Steinberg v. Fusari, Civ. No. 15104.

• Citation: 364 F. Supp. 922
• Decision Date: 17 September 1973
• Docket Number: Civ. No. 15104.
• Court: United States District Courts. 2nd Circuit. United States District Court (Connecticut)
• Parties: Larry STEINBERG et al. v. Jack A. FUSARI, Commissioner of Labor, et al.

364 F. Supp. 922

Larry STEINBERG et al. v. Jack A. FUSARI, Commissioner of Labor, et al.

Civ. No. 15104.

United States District Court, D. Connecticut.

September 17, 1973.

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Raymond J. Kelly, John A. Dziamba, Tolland-Windham, Legal Assistance, Arthur P. Meisler, Willimantic, Conn., Elliot Taubman and Ralph U. Bergman, Legacy, Inc., Norwich, Conn., Matthew Shafner, O'Brien, Shafner & Garvey, Groton, Conn., John M. Creane and Donald H. Tamis, Bridgeport, Conn., for plaintiffs.

Robert K. Killian, Atty. Gen. of Conn., Donald E. Wasik, Asst. Atty. Gen., Hartford, Conn., for defendants.

Before SMITH, Circuit Judge, and BLUMENFELD and NEWMAN, District Judges.

MEMORANDUM OF DECISION

J. JOSEPH SMITH, Circuit Judge:

This suit presents the question of whether either the Fourteenth Amendment, or § 303 of the Social Security Act, 42 U.S.C. § 503(a)(1), requires that recipients of Connecticut unemployment compensation benefits be afforded a Goldberg v. Kelly¹ hearing prior to being deprived of such payments. In addition, this case requires us to interpret the precise precedential significance of a series of rather bewildering summary dispositions of factually related suits by the Supreme Court.² For the reasons given below, we conclude that the Connecticut system fails to meet minimal due process standards, and therefore must be enjoined.

I.

While the relevant factual background is complex, it is also undisputed, and has been the subject of a rather lengthy stipulation. Unemployment insurance benefits in Connecticut are paid entirely out of a trust fund maintained by the contributions of in-state employers, including interest and penalties.³ So long as the state program meets federal statutory requirements, its costs of administration are met by the federal government, pursuant to § 302 of the Social Security Act, 42 U.S.C. § 502. The Social Security Act requires, inter alia, that states receiving such assistance have methods of administration "reasonably calculated to insure full payment of unemployment compensation when due," 42 U.S.C. § 503(a) (1).

The claimant's entry into the unemployment compensation system begins with the filing of a valid initiating claim. Conn.Gen.Stat. § 31-230.⁴ The state system of determining initial eligibility is not under attack here. After a determination of such eligibility is made, the claimant is instructed to report bi-weekly to his local unemployment compensation office. Upon reporting, he fills out a "Continued Claim for Unemployment Compensation," (U.C.-46), upon which he swears to his availability for work and his "reasonable efforts" to find work, among other things. The claimant also fills out a "Continued Claim Work Effort Information Form," (U.C.-45) when making his bi-weekly visit. He then enters the claims line and eventually presents the completed forms to an employee of the Unemployment Compensation Department.⁵ If no questions arise, the claimant is routinely given his benefit checks for the two-week period at issue.

If the claims line employee raises an issue of possible disqualification, he sends the claimant to another line for a "seated interview." Upon reaching the head of this line, the claimant is interviewed by a "Fact Finding Examiner," who seeks to ascertain facts as to possible disqualification. If the examiner decides that the claimant is in fact qualified to receive benefits for the period in issue, he simply sends him back to the claims line, and checks are issued. If, however, the examiner decides that the claimant does not meet the statutory criteria for receiving assistance, the claimant is not given his checks, and is told that he will receive written notification of the Department's decision concerning his eligibility for the weeks in question. A letter is then sent out under the signature of the office manager, stating the reasons for non-payment and citing a statutory provision therefor.

Of necessity, questions will often arise during the "seated interview" which involve third-party information. If such a question arises, the fact finder will attempt to contact the third party while the claimant is present, and will take the information into consideration when reaching a decision. However, if the third party cannot be reached, the claims examiner may still proceed to make his own determination as to eligibility.⁶

The most common reason for the denial of benefits to a claimant is for failure to comply with Conn.Gen.Stat. § 31-235(2), which requires that applicant make "reasonable efforts to obtain work" and be "able" and "available" to do the same.⁷ Other common reasons for disqualification include refusal of a suitable job offer, see Conn.Gen.Stat. § 31-236(1), and the fact that an applicant has received some form of disqualifying income, see § 31-236(4) and (7).

The eligibility determination is made on a week-to-week basis, even though the claimant visits the office only bi-weekly. Thus, it is possible that the fact finder will conclude that a claimant failed to make reasonable efforts to find work in one of the weeks at issue, yet allow benefits for the other. Similarly, it is the Department's policy that a claimant remains eligible for subsequent time periods so long as he satisfies the eligibility requirements for those periods, without regard to his past record.⁸

The Department deviates from its "seated interview" procedure in at least two instances. If an employee of the State Employment Service Department⁹ has provided information that a claimant has refused to accept a job referral, notice is sent to the claimant scheduling a hearing for a date and time certain and advising claimant of the reason for the hearing and of his right to bring counsel and witnesses.¹⁰ The claimant then has the right to confront the employee at this hearing. In the routine case, benefits continue until the hearing is held.¹¹ Similarly, if information concerning the refusal of a suitable job comes from an interested employer — one whose "merit rating" account has been charged because of the termination of the claimant's employment¹² — notice of a proposed hearing is sent both to the claimant and the employer, and a procedure similar to the one above is followed.

However, since the majority of cases involve a fact finder's determination that the claimant has not made reasonable efforts to find work, a pre-termination hearing is the exception, rather than the rule. Once the claimant receives written notice of the fact finder's decision, he may file an appeal. This appeal is heard by an Unemployment Compensation Commissioner, see Conn.Gen. Stat. §§ 31-241 and 31-242 who determines the matter of eligibility de novo. Unless "good cause" is "shown," Conn. Gen.Stat. § 31-241, benefits for the period at issue are not paid pending appeal. No attack is made in this suit upon the procedures employed in the eventual Commissioner's hearing, which are statutorily mandated "as far as possible," to be "in accordance with the rules of equity." Conn.Gen.Stat. §§ 31-244 to 31-248.¹³,¹⁴

II.

A review of the factual situations of three of the named plaintiffs will serve to put the general background outlined above into sharper perspective.¹⁵ Larry Steinberg had filed a valid initiating claim for benefits in Willimantic on or about April 17, 1971, and received weekly benefits through October 9 of that year. On October 27, Steinberg reported to the Willimantic Unemployment Compensation Office for his bi-weekly visit, and to claim benefits for the weeks ending October 16 and 23, 1971. He was directed from the claims line to a "seated interview." After some discussion with a fact finder, Steinberg was told that he would not receive the two weekly checks at issue, for failure to use "sufficient efforts to obtain work."

A formal notice, citing the statutory requirements of Conn.Gen.Stat. § 31-235(2) was received by Steinberg on November 1, 1971, disqualifying him from benefits retroactive to October 10. Steinberg filed an appeal to the Unemployment Compensation Commission on November 5; a hearing was held on January 13, 1972. On May 10, 1972, the Commissioner upheld the Departmental fact finder; Steinberg did not seek review in the courts.

Delia Triana had received benefits in Bridgeport from June 18 through July 8, 1972. On about July 24, 1972, she visited the Bridgeport office to file for benefit checks covering the weeks ending July 15 and 22, 1972. She was directed to a "seated interview," where it was determined that she had not made sufficient efforts to find work for the two periods, and she did not receive her checks. At two subsequent bi-weekly appointments, Mrs. Triana was disqualified from receiving benefits for the period between July 29, 1972, and August 18, 1972, on similar grounds.

Mrs. Triana filed her original appeal on August 7, 1972; her case was heard on October 27. On November 10, 1972, the Commissioner upheld the denial of benefits for the first two-week period, but held that Mrs. Triana was entitled to benefits for the latter period. His decision was not appealed by either side.

Juan Miranda presents a similar situation. After the familiar "seated interview," he was denied benefits for the weeks ending August 19 and 26, 1972, on the grounds of having made insufficient efforts to find work. He was notified on September 11, 1972, that all claims from August 13, 1972, onward were disapproved on the above grounds. He filed a prompt notice of appeal; hearing was held on October 17, 1972. On October 24, 1972, the Commissioner held that the benefits from August 13 to the date of the' appeal hearing were wrongly withheld. The Department did not appeal, and Miranda eventually received checks covering this time period.

III.

We turn first to plaintiffs' request to have this suit designated as a class action. The relevant class is claimed to be all present and future recipients of unemployment compensation benefits whose benefits...