Crow v. California Dept. of Human Resources Develop.

• Decision Date: 14 December 1973
• Docket Number: No. 26749,71-1045.,26749
• Citation: 490 F.2d 580
• Parties: Ellenmae CROW et al., Plaintiffs-Appellees, American Federation of Labor and Congress of Industrial Organizations and United Steelworkers of America, AFLCIO, Intervenor Plaintiffs-Appellees, v. CALIFORNIA DEPARTMENT OF HUMAN RESOURCES DEVELOPMENT et al., Defendants-Appellants, United States of America, Intervenor Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

490 F.2d 580 (1973)

Ellenmae CROW et al., Plaintiffs-Appellees American Federation of Labor and Congress of Industrial Organizations and United Steelworkers of America, AFLCIO, Intervenor Plaintiffs-Appellees, v. CALIFORNIA DEPARTMENT OF HUMAN RESOURCES DEVELOPMENT et al., Defendants-Appellants United States of America, Intervenor Defendant-Appellant.

Nos. 26749, 71-1045.

United States Court of Appeals, Ninth Circuit.

December 14, 1973.

Charles Liebert Crum, Atty. Dept. of Labor, Washington, D. C., Asher Rubin, Deputy Atty. Gen. (argued), William P. Spohn, Asst. U. S. Atty., San Francisco, Cal., Morton Hollander and Patricia S. Baptiste, Attys. Dept. of Justice, Robert E. Kopp, Atty. (argued), Dept. of Justice, Washington, D. C., for defendants-appellants.

Steven P. Berzon, Stefan M. Rosenzweig, Legal Aid Society of Alameda County, Oakland, Cal., K. Randlett Walster, Santa Cruz, Cal., Ono, Manley, Schwartz & Kubota, San Jose, Cal., Contra Costa Legal Services Foundation, Richmond, Cal., Fred H. Altshuler and Lucy K. McCabe (argued), San Francisco, Cal., J. Albert Woll, Washington, D. C., Bernard Kleiman, Chicago, Ill., for plaintiffs-appellees.

Before DUNIWAY and TRASK, Circuit Judges, and BATTIN,^* District Judge.

BATTIN, District Judge:

Ellenmae Crow commenced this class action against the State of California Department of Human Resources Development¹ hereinafter "Department", seeking reinstatement of her entitlement to unemployment insurance benefits and an order requiring their continued payment until she was afforded a "Goldberg" type due process hearing.²

Ms. Crow, who had previously qualified for and was receiving unemployment benefits, was notified by the Department of an employment opportunity. At an interview for this employment opportunity, it came to light that Ms. Crow, if hired, would leave the job if elsewhere offered higher wages. As a consequence, Ms. Crow was not offered employment.

A condition of receipt of benefits from the Department is that the claimant be ready, willing and able to work. Thus, Ms. Crow was advised by the Department that she would have to explain the circumstances surrounding the job interview before her benefit check would be released. She filled out the required form but left blank the question, "Was any work offered you?" On the basis of this omission, her check was withheld and she was referred to a Department claims interviewer, who concluded that Ms. Crow had, at the "job interview", "precluded an offer of suitable work and accordingly was not eligible to receive unemployment compensation benefits for a period of ten weeks." A subsequent "pre-appeal" interview, with Ms. Crow in attendance, upheld the withholding of benefits.

Subsequent to filing this action, Ms. Crow requested an administrative hearing, and in lieu of a requested temporary restraining order, the district court withheld action pending the hearing.

The Hearing Referee ruled in favor of Ms. Crow, finding that a claimant could express a desire for higher wages without being guilty of precluding employment if such expression did not convey a negative attitude. Thus, the Referee's decision was based solely on the legal affect of what had transpired at the job interview, although it necessarily characterized Ms. Crow's conduct as permissible. Notwithstanding this administrative result, the district court reached the merits of Ms. Crow's complaint and concluded:

"When an individual is deprived of a statutory benefit which he has previously enjoyed due to an adverse finding where factual issues are in dispute, and where the agency concerned has acted upon third party information, the ancient and `relatively immutable\' jurisprudence of Greene, Sniadach, and Goldberg³ comes into play. It is in a case such as this . . ., where the claimant said she was offered no job, and where the defendant department\'s interviewer disagreed, . . . based on his understanding of third party information, that confrontation and cross-examination are necessary."

Crow v. Cal. Dept. of Human Resources, 325 F.Supp. 1314, 1319 (N.D.Cal.1970).

MOOTNESS

The Supreme Court's remand of Burney⁴ implicitly indicates that a district court's conclusion against mootness permits review of at least that question. We concur with the district court's finding that this case is not moot, and find it to be of that type which is capable of repetition yet potentially evading review. The intervention as a party plaintiff of the AFL-CIO precludes any other conclusion.

MERITS OF PLAINTIFF'S CLAIM

It is the opinion of this court that the record does not reflect a situation necessitating a wholesale application of the principles enunciated by Goldberg and its progeny. Moreover, should we erroneously construe the record, the procedures employed by the Department in this case and the situations which it encompasses, in our opinion, satisfy the requisites of due process. That procedure, which includes an informal hearing in the presence of the claimant prior to the administrative determination regarding the continued eligibility for unemployment compensation, was employed here and is employed in all similar cases. That procedure is the subject matter of an affidavit filed in this case and which, because of its obvious importance, is set out in the margin.⁵

First, we disagree with the district court's finding that the termination here was based upon third party information. The situation which Ms. Crow brings to the fore is that in which the claimant is the source of information upon which the continued eligibility claims examiner predicates his decision of ineligibility. Goldberg indicates quite clearly that a pretermination hearing is mandated only where the questioned agency action is challenged as resting upon incorrect or misleading factual premises or upon misapplication of rules or policies under the facts of the particular case. Goldberg v. Kelly, supra, 397 U.S. at 268, 90 S.Ct. 1011. Here, the facts presented the eligibility examiner indicated that the claimant, when asked, admitted that she would leave any job offered for a subsequent, more lucrative position. While it may be true that information from the job opportunity interviewer may have formed a part of the conclusion by the eligibility interviewer, that information, insofar as the record indicates, differed in no material respect from that presented to the Department's interviewer by Ms. Crow. Thus, we are constrained by the record to conclude that we are here dealing not with agency misconstruction of a factual situation, but rather, and if at all, with that aspect of Goldberg which interposes the Fourteenth Amendment in situations challenged as an agency's misapplication of rules or policies.

Second, we find no basis for a claim that there has been misapplication of policies or rules in this case. The rule confronting the Department's examiner required termination if a claimant had "precluded" employment. This claimant was not offered employment because of her candid admission that she would leave a job if offered more remuneration elsewhere. We find it logically impossible to label the examiner's action as a misapplication of rules or policies.

And, third, should we take too much liberty with the record by concluding there was here no erroneous fact-finding by the Department, we nonetheless must reverse the court below for we find that due process is accorded by the Department's procedures governing this situation. Due process is, of course, a flexible concept, the requirements of which are not immutably fixed but frequently vary with the type of proceeding involved. Hannah v. Larche, 363 U.S. 420, 440, 80 S.Ct. 1502, 4 L.Ed.2d 1307 (1960).

"Consideration of what procedures due process may require under any given circumstances must begin with a determination of the precise nature of the government function involved as well as of the private interest that has been affected by governmental action * * *."

Cafeteria Workers v. McElroy, 367 U.S. 886, 895, 81 S.Ct. 1743, 1748, 6 L.Ed.2d 1230 (1961).

We conclude that the protection of persons receiving unemployment compensation benefits against capricious and arbitrary governmental action is adequately safeguarded in this case. There is no need to further burden the procedures by requiring a full evidentiary hearing in the situation such as the one at hand where the record reflects the absence of a factual dispute or misapplication of rules and regulations.

Goldberg and its progeny do not dictate a contrary result. Goldberg held, in effect, that prior to termination of welfare benefits a due process hearing was required. Close examination of the decision requires the conclusion that the strict principles it enunciates are inapposite in the situation here at hand. Goldberg, in fact, makes clear that some governmental benefits can administratively be terminated without affording the recipient a pretermination hearing. Goldberg, supra, 397 U.S. at 263, 90 S.Ct. 1011. The Goldberg rationale is based, at least in part, upon the fact that a welfare recipient will, upon termination, be faced with a grievous loss. No such loss exists in this situation. Here, we deal with unemployed persons who, as a condition to receive unemployment compensation benefits in the first instance, must be able and willing to work and subsequently in reasonably good health and a bona fide member of the work force.⁶ While that distinction alone may be sufficient to take this case out of the Goldberg context, several others indicate the probity of the conclusion. For example: The source of funds used to pay unemployment benefits is different than the source of funds used to pay welfare; and the state's interest in unemployment compensation is different because it is that of a stake-holder, rather than a benefactor. Just as the context differs, so do the requirements of due process.⁷

We find the Constitution to demand here no more than is afforded by...