Caldwell v. Hospital Authority of Charlton County, 38079

• Decision Date: 09 February 1982
• Docket Number: No. 38079,38079
• Citation: 248 Ga. 887,287 S.E.2d 15
• Court: Georgia Supreme Court
• Parties: Sam CALDWELL, Comr. v. HOSPITAL AUTHORITY OF CHARLTON COUNTY et al.

Page 15

287 S.E.2d 15

248 Ga. 887

Sam CALDWELL, Comr. v. HOSPITAL AUTHORITY OF CHARLTON COUNTY et al.

No. 38079.

Supreme Court of Georgia.

Feb. 9, 1982.

Michael J. Bowers, Atty. Gen., Kirby G. Atkinson, Asst. Atty. Gen., for Sam Caldwell, Comr.

John B. Adams, Folkston, for Hospital Authority of Charlton County et al.

HILL, Presiding Justice.

This case involves constitutional challenges to the "reimbursable employer" provisions of our Employment Security Law, Code Ch. 54-6. The facts are that Alphya M. Benefield worked for the Hospital Authority of Charlton County until her voluntary resignation on October 12, 1979, to accept another job. Benefield commenced working for the other employer, but that relationship was terminated and on January 24, 1980, Benefield filed a claim for unemployment compensation. The Employment Security Agency of the Department of Labor determined that the employee was eligible for benefits, and that the Hospital Authority, as a reimbursable base period employer, was required to reimburse the Agency for a part of the benefits paid to her. Under Georgia's Employment Security Law, the Hospital Authority was a "reimbursable employer"; i.e., it was entitled to and did elect to reimburse the Agency for benefits paid and chargeable to it, rather than to make regular contributions to the Unemployment Compensation Fund. Code Ann. § 54-622.1(b).

The Hospital Authority appealed to the Department of Labor's Board of Review the Agency's determination that it was chargeable for part of the employee's claim. Code Ann. §§ 54-612 through 614. The Board of Review affirmed the decision of the Employment Security Agency, Code Ann. § 54-615, and the Hospital Authority appealed to the superior court. Code Ann. §§ 54-618 through 619. The superior court reversed the decision of the Board of Review, holding that Code Ann. §§ 54-622.1(c)(1) and (e) were unconstitutional as a denial of due process because they place part of the burden of paying unemployment benefits on an employer who is not responsible for the termination of employment. The Commissioner of the Department of Labor and the employee bring this appeal.

1. Relying on a line of cases which stand for the proposition that "A county or municipal corporation, created by the legislature, does not have standing to invoke the equal protection and due process clauses of the State or Federal Constitution in opposition to the will of its creator", City of Atlanta v. Spence, 242 Ga. 194, 195, 249 S.E.2d 554 (1978), the Commissioner first contends that the Hospital Authority does not have standing to challenge the Employment Security Law on due process and equal protection grounds, which are the only constitutional attacks raised here. The Hospital Authority concedes that neither a county nor a municipal corporation has standing to challenge a state statute on state, City of Atlanta v. Spence, supra, or federal equal protection or due process grounds, Williams v. Baltimore, 289 U.S. 36, 53 S.Ct. 431, 77 L.Ed. 1015 (1933); Village of Arlington Heights v. Regional Transportation Auth., 653 F.2d 1149, 1151-53 (7th Cir. 1981); Appling County v. Municipal Electric Authority of Georgia, 621 F.2d 1301, 1307-08 (Appendix) (5th Cir.), cert. denied, 449 U.S. 1015, 101 S.Ct. 574, 66 L.Ed.2d 474 (1980). But it insists that this doctrine does not encompass a Hospital Authority. The Commissioner, for his part, points out that the Hospital Authority exists only by virtue of legislative authorization, Code Ann. § 88-1803, and that it is a "governmental entity." Cox Enterprises, Inc. v. Carroll City/County Hospital Auth., 247 Ga. 39, 273 S.E.2d 841 (1981).

We find it unnecessary to decide whether absent legislative authorization a Hospital Authority would have standing to challenge a state statute on the basis that it violated the equal protection and due process clauses of the state constitution, Code Ann. §§ 2-101, 2-203, because in this case we find that legislative authorization exists. The General Assembly authorized the Hospital Authority "to exercise any or all power now or hereafter possessed by private corporations performing similar functions." Code Ann. § 88-1805(s). A private corporation is, of course, a "person" within the meaning of the due process and equal protection clauses. Code Ann. §§ 2-101, 2-203; Code Ann. § 102-103. A private corporation may attack a state statute on the grounds that it violates due process and equal protection. See, e.g., Georgia Franchise Practices Commission v. Massey-Ferguson, Inc., 240 Ga. 743, 242 S.E.2d 69 (1978). Thus the Hospital Authority has been granted standing by statute to attack the Employment Security Law on the grounds that it violates the due process and equal protection clauses of the Georgia Constitution. See Williams v. Baltimore, supra, 289 U.S. at 47-48, 53 S.Ct. at 435. Because we find no difference here between the Hospital Authority's state and federal due process and equal protection rights, we need not decide the question of whether the Hospital Authority has standing to raise federal due process and equal protection issues. Having decided that the standing question does not preclude judicial review, we proceed to the substantive issues.

2. The Hospital Authority, as pointed out above, exercised its election to be a reimbursable employer as opposed to a contributing employer under the Employment Security Law. Code Ann. § 54-622.1 (b). ¹ Pursuant to this election, the Hospital Authority must pay "the full amount of regular benefits plus one-half of the amount of extended benefits paid during such quarter or other prescribed period that is attributable to service in the employ of such organization." Code Ann. § 54-622.1(c)(1). In this case, the Employment Security Agency determined that the employee was eligible for benefits and that the Hospital Authority was a base period employer. The Hospital Authority contends, and the superior court held, that allowing an unemployed claimant to collect benefits based on a period of employment which the employee voluntarily terminated offends its rights to substantive due process because it bears no rational relationship to the object of the Employment Security Law and because the Hospital Authority would be being held liable without fault. We disagree as to both points.

Code Ann. § 54-602 states the purpose of Georgia's Employment Security Law: "As a guide to the interpretation and application of this Chapter, the public policy of this State is declared to be as follows: Economic insecurity due to unemployment is a serious menace to the health, morals, and welfare of the people of this State. Involuntary unemployment is therefore a subject of general interest and concern, which requires appropriate action by the legislature to prevent its spread and to lighten its burden which now so often falls with crushing force upon the unemployed worker or his family. The achievement of social...