INDIANA EMPLOYMENT DIVISION v. BURNEY
Argument of Darrel K. Diamond
Chief Justice Warren E. Burger: Mr. Diamond.
Mr. Darrel K. Diamond: Mr. Chief Justice and may it please the Court.
This appeal by the Indiana Employment Security Division presents the issue of validity of certain practices used by the Division in determining the eligibility of claimants for unemployment compensation benefits.
These practices which are called for by the Indiana Law, were held by a three-judge district court not to comply with requirements of the Social Security Act.
Chief Justice Warren E. Burger: Before you move further Mr. Diamond it would help me if you clear up the situation, the factual situation.
As I understand it the appeal board reversed the division officer's decision to terminate these benefits and so what is the posture of the benefits now?
Were they allowed, and are they being paid?
Mr. Darrel K. Diamond: Are you referring here Mr. Chief Justice to Mrs. Burney's case if it is a General rule?
I am afraid, I don't understand the question.
Chief Justice Warren E. Burger: Well, somewhere in this massive material, I got the impression that the division officer in this case --
Mr. Darrel K. Diamond: In this case --
Chief Justice Warren E. Burger: -- have reversed -- had been reversed by the appeal board and that the benefits denied by the division officer were then granted.
Mr. Darrel K. Diamond: They had in fact been granted much earlier on the basis of the preliminary injunction and temporary restraining order issued by the district court.
The facts of Mrs. Burney's particular case were moot well before the district court entered its judgment.
In fact, it became moot at the time the referee providing the type of hearing which was required by the district court order determined that she was not eligible for benefits.
In this case, the first determination by the deputy was that Mrs. Burney was not eligible for benefits in that she was unduly restricting the hours in which she was available for work.
The referee after a full hearing upheld that determination.
The review board after going over the case, hearing argument determined that the restriction upon her hours of possible work was not so severe as to indicate that she was not available for work within the statutory meaning.
Justice Byron R. White: And then what happened?
Mr. Darrel K. Diamond: At that time her case was completed.
There was no appeal to the Indiana Court of appeals on this.
So, Mrs. Burney's case was moot at this point in the same way that the Java case, also an unemployment compensation case, was moot well before it ever came before the courts for final decision.
This was a class action, although her particular claim was not designated as such.
The district court clearly stated that it was ruling on behalf of Mrs. Burney and of a subclass within the original case.
In the original case, there were actually two questions.
One being precisely identical to the Java issue and the other Mrs. Burney's case.
So the district court divided this into two subclasses while Mrs. Burney's particular case was moot at a very early stage this is a class action within the scope of the district court opinion.
Justice Byron R. White: She is the only named plaintiff within this subclass?
Mr. Darrel K. Diamond: Yes she was.
Unknown Speaker: There has been no (Inaudible)
Mr. Darrel K. Diamond: That is correct.
She intervened in the complaint which was filed by Mr. Hayatt.
Justice Potter Stewart: And that was a class action and that had to do I guess rather directly with the doctrine of the Java case and that was decided and that is not an issue before us.
And she was the only in -- she was an individual intervener in that case, was she not?
Mr. Darrel K. Diamond: She was an individual intervener within the scope of her case.
However, the district court in its order spoke of its ruling as going to a subclass within the initial order.
So we are really --
Justice William J. Brennan: Can you name the person who have subclass to it?
Mr. Darrel K. Diamond: No, Your Honor.
Unknown Speaker: Can you give me some subclass that deprived exactly?
Mr. Darrel K. Diamond: I can not give you the exact language, but it was all persons who had initially been determined eligible for benefits and then at a later time had been administratively determined no longer to be eligible.
Justice William H. Rehnquist: Mrs. Burney was only one of that class who was either an intervener or a named plaintiff?
Mr. Darrel K. Diamond: That is correct, Your Honor.
Justice Byron R. White: And her case is now have been terminated because she is receiving benefit?
Mr. Darrel K. Diamond: In fact her benefit eligibility period ran out some time ago, Your Honor.
Justice Byron R. White: Oh!
I see, so she is really out of the case?
Mr. Darrel K. Diamond: Yes.
Justice Thurgood Marshall: And (Inaudible) named for as of this moment?
Mr. Darrel K. Diamond: There it was none.
In considering the question of determination of the --
Justice Byron R. White: Under our cases, under controlling cases, what is the situation then?
Do we still have a live case here?
When the only -- when there is no named plaintiff still with case of controversy?
Mr. Darrel K. Diamond: I cannot say definitely.
We thought it would be better to see if we get determination because this was fair representation and the fact that the district court order did not depend upon the facts of the individual case.
District court order was very general.
Justice Thurgood Marshall: What (Inaudible) issue an advisory opinion?
Mr. Darrel K. Diamond: This would not be an advisory opinion Your Honor because it is an injunction which is against the division.
Justice Thurgood Marshall: Who is the controversy between?
Mr. Darrel K. Diamond: At first point the controversy would be between the division and all persons within the subclass as designated by the district court.
Justice Thurgood Marshall: Is there any case you know that we have held that?
Mr. Darrel K. Diamond: No, Your Honor, I do not know of that of any such case.
Justice Thurgood Marshall: And where did we get jurisdiction.
Who do we -- suppose the other side looses, who do you assess costs against, the class?
Mr. Darrel K. Diamond: I cannot give a firm answer.
This is an in forma pauperis appeal of course.
So the question of cost may be --
Justice Thurgood Marshall: But who is the pauper?
Mr. Darrel K. Diamond: Originally --
Justice Thurgood Marshall: Is the class is the pauper?
Justice Byron R. White: They are not pauper.
Justice Thurgood Marshall: The class is pauper.
I don't understand where we have any jurisdiction over this at all, without a named party.
I thought, all class actions required one party that had a right to maintain the action in his own behalf.
Am I right or wrong?
Mr. Darrel K. Diamond: I would have to agree with you.
Justice Thurgood Marshall: And we don't have such a party?
Mr. Darrel K. Diamond: So far as I know there is no such party in this case.
Justice Byron R. White: You would be satisfied I suppose, wouldn't you, if the -- or would you, if the decision of the district court were vacated?
Mr. Darrel K. Diamond: If the injunction --
Justice Byron R. White: No the judgment is vacated?
Mr. Darrel K. Diamond: Yes, as far as the Indiana procedure is concerned --
Justice Byron R. White: Accept the your court hasn't decided one way or another, I suppose?
Mr. Darrel K. Diamond: One way or the other because there are other cases which would have to be decided but presenting exactly the same issue.
Chief Justice Warren E. Burger: What would the same?
Isn't it that you would like an advisory opinion from the court to govern future faces or strike advisory would like an opinion from the court governing future cases?
Mr. Darrel K. Diamond: Governing future cases and the cases by which we are now operating.
If this were dismissed and the district court judgment were held of no effect.
Then the initial effect would be exactly the same unless of course a new action were brought.
Justice Byron R. White: Could I ask you, sense to judgment of the district court has Indiana been following it or not?
Mr. Darrel K. Diamond: Yes, Your Honor, since that time when a deputy has made a determination of ineligibility, if the claimant files a notice of appeal benefits are still paid until the referee hears it and enters a decision --
Justice Byron R. White: So, this practically guarantees that there are no other members of this class?
Mr. Darrel K. Diamond: Within the terms -- at the present time if this were vacated it would go and go back our assume to the prior practices, this would be a decision made by the division and not by our office and then the class would come back into and the injunction was no longer in effect.
Justice Byron R. White: The fact is that there is probably no other member of this class who could now intervene in the lawsuit because you have made sure there isn't any other member of the class?
Mr. Darrel K. Diamond: That is true because we would like to follow District Court injunctions.
Chief Justice Warren E. Burger: If the district court Injunction were vacated, you would soon have a lot of people coming into that class?
Mr. Darrel K. Diamond: I would assume so because I would assume the decision is not my to make, but as soon as Division would then go back to something like its prior practices.
If I may then, deal briefly with the types of determinations which are involved here.
In determining a claim for benefits, there are basically three determinations to be made, breaking this down into three as far as appropriate analysis, as a matter of law, there are only two.
The first of these is the determination of insured status.
This is merely whether the claimant has had enough work and has earned wage credits in a covered employment to be eligible for benefits if he meets the eligibility requirements.
This determination says nothing about whether the person is eligible or not eligible.
In fact, a person can even request this determination when he is still employed.
The second determination goes to eligibility and this, I have broken down into two parts.
The first issue, going to the reason for termination of the prior employment, that is basically whether the termination was attributable to the employer or to the employee.
The third issue, which is involved in this case is a continuing question of the conduct of the claimant during the period of the unemployment.
Each week, the claimant is required to well, continue to be unemployed, to be able to work, to be available for work, to be making an independent effort to secure work, to not have refused an offer of a suitable job or not have refused instructions by Division to apply for a job which would be suitable.
This determination is made each week by the Division and it is on this basis that the determination of eligibility for that week is made.
There is never any determination by the Division which would have any effect for any week prior -- past the time of that week.
This is like, in a sense, pay for looking for work and you don't get paid until after you have done the job.
When a person comes in each week to present his claim, he is required to establish that he has met these criteria.
This establishment may come about by his certification, upon the voucher form that he has met these requirements.
It may come by an interview or a hearing, an interview type hearing with a Claims Deputy.
This hearing would be basically similar to the hearing on an initial claim which was described by this Court in its opinion in the Case of California Department of Human Resources Development versus Java.
The party, the claimant is called in, the question which raises the doubt is discussed.
If there is anyone else who would have information, the Deputy finds that information and he reaches a determination of whether or not the person was eligible for that particular week.
That decision is as much an initial decision in that sense as is the first week.
The only difference being that in the normal situation, it is not necessary each week to determine the questions of why the previous employment was terminated.
In this case, Mrs. Burney was determined by the Division, by the Deputy not to be available for work in that she was unduly restricting the hours for which she was available for work and the other case was presenting the same issue, in the New York case of Torres, there was the plaintiff Mr. Dinger who was found by the Division not to be making an effort to secure work.
In the Vermont case of Wheeler versus Vermont, there was a determination there that the claimant had refused to seek work when directed by the Division.
In the California case, Mrs. Crow was determined to have refused an offer of suitable work.
When these questions arose, it was necessary to make a determination of the prior week's conduct because each of these questions is a condition precedent to eligibility for unemployment compensation benefits.
This is a different type of system than the welfare system, in which there is an initial determination of status such as a family has a child or children who are dependent within the definition of 42 U.S.C Section 606, that is, a needy child living with a designated relative who is deprived of the parental support of at least one parent.
In those cases, once a determination is made, it continues in effect and it was necessary to have a hearing because a prior determination having continuing effect is now being changed.
The welfare recipient has no such affirmative duties to go out and look for work, to be available for work and not to review his work.
So, we have a completely different situation here.
The welfare situation is not applicable to this case at all.
In looking to this Court's decision in Java last year which was held by the District Court to be dispositive of the issue, I believe that the rule of law of the Java Court actually supports the position of the Division in this case.
In Java, you had an initial determination by the Deputy in the California Department, as to the eligibility of a particular claimant.
After that determination had been made, one of the parties to that case filed a notice appeal and that notice or appeal was sufficient in itself to call for determination of benefits, even though in that case, the Division had determined that the benefits were due.
So, you were allowing a party to upset the decision of the impartial agency.
In this case, we merely have the other party seeking to overturn the decision of the impartial agency that benefits are not due, this is merely two sides of the same coin.
I would emphasize in this respect that the Indiana Employment Security Division is an impartial arbiter in these cases.
The State of Indiana and the Division have no interest in whether or not these payments are made, in the sense that the money used to pay these benefits comes from employers and not from the state treasury.
The administrative expenses so long as the plan is held to be in compliance with the Federal Law are paid by the Federal government.
The interest of the state agency is merely in having a workable system in which the authority of the impartial arbiter is upheld and the duties placed upon claimants by the Social Security Act and the State Unemployment Compensation Laws are met.
When Congress passed the provision to the Social Security Law dealing with the questions of Unemployment Compensation, they had before it a general outline of what Unemployment Compensation plan would be like and this included these issues.
The District of Columbia Unemployment Compensation Code which was then passed by Congress, includes the same provisions.
So as a result we have the determination by the agency that a party is not eligible for benefits.
We have a claimant for whatever reason, in most cases probably because of a sincere questions as to the fact but as was pointed out in the Java case possibly by an arbitrary desire or merely by a desire to apply short run benefit may file a frivolous appeal.
There is no way to determine this until the referee decision has been made and in some cases on from there to the Review Board and from there to the Indiana Court of Appeals.
The issue of due process has been presented in this case.
I am not sure that it is this issue in this case except to in the following way.
The District Court did not rule on the due process issue presented under Goldberg versus Kelly.
It did, however, require the division to provide a prior due process hearing and did not explain what that hearing should consist of.
Division filed a motion for amendment of judgment to show what that hearing would consist of and the District Court refused that motion being unable or unwilling to say what a due process hearing is.
I believe it's clear from the law that there is no such thing as a due process hearing in the sense of a specific set of requirements.
Due process is a much more general phrase which would vary from period to period and from case to case.
What is due process in one situation would not be due process in another.
And what maybe a denial of due process in one situation would provide due process in another situation.
Therefore, it's necessary to look at this question within the realm of the unemployment compensation and not in the question of welfare even though both of these are programs under the Social Security Act and determine whether the deputy determination would be a proper determination in this case.
Whether the deputy determination is itself a due process hearing within the scope of the District Court order.
Since the District Court refused or wasn't able to clarify that order, the Division felt it was necessary to give it the strictest possible interpretation because they didn't know what might put them in contempt of Court.
Justice William J. Brennan: What mode of hearing is in fact given?
Mr. Darrel K. Diamond: Since the injunction was presented, there is the deputy determination which is basically the same question -- the same procedure as was presented in the Java case, that is the deputy interviews the claimant, interviews other persons having information about it.
Now in the above both the cases for example frequently there will be no employer party because the prior employer would have no way of having knowledge as to the behavior of the claimant after this period.
After all of this information is presented and in most of these cases the information comes exclusively from the claimant himself, the deputy determines the facts and determines whether that brings a person within one of the limitations, whether in that situation the person is eligible.
However, since the District Court injunction was entered, the deputy determination did made in the same way.
However the deputy determination of ineligibility is not given effect if the claimant expresses a desire to appeal to a referee, but rather benefits are paid despite the fact that there has never been a determination of eligibility for that period until a referee hearing and the written formal referee opinion is handed down.
Chief Justice Warren E. Burger: Would again espouse just how is that different from what occurred before the injunction?
What did you do before the injunction?
Mr. Darrel K. Diamond: Before the injunction when the deputy made determination, that's if the deputy determined that then -- the claimant was not eligible for benefits, benefits are not paid for that week.
Justice William J. Brennan: Then I gather the claimant appealed and prevailed on the appeal and benefits were resumed, would they be retroactive?
Mr. Darrel K. Diamond: They would be retroactive.
Justice William J. Brennan: And were you not constrained as you believe you are by the injunction, to do what you are presently doing?
I take it you would back to that procedure, wouldn't you?
Mr. Darrel K. Diamond: I believe that it would go back to that procedure.
This is -- that rule made by the Division Court is not --
Justice William J. Brennan: Yes, but I gather then the real problem here is whether pending decision on the appeal by the referee and benefit shall or shall not be terminated?
Mr. Darrel K. Diamond: Well, that is basically the question.
However, I would have to take issue with the statement you used in that there is no termination of benefits.
This is a one point I would like to emphasize most clearly.
Justice William J. Brennan: This is simply not paid?
Mr. Darrel K. Diamond: Simply – except there has never done any determination that the claimant was eligible for any period other than past weeks and the question of what happened in past weeks does not control what happens in the week in question?
Chief Justice Warren E. Burger: What you were saying is that there is a burden of proof every week on part of the claimant and must meet that burden of proof?
Mr. Darrel K. Diamond: Yes.
He must come in and certify has met these requirements.
He must fall of the certification or if it's a time when there is interview, at that time they will discuss what he has been doing during the time, what efforts he has made to secure work, what he is been doing.
At that time also they might suggest other ways of finding work, perhaps looking in a slightly different field, checking to see if there is some other type of skill which the employee -- which the claimant has, which would enable him to find work in a slightly different field.
This is not merely an attempt by the Division to do a person out of benefits.
It's an attempt to find out whether the person meets the criteria and try to find a way to find him a job.
Justice Harry A. Blackmun: Mr. Diamond it's probably of no consequence, but a while back you said the fund came from the employer.
Is there no contributory aspect to this at all, nothing taken out of the employee's salary while he is working?
Mr. Darrel K. Diamond: As I understand it, I believe it is unlawful for the employer to attempt to deduct any of this contribution from the employee's wages.
Justice Harry A. Blackmun: So in theory it's non-contributory fund?
Mr. Darrel K. Diamond: It is not a contributory fund.
This is simply a payment by the employer himself.
No claimant money involved, no state money involved.
Justice Lewis F. Powell: Mr. Diamond, is there a time limitation on the theory within which an appeal maybe made from the decision of the deputy to the referee?
Mr. Darrel K. Diamond: Yes there is.
Justice Lewis F. Powell: What is that?
Mr. Darrel K. Diamond: I believe it is 10 days in the normal case.
In certain cases where you have an interstate claimant and the like, it maybe 15 days, but ordinarily the appeal must be presented within that period of time and under Indiana law that time limit is jurisdictional for consideration by the next highest club.
Justice Lewis F. Powell: Well that is the time limit on the filing of the appeal.
What is the experience been in the terms of how promptly a hearing maybe had before the referee?
Mr. Darrel K. Diamond: This varies according to the staffing of the department and according to the case load at the time.
At the time that Mrs. Burney's case arose, it was a long period of time, perhaps 10-15 weeks.
At the present time, most -- about half of the cases or more -- are being decided by the referee within 30 days.
This is because primarily of an increase in the staffing and partly because this is a little bit soccer time for claims, not has been any claims are being presented.
Justice Lewis F. Powell: And what type of hearing is now afforded they claim on before the referee, his counsel provided or allowed, may witnesses be called?
Mr. Darrel K. Diamond: Before the deputy -- there were two questions unless I fail to understand all the -- both of them?
Justice Lewis F. Powell: The question I asked was whether at the hearing before the referee what elements of due process are now provided in light of the injunction of the district court, how do they compare with what previously existed?
Mr. Darrel K. Diamond: The injunction of the district court did not affect the referee hearing.
This is an administrative hearing of counsel.
The parties are given notice.
They are told that they may bring witnesses.
They may bring counsel or any other person to assist them in presenting their case.
If a party is not represented the referee is given the duty of helping them present their case of bringing out all the facts which might be relevant to it.
It is like a court hearing in a sense, except that the referee has greater duties to make sure that the facts are presented then would an impartial judge who merely sits back and decides what the case is like.
It might be like a smoke flame cordon in many areas.
I don't think that there is any question but that that the referee hearing would provide the due process elements under Goldberg.
Justice Lewis F. Powell: This is true before an injunction?
Mr. Darrel K. Diamond: This was true both before and after.
The practices of the division had not been changed by the injunction except to the extent that the determination by the deputy of non eligibility is no longer given effect.
That is the only difference in the procedure at this time.
Justice William J. Brennan: In other words, benefits are paid pending a decision of the appeal?
Mr. Darrel K. Diamond: That is right Your Honor.
Justice William J. Brennan: I was just wondering what's maximum number of weeks in benefits?
Mr. Darrel K. Diamond: The benefit year can be up to 52 weeks, if there is a situation -- a substantial unemployment then under a federal program.
There can be an extended benefit period beyond this.
Justice William J. Brennan: Have you any idea what this payment of benefits pending the decision of the referee has met in other terms?
Mr. Darrel K. Diamond: I do not have those figures for Indiana.
I don't believe those figures have been calculated.
Indiana is also in this regard a small state.
We have only --
Justice William J. Brennan: California's amicus brief suggests 50 million dollars in the case of that state?
Mr. Darrel K. Diamond: I believe the information I received from their office when last talking to them was that the an affidavit in the record in the co-case in California indicated that the total cost be something like the 167 million dollars there.
This was in extra employer contributions and extra administrative expenses.
If the benefits are found to be paid erroneously and is necessary to try to bring them back by either collecting the money or not paying for future weeks' of eligibility.
This requires extra administrative help.
For example, the Indiana Polis local claims office; before the injunction had one worker spending about half of his time on recouping erroneous payments.
Now this one office has two employees full time on this case and this is only the one local office.
So there is an extra administrative load which the expense of this is probably on the United States government and not upon the state government, but it is an extra administrative expense and extra administrative burdens.
Justice William J. Brennan: Do I infer from what you said that now that you are paying benefits pending the appeal, were the claimant loses an effort us made to recoup either by getting the money back or perhaps against not paying future benefits?
Mr. Darrel K. Diamond: That is correct.
Justice William J. Brennan: And how successful is that then?
Mr. Darrel K. Diamond: -- I don't know that the figures are available for this latest period. Previously they were receiving kind of big payment I think about 60%-70%, I am not sure of the exact figure but as I remember it's in that area.
Justice Byron R. White: Could I ask you this when there has been a initial determination of eligibility and then as you say each week there is a necessity of the redetermination of eligibility, that redetermination is normally made most often made just on the papers, just on the certification that is received?
Mr. Darrel K. Diamond: Yes, Your Honor.
When they claimants comes in to the office.
Justice Byron R. White: Yes, but each week he doesn't have to come in the each week, does he?
Mr. Darrel K. Diamond: Yes he comes in each week (Voice Overlap) for benefits.
Justice Byron R. White: He cannot get it by mail?
Mr. Darrel K. Diamond: Only in exceptional cases where the agency will --
Justice Byron R. White: So he comes in each reach and he fells out a blank for that week?
Mr. Darrel K. Diamond: Yes the voucher form which he fills out is a blank IBM card which would be punched later and includes the statement, “I hereby certify that I fulfill the registration for work requirements, that during the compensable week covered by this voucher I was unemployed, physically fit available for and actively seeking work except as noted herein.”
Justice Byron R. White: Every man on your initiative there is an interview?
Mr. Darrel K. Diamond: Yes, periodically.
Justice Byron R. White: Periodically?
Now is a determination of ineligibility after an initial determination of eligibility, is a determination of ineligibility for some future week ever made without an interview, just on the paper?
Mr. Darrel K. Diamond: If the --
Justice Byron R. White: How about in this case, was there an interview?
Mr. Darrel K. Diamond: There was an interview and it was at the interview that the information came out.
Justice Byron R. White: Right, but is it ever done just on certification I suppose --
Mr. Darrel K. Diamond: Well if the person refuses to sign a certification and there can be no payment because this voucher must be signed and sent in and is from this voucher that payment is made.
Justice Byron R. White: But if --
Mr. Darrel K. Diamond: If there is a question which arises the claims taker will then refer that to a deputy for the full interview hearing type.
Justice Byron R. White: Well, does it ever happen that he would refuse to sign the voucher?
Mr. Darrel K. Diamond: I am sure it will be unusual, but I was told that everything happens and it does happen except it will be unusual --
Justice Byron R. White: If that happens do they take action on it without have asking what's wrong,without asking him for an interview -- at an interview?
Mr. Darrel K. Diamond: If there is a question ordinarily any time the claims taker presents, sees any issue this is to be referred to a deputy for a full interview to find out what the situation is.
Justice Lewis F. Powell: If (Inaudible) brief stated that prior to the decision of the judicial court on appeals from the deputy to the referee that there were reversals in about 49% of the cases, what has been the experience in respect of appeals since the district court injunction?
Mr. Darrel K. Diamond: It has been about the same.
Justice Lewis F. Powell: No change?
Mr. Darrel K. Diamond: No significant change, Your Honor.
I would point out in relation to these statistics that I think I covered this in reply brief, but I don't think these are really relevant to the case and in any event these are surely a somewhat comparable reversal at the review board of the referee and in addition I would point out to the Java decision when this Court spoke with an air of approval it seems to me of the Java procedure, it pointed out in a footnote in that case, footnote 7 of the number of reversals from the deputy to the referee and it was just looking at the referee somewhere in the 30% area.
So this apparently, I don't know to what extent it was covered in Java, but this was before record in Java and the Court still spoke of it Your Honor.
Chief Justice Warren E. Burger: Mr. Bodensteiner?
Argument of Ivan E. Bodensteiner
Mr. Ivan E. Bodensteiner: Mr. Chief justice and may it please the Court.
On the question of mootness this case comes up in exactly the same posture as Java did.
It comes up in exactly the same posture as Goldberg did.
In other words, in Goldberg the welfare receipts had also resume receiving benefits and had their hearing before the case reached this Court and before it was finally decided in the lower court.
By the very nature of the problem what I were dealing with here, the problem of --
Justice Thurgood Marshall: (Inaudible) to get the same problem again in both those cases?
Mr. Ivan E. Bodensteiner: In Java and Goldberg?
Justice Thurgood Marshall: Huh huh.
Mr. Ivan E. Bodensteiner: It would be true as much in this case as it was in Java.
In other words in Java presumably Mrs Java could at some point in the future have another claim.
Here also Mrs. Burney could have another claim.
In the area of (Inaudiblt) they could also have another claim, that is correct
Justice Thurgood Marshall: You got any other reasons says that this is a good case in (Inaudible).
Mr. Ivan E. Bodensteiner: Pardon.
Justice Thurgood Marshall: Any other reason that says this is a case in controversy as off now?
Mr. Ivan E. Bodensteiner: Yes, and as we do it as always --
Justice Thurgood Marshall: Wouldn't it been much easier to intervene somebody?
Mr. Ivan E. Bodensteiner: Well, I think Your Honor after the -- after the injunction was issued, it did cover the entire class.
In other words the lower court defined the class as any recipient --
Justice Thurgood Marshall: Any number of that class could intervene?
Mr. Ivan E. Bodensteiner: That could have, except that after the injunction was issued they were all receiving the benefits of the order.
In other words, the state was under a injunction not to terminate anyone in the state without a hearing.
Justice Thurgood Marshall: Why couldn't they intervene to protect that?
Mr. Ivan E. Bodensteiner: There is one answer-
Justice Thurgood Marshall: As I understand the law of class action is any member of the class can intervene at any time, am I right?
Mr. Ivan E. Bodensteiner: Yes.
Justice Thurgood Marshall: Why hadn't somebody, why had no body intervened?
Mr. Ivan E. Bodensteiner: The problem is that, they didn't --
Justice Thurgood Marshall: It's actually just not as to say that, you don't have to insist on that?
Mr. Ivan E. Bodensteiner: No Your Honor, the reason no one intervened is because they were receiving the benefits of the order and as long as their benefits were not being terminated without a hearing they had no reason to intervene.
Justice Thurgood Marshall: Who do you represent then?
Mr. Ivan E. Bodensteiner: I represent Mrs. Burney and all members of the class as defined by the lower court.
I think what is important here is because of the very nature of the problem we are dealing with as the court was dealing with in Goldberg, the question is when do you get a hearing.
After the hearing is granted, there is no permanent member, no permanent class representative.
The problem continues as was indicated earlier that if the order is vacated, we will probably be back in the same circumstances, since it will be necessary to re-litigate the matter.
So in spite of the fact that Mrs. Burney has in fact received her hearing, as in fact received her benefits, the case is though is still ripe and there is still a controversy.
Now this Court in addition to Java and Goldberg has ruled similarly in some of the earlier cases.
In Motor Coach Employees versus Missouri in 1963 involved a labor dispute and a seizure of property by the Governor of Missouri.
The property was released before the appeal or reached the court and this Court still ruled on the question.
Likewise in Carroll versus Princess Anne College where students were enjoined from rally.
Justice Thurgood Marshall: But in this case she is no longer eligible to anything?
Mr. Ivan E. Bodensteiner: Not on this particular claim.
Justice Thurgood Marshall: She is now not a member of the class, am I right or wrong?
First of all what is the class?
Mr. Ivan E. Bodensteiner: The Class is defined as all present, future recipients of unemployment compensation benefits in the state of Indiana.
Justice Thurgood Marshall: And she is no longer eligible?
Mr. Ivan E. Bodensteiner: She is not eligible on the basis of that particular claim.
Justice Thurgood Marshall: Well, how is she a member of the class?
Mr. Ivan E. Bodensteiner: She would be a member of the class as a --
Justice Thurgood Marshall: My question is how is she a member of the class as of now?
Mr. Ivan E. Bodensteiner: To the extent that it covers future recipients of unemployment compensation benefits, she could be.
Justice Potter Stewart: Well, that is everybody employed in the whole state, is in that class.
Everyone is a potential recipient of the future unemployment compensation?
Justice Thurgood Marshall: Including the deputy attorney general?
Mr. Ivan E. Bodensteiner: Possibly.
Alright, turning to the narrow issue presented in this appeal, the question is very simply whether unemployment compensation benefits of an unemployed worker has been determined eligible for benefits, has began receiving benefits can be terminated without a prior evidentiary hearing.
We claim there is a right to such a prior evidentiary hearing under both the Social Security Act and the U.S Constitution.
The case can be decided on statutory grounds without reaching the constitutional issue.
Justice William J. Brennan: (Inaudible) in Java?
Mr. Ivan E. Bodensteiner: Exactly Your Honor.
Java and the Section 303 (a) (1) and 3 of the Act.
Justice Potter Stewart: Or do you mean Goldberg?
Mr. Ivan E. Bodensteiner: Goldberg on the constitutional issue, Your Honor, Goldberg reached the constitutional issue involved in the welfare situation.
Chief Justice Warren E. Burger: Do you say the eligibility factors are the same in this kind of case as in a welfare case under Social Security?
Mr. Ivan E. Bodensteiner: There are different eligibility criteria.
They are both Social Security Act programs.
The Social Security Act welfare aspects were aimed at those pretty much unable to work, the blind, old, disabled and children.
In the area of Unemployment Compensation Benefits, Congress was dealing with those who were working, suddenly out of work for a short-term period and Congress was interested in taking care of their short-term need and for this reason, we feel the case is even stronger on the constitutional issue in Goldberg.
We're dealing with more complex factorial issues.
The interest of the State are much less than the interest of the State that were explored in Goldberg.
Justice William J. Brennan: (Inaudible) exclusively public fund?
Mr. Ivan E. Bodensteiner: That is one reason, Your Honor.
Another reason is the recouperment rate.
As our brief indicates, the State recoups over 72% of any wrongful payments.
Justice William J. Brennan: I wonder why that is.
The recoup it by denying future benefits until that --
Mr. Ivan E. Bodensteiner: That is one way, Your Honor and the other way is we must remember we are dealing with people who are working as opposed to welfare where this Court recognized that there would in effect be no recoupment.
Justice Byron R. White: Well, I take that one of your propositions is that the Indiana method of determining initial eligibility for compensation does not comply with Goldberg against Kelly.
Mr. Ivan E. Bodensteiner: Now, Your Honor, we're not dealing as the court below pointed out, we are not dealing here with claimants found initially ineligible.
Justice Byron R. White: Hold on, I will ask you if this.
Do you think that the method for determining eligibility or the ineligibility initially in Indiana comports with Goldberg against Kelly?
Mr. Ivan E. Bodensteiner: No, that comports with the procedure outlined in Java for determining --
Justice Byron R. White: So you don't think that the procedure outlined in Java for determining initial eligibility for unemployment compensation would pass muster under Goldberg against Kelly?
Mr. Ivan E. Bodensteiner: That is correct, Your Honor.
Justice Byron R. White: So a fortiori it wouldn't for a redetermination?
Mr. Ivan E. Bodensteiner: When we are talking about, when we're talking about a redetermination, in other words, when we are talking about now taking that recipient off, that is correct.
We are saying that the procedure does not comply with Goldberg.
Justice Byron R. White: Let's assume that the court disagreed with you, that the procedure outlined in Java for determining initial eligibility would pass muster under Goldberg against Kelly?
Mr. Ivan E. Bodensteiner: Would I agree with that?
Justice Byron R. White: No, no, let's assume the Court, that is what the Court would hold, then would settle this case?
Mr. Ivan E. Bodensteiner: If the court were to hold that, I assume that we are -- however, we are saying that those procedures are (1) do not comply with Goldberg; (2) they are not sufficient even under the Act because at this point, we must remember that what the program is all about, the program as pointed out in Java is to get benefits to unemployed workers when they are unemployed and not six months later when they are back to work.
So, one of the key factors here is that the program was designed to get these benefits to the unemployed as soon it is possible after they lose their job.
Chief Justice Warren E. Burger: Isn't this program different from Social Security in that there is an affirmative burden on the unemployed worker to prove every week that he is complied with these standards.
Mr. Ivan E. Bodensteiner: The same burden rests on the welfare recipient, Your Honor, as pointed out in Java.
In other words --
Chief Justice Warren E. Burger: Are they required to come in with new proof every week and sign a new certificate every week?
Mr. Ivan E. Bodensteiner: They are not required to come in with new proof to the extent that – you know, they have to demonstrate compliance with the rules and regulations.
In other words, once found eligible for welfare, you continue eligible as long as you comply with the rules and regulations.
Chief Justice Warren E. Burger: That is not true here, is it?
Mr. Ivan E. Bodensteiner: It is true, Your Honor.
Once found initially eligible for Unemployment Compensation, you are found eligible for a set number of weeks.
In Mrs. Burney's case, 22 weeks.
Chief Justice Warren E. Burger: If provided -- provided a number of things are demonstrated each week?
Mr. Ivan E. Bodensteiner: That is correct.
Provided she continues --
Chief Justice Warren E. Burger: (Voice Overlap) semantics, but there is a real difference, is there not, between the unemployment and the welfare in that sense?
He must come in and show every week that he hasn't refused any suitable employment, that he stands ready, able and willing to take it, that he hasn't unable to get it, and perhaps several other things?
Mr. Ivan E. Bodensteiner: Similarly, Your Honor, the welfare recipient, for example, must prove he/she is not working, must show that the children are still living in the home.
Chief Justice Warren E. Burger: What kind of a certificate does the welfare recipient sign every week?
Mr. Ivan E. Bodensteiner: The welfare procedure, the welfare system does not use the same procedure, in that there is not a signing.
There is the affirmative duty to report any change.
In addition, there is the periodic interview, just as there is an unemployment compensation.
Chief Justice Warren E. Burger: Well, there is an affirmative decision in, the other is a negative?
Mr. Ivan E. Bodensteiner: I think they are well, they are both affirmative to the extent that the obligation is on the recipient to in effect say, I am still eligible.
The difference is that in the one case, the claimant comes to the office in the other case, the claimant is in many states mail the check.
Chief Justice Warren E. Burger: Well, in the most places, their welfare check is mailed, is it not?
Mr. Ivan E. Bodensteiner: That is my understanding, Your Honor.
Chief Justice Warren E. Burger: And in any case is the unemployment mailed?
Mr. Ivan E. Bodensteiner: I think it is in some states, Your Honor.
Now, also some states, it may be like, the check may be every two weeks as opposed to every week.
Justice William H. Rehnquist: How about in Indiana, whether it is mailed or requires personal appearance there?
Mr. Ivan E. Bodensteiner: As a general rule in Indiana, it requires personal appearance each week as was indicated earlier.
In some cases, there can be -- the certification can be done by mail.
The check itself is actually mailed to the recipient.
Justice William H. Rehnquist: You don't get it when you come into the office for your appearance?
Mr. Ivan E. Bodensteiner: That is correct.
Now, in this case, Mrs. Burney had filed -- was employed, involuntarily lost her last employment and filed a claim for Unemployment Compensation Benefits.
As pointed out, she was found eligible for a period of 22 weeks.
She received these benefits for a period of 10 weeks.
At that time, she was advised by a Deputy that she was no longer eligible and the benefits would be terminated and were, in fact, terminated at that point.
Now Mrs. Burney's case points out the importance of a hearing in this context.
The termination was based on an alleged refusal to accept suitable work and an allegation that she was not making herself available for work.
After this was made, she requested a hearing.
Three months later, this hearing was held.
At this time, she produced evidence that she did, in fact, had grounds for refusing this job, that she was in fact available for work and that she also demonstrated that the reason she could not accept this job was because of the lack of proper transportation, the lack of babysitting, the fact that the job was in the middle of the night, the fact that she had never worked in night shift, the fact that she had no car, no public transportation, the job was too far away for her to walk to.
Now, when the Division was forced to prove its assertion that she had in fact refused suitable work, they were unable to do so.
As a result, the Review Board ultimately ruled in her favor.
Justice William J. Brennan: She was initially declared eligible, was she?
Mr. Ivan E. Bodensteiner: That is correct.
Justice William J. Brennan: Now suppose what would be your position if as to the application of Goldberg, if her initial determination was ineligible?
Mr. Ivan E. Bodensteiner: That was a different situation under Goldberg.
Justice William J. Brennan: What were you thinking?
Whats would be the situation?
Mr. Ivan E. Bodensteiner: I think a footnote in Goldberg specifically indicated, they were not dealing with the initial application process that --
Justice William J. Brennan: I know we were not, of course, in Goldberg.
I just wondered what would be your view of the application of principles of Goldberg to a situation that the initial determination of ineligibility.
Mr. Ivan E. Bodensteiner: Whether there is a right to a hearing before a denial?
Justice William J. Brennan: That's right.
What kind of hearing that they required?
She applies for benefits and there is a determination of ineligibility.
Would you challenge the hearing under Goldberg and that is it?
Mr. Ivan E. Bodensteiner: No, it would only be a subsequent hearing in that case.
Justice William J. Brennan: And then suppose you would take an appeal from the initial determination of ineligibility, you took an appeal, would you – the claimant be entitled to benefits pending decision of the appeal?
Mr. Ivan E. Bodensteiner: Not if initially determined ineligible.
We are keying in here on --
Justice William J. Brennan: Here, however the situation is Mrs. Burney was in fact initially declared eligible?
Mr. Ivan E. Bodensteiner: That is correct.
Justice William J. Brennan: And determine to be ineligible in some subsequent week?
Mr. Ivan E. Bodensteiner: That is correct.
Justice William J. Brennan: And it is in that connect that you mention Goldberg claim?
Mr. Ivan E. Bodensteiner: That is correct, Your Honor.
Justice William J. Brennan: Since she did not have an adequate hearing?
Mr. Ivan E. Bodensteiner: That is correct.
She was determined eligible for a set number of weeks, 22 weeks in her instance, had received benefits for 10 weeks and then the termination.
Justice William J. Brennan: Your class limited to those who had been declared initially eligible?
Mr. Ivan E. Bodensteiner: That is correct, Your Honor.
The class was limited to the present, future employment compensation recipients found initially eligible which as described in Java is the critical point in this whole procedure.
Justice Harry A. Blackmun: Why do you insist so on her eligibility for 22 weeks?
Doesn't this depend on future developing facts or is that the limitation period, the long discovery that she might have under any conceivable facts?
Mr. Ivan E. Bodensteiner: That is the initial determination of eligibility.
In other words, these decisions concerning past employment are made.
There was no misconduct in her leaving the job, she left in voluntarily.
At that point, under the Federal law, Mrs. Burney and others are determined eligible for a number of weeks and that eligibility continues so long as Mrs. Burney complies with the rules and regulations, just as welfare --
Justice Harry A. Blackmun: By that you mean so long as she complies with the conditions, will continue in eligibility?
Mr. Ivan E. Bodensteiner: That is correct.
Justice Byron R. White: Which must be determined every week?
I take it you just disagree with the proposition that each week is a new determination of eligibility?
Mr. Ivan E. Bodensteiner: Yes, we disagree with that.
Justice Byron R. White: But if -- to the extent that that is a defensible position, then you are going to get into trouble?
Mr. Ivan E. Bodensteiner: Yes, but I think it is clearly not a defensible position when we look at the program.
As was pointed out in Java, in view of the nature of those program to get benefits to the unemployed workers, when they are unemployed, this is the critical point in the procedure, this initial determination and at that point, certain one time decisions are made regarding the last employment.
Was the claimant at fault in leaving that employment?
Does the claimant have the required ensured status?
If the answer is yes, then determined eligible as I indicated for the set number of weeks.
Chief Justice Warren E. Burger: It just means that the second and the third and the fourth week, he doesn't have to prove as many things as he did the first week?
Mr. Ivan E. Bodensteiner: That is --
Chief Justice Warren E. Burger: (Voice Overlap) that is he -- all he has to demonstrate the first or rather from the second week on, he doesn't need to re-demonstrate the nature of his severance from his employment?
Mr. Ivan E. Bodensteiner: That is correct and in addition he doesn't have to demonstrate the ensured status and as in welfare then the recipient remains eligible as long as the rules and regulations are complied with.
Chief Justice Warren E. Burger: Isn't then eligibility that merely means that he is part of a class of people covered by the statute, not that he is entitled to something, but through his private class which may be entitled to something, if they can prove all these things they must prove each week?
Mr. Ivan E. Bodensteiner: That is one aspect of the initial -- that is the ensured status determination, but the second and most important determination is an individual determination.
What are the circumstances surrounding the severance of last employment?
Justice William H. Rehnquist: In the coal, Indiana Coal Provision, that are cited at the very end of the jurisdictional statement, they may be cited in your brief too, Section 2 (d), where it says, in addition to the fore growing determination of insured status by the Division, the Deputy shall throughout the benefit period determine the claimant's eligibility with respect to each week for which he claims waiting period, credit or benefit rights.
Now, I take it that you are bound by the statutory description there about what is happening?
Mr. Ivan E. Bodensteiner: Yes, but I think this is simply a description of how Unemployment Compensation Benefits are paid.
In other words, they are in Indiana paid by the week.
They resemble wages as closely as possible and as indicated earlier after this initial determination, as long as the recipient complies with the rules and regulations, there is the expectancy that these benefits continue through that definite period determined initially which is a number of weeks.
Justice William H. Rehnquist: Our affirmance in Torres was correct, can you prevail here?
Mr. Ivan E. Bodensteiner: Well, I think in dealing with Torres, first thing we have to discuss is the fact that the case is actually pending before this Court now on a petition for rehearing.
To the extent that Torres raises the same issues as are present here, we disagree with the lower Court decision in Torres.
Justice William H. Rehnquist: You mean us in affirming it, I rake it?
Mr. Ivan E. Bodensteiner: I think one of the, as indicated and it is still pending on rehearing and to the extent that there is an affirmance on the identical issues raised by plaintiff Dinger we would disagree.
Justice William J. Brennan: As I understand, Mr. Justice Rehnquist's question is how can you prevail?
Mr. Ivan E. Bodensteiner: Insofar, as the Torres decision raises the same issues and I must point out, there are some distinctions, especially on plaintiff Torres where there was a very unusual circumstance involving the initial determination, but insofar as the issue is exactly the same as raised by plaintiff Dinger, we would disagree with that affirmance.
Justice William J. Brennan: Suppose we let it stand, how do you stand that?
Mr. Ivan E. Bodensteiner: Well, I think the -- we have to keep in mind also that that was a summary affirmance and the Court did not consider the --
Justice William J. Brennan: Well, really, doesn't this come back down to that, without overruling Torres, you have real difficulty into that.
Mr. Ivan E. Bodensteiner: To the extent that the issues were exactly the same.
Justice William H. Rehnquist: I think Justice Brennan and I would know that without asking you that to the extent the issues are exactly the same [Attempt to Laughter] you would in trouble, I mean, to what extent are the issues not the same?
Mr. Ivan E. Bodensteiner: They are not the same to the extent that in that case the plaintiff Torres presented a very unusual circumstance to the Court.
Plaintiff Torres was determined initially eligible for benefits allegedly without the employer having any notice of the application and therefore, without being involved in the critical procedure which this Court described in Java.
So, to that extent, it is a very unusual circumstance which we clearly don't have here.
Here the employer was involved in that initial determination of eligibility.
Now, concerning the constitutional issue.
In Goldberg, this Court found that welfare benefits could not be summarily terminated without affording the recipient a prior evidential hearing.
As pointed our earlier, this case is uniquely like Goldberg and in many respects, it is even stronger than Goldberg.
For example, the issues, the factual determinations to be made in unemployment compensation are more complex than those to be made in the context of welfare.
The interest of the State in a summary procedure are much less here than they were in Goldberg because of the recoupment provisions.
As pointed out, the State recoups over 70% of any wrongful payments.
In Goldberg, the Court recognized there was virtually no chance of recoupment.
Justice Byron R. White: The Goldberg argument only becomes really a cutting if you are right in saying and in maintaining that this weekly determination is not a determination of initial eligibility?
Mr. Ivan E. Bodensteiner: Yes.
In addition here, the determination of unemployment compensation benefits is a serious deprivation and a serious loss to the recipient as was the welfare, even though initial eligibility is not based on an individual means test.
Java and earlier decisions of this Court recognized that, Congress intended Unemployment Compensation to meet a short term need.
Just as welfare provides funds for the old, disabled, blind and children, Unemployment Compensation provides funds for unemployed workers, during their short-term unemployment.
Now as pointed out in the legislative history, a means test was not used because there was an explicit effort to avoid the stigma of welfare and the welfare mentality.
They didn't want workers to get into the -- relying on welfare and therefore, not look for jobs, but the need for a prior evidential hearing is very great here because of the complex factual issues.
Once a person is in this continued claim status after the initial determination of eligibility the issues that come up subsequently are usually as in Mrs. Burney's case, issues of availability and issues of refusal of work.
Indiana Courts have held that these questions involved questions of fact and depend on the circumstances in each case.
For example, is the claimant restricting the hours of work?
Is the claimant restricting herself to certain types of work?
Is the claimant looking for work?
Is the job suitable?
Was there an actual offer of a job?
Is the job safe?
Is there transportation to the job?
Is there babysitting?
What were the previous work habits?
Is the person physically fit to attend, to work at this job?
We contend that reliable answers to such questions can best be obtained at an evidential hearing.
I think the past experience of the division with a near 50% reversal rate indicates that there are -- in the past, there was not a reliable procedure.
As pointed out earlier, the interest of the State here are much less than in the welfare situation.
The ones -- argument advanced by the State and the brief is the need to minimize expenses.
Well, the State -- this is not convincing because of the recoupment procedures.
Indiana has been implementing this order for over a year now and there was no apparent great increase in the costs.
The issue, the numbers presented by the California situation, I think the decision there, the Crow decision had been in effect for over a year and I think those figures were actually rebutted by the opposition when that case came before this Court for an emergency cert.
The other argument advanced by the State is that this is going to create administrative chaos.
The experience is that it simply has not.
They have simply moved their referee hearing up in time and according to their own statistics is working very well.
So, there is absolutely no demonstration of either great costs or administrative chaos here.
The conclusion is as Congress recognized, we are dealing here with a program that is of critical importance to unemployed workers and our position is that only an evidential hearing prior to a termination of benefits can assure that the purposes of this program to get benefits to unemployed workers can adequately be met.
Thank you, Your Honors.