Crow v. California Department of Human Resources

Decision Date12 October 1970
Docket NumberNo. C-70 1128.,C-70 1128.
Citation325 F. Supp. 1314
PartiesEllenmae CROW et al., Plaintiffs, v. CALIFORNIA DEPARTMENT OF HUMAN RESOURCES et al., Defendants.
CourtU.S. District Court — Northern District of California

Stephen P. Berzon, Contra Costa Legal Services Foundation, Richmond, Cal., Randlett W. Schubach, Santa Cruz, Cal., for plaintiffs.

Thomas C. Lynch, Atty. Gen. of Cal., James L. Browning, Jr., U. S. Atty., William Spohn, San Francisco, Cal., Robert N. Ford, Civil Division, Dept. of Justice, Washington, D. C., for defendants.


WOLLENBERG, District Judge.

This case follows in the wake of Java, et al. v. California Department, etc., et al., 317 F.Supp. 875 (N.D.Calif., 1970). Java held that Goldberg v. Kelly, 397 U. S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970), which mandates a due process "fair hearing" prior to termination of welfare benefits, applies equally well to the unemployment compensation field, and that the ends of the Social Security Act, as well as of the Constitution, are best served when persons who have once been found eligible for benefits continue to receive such benefits during the pendency of appeal actions initiated by former employers.

The instant case does not involve an employer's appeal of an initial determination of eligibility. Rather, the Court must pass upon a termination of benefits, without prior hearing, following a finding that the recipient has "without good cause, refused to accept suitable employment when offered to him". Calif. Unempl.Ins.Cde. § 1257(b). Such a determination renders the recipient "ineligible to receive unemployment compensation benefits for not less than two nor more than ten consecutive weeks beginning with the week in which the cause of * * * disqualification occurs." Calif.Unempl.Ins.Cde. § 1260(b). The plaintiff in the instant case, found to have "precluded an offer of suitable work", was declared ineligible for the full ten week period specified by § 1260 (b).

Though a determination that a recipient has "refused to accept suitable employment" would, in most instances, seem pre-eminently factual, it is made without the recipient being given advance notice that the issue has been raised, or the right to confront and cross-examine those persons whose testimony may prove decisive. It is this failure to provide what are alleged to be the requisites of a "due process `fair hearing'" that is said to run counter to Goldberg and Java, cit. supra.1

Certain procedural questions must be resolved before the Court reaches the merits herein. First, it is said that the case is moot, in that the named plaintiff, Mrs. Crow, has had benefits reinstated. The Court finds that while the incident which gave rise to the controversy herein has been resolved, the underlying problem remains. The Department continues to interpret the cited sections so as to stop payments to recipients who have no right to a pre-termination fair hearing. This allegedly arbitrary procedure continues to threaten members of plaintiff's class. See Kelly v. Wyman, 294 F.Supp. 893, 908 (D.C. 1968); Singleton v. Board of Com'rs., etc., 356 F.2d 771 (5 Cir., 1966).

Related to the asserted mootness of the controversy is the motion of one Eldon Lee Allison to intervene as named plaintiff. The motion will be denied. As noted above, the need of another named plaintiff to keep alive Mrs. Crow's case is at best arguable, and in addition, Allison's affidavit indicates additional issues which would unduly complicate those presented in Mrs. Crow's complaint.

Finally, the State and federal defendants contest the propriety of this suit as a class action under Rule 23. The Court notes that a great many of the recent cases presenting issues similar to this one have been class actions, as would seem appropriate: under challenge are state-wide procedures uniformly applicable to large numbers of persons no one of whom has such a financial stake as would justify the prosecution of an individual action. Kelly v. Wyman, cit. supra, 294 F.Supp. at 908; Wheeler v. Montgomery, 296 F.Supp. 138 (D.C.1968), rev'd on other grounds 397 U.S. 280, 90 S.Ct. 1026, 25 L.Ed.2d 307 (1970); Johnson v. Robinson, 296 F. Supp. 1165 (D.C.1967). See also 28 U.S.C.A. Rule 23, Notes of Advisory Committee on Rules note to Rule 23(b) (1) (A). In light of these precedents, the Court finds this a proper class action under Rule 23 of the Federal Rules of Civil Procedure.

The Court thus moves to the merits. After hearing extensive oral argument, receiving exhaustive legal memoranda, and having taken under submission cross motions for summary judgment, it is this Court's decision that the arguments presented by the defendants were, without exception, made to and rejected by the judges in Goldberg and Java, cit. supra, and that plaintiffs are accordingly entitled to summary judgment.

The arguments against relief, considered in reverse order of importance, are the following: (1) unemployment insurance programs, and the practices here challenged, are nationwide, and the Court should avoid tinkering with questions of such broad import; (2) the public purse will be unduly threatened if the procedure urged by plaintiff is adopted; (3) the Goldberg rationale should be confined to welfare and has no application to unemployment compensation programs; (4) even if applicable to unemployment compensation, the Goldberg reasoning should not be applied to the case of Mrs. Crow.

(1) Unemployment insurance, like public assistance, is administered by the individual States within a federal statutory framework. Both programs involve grants made to the States which have established programs of aid to unemployed and/or needy persons, which programs have been certified by relevant officials as meeting the standards set by federal statutes and regulations. A challenge to any part of this national program will have repercussions elsewhere, but it would belabor the obvious to cite the decisions which have been rendered in these areas by Courts undeterred by fears that any lead provided by them might be followed in other jurisdictions. To be further noted is that any decision with regard to California's procedures will not be automatically applicable to other States. The demands of procedural due process must always be interpreted in light of particular systems and situations; a decision as to one such system will not be automatically applied elsewhere in the same way as were decisions based on substantive due process, e. g., Sherbert v. Verner, 374 U.S. 398, 83 S.Ct. 1790, 10 L.Ed.2d 965 (1963); and Shapiro v. Thompson, 394 U.S. 618, 89 S.Ct. 1322, 22 L.Ed.2d 600 (1969).

(2) The public purse has been repeatedly invoked in cases prior to this one. This Court will only echo its predecessors: fiscal considerations are always relevant, but are seldom if ever decisive in cases of this sort. "Against the justified desire to protect public funds must be weighed the individual's overpowering need in this unique situation not to be wrongfully deprived of assistance." Kelly v. Wyman, cit. supra, 294 F.Supp. at 901, cited with approval by Goldberg v. Kelly, cit. supra, 397 U.S. at 261, 90 S. Ct. 1011. There are ways by which the State can protect itself, even in the welfare situation where recipients are often judgment proof, from undue dissipation of its funds. Hearings may be accelerated, and additional personnel employed. Furthermore, there are recoupment measures available which have been found constitutional. Goldberg v. Kelly, cit. supra, 397 U.S. at 266, 90 S.Ct. 1011; Snell v. Wyman, 281 F.Supp. 853 (D.C. 1968), aff'd 393 U.S. 323, 89 S.Ct. 553, 21 L.Ed.2d 511 (1969). Most pertinent in this context are Calif.Unempl.Ins.Cde. §§ 1375-1380 (liability for overpayments) and the penalty provisions of § 1260(b) itself, which mean that if, after a fair hearing, an individual is found to have refused suitable employment in a given week, he may forfeit his right to payments not only for that week but for as many as nine succeeding weeks. It is difficult to see how, with the latter provision, the State would be out of pocket even if cut-off under § 1257(b) is delayed somewhat to allow confrontation and cross-examination.

(3) The government's contention that the due process considerations held decisive in Goldberg should be confined to welfare situations has been disposed of by Java, cit. supra. The State argued in Java, as the federal government argues here, that the controlling factor in Goldberg was the "brutal need" which characterizes the case of the typical welfare recipient.

Reference is made to plaintiff Crow's financial situation, to the fact that she is married to an employed individual, and to the family's ownership of two (very used) automobiles. Defendants conclude with the argument that since Mrs. Crow does not lack "the very means to live" she is not entitled to "the extraordinary remedy of a predetermination hearing * * *."

Defendants misread Java, Goldberg, relevant California statutes, and the recent history of American jurisprudence. The right to confront and cross-examine adverse witnesses, where an important decision hinges on a question of fact, is not an "extraordinary remedy". It has been found by the Supreme Court to be constitutionally mandated "in almost every setting". Goldberg v. Kelly, cit. supra, 397 U.S. at 269, 90 S.Ct. 1011. It is welfare, not unemployment compensation, or government employment, or garnishment proceedings, which was for the longest time deemed outside the protections of the due process clause. The Supreme Court invoked the "brutal need" of the welfare client, not to give him special rights not enjoyed by others, but as part of the balancing process which had been employed in previous due process cases, e. g. Sniadach v. Family Finance Corp., 395 U.S. 337, 341-342, 89 S.Ct. 1820, 1822-1823, 23 L.Ed.2d 349 (1969) ("prejudgment garnishment * * may * * * drive a wage-earning family...

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