Martinez v. Marshall, 76-2644
| Decision Date | 04 November 1977 |
| Docket Number | No. 76-2644,76-2644 |
| Parties | Kenneth R. MARTINEZ, etc., et al., Plaintiff-Appellee, v. F. Ray MARSHALL, successor to John T. Dunlop, Secretary, Department of Labor, et al., Defendants-Appellants. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Timothy H. McCarthy, Salinas, Cal., argued for plaintiff-appellee.
William T. McGivern, Jr., Asst. U. S. Atty., San Francisco, Cal., argued for defendants-appellants.
Appeal from the United States District Court for the Northern District of California.
Before CHAMBERS and CHOY, Circuit Judges, and BONSAL, * District Judge.
This is an appeal from an order of the United States District Court for the Northern District of California (Orrick, J.) granting summary judgment and class certification to plaintiff Martinez. The issue on appeal is whether the district court erred in holding that the Secretary of Labor (the "Secretary") 1 exceeded his authority under the Emergency Jobs and Unemployment Assistance Act of 1974, Pub.L.No. 93-567, 88 Stat. 1845 (the "Act") in promulgating regulation 20 C.F.R. § 619.13 (1975) ("Regulation 619.13") with respect to overpayments of Supplemental Unemployment Assistance ("SUA") benefits.
In early 1975, Martinez was unemployed and became eligible to receive SUA benefits in California. In March and April 1975, he was overpaid a total of $165.00 through no fault of his own. The other 1,962 members of the class also received such overpayments of SUA benefits. The California Employment Development Department, acting pursuant to Regulation 619.13, recouped Martinez' overpayment by withholding his weekly SUA benefits. Martinez sought declaratory and injunctive relief contending that the Secretary abused his authority and discretion under the Act and violated Section 207 of the Act, 88 Stat 1852, 26 U.S.C. § 3304 (note), by recouping overpayments without consideration of Section 1375 of the California Unemployment Insurance Code which provides:
On January 16, 1976, the district court heard oral argument on the parties' cross-motions for summary judgment and then granted Martinez' motion and denied the defendants' motion. The district court also certified the action as a class action.
On March 8, 1976, the district court filed an opinion holding that the defendants should be enjoined from enforcing Regulation 619.13 insofar as it authorized recovery of SUA overpayments under circumstances inconsistent with the provisions of the Act, and that the defendants should review the claims of the individual class members to determine which payments were recouped without consideration of the provisions of the California law. Final judgment was filed on May 24, 1976. The Secretary appealed. We affirm.
Statutory Provisions
The Act, which was approved on December 31, 1974, provides monetary assistance for unemployed persons. Title II establishes a temporary federal program of special unemployment assistance for workers "who are unemployed during a period of aggravated unemployment and who are not otherwise eligible for unemployment allowances under any other law." Under the SUA program, workers not previously covered, including farmworkers, domestics, and certain public employees, may be eligible for up to 26 weeks of unemployment benefits.
Section 202 of the Act, 88 Stat. 1850, 26 U.S.C. § 3304 (note), provides:
Section 207 of the Act, 88 Stat. 1852, 26 U.S.C. § 3304 (note), provides:
"Except where inconsistent with the provisions of this title, the terms and conditions of the applicable State unemployment compensation law which apply to claims thereunder for regular compensation and the payment thereof shall apply to claims for assistance under this title and the payment thereof."
On February 6, 1975, the Secretary promulgated Regulation 619.13 which provided in relevant part:
"If the State agency of the applicable State or a court of competent jurisdiction finds, after a determination and an opportunity for fair hearing thereon, that an individual has received a payment of SUA to which the individual was not entitled under the Act and this regulation, irrespective of whether or not payment was due to the individual's fault or misrepresentation, the individual shall be liable to repay to the applicable State the total sum of the payment to which the individual was not entitled, . . ." 20 C.F.R. § 619.13(a).
"Any provision of the applicable State law providing for waiver of recovery of overpayments or compensation shall not be applicable to SUA." 20 C.F.R. § 619.13(f).
Effective June 30, 1975, Congress enacted the Emergency Compensation and Special Unemployment Extension Act of 1975, Pub.L.No. 94-45, 89 Stat. 236, which contained technical amendments to the Act to permit a state agency to waive repayment of SUA overpayments if the overpayment was not due to the fault of the recipient and if the repayment would be contrary to equity and good conscience. Subsequently, the Secretary amended Regulation 619.13 to provide for the waiver of repayment of SUA overpayments.
Therefore, the issue on appeal is whether the district court erred in holding that the actions of the Secretary in recouping overpayments pursuant to Regulation 619.13 between February 6, 1975 and June 30, 1975 were contrary to law.
The Secretary contends that he was authorized to promulgate Regulation 619.13 to effectuate the purposes of the Act because Section 202 of the Act provides that the payments of SUA benefits are to be made "in accordance with the provisions of this title and the rules and regulations prescribed by the Secretary of Labor hereunder . . ." (emphasis supplied). The Secretary argues that Regulation 619.13 is within the scope of his authority and that the June 30, 1975 amendments are not retroactive and do not apply to prior recoupments.
The Secretary also contends that any repayment of SUA overpayments to Martinez or members of the class would constitute unauthorized retroactive benefits in violation of the doctrine of sovereign immunity. Edelman v. Jordan, 415 U.S. 651, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974); Larson v. Domestic & Foreign Commerce Corp., 337 U.S. 682, 69 S.Ct. 1457, 93 L.Ed. 1628 (1949).
In granting summary judgment for Martinez, the district court found that, while the Act prior to the June 30, 1975 amendments did not provide for waiver or recoupment of overpayments, it did provide that state law applied except where inconsistent with the Act. Since the Act was silent on the issue, the district court reasoned that the California law, which provided for waiver of overpayments, was not inconsistent with the Act and should have been applied. Therefore, the district court held that Regulation 619.13 was not authorized by the Act and that its promulgation constituted an abuse of the Secretary's discretion.
The district court also held that sovereign immunity did not bar the suit because the Secretary of Labor acted in excess of his statutory authority in promulgating Regulation 619.13. See Dugan v. Rank, 372 U.S. 609, 621-22, 83 S.Ct. 999, 10 L.Ed.2d 15 (1963); Florida v. Weinberger, 492 F.2d 488, 496 (5th Cir. 1974); Phillips v. Dawson, 393 F.Supp. 360, 366 (W.D.Ky. 1975). The district court held that jurisdiction was proper under both the Administrative Procedure Act, 5 U.S.C. § 702, and the mandamus statute, 28 U.S.C. § 1361. See Mulry v. Driver, 366 F.2d 544 (9th Cir. 1966); Knuckles v. Weinberger, 511 F.2d 1221 (9th Cir. 1975).
The decision of the district court was rendered prior to the decision of the Supreme Court in Califano v. Sanders, 430 U.S. 99, 97 S.Ct. 980, 51 L.Ed.2d 192 (1977), holding that Section 10 of the Administrative Procedure Act, 5 U.S.C. §§ 701-706, does not afford an implied grant of subject-matter jurisdiction to review agency actions. Since we are bound by Sanders, we reverse the district court in its finding of jurisdiction under the APA. We agree with the district court's second basis for review, however, the mandamus statute.
Section 207 of the Act provides for the application of state unemployment compensation law "except where inconsistent with the provisions of this title." It is clear from the language of the Act that the SUA program was to be carried out jointly by the state and federal governments with the federal government providing the funds.
In four earlier unemployment insurance programs (1) federal employees (5 U.S.C. § 8501 et seq.); (2) ex-servicemen (5 U.S.C. § 8521 et seq.); (3) the Federal-State Extended Unemployment Compensation Act of 1970 (Title II of Pub.L.No. 91-373, 84 Stat. 695, 708); and (4) the Emergency Unemployment Compensation Act of 1971 (Title II of Pub.L.No. 92-224, 85 Stat. 810, 811) the Secretary provided by regulation for waiver of overpayments in accordance with applicable state law. 2 Thus, these statutes, which contain language similar to that contained in Section 207 of the Act, 3 have been...
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