Drumright v. Padzieski

• Decision Date: 22 August 1977
• Docket Number: Civ. A. No. 7-70477.
• Citation: 436 F. Supp. 310
• Parties: Lonzo DRUMRIGHT, on behalf of himself and all others similarly situated, Plaintiff, v. Frank PADZIESKI et al., Defendants.
• Court: U.S. District Court — Western District of Michigan

436 F. Supp. 310

Lonzo DRUMRIGHT, on behalf of himself and all others similarly situated, Plaintiff, v. Frank PADZIESKI et al., Defendants.

Civ. A. No. 7-70477.

United States District Court, E. D. Michigan, S. D.

August 22, 1977.

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Kurt Berggren, Ann Arbor, Mich., for plaintiff.

James H. White, Asst. Atty. Gen., Michele C. Mayes, Asst. U. S. Atty., Detroit, Mich., for defendants.

MEMORANDUM OPINION AND ORDER

PHILIP PRATT, District Judge.

Plaintiff has filed suit on behalf of himself and others similarly situated against the United States Secretary of Labor and members and executive director of the Michigan Employment Security Commission (MESC). Plaintiff asserts that the state-enacted statutes and regulations governing MESC violate the due process clause of the Fourteenth Amendment, and the terms and purpose of the Social Security Act, 42 U.S.C. §§ 501-4, by permitting the termination of unemployment compensation benefits without a prior hearing. Plaintiff seeks declaratory and injunctive relief as well as retroactive payment of funds he alleges were wrongfully withheld.

The operation of unemployment insurance programs is a joint state-federal venture. Michigan has enacted the Michigan Employment Security Act which empowers the MESC to administer an unemployment compensation program within the borders of the state. See M.C.L.A. § 421.1 et seq. The federal government provides funds for expenses upon proper certification by the Secretary of Labor to the Secretary of the Treasury. 42 U.S.C. § 502 et seq.; 26 U.S.C. § 3301 et seq.

Plaintiff received unemployment compensation benefits from October 2, 1976 through November 6, 1976 following a determination that he was eligible for such benefits. Subsequently, pursuant to state regulations, plaintiff's former employer protested that plaintiff had been discharged for good cause and was not legally eligible. On November 22, 1976, MESC notified the plaintiff that it had redetermined the matter and that he was ineligible. Plaintiff was ordered to repay all benefits received.

The case is before the Court on several motions. Both the state and federal defendants have filed motions to dismiss for lack of jurisdiction and failure to state a claim upon which relief can be granted. Plaintiff has filed motions for preliminary injunction, for class certification and for intervention on behalf of several others.

I. MOTIONS TO DISMISS

A. Jurisdiction

The state defendants argue that the Court lacks jurisdiction over the subject matter and over the individual state defendants. The plaintiff asserts several jurisdictional bases only one of which need be considered at this juncture.

The complaint charges that the defendants' procedures deprive plaintiff of his right to due process of law. 42 U.S.C. § 1983 creates a cause of action against

"Every person who, under color of any statute, ordinance, regulation, custom or usage, of any State . . . subjects . . . any citizen of the United States . . . to the deprivation of any rights, privileges or immunities secured by the Constitution and laws, . . ."

Section 1983, of course, is not jurisdictional. Plaintiff relies for its jurisdictional base on 28 U.S.C. § 1343(3), which provides:

"The district courts shall have original jurisdiction of any civil action authorized by law to be commenced by any person: . . . (3) To redress the deprivation, under color of any State law, statute, ordinance, regulation, custom or usage, of any right, privilege or immunity secured by the Constitution of the United States . . ."

The state defendants apparently do not quarrel with the fact that as a formal, logical matter, plaintiff's complaint falls within the coverage of Sections 1983 and its jurisdictional counterpart, Section 1343(3), for it is clear from reading the complaint that plaintiff's first cause of action alleges a deprivation under color of state law and regulation of plaintiff's Fourteenth Amendment rights. Rather, the state defendants argue that jurisdiction is not proper because "previous decisions of the United States Supreme Court render the claim frivolous and obviously without merit." The Court cannot agree with this assertion.

In Hagans v. Lavine, 415 U.S. 528, 94 S.Ct. 1372, 39 L.Ed.2d 577 (1974) the Supreme Court held that there was jurisdiction in a federal district court to entertain a class action on behalf of AFDC recipients challenging state procedures that permitted recoupment of certain emergency payments. In the course of that opinion the court discussed the issue of "substantial federal question" in the context of 42 U.S.C. § 1983 and 28 U.S.C. § 1343(3). The court said that:

"Over the years this Court has repeatedly held that the federal courts are without power to entertain claims otherwise within their jurisdiction if they are `so attenuated and unsubstantial as to be absolutely devoid of merit,' Newburyport Water Co. v. Newburyport, 193 U.S. 561, 579 24 S.Ct. 553, 557, 48 L.Ed. 795 (1904); `wholly insubstantial,' Bailey v. Patterson, 369 U.S. 31, 33 82 S.Ct. 549, 550-551, 7 L.Ed.2d 512 (1962); `obviously frivolous,' Hannis Distilling Co. v. Baltimore, 216 U.S. 285, 288 30 S.Ct. 326, 327, 54 L.Ed. 582 (1910); `plainly unsubstantial,' Levering & Garrigues Co. v. Morrin, 289 U.S. 103, 105 53 S.Ct. 549, 550, 77 L.Ed. 1062 (1933); or `no longer open to discussion,' McGilva v. Ross, 215 U.S. 70, 80 30 S.Ct. 27, 31, 54 L.Ed. 95 (1909)." Id. at 536-7, 94 S.Ct. at 1378.

The state defendants argue that this complaint fails to meet even this loose standard, relying on Torres v. New York State Department of Labor, 333 F.Supp. 341 (S.D. N.Y.1971), aff'd mem, 405 U.S. 949, 92 S.Ct. 1185, 31 L.Ed.2d 228 (1972). Initially it should be observed that the sufficiency of a complaint for purposes of jurisdiction is different than the sufficiency of a complaint to withstand a motion to dismiss for failure to state a claim upon which relief can be granted. As the Supreme Court has indicated:

"Jurisdiction, therefore, is not defeated as respondents seem to contend, by the possibility that the averments might fail to state a cause of action on which petitioners could actually recover. For it is well settled that the failure to state a proper cause of action calls for a judgment on the merits and not for a dismissal for want of jurisdiction. Whether the complaint states a cause of action on which relief could be granted is a question of law and just as issues of fact it must be decided after and not before the court has assumed jurisdiction over the controversy." Bell v. Hood, 327 U.S. 678, 682, 66 S.Ct. 773, 776, 90 L.Ed. 939 (1946) (citations omitted).

Here, too, the issue is not whether plaintiff has stated a claim upon which relief can be granted within the meaning of FRCP 12(b)(6), but, rather, whether the allegations of the complaint are so insubstantial that they deprive this Court of jurisdiction.

Torres v. New York State Department of Labor, supra, does not deal directly with the matter presently in issue. In that case the Supreme Court upheld the determination of a three-judge court, after remand, that New York's procedures were not contrary to federal law. In the previous opinion, Torres v. New York State Department of Labor, 321 F.Supp. 432 (S.D.N.Y.1971), vacated and remanded 402 U.S. 968, 91 S.Ct. 1685, 29 L.Ed.2d 133 (1971), the district court ruled that New York's procedures for suspending or terminating unemployment compensation benefits without a full hearing did not violate the dictates of due process of law. Jurisdiction over the constitutional claim was never considered by any of the reported opinions. Thus, it can be inferred that the state defendants' real argument is that Torres establishes as a matter of controlling law that hearings are not required prior to the suspension or termination of unemployment compensation benefits and therefore plaintiff's complaint is "insubstantial."

The Court must first consider the precedential effect of the Supreme Court's summary affirmance of Torres. State defendants argue that the summary affirmance in Torres conclusively established that hearings such as those required in Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970) are not required in unemployment benefit programs. Despite the fact that "the lower courts are bound by summary decisions by the Supreme court `"until such time as the Court informs them that they are not,"'" Hicks v. Miranda, 422 U.S. 332, 344-5, 95 S.Ct. 2281, 2289, 45 L.Ed.2d 223 (1975), quoting Doe v. Hodgson, 478 F.2d 537, 539, cert. den. sub nom. Doe v. Brennan, 414 U.S. 1096, 94 S.Ct. 732, 38 L.Ed.2d 555 (1973), defendants' argument is not persuasive. In remanding the case the Supreme Court instructed the three-judge court to consider the impact of California Dept. of Human Resources v. Java, 402 U.S. 121, 91 S.Ct. 1347, 28 L.Ed.2d 666 (1971) which involved a statutory challenge to the state's unemployment compensation award procedures. In accordance with the remand the lower Court restricted itself to that particular issue. Thus, the Supreme Court in its affirmance did not review the constitutional questions adjudicated in the earlier opinion. The fact that three justices of the Supreme Court dissented from the Court's failure to apply the rule of Goldberg v. Kelly, supra, to Mr. Torres' case suggests that the Supreme Court did affirm the judgment that New York's particular scheme did not violate due process. That, however, does not settle the issue with respect to the Michigan procedures and regulations at issue. It is clear that issues not presented to the Supreme Court are not decided by summary affirmances. Summary affirmances should be narrowly limited to the issues in their jurisdictional statements. Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 14, 96 S.Ct. 2882, 49 L.Ed.2d 752 (1976).¹ Here the averments of the complaint suggest...