Fusari v. Steinberg 8212 848

• Decision Date: 14 January 1975
• Docket Number: No. 73,73
• Parties: Jack A. FUSARI, Commissioner of Labor of the State of Connecticut, Administrator, Unemployment Compensation Act, Appellant, v. Larry STEINBERG et al. —848
• Court: U.S. Supreme Court

419 U.S. 379

95 S.Ct. 533

42 L.Ed.2d 521

Jack A. FUSARI, Commissioner of Labor of the State of Connecticut, Administrator, Unemployment Compensation Act, Appellant,

v Larry STEINBERG et al.

No. 73—848.

Argued Oct. 15 and 16, 1974.

Decided Jan. 14, 1975.

Syllabus

The judgment of a three-judge District Court holding that the Connecticut 'seated interview' procedures for assessing continuing eligibility for unemployment compensation benefits violated due process is vacated, and the case is remanded for reconsideration in light of intervening changes in Connecticut law. Pp. 385—389.

D.C., 364 F.Supp. 922, vacated and remanded.

Donald E. Wasik, Hartford, Conn., for appellant.

John M. Creane, Bridgeport, Conn., for appellees.

Mr. Justice POWELL delivered the opinion of the Court.

This case comes to us on appeal from a three-judge District Court determination that the Connecticut 'seated interview' procedures for assessing continuing eligibility for unemployment compensation benefits violate the Due Process Clause of the Fourteenth Amendment. 364 F.Supp. 922 (Conn. 1973). Our independent examination of Connecticut law reveals that the State significantly revised its unemployment compensation system following the District Court's decision. Some of the amendments are designed to ameliorate problems that the court identified. In these circumstances, we think it inappropriate to decide the issues tendered by the parties. We therefore vacate the decision of the District Court and remand for reconsideration in light of the intervening changes in Connecticut law.

I

In Connecticut, unemployment compensation benefits are paid from a trust fund maintained by employer contributions. Appellant Fusari, State Commissioner of Labor and Administrator of the Unemployment Compensation Act, administers the fund. Under the Connecticut statute, a claimant first must file an initiating claim and establish his general entitlement to receive state unemployment compensation benefits. Conn.Gen.Stat.Rev. §§ 31—230 and 31—235 (1973). Thereafter, the claimant must report to the local unemployment compensation office biweekly and demonstrate continued eligibility for benefits for the preceding two-week period. The claimant must submit forms swearing to his availability for work and to his reasonable efforts to obtain employment during the period in question. He also must submit a form listing the persons to whom he has applied for employment during the preceding two weeks.

Upon receipt of the forms, the paying official may make routine inquiries. If no serious question of eligibility arises, immediate payment is made. If, however, the forms or responses to questions raise suspicion of possible disqualification, the claimant is directed to a 'seated interview' with a factfinding examiner for a more thorough inquiry into the possible factors that might render him ineligible for benefits. Although the claimant bears the burden of establishing eligibility, Northrup v. Administrator, 148 Conn. 475, 480, 172 A.2d 390, 393 (1961); Waskiewicz v. Egan, 15 Conn.Supp. 286, 287 (1947), doubtful cases are to be decided in his favor. Conn.Gen.Stat.Rev. § 31—274(c).

An examiner's favorable determination of eligibility results in immediate payment of benefits. If, however, the examiner concludes that the claimant is ineligible, no payment is made. Within a few days the claimant receives a written statement indicating the reasons for disqualification and notifying him of the right to appeal. Benefits for the period in question normally are withheld pending resolution of the administrative appeal.¹ The State's policy, sometimes honored in the breach, is that pendency of an appeal does not affect the claimant's eligibility to receive benefits for subsequent periods. ²

This appeal arises from a class action challenging the legality of the procedures used for determining continued eligibility for benefits.³ Appellees asserted that Connecticut violated the federal statutory requirement that state procedures be designed reasonably to assure the payment of benefits 'when due,' 42 U.S.C. § 503,⁴ and also that the Connecticut seated-interview procedures were constitutionally defective in failing to provide a pretermination hearing satisfying the standards of Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970). At appellees' request, a three-judge court was convened to hear the matter.⁵

The District Court's findings of fact provide some indication of the actual operation of the Connecticut system. The findings reveal that the reversal rate of appealed denials of benefits was significant, ranging from 19.4% to 26.1% during the periods surveyed.⁶ The District Court also found that a significant delay was required for obtaining administrative review of the examiner's determination: 89.9% of the 461 intrastate appeals⁷ filed in the month of December 1972 required more than 100 days to resolve. The average delay during that period exceeded 126 days. Moreover, the court determined that the December 1972 figures probably were typical of the delays that might be encountered in other time periods.⁸

The District Court expressed serious reservations whether the Connecticut system satisfied the 'when due' requirement of federal law. It felt foreclosed from so ruling on this statutory issue, however, by this Court's summary affirmance in Torres v. New York State Dept. of Labor, 405 U.S. 949, 92 S.Ct. 1185, 31 L.Ed.2d 228 (1972). The District Court concluded that Torres was distinguishable on the constitutional issue, and held that the Connecticut procedures violated due process 'because (a) a property interest has been denied (b) at an inadequate hearing (c) that is not reviewable de novo until an unreasonable length of time.' 364 F.Supp., at 937—938. After suggesting a number of alterations of the state system that might raise its operation to a constitutionally adequate level, the court enjoined appellant from denying unemployment benefits under then-existing procedures without first providing a constitutionally sufficient prior hearing. Id., at 938. At appellant's request, the District Court stayed its injunction pending resolution of an appeal to this Court. We subsequently noted probable jurisdiction. 415 U.S. 912, 94 S.Ct. 1406, 39 L.Ed.2d 466 (1974).

II

Following our notation of probable jurisdiction, the Connecticut Legislature enacted major revisions of the procedures by which unemployment compensation claims are determined. Conn.Pub. Act 74—339 (1974).⁹ Section 31—241, one of the sections under consideration in this appeal, was amended to require that examiners only consider evidence presented in person or in writing at a hearing provided for that purpose.¹⁰ Id., § 14, amending Conn.Gen.Stat.Rev. § 31—241. The legislature also completely altered the structure of the Connecticut system of adminisrative review, substituting a two-tiered Employment Security Appeals Division for the Unemployment Compensation Commission. Conn.Pub. Act 74—339, supra, §§ 1—12.

The amended statute provides for the creation of a staff of referees to review the examiners' decisions de novo. § 15. Referees are to be appointed by an Employment Security Board of Review, § 9,¹¹ the three mem- bers of which are appointed by the Governor. § 3. The statute further provides that the referee section 'shall consist of such referees as the board deems necessary for the prompt processing of appeals hearings and decisions and for the performance of the duties imposed—by this act.' § 9. Appeals from the referees' decisions are to be taken to the Employment Security Board of Review and thereafter to the state courts. §§ 15 and 21, amending Conn.Gen.Stat.Rev. §§ 31—242 and 31—248, and new § 25 added by the 1974 amendments.

The legislative history indicates that the Connecticut Legislature anticipated that these amendments would have a significant impact on the speed and fairness of the resolution of contested claims. Legislators repeatedly characterized the amendments as a 'true reform' of important consequence. See Conn.S.Proc. 2578, 2624, 2629 (May 7, 1974). Particular emphasis was placed on the need to improve the State's treatment of administrative appeals. It was recognized that Connecticut's torpid system of administrative appeal was markedly inferior to those used in other States. Id., at 2578, 2621; Conn.H.Proc. 5133 5135, 5152 (May 2, 1974). Revision of the appellate system was designed to remedy that problem. In the words of one member of the House: 'The bill . . . sets up a unique system which is designed to cut down that (appellate) backlog.' Id., at 5152.

III

The amendments to the Connecticut statute, which became effective on July 1, 1974, Conn.Pub. Act 74—339, § 36 (1974), may alter significantly the character of the system considered by the District Court. Although the precise significance of the amendment to § 31—241 is unclear, the court's concern for the absence of a right of confrontation, 364 F.Supp., at 935, may be diminished by the requirement that examiners base their decisions only on evidence submitted in person or in writing. Perhaps of greater importance is the revision of the State's system of administrative appeal. Both in distinguishing Torres and in determining that the Connecticut system failed to satisfy the minimal requirements of procedural due process, the District Court placed substantial reliance on the length of time required to obtain administrative review of the examiner's decision. The amendments to Connecticut law are designed to remedy this problem.

This Court must review the District Court's judgment in light of presently existing Connecticut law, not the law in effect at the time that judgment was rendered.¹² Diffenderfer v. Central Baptist Church, 404 U.S. 412, 414, 92 S.Ct. 574, 575, 30 L.Ed.2d 567 (1972); Hall v. Beals, 396 U.S. 45, 48, 90 S.Ct. 200, 301, 24 L.Ed.2d 214 (1969); United States v. Alabama, 362 U.S. 602, 604, 80...