Wilkinson v. Abrams
| Decision Date | 01 July 1980 |
| Docket Number | No. 79-2346,79-2346 |
| Parties | Joseph WILKINSON et al., Plaintiffs-Appellants, v. Maurice ABRAMS et al., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Third Circuit |
Alan L. Phillips (argued), Harold I. Goodman, Community Legal Services, Inc., Philadelphia, Pa., for plaintiffs-appellants.
Peter F. Vaira, U.S. Atty., by Walter S. Batty, Jr., Asst. U.S. Atty., Thea Duell (argued), Philadelphia, Pa., for defendants-appellees.
Before ALDISERT and GIBBONS, Circuit Judges, and GERRY, * District Judge.
This is an appeal from the order of the district court which granted the United States Secretary of Labor's motion for summary judgment and denied the cross-motion of the plaintiff class for summary judgment. This court has subject matter jurisdiction of the claims of the plaintiff class against the Secretary of Labor pursuant to 28 U.S.C. § 1331. 1
At issue on this appeal is the validity of a regulation promulgated by the Secretary of Labor ("Secretary") concerning the administrative appeal procedures utilized by state governments in state unemployment compensation programs which receive federal financial assistance. The appellants consist of a class of all persons ("Wilkinson class") who have filed or will file appeals to the Pennsylvania Unemployment Compensation Board of Review ("Board of Review") from referee decisions denying them unemployment compensation benefits and who will wait in excess of 60 days from the initiation of their appeal until a final decision of the Board of Review. 2 They challenge a regulation of the Secretary which states that such second level appeals within state unemployment compensation programs must be decided "with the greatest promptness that is administratively feasible." 20 C.F.R. § 650.3(a). The Wilkinson class contends that this regulation condones or fosters undue delays in the processing and decision of second level administrative appeals in state unemployment compensation programs. Plaintiffs raise three basic arguments: (1) that the regulation promulgated by the Secretary is invalid because it lacks a rational basis and because it fails to comport with the purpose of the Social Security Act, 42 U.S.C. § 501-504, insofar as that Act applies to state unemployment compensation programs; (2) that the Secretary is obligated by § 303 of the Act, 42 U.S.C. § 503, to promulgate regulations establishing specific timeliness criteria for the prompt processing of second level unemployment compensation appeals; and (3) that the Secretary's current regulation, and his failure to promulgate a more definite regulation, has deprived the Wilkinson class members of due process rights guaranteed by the fifth amendment. The Secretary argues that this case is moot because there are no longer any delays in the processing of second level appeals in Pennsylvania. Alternatively, the Secretary argues in favor of the validity of his current regulation.
We conclude that this case is not moot. Our review of the Secretary's current regulation convinces us that it is rationally founded and consistent with the purposes of the Social Security Act. Moreover, the regulation is not infirm under the Due Process clause. In our view, neither the Social Security Act nor the Due Process clause requires the Secretary to promulgate the more specific regulations urged upon us by the appellants. We will therefore affirm the order of the district court which granted the Secretary's motion for summary judgment and denied the cross-motion by the Wilkinson class for summary judgment.
A. The Social Security Act ("Act") establishes a federal program designed to assist states in the administration of their unemployment compensation programs. Under the Act, 42 U.S.C. §§ 501-504, states whose programs satisfy certain requirements set forth in the Act qualify for federal funding. These funds are used to pay the costs of administering the state's unemployment compensation program. Id. § 502. The Secretary of Labor is responsible for monitoring funding to the states. No grant may be made to a state for a fiscal year unless the Secretary certifies the amount to be paid. 42 U.S.C. § 502(a). The Secretary may not certify payment of federal funds unless he first determines that the state's program conforms to federal requirements. In particular, § 303(a) of the Act, 42 U.S.C. § 503(a), requires that the state provide certain procedural safeguards for individuals submitting claims for benefits under the state's unemployment compensation program. That section provides in pertinent part:
(a) The Secretary of Labor shall make no certification for payment to any State unless he finds that the law of such State, approved by the Secretary of Labor under the Federal Unemployment Tax Act, includes provision for
(1) Such methods of administration . . . as are found by the Secretary of Labor to be reasonable calculated to insure full payment of unemployment compensation when due; and
(3) Opportunity for a fair hearing, before an impartial tribunal, for all individuals whose claims for unemployment compensation are denied . . . .
42 U.S.C. § 503(a)(1), (3). The Secretary is required to stop certifying payments if he finds that the state in administering its program fails to "comply substantially" with these procedural requirements. 42 U.S.C. § 503(b)(2). No further certification of payments may be made until the Secretary is satisfied that the failure has been corrected. Id. § 503(b).
Pennsylvania, which receives federal funding for its unemployment compensation program pursuant to the Act, provides two levels of administrative review for individuals whose claims for unemployment compensation are denied. Pa.Stat.Ann. tit. 43, §§ 751 et seq. After an initial determination denying benefits is made by the Department of Labor and Industry of the Commonwealth of Pennsylvania ("Department") on the basis of submitted written information, id. § 821, an unsuccessful claimant may appeal this determination to a referee of the Board of Review. At this stage, known as a first level appeal, the claimant is given an "opportunity for a fair hearing," id. § 822, which includes an evidentiary hearing with the rights to be present with counsel, to present evidence, and to cross-examine witnesses. 34 Pa.Code § 101.86. The referee, in a written decision, will then affirm, modify or reverse the Department's fact findings and determination. Pa.Stat.Ann. tit. 43, § 822. Although further administrative review is not required as a prerequisite to federal funding under § 303 of the Act, 42 U.S.C. § 503, Pennsylvania, as is the case with many states, provides for a second level appeal from the referee's decision directly to the Board of Review. 3 The Board of Review may affirm, modify or reverse the decision of the referee, either on the basis of the record below or after taking additional evidence. Pa.Stat.Ann. tit. 43, § 824. An aggrieved claimant may then seek judicial review in the Commonwealth Court of Pennsylvania. 42 Pa.Cons.Stat.Ann. §§ 763, 5105(a)(2); 34 Pa.Code §§ 90, 101.111, 101.112. Any determination of the Department, referee, or Board of Review from which an appeal is not taken becomes the final administrative determination. Pa.Stat.Ann. tit. 43, § 829.
The regulation under attack here is one of several dealing with the promptness with which states must complete their administrative review of claims for unemployment compensation benefits to comply with the procedural safeguards required by § 303 of the Act, 42 U.S.C. § 503. 20 C.F.R. §§ 650.1-650.5. These regulations state that the Secretary interprets §§ 303(a)(1) and (a)(3) to require, as a condition of funding, that a state establish provisions mandating the issuance of decisions in administrative appeals affecting benefit rights with the "greatest promptness that is administratively feasible." 20 C.F.R. § 650.1(b). 4 The regulations further state that the Secretary's interpretation applies to both first and second level administrative appeals. 20 C.F.R. § 650.1(d). Thus, the regulations require that second appeals be decided with the "greatest promptness that is administratively feasible." With respect to first level appeals, the Secretary has provided specific guidelines concerning state compliance with the Secretary's requirements. Id. § 650.4(b). The regulations do not establish specific percentage criteria for second level appeals.
B. This appeal arises out of two companion suits filed as class actions in the Eastern District of Pennsylvania, each seeking declaratory and injunctive relief against those officials of the Commonwealth of Pennsylvania ("Commonwealth defendants") and the United States Department of Labor (referred to variously as "federal defendants" or "Secretary") who are involved in the administration of Pennsylvania's unemployment compensation program. Hower v Smith, No. 76-2063 (E.D.Pa., filed July 1, 1976); Wilkinson v. Abrams, No. 76-1932 (E.D.Pa., filed June 30, 1976). Hower challenged the defendants' administration of Pennsylvania's first level unemployment compensation appeals before the referee. Wilkinson, from which this appeal is taken, attacked the defendants' administration of Pennsylvania's second level appeals before the Board of Review. Specifically, these two cases challenged the failure of the Commonwealth defendants to render prompt decisions at both the first and second levels of administrative review and the failure of the Secretary to promulgate regulations which would adequately insure that the Commonwealth defendants promptly processed appeals at both levels. The Hower class complained that the Secretary's current regulations relating to first level appeals were ineffective because they did not require one hundred percent compliance within any particular period of time. The Wilkinson class contended that insofar as the regulations...
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