Miranda v. Unemployment Ins. Appeals Bd.

• Decision Date: 21 December 1973
• Court: California Court of Appeals Court of Appeals
• Parties: Alex MIRANDA, Petitioner and Respondent, v. CALIFORNIA UNEMPLOYMENT INSURANCE APPEALS BOARD, Appellant; NORRIS INDUSTRIES, Real Party in Interest and Respondent. Civ. 41488.

Page 419

111 Cal.Rptr. 419

36 Cal.App.3d 213

Alex MIRANDA, Petitioner and Respondent, v. CALIFORNIA UNEMPLOYMENT INSURANCE APPEALS BOARD, Appellant;

NORRIS INDUSTRIES, Real Party in Interest and Respondent.

Civ. 41488.

Court of Appeal, Second District, Division 2, California.

Dec. 21, 1973.

Henry R. Fenton, Jonathan B. Steiner, Los Angeles, for petitioner. at Evelle J. Younger, Atty. Gen., Elizabeth Palmer, Asst. Atty. Gen., Edward M. Belasco and Melvin R. Segal, Deputy Attys. Gen., for appellant.

No appearance for respondent and real party in interest, Norris Industries.

COMPTON, Associate Justice.

The California Unemployment Insurance Appeals Board (the Board) appeals from a judgment of the Superior Court of Los Angeles County granting a peremptory writ of mandate directing the Board to in turn order the California Department of Human Resources Development (the Department) to pay to Alex Miranda (petitioner) benefits claimed to be due him under the California Unemployment Insurance Code for the period March 16, 1971 to October 18, 1971.

FACTS

Petitioner was discharged by his employer Norris Industries on February 8, 1971.

Subsequently he filed a claim for unemployment insurance benefits. On March 12, 1971, Norris Industries, after receiving notice of petitioner's claim, informed the Department in writing that petitioner had been discharged for misconduct thus rendering him ineligible for the claimed benefits. Three days later petitioner was interviewed by a representative of the Department for the purpose of determining petitioner's eligibility.

Unemployment Insurance Code section 1256 provides that an individual is ineligible for benefits it the Director of the Department finds that the claimant voluntarily terminated his employment or was discharged for misconduct.

At the interview petitioner was told of his employer's allegations and was given an opportunity to present evidence supporting his claim of eligibility. The interviewer made a determination that petitioner was eligible and delivered to him a check for $61.00.

Approximately seven days later Norris Industries objected to the determination of eligibility and requested the Department to reconsider. A supervisor of the original interviewer reviewed the matter pursuant to Unemployment Insurance Code section 1332(a) ¹ and basing his decision on the same evidence developed at the interview concluded that petitioner was ineligible. Petitioner was notified that no further payments would be forthcoming.

Petitioner unsuccessfully pursued the administrative remedies open to him by appealing first to a referee and then to the Board. Both the referee and the Board determined that petitioner had been discharged for misconduct and denied petitioner's claim.

Additionally, the Board specifically upheld the application of Unemployment Insurance Code section 1332(a) and the act of reconsideration by the supervisor.

Petitioner next sought a writ of mandate, which is the subject of this appeal, to compel payment to him of benefits claimed to be due for the period of time between the supervisor's determination of ineligibility and the decision of the referee upholding that determination.

Petitioner has thus exhausted his administrative remedies and at this time only court review of the Board's decision upholding the determination of ineligibility is still pending.

In the limited phase of the litigation involving petitioner's claim which now engages our attention, the superior court determined that the Department had wrongfully refused to make payments during the period preceding the referee's decision that petitioner was ineligible.

Inferentially the superior court determined that even though the referee's decision of ineligibility be ultimately approved, petitioner was entitled to receive payments in the interim period, subject to later recoupment by the Department.

Specifically the superior court concluded that petitioner's right to receive payments arose at the time the original interviewer declared him to be eligible and that the reconsideration by the supervisor authorized by Unemployment Insurance Code section 1332(a), without an evidentiary hearing, deprived petitioner of due process of law and violated controlling federal statutes.

DISCUSSION

The system of unemployment insurance is a federal-state cooperative program under which federal funding is provided to state programs that conform to federal requirements. (42 U.S.C.A., §§ 501--503.) Those requirements that are relevant here are contained in United States Code Annotated, Title 42, section 503, which provides in part that the state program must be (1) 'reasonably calculated to insure full payment of unemployment compensation when due;' and (2) must provide an 'opportunity for a fair hearing, before an impartial tribunal, for all individuals whose claims for unemployment compensation are denied.'

California's procedure has qualified for federal funding. That procedure consists of an initial administrative determination as to eligibility followed by a two step process of appeal first to a referee and then to the Board, a process open to claimant and employer alike. (Unempl.Ins.C., §§ 1326--1328, 1336.) This appeal process satisfies the 'fair hearing' requirement for claimants initially determined to be ineligible.

Responsibility for the initial eligibility decision rests with the Director of the Department of Human Resources (Director) who is the Department's executive officer. (Unempl.Ins.C., § 301.) The Director is empowered to employ various personnel to assist him in administering the program. (Unempl.Ins.C., § 311.) His decision as to eligibility of a claimant is based upon evidence developed at the interview conducted with the claimant at which, in case of a dispute, both the employer and the claimant may present evidence supporting their respective positions.

If the Director's determination favors the claimant, payment of benefits begins promptly. If on appeal by the employer to the referee the claimant is found to be ineligible, benefits cease. On the other hand, if the referee upholds the finding of eligibility, payment of benefits continues even though the employer perfects an appeal to the Board. (Unempl.Ins.C., § 1335(b).) By the same token if the Director's determination is that the claimant is ineligible, benefit payments would not commence until on appeal by the claimant, the referee or the Board reversed such determination. The average time which elapses between the Director's determination and a decision by the referee on a claimant's appeal is 54 days.

Petitioner here contends that because the interviewer initially determined that he was eligible, the benefit payments became due and that the Director was powerless to change that decision upon review by the supervisor without a 'due process' hearing. In taking this position petitioner relies on California Dept. of Human Resources v. Java, 402 U.S. 121, 91 S.Ct. 1347, 28 L.Ed.2d 666 and Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287. We disagree.

In Java, the court was confronted with an attack on certain provisions of Unemployment Insurance Code section 1335 which then provided that after an initial determination by the Director that the claimant was eligible, the filing of an appeal by the employer caused the payment of benefits to be suspended until a decision was rendered on appeal to the referee. ² The time usually consumed by such appeal was from six to seven weeks.

The employer in Java failed to provide evidence of ineligibility to the Director who found the claimant eligible. The employer then filed an appeal thereby causing payments of benefits to be suspended. The court held that compensation became 'due' when the Director determined that the claimant was eligible and that permitting the employer to effect a suspension of payments by the unilateral action of filing an appeal was contrary to the 'prompt payment' requirement of United States Code Annotated, Title 42, section 503, stating: 'It would frustrate one of the Act's basic purposes . . . to permit an employer to ignore the initial interview or fail to assert and document a claimed defense, and then effectuate cessation of payments by asserting a defense to the claim by way of appeal.' (Java, 402 U.S. at p. 134, 91 S.Ct. at p. 1355.) That is not what happened here.

Pursuant to the authority of Unemployment Insurance Code section 1332(a), the Director in the instant case after first finding the petitioner to be eligible, reconsidered his decision and on the basis of the information developed in the original interview, found petitioner to be ineligible. No appeal by the employer was involved. The action was not automatic and the employer's objections had been documented. These are significant factual differences from the situation in Java.

More importantly, however, in Java the ultimate and final decision of the director as reached in the initial interview was that the...