Moore v. Ross, 1308

• Decision Date: 17 August 1982
• Docket Number: No. 1308,D,1308
• Parties: Unempl.Ins.Rep. CCH 21,694 Wilbert MOORE and Malcolm Turner, individually and on behalf of all others similarly situated, Plaintiffs-Appellants, v. Philip ROSS, individually and as Industrial Commissioner of the State of New York, New York State Department of Labor; Louis Sitkin, individually and as Chairman of the New York State Unemployment Insurance Appeal Board; John A. Rogalin, individually and as a Member of the New York State Unemployment Insurance Appeal Board; James R. Rhone, individually and as a Member of the New York State Unemployment Insurance Appeal Board; Harry Zankel, individually and as a Member of the New York State Unemployment Insurance Appeal Board; and G. Douglas Pugh, individually and as a Member of the New York State Unemployment Insurance Appeal Board, Defendants-Appellees. ocket 81-7037.
• Court: U.S. Court of Appeals — Second Circuit

Page 604

687 F.2d 604

Unempl.Ins.Rep. CCH 21,694

Wilbert MOORE and Malcolm Turner, individually and on behalf of all others similarly situated, Plaintiffs-Appellants, v. Philip ROSS, individually and as Industrial Commissioner of the State of New York, New York State Department of Labor Louis Sitkin, individually and as Chairman of the New York State Unemployment Insurance Appeal Board; John A. Rogalin individually and as a Member of the New York State Unemployment Insurance Appeal Board; James R. Rhone individually and as a Member of the New York State Unemployment Insurance Appeal Board; Harry Zankel individually and as a Member of the New York State Unemployment Insurance Appeal Board; and G. Douglas Pugh, individually and as a Member of the New York State Unemployment Insurance Appeal Board, Defendants-Appellees.

No. 1308, Docket 81-7037.

United States Court of Appeals, Second Circuit.

Argued June 14, 1982.

Decided Aug. 17, 1982.

Kenneth Rothstein, The Legal Aid Society, New York City (Kalman Finkel, Morton B. Dicker, John E. Kirklin, Nancy Haber, Marshall Owen, Rachel Vorspan, The Legal Aid Society, New York City, of counsel), for appellants.

Donald Sticklor, Asst. Atty. Gen., New York City (Robert Abrams, Atty. Gen. of the State of N. Y., George D. Zuckerman, Asst. Sol. Gen., New York City, of counsel), for appellees.

Before OAKES, MESKILL and KEARSE, Circuit Judges.

OAKES, Circuit Judge:

This appeal challenges the constitutionality of two practices of the New York State Unemployment Insurance Appeal Board. Claimants Wilbert Moore and Malcolm Turner contend that the Board's practices

of reversing credibility determinations by administrative law judges (ALJs) without holding additional hearings, and of reversing ALJs' decisions without specifying the evidence relied upon, violate their rights to due process and fair hearing. Judge Robert L. Carter of the Southern District of New York found no due process violation in either practice. Moore v. Ross, 502 F.Supp. 543 (S.D.N.Y.1980). We affirm.

FACTS

Moore and Turner both applied for unemployment insurance benefits after they were dismissed from their jobs. Moore's local office determined that he was entitled to benefits, and his employer requested a hearing before an ALJ; Turner's local office found him not entitled to benefits, and he requested a hearing before an ALJ. ¹

After conducting hearings, the ALJs in both cases found the claimants entitled to benefits. In Moore's case, the crucial issue was whether he had compelling personal reasons for reporting late to work one morning. The ALJ, finding that "claimant was discharged due to his lateness after taking his son to school" when his wife was called away on a family emergency, held that Moore's lateness was not misconduct disentitling him to benefits. In Turner's case, the crucial issue was whether he had called in to report his intended absence as required by his employer's rules. The ALJ found that Turner had "report(ed) his absence and the employer (had) refused to receive the report."

The respective employers appealed these rulings to the Appeal Board, ² which reversed and denied benefits in both cases. The Board did not hold a further hearing in either case, but based its decision on the record and testimony already developed. In Moore's case, the Board's opinion stated:

The credible evidence establishes that claimant was late on December 19, 1977 after receiving warnings about latenesses. Although he knew that he would be late on that day he failed to notify his employer. In view of the contradictions in claimant's statements, we reject his contention that he was late due to a compelling reason. We conclude that the claimant lost his employment through misconduct in connection therewith.

In Turner's case, the Board's opinion stated:

The evidence establishes that claimant did not call his employer within one hour prior to his starting time, as the employer required. Significantly, claimant had been placed on final warning and he knew that his job was in jeopardy if he continued to violate the attendance rules. We reject claimant's contention that he notified a co-worker of his absence, in view of the co-worker's testimony to the contrary. Under the circumstances we conclude that claimant lost his employment through misconduct in connection therewith.

Neither claimant appealed the Board's decision in his case to a state court. ³ Instead Moore and Turner filed a class complaint in the Southern District of New York for declaratory and injunctive relief and damages, alleging that the Appeal Board's challenged practices were invalid under both the Due Process Clause of the Fourteenth 1) It is a policy and practice of the New York State Unemployment Insurance Appeal Board to review de novo and make a de novo determination on all issues, including credibility, without necessarily holding a further hearing.

                Amendment and the fair hearing requirement of the Social Security Act.  4  The parties stipulated that the challenged practices were the following:
                

2) It is a policy and practice of the New York State Unemployment Insurance Appeal Board to make findings of fact, opinions and decisions, including reasons, without specifying the evidence relied upon other than a reference to the record and without necessarily making reference to the decision of the Administrative Law Judge.

The parties then cross-moved for summary judgment, and appellants moved for class certification. Judge Carter granted the appellees' motion for summary judgment, denied class certification, and dismissed the complaint.

DISCUSSION

A. Reversals of Credibility Determinations

Judge Carter held that the Appeal Board's practice of reversing ALJs' credibility determinations without holding further hearings does not violate due process. First, he found that in both Moore's and Turner's cases, the Appeal Board "made a bona fide effort to justify credibility reversals by reliance on matters in the record ...." Moore v. Ross, 502 F.Supp. at 554. The Board did not depart from the ALJs' "testimonial inferences," i.e., inferences dependent on observation of the witnesses' demeanor, Judge Carter reasoned, but rather drew contrary "derivative inferences" based on other evidence in the record. Id. (citing Penasquitos Village, Inc. v. NLRB, 565 F.2d 1074, 1078 (9th Cir. 1977)). While the Board could not legitimately draw its own testimonial inferences "without seeing and hearing the witness personally," Judge Carter wrote, the Board's reliance on derivative inferences in reversing an ALJ's credibility determination is not inherently arbitrary. 502 F.Supp. at 554.

Second, Judge Carter suggested, the availability of judicial review of the Board's decisions in the state courts, N.Y. Labor Law § 624, diminishes the likelihood that erroneous determinations will go unredressed. 502 F.Supp. at 553. Thus even though Judge Carter acknowledged that an individual's interest in unemployment benefits, similar to that in welfare benefits, see Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970), is "vital," 502 F.Supp. at 551, he suggested that existing state procedures satisfied the requirements of due process under the standards set forth in Mathews v. Eldridge, 424 U.S. 319, 335, 349, 96 S.Ct. 893, 903, 909, 47 L.Ed.2d 18 (1976).

We affirm, although we do not adopt Judge Carter's first rationale. We readily agree that the Appeal Board would be free to overrule an ALJ's findings crediting or discrediting a witness's testimony if those findings were in conflict with strong inferences from documentary evidence, from undisputed facts in the record, or from other evidence credited by the ALJ, see Utica Observer-Dispatch, Inc. v. NLRB, 229 F.2d 575, 577 (2d Cir. 1956). We do not think it quite accurate, however, to characterize the Board's reversal in Moore's or Turner's case as depending solely on such derivative inferences.

In Moore's case, it is true that the Board found evidence in the record that Moore had previously been late and had been warned about lateness. These findings were relevant to determining whether any one lateness constituted misconduct under N.Y. Labor Law § 593(3), see Ramsey v. Ross, 63 A.D.2d 1061, 1061-62, 405 N.Y.S.2d 808, 810 (3d Dep't 1978), and involved no reversal of a credibility determination by the ALJ, who did not mention or implicitly discredit this evidence in her opinion. But the Board's decision reversing the ALJ also rejected Moore's account of his reasons for being late on the day he was fired "(i)n view of the contradictions in claimant's statements." On cross-examination during the hearing, Moore had resolved the "contradiction" between his statement that he drove his son to the school bus stop and his statement that he drove his son to school by explaining that he drove his son to the bus stop and then, because the bus was late, directly to school. It is implicit in the ALJ's opinion that she believed him. Thus the Appeal Board's decision turned at least in part on the Board's substitution of its own testimonial inferences concerning Moore's credibility for those of the ALJ.

In Turner's case, the Appeal Board similarly took into account record evidence of previous latenesses and warnings, but it also plainly resolved conflicting testimony in the opposite way from the ALJ. The ALJ explicitly found from Turner's testimony that Turner had called to report his intended absence, but that "(t)he person receiving the call, a shipping clerk, (had) declined to pass the word along," and that Turner's further attempted calls to the personnel manager had not been put through. The ALJ thus implicitly discredited the employer's witnesses, who testified that Turner had not telephoned. The Appeal Board, however, stated, "We reject claimant's contention that he notified a co-worker of his absence, in view of the co-worker's testimony to the contrary," a credibility determination material to...