City of Billings v. State Bd. of Labor Appeals

• Decision Date: 10 May 1983
• Docket Number: No. 82-106,82-106
• Parties: CITY OF BILLINGS, Petitioner and Respondent, v. STATE of Montana BOARD OF LABOR APPEALS, Montana State Department of Labor and Industry and 325 Members of Local # 190, et al., Respondents and Appellants, and Decker Coal Company, Intervenor.
• Court: Montana Supreme Court

Page 1167

663 P.2d 1167

204 Mont. 38

CITY OF BILLINGS, Petitioner and Respondent, v. STATE of Montana BOARD OF LABOR APPEALS, Montana State

Department of Labor and Industry and 325 Members

of Local # 190, et al., Respondents and Appellants,

and

Decker Coal Company, Intervenor.

No. 82-106.

Supreme Court of Montana.

Submitted March 24, 1983.

Decided May 10, 1983.

Hilley & Loring, Emilie Loring, Great Falls, R. Scott Currey, Dept. of Labor, Helena, for respondents and appellants.

Kenneth D. Peterson, Billings, for petitioner and respondent.

Holland & Hart, Carey E. Matovich, Billings, for intervenor.

SHEEHY, Justice.

Appellants (claimants) appeal from a decision of the District Court, Thirteenth Judicial District, Yellowstone County, which in effect held that the claimants were not entitled to unemployment insurance benefits.

We find two principal issues arise in this appeal. The first is procedural (raised by us), whether MAPA (Montana Administrative Procedure Act) applies to agency and court handling of claims for unemployment insurance benefits (for brevity "claims"). The second issue is substantive, whether a stoppage of work occurred which disqualified claimants for benefits.

We hold that MAPA does not apply to the determination of such claims; and that the claimants in this case are entitled to unemployment insurance benefits.

On April 24, 1980, 379 employees of the City of Billings went on strike. The strike was settled on May 10, 1980, and the striking employees returned to work on May 12, 1980. During the strike, 325 employees filed claims. A deputy of the Department of Labor and Industry made an initial determination that the claimants were not eligible for unemployment insurance benefits because a stoppage of work occurred during the strike. (Section 39-51-2305, MCA.)

The adverse decision of the deputy was appealed by the claimants to an appeals referee who sustained the deputy's decision, finding that a work stoppage existed. The claimants appealed the decision of the appeals referee to the Board of Labor Appeals. After reviewing the record before the appeals referee, and hearing argument, the Board reversed the decision of the appeals referee, finding that there was not a sufficient work stoppage to disqualify the claimants.

The decision of the Board of Labor Appeals in turn was appealed by the City of Billings to the District Court. After receiving briefs and hearing oral argument, the District Court reinstated the decision of the appeals referee.

Thereafter the District Court entered judgment holding that there was a work stoppage in the City of Billings as contemplated by law due to the strike, and that the claimants were disqualified from receipt of unemployment insurance benefits for the period of the strike because of the work stoppage.

The judgment of the District Court has been appealed by the claimants to this Court.

DOES MAPA APPLY TO CLAIMS FOR UNEMPLOYMENT INSURANCE BENEFITS?

We note that the statutory scheme at the agency level for handling unemployment insurance benefits claims has been the same with slight variations since the Unemployment Insurance Law was first enacted in 1937 (Ch. 137, § 6, Laws of Montana (1937)). Since its enactment, the law has provided for an initial determination of claims by a deputy, for an appeal from the deputy to an appeals tribunal or appeals referee, and for an appeal from the appeals tribunal or referee to the State Unemployment Compensation Commission, and since executive reorganization in 1971, to the Board of Labor Appeals. The original enactment (Ch. 137, § 6, Laws of Montana (1937)) also provided for District Court review from the [commission's] determination and provided that in the District Court, the findings of the commission as to facts, if supported by the evidence and in the absence of fraud, were deemed to be conclusive, and the review jurisdiction of the District Court was confined to questions of law.

There is contained within the Unemployment Insurance Law itself, without regard to MAPA, a complete procedure for hearing and determining disputed claims for unemployment insurance benefits, beginning with the deputy and ending in the Montana Supreme Court.

Under the Unemployment Insurance Law, the initial determination of a claim is to be made by a deputy of the Department of Labor and Industry. Section 39-51-2402, MCA. An adverse decision by the deputy may be appealed to an appeals referee. Section 39-51-2402(4), MCA. After a hearing, the appeals referee is required to make findings and conclusions promptly and on the basis thereof affirm, modify, or reverse the deputy's determination. Section 39-51-2403, MCA.

Any interested party dissatisfied with the decision of an appeals referee may appeal to the Board of Labor Appeals. Section 39-51-2404, MCA. An appeal from the Board's decision to the District Court may be had under the provisions of section 39-51-2410, MCA. The decision of the District Court may be appealed to the Supreme Court of Montana in like manner as other civil cases. Section 39-51-2410(6), MCA.

In this case, however, the District Court applied the provisions of MAPA, particularly section 2-4-621, MCA, instead of applying the Unemployment Insurance Law. In reversing the holding of the Board of Labor Appeals, the District Court stated here:

"The Board of Labor Appeals is held to the same standard of review as is this Court. The Board cannot substitute its judgment for that of the appeals referee as to the weight of the evidence on questions of fact. The board may reverse or modify the decision of the appeals referee only if substantial rights of the parties have been prejudiced because such administrative findings and conclusions are clearly erroneous in view of the reliable, probative and substantial evidence on the whole record. ( Yanzick v. School District, [Mont. 641 P.2d 431] 1982, 39 St.Rep. 191)."

Thus the District Court determined, and the City here contends, that the Board of Labor Appeals could not reject or modify the findings of fact of the appeals referee unless the Board first determined from a review of the complete record that the findings of fact of the appeals referee were not based upon competent, substantial evidence or that the proceedings on which the findings were based did not comply with essential requirements of law.

There is no statutory basis in the unemployment insurance law upon which the District Court could have relied in placing such a fence around the power of the Board of Labor Appeals to review a decision by an appeals referee. Section 39-51-2404, MCA, provides:

"Appeal to the Board. Any interested party dissatisfied with a decision of an appeals referee is entitled to appeal to the board. The department will promptly transmit all records pertinent to the appeal to the board. When a decision is rendered by the board with copies of such decision to all interested parties, including the department, that decision shall become final unless an interested party requests a rehearing or initiates judicial review ..."

There is no limitation upon the Board's power of review in that paragraph. We are guided, however, by companion statutes which determine the function of the board. In section 39-51-310, MCA, it is said:

"Function of Board. The board shall act in a quasi-judicial capacity for the hearing of disputes concerning the administration of Montana's unemployment insurance laws."

Under the Executive Reorganization Act, the Board of Labor Appeals is a quasi-judicial board. Section 2-15-1704, MCA. The functions of a quasi-judicial board are defined in section 2-15-102(9), MCA, and they include:

" 'Quasi-judicial function' means an adjudicatory function exercised by an agency, involving the exercise of judgment and discretion in making determinations in controversies. The term includes but is not limited to the functions of interpreting, applying, and enforcing existing rules and laws; ... determining rights and interests of adverse parties; evaluating and passing on facts; ... adopting procedural rules; holding hearings, and any other act necessary to the performance of a quasi-judicial function."

The holding of the District Court here as to the review power of the Board of Labor Appeals stripped the Board of its quasi-judicial function. Obviously, by statute, the Board of Labor Appeals, in determining disputed claims, acts in a quasi-judicial capacity since it is a quasi-judicial board. Section 39-51-310, MCA. The fundamental purpose of the Supreme Court is to ascertain and give effect if possible to the intention of the legislature in construing the Unemployment Insurance Law (McCarthy v. Montana Power Company (Unemployment Compensation Commission) (1963), 143 Mont. 134, 387 P.2d 438). We therefore determine that the Board of Labor Appeals is not confined in its review of disputed benefits claims to the restrictions imposed by the District Court in this case.

As a quasi-judicial board, the Board of Labor Appeals may consider not only the record made before the appeals referee, but new evidence produced at the board hearing. Manifestation of this is found in section 24.7.306, Administrative Rules of Montana (A.R.M.), which provides:

"(1) The board shall include in the record and consider as evidence all records of the Division that are material to the issues. The board shall also consider any new material evidence introduced at the board hearing by interested parties. As soon as possible after the hearing, the board shall render a written decision which shall state the findings of fact and the reasons for the decision. Copies of such decision shall be mailed to all interested parties."

It is easy to demonstrate that MAPA does not apply to claims for unemployment insurance benefits. To begin with, MAPA itself excepts from its provisions procedures imposed by other statutes or otherwise recognized law. Section 2-4-107, MCA. Since there is a complete procedure...