligibility.
In recent months the State defendants have tried to alleviate the problems of excessive delays and backlogs by opening new offices, hiring additional staff, working the staff overtime, establishing a courier service, and utilizing task forces at major trouble spots. In addition, the State defendants are in the process of redesigning the computer system for the entire unemployment compensation program. Other steps have also been taken, but as of June 19, 1975, the State defendants had not utilized their full authorization for the hiring of staff.
Defendants have represented that they are using all available methods to avoid the delays specified hereinabove and that some progress is being made. This does not yet appear from the record, however.
The district court denied the plaintiffs' relief except to the extent that it required the defendants to report back to the court in 35 days concerning what advances, if any, were made during the period. If no progress were made, the court threatened to hire at the defendants' expense a management consulting firm to suggest remedies.
Section 303(a)(1) of the Social Security Act, 42 U.S.C. § 503(a)(1), requires that the Secretary of Labor make no certification for payment to any state unless he finds that such state has developed methods of administration for its unemployment compensation program which are "reasonably calculated to insure full payment of unemployment compensation when due." (Emphasis added.) The Supreme Court in California Department of Human Resources Development v. Java, 402 U.S. 121, 91 S.Ct. 1347, 28 L.Ed.2d 666 (1971), held that this requirement applies to state programs not only when the Secretary of Labor certifies the programs, but that this requirement is also a general standard that state programs must meet. The Court also held that the requirement is an appropriate one for court enforcement. Cf. Rosado v. Wyman, 397 U.S. 397, 420-22, 90 S.Ct. 1207, 25 L.Ed.2d 442 (1970) ().
The Court in Java made clear that the "payment when due" requirement has crucial significance to the administration of unemployment compensation....
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