CHRISTIAN v. NEW YORK DEPARTMENT OF LABOR
Argument of E. Richard Larson
Chief Justice Warren E. Burger: We’ll hear arguments next in 72-5704, Christian against New York State.
Mr. Larson you may proceed whenever you’re ready.
Mr. E. Richard Larson: Mr. Chief Justice, may it please the Court.
This case is on appeal from a final judgment with the three-judge District Court, one judge dissenting from the southern district of New York.
The issue here involves questions of due process, equal protection, and statutory construction.
The issue here stated specifically is whether consistent with the statutory and constitutional framework of unemployment compensation.
A former or a Federal agency may deny compensation, unemployment compensation to a former Federal probationary employee, solely on the basis of the employing agency’s statement of its reasons for discharging the former employee, without that employee ever being provided with an opportunity for a fair hearing, at which the employee may contest the reasons for which he has been denied unemployment compensation.
Stated more simply, the issue is simply is whether unemployment compensation maybe denied without any hearing, at any time on the basic reasons for the denial of compensation.
This case arises within the context of the jointly administered State and Federal Unemployment Compensation Program, a program through which the states administer the payment of unemployment compensation to all covered employees, pursuant to various Federal requirements.
One of those Federal statutory requirements is the requirement that a fair hearing before an impartial tribunal be provided to all individuals whose claims for compensation are denied.
This case arises from the appellee’s interpretation of one of the unemployment compensation statutes, a section of the Social Security Act countrified as 5 U.S.C. Section 8506 (a).
Pursuant to the appellee’s interpretation of this particular statute, a Federal agency’s ex parte statement of its reasons for discharging a probationary employee are final and conclusive upon the State unemployment compensation agency and accordingly may not be reviewed by the state in the fair hearing, which is provided by the state.
This interpretation should be noted at the outset is directly contrary to the statutory interpretation provided by the case of Smith v. District Unemployment Compensation Board, a case decided more than three years ago by the Court of Appeals for the District of Columbia.
The appellee’s interpretation, which is at issue in this case, is best illustrated by describing the facts relevant to the denial of compensation to appellant Christian in this case.
Appellant Christian was discharged by her employer, the post office during her probationary period, on the grounds allegedly of having an unsatisfactory attendance record, specifically that she had not reported her absences to her employer during a period, when she was on a restricted sick leave list.
Well, since appellant Christian was not a permanent employee, she was not eligible for a termination hearing.
This is not something that is contested in this case at all, we can see she is not eligible for termination hearing and do not seek a termination hearing.
Similarly however, since she had not resigned her Federal employment, she was not provided with an unemployment compensation fair hearing for purposes of unemployment compensation.
She was however basically eligible for compensation, because she had worked the minimum amount of time and earned a minimum amount of remuneration in order to have her contractual right to unemployment compensation.
The contractual right, which this Court recognized in the case of California Department of Human Resources v. Java at 402 U.S. accordingly, she applied for compensation through a claims examiner at the New York State Department of Labor.
A claims examiner normally obtains information, both from the claimant and from the former employer and makes an impartial decision on the information that is received relevant to such issues as reasons for termination of employment.
In this case however, the claims examiner felt himself bound by Federal appellee’s interpretation of the statute at issue here and accordingly, after receiving the ex parte statement of the reasons for discharging appellant Christian, the claims examiner denied compensation to appellant Christian on the grounds of those that ex parte statements.
Justice William J. Brennan: What would’ve been the case if a fellow who had been a New York State employee?
Mr. E. Richard Larson: If the appellant had been a New York State employee, and particularly a probationary state employee, the appellant would’ve been treated as or private employee.
The claims examiner would have obtained information from the State of New York, concerning the reasons for discharge and information from he claimant himself or herself and on the basis of that information, the claims examiner would’ve made a fair determination as to the reasons for discharge for purposes of compensation.
Justice William J. Brennan: And, your only point is that as Federal employee she should get the same procedure.
Mr. E. Richard Larson: Oh! Very definitely Your Honor, I should point out that--
Justice William J. Brennan: But that’s the point of this --
Mr. E. Richard Larson: Yes, it is.
Permanent and probationary, private employees and permanent and probationary state employees, permanent and probationary Federal employees who resigned, and all permanent Federal employees receive this fair determination through an opportunity for fair a hearing for purposes of unemployment compensation.
Justice Potter Stewart: But some of those Federal employees get it in a Federal form, not on the state’s form.
Mr. E. Richard Larson: Through the Federal form, through their termination hearings.
Justice Potter Stewart: Right.
Mr. E. Richard Larson: Because of their status as permanent employees.
Chief Justice Warren E. Burger: And that we have described the process for the state employee, it was not a hearing, if I followed you correctly, but merely an inquiry --
Mr. E. Richard Larson: That is the initial determination --
Chief Justice Warren E. Burger: -- initial determination.
Mr. E. Richard Larson: -- which you described in the Java case, Mr. Chief Justice.
Subsequent to the initial determination procedure as it is illustrated by the facts of appellant Christian here, if the initial of termination is adverse to the claimant, Social Security Act requires that a state must provide an opportunity for fair hearing for an impartial tribunal--
Chief Justice Warren E. Burger: You weren’t undertaking to describe the whole process, but only the initial?
Mr. E. Richard Larson: Well --
Chief Justice Warren E. Burger: Eligibility.
Mr. E. Richard Larson: At this stage, yes I’m getting to the hearing, because something significant happened at this hearing, with regard to appellant Christian and that is that although the appellee’s interpretation of the statute issue here, requires the fair hearing referee at the second stage, now requires the fair hearing referee to accept that ex parte statement of reasons by the Federal agency as final and conclusive.
The hearing referee in this case, after hearing the evidence submitted orally on the issue of termination by appellant Christian and after having received the statement from the post office, submitted in lieu of appearance through the Industrial Commissioner.
The hearing referee here disregarded the appellee’s interpretation of the statute, and in fact did make a fair findings on the issue that was before the referee.
Now, this was a very short lived fair determination procedure, because the state immediately appealed this fair finding as fair determination procedure to the State Appeal Board and the State Appeal Board reversed on the grounds that the state had to accept the Federal reasons as final and conclusive, so it is a two-step process.
Justice William J. Brennan: So, I gather as a dismissed Federal employee, she gets neither --
Mr. E. Richard Larson: She gets neither.
Justice William J. Brennan: -- the initial determination or they should get the ultimate final determination.
Mr. E. Richard Larson: That is correct Mr. Justice Brennan.
Justice Potter Stewart: I suppose she gets an initial determination, but it’s preordained, is that it?
Mr. E. Richard Larson: It’s certainly as not a fair determination.
Justice Potter Stewart: No, it’s not. She gets no fair hearing.
Mr. E. Richard Larson: For example in Java this Court noted that the word “do” in Section 503 of the Social Security Act met after the first time when both parties could be heard in an impartial decision rendered that was the initial determination procedure.
That as a fair process, as reached in Java never occurs with regard to Federal probation or employee.
Justice Potter Stewart: And, there’s no argument between you and your brothers on the other side as to what happens, as to what the issue.
Mr. E. Richard Larson: There’s no argument.
This is acceptable.
Justice Potter Stewart: Right.
Mr. E. Richard Larson: Before I turn into the due process, and the equal protection, and the statutory construction issues in this case, I’d like to reiterate a couple of points about what this case is about and what it is not about.
And this is particulary in light of the briefs submitted by the Federal appellees in this case.
The hearing which is sought in this case and which we contend as constitutional and statutorily required is unemployment compensation hearing for purposes unemployment compensation.
The appellants do not seek a termination hearing, they do not seek reemployment, rather all is sought here is a fair determination procedure through a fair hearing for purposes of unemployment compensation.
Now, second the provision of a fair hearing for purposes of unemployment compensation to the appellants here would have no affect whatsoever upon the Federal discharge procedures with regard to probationary employees.
It is conceded on the record, indeed the Federal regulations provide and we do not challenge them that a Federal probationary employee maybe discharged without cause, during his probationary period.
Accordingly, if there maybe a discharge without cause, a subsequent hearing for purposes of unemployment compensation, which merely review the reasons or the lack of reasons for the discharge could have no effect upon the discharge procedures for that employee.
Now thirdly, the issue here, the unemployment compensation issue at the hearings, the reasons for termination as this Court noted in Java the reasons for termination constitute the most frequently disputed issue in unemployment compensation.
And, as we point out in our brief, note 8 on page 10 more than 60% of the claims in the State of New York that reached the fair hearing referee involved issues concerning reasons for termination, so it is a frequently disputed issue on our employment compensation and this is what is being denied to the appellants here.
Now fourth, we have contended and we continue to contend that the fair hearing, which we say is required both constitutionally and statutorily maybe provided either by the Federal appellees or by the state appellees.
Now, particularly relevant here is the Circuit Court of Appeal’s decision in Smith.
What happens in Smith is that the panel composed of Judges Leventhall, Fahy, and Robb said that in the first instance the Federal agencies or the Civil Service Commission could provide the hearing for purposes of unemployment compensation to the Federal employees.
But, if the Federal agencies of Civil Service Commission did not provide the hearing, in that case the state mechanism, the unemployment compensation agency mechanism for fair hearing, which is already in existence and which provides fair hearings to all other employees should be made available and would be made available for the Federal employees in a similar matter.
In other words, the fair hearing could be provided either at the state level or at the Federal level.
The fifth, the Smith case, which they --
Justice Byron R. White: Are you saying that you should have a hearing to determine whether that cause existed?
Let's assume the unemployment people say “You were discharged for cause.”
And is the issue whether the government said you were discharged or cause or as a matter of fact whether that was cause?
Mr. E. Richard Larson: Well, the issue is whether there was cause, whether it was a matter of fact there was cause.
Justice Byron R. White: If you agree that the government may discharge a probationary employee, for no cause at all.
Mr. E. Richard Larson: Right.
Justice Byron R. White: You must agree also that they could discharge him for cause.
Mr. E. Richard Larson: Certainly, they may.
Justice Byron R. White: By just saying “You were late yesterday.”
Mr. E. Richard Larson: Correct.
Justice Byron R. White: And discharged him, whether it’s true or false.
Mr. E. Richard Larson: Right.
In that situation --
Justice Byron R. White: If that’s the reason they discharged him, you say there must be a hearing to go behind that statement at the unemployment state?
Mr. E. Richard Larson: Well, the way the system operates right now pursuant to the apellee’s interpretation of the statute, whatever reason the Federal appellees give or the Federal agency gives is final, conclusive, and can never be reviewed.
For instance, the Federal agency may say you were late yesterday.
In appellant Christian’s case the facts were very similar to that, where "You were absent yesterday and you did not call in."
Appellant Christian said, “My older daughter did call in and she advised me that she did so and I had her do so."
"The telephone in my apartment does not work.”
There were underlying facts as to whether or not she did call in, and which is a crucial determination because the state applies its state law as to whether as misconduct (Voice Overlap)
Justice Byron R. White: Well, then I gather you say the hearing you require then really is something that you can’t get satisfied just by a paper record.
You think you must have --
Mr. E. Richard Larson: Oh! Certainly not.
Justice Byron R. White: Have a witness and an impartial confrontation, impartial hearing officer, etcetera?
Mr. E. Richard Larson: In our due process claim of course, we alleged that the requisites, the fundamental requisites of due process.
The normal requisite elements of a due process hearing should be provided.
But, then I think I can illustrate with the plaintiffs here.
Justice Byron R. White: But, the statutory procedure that were available would be enough for you?
Mr. E. Richard Larson: The procedure with regard to the state procedure.
Justice Byron R. White: Yes.
Mr. E. Richard Larson: I should note here that the state procedure, as well as the Federal procedure with regard to terminating a Federal employees.
The elements of the hearings are basically the due process elements.
There is an impartial hearing examiner.
There is a requirement that decision must be based upon the evidence --
Justice Byron R. White: But, that is at the discharge state, but how about at the employment stage?
Mr. E. Richard Larson: This is also present at the unemployment stage.
Justice Byron R. White: But, any way, whatever hearing they provide, where it’s available, that hearing is enough for your purpose?
Mr. E. Richard Larson: Yes.
Justice Byron R. White: Well, let me say if I understand, if this were a state employee, at the initial stage, whatever form that hearing takes, the determination by the hearing examiner would be what?
There was a cause, or there was not cause, which?
Mr. E. Richard Larson: I --
Justice Byron R. White: At the initial stage, is a dismissal in the state service.
Mr. E. Richard Larson: In the state situation, the hearing examiner would base its determination upon --
Justice Byron R. White: I know, but what would he decide?
There was cause or was not cause, which?
Mr. E. Richard Larson: It depends upon the facts before him.
Justice Byron R. White: But, that’s what he would decide.
Mr. E. Richard Larson: That’s what would he decide.
Justice Byron R. White: And if he --
Mr. E. Richard Larson: Decide the facts before him.
Justice Byron R. White: Right, and if he decided there was cause, whatever it may have been, and then she be an eligible for unemployment compensation?
Mr. E. Richard Larson: At that stage, yes.
Justice Byron R. White: Whereas if he said “there was no cause” and then she would be eligible at that stage, is that it?
Mr. E. Richard Larson: Right.
Justice Byron R. White: And then, the next step is the --
Mr. E. Richard Larson: Fair hearing --
Justice Byron R. White: -- the fair hearing, at which the issue was the same, isn’t it?
Mr. E. Richard Larson: That is correct.
Justice Byron R. White: With just the different procedure?
Mr. E. Richard Larson: It’s a more elaborative procedure, where there is an opportunity for cross examination and confrontation of witnesses, their seeking the power.
Justice Byron R. White: But the state agencies handling a Federal employee, accept the certification of the Federal official there was cause, period, in that statement.
Mr. E. Richard Larson: That’s final and conclusive, nothing more.
Justice Byron R. White: And at both stages?
Mr. E. Richard Larson: At both stages.
Chief Justice Warren E. Burger: What if instead of having a one year probationary period, the petitioner here, appellant here had been hired on a one year contract, renewable if the government wanted them?
If it’s a contract, the year expires, the contract expires, that’s unemployment, not renewed?
Mr. E. Richard Larson: Section 8501, which provides the basic coverage of the law, specifically accepts from coverage certain Federal employees.
It does accept that type of Federal employee.
It was on the contract or fee basis.
Chief Justice Warren E. Burger: But --
Mr. E. Richard Larson: So, that person would not be covered.
Chief Justice Warren E. Burger: But how do you distinguish a one year probationer from a one year termination?
Mr. E. Richard Larson: I’m not sure I understand your question Mr. Chief Justice.
If he --
Chief Justice Warren E. Burger: How is a one year probationer who is not continued in the service different from a one year contract employee, who is not renewed?
Mr. E. Richard Larson: Well, the unemployment compensation is not available to the latter employee.
If it were available to the latter employee, who were on a contract basis, I would say that that would be a resignation.
Basically, a resignation situation or it maybe interpreted as a lay-off.
But if it is lay-off, then the person would be eligible.
But, this is a factor, which under state law or with regard to all state employees, private employees, Federal permanent employees is fairly decided, if there are factual issues.
It is fairly decided for those employees, but if it’s a Federal probationary employee, it is not fairly decided with Federal reasons are automatically accepted as binding and conclusive.
With regard to the due process argument, most of the due process cases, which come before this Court of course, concern the finer issues of due process, with regard to the timing of the hearing or the form of the specific elements of the hearing.
Here, of course the issue is much more basic, since there is no hearing at anytime, yet this contractual right is taken away from the appellants.
Here there is no impartial decision maker, there is no decision to be based upon the evidence, there is no oral presentation of evidence, no oral argument, no right to representation, no confrontation or cross examination, none of these elements are here.
Justice William H. Rehnquist: As our affirmance in Tori as I take it approved is the absence of some of those procedures for a termination of unemployment compensation, would you apply a different standard to the initial eligibility determination?
Mr. E. Richard Larson: No, I think should I point out that Tori of course, as in the Bernie case the prior hearing cases which were at issue here, already provided the precise procedures, which we are seeking here.
The issue in Tori and Bernie was a prior hearing.
What was required prior to the termination of benefits, but as required by statute, as Mr. Chief Justice asked, the procedure that we're seeking here was required to be provided in Tori’s and in Bernie’s the initial fair and initial termination, and the fair hearing procedure later.
That was not an issue in Bernie or Tori’s that was already statutorily provided.
This is not a prior hearing case, this is just a hearing, there is no hearing, no fairness in this procedure at all, as the apellees state at page 17 of their brief, all they find, all they determined, they state that it’s merely a statement of the agency’s reasons for discharging the employee that’s all there is.
Justice William H. Rehnquist: Are you suggesting a bit of a more fire reaching type of hearing is required in making an initial determination that you're entitled to a right, than in making a later determination that takes it away from you?
Mr. E. Richard Larson: No, I am not suggesting that at all.
Justice William H. Rehnquist: Well, then why is there that distinction that you suggest between a hearing and determining initial eligibility and a hearing terminating the right.
Mr. E. Richard Larson: That’s provided for in the statutes and we do not challenge that statutory scheme of having an initial determination procedure, which is not a full blown hearing.
We do not challenge the absence of full blown hearing procedures of the initial stage, because there is a later statutory hearing.
Here, there is never any statutory hearing, nor is there even a fair initial determination process.
I think this can be the lack of one of the essential elements of a due process here in confrontation and cross examination is particularly well illustrated by appellant Green’s case.
Appellant Green was discharged by his employer, the Treasury Department, as noted on page 52 of the appendix, “as you were observed” engaging in such, and such alleged misconduct.
Now, appellant Green never new with this observer was.
Unknown Speaker: Is he the sky marshal took a drink within 24 hours before he had to fly?
Mr. E. Richard Larson: Yes, now it is alleged --
Unknown Speaker: It was observed to happen.
Mr. E. Richard Larson: He was observed to have been drinking and the observation is a matter of fact occurred more or alleged to have occurred more than 3 ½ months prior to his termination.
In other words, if--well, he was not terminated immediately after this alleged event took place, rather they waited.
It was six days before the end of his probationary period at which he was terminated for this alleged observation, which took place 3 ½ months before.
Now, of course, appellant Green was allowed no opportunity for confrontation or cross examination of this unknown observer, this element was completely absent as are the other elements of a fair hearing.
There’s no procedure, there’s no requirement for a fair hearing examine or fair decision maker, instead the decision maker here is conceded to be the agency, a bias party.
Indeed, there is no requirement that the decision be based upon the evidence.
Instead all that we have is the ex parte’s statement of the reasons by the Federal agency.
This procedure we submit is a one sided determination of facts, the size of contractual right.
Unknown Speaker: You haven’t addressed the statutory argument, but I gather that both things on pliable one to apply on three-judges?
Mr. E. Richard Larson: The statutory argument is based on, I guess many different factors, but the outset we would look at the Powell decision in the Smith case.
And what they did of course is they looked at unemployment compensation generally.
The right to a fair hearing that this is a very important right in the unemployment compensation statutory scheme, and that this fair hearing cannot be lightly taken away.
Now of course, the appellees in this case do not contend that their interpretation of the statute is necessarily the only interpretation of the statute.
All they contend is that the secretary has grabbed the authority to make whatever fact-finding procedure it chooses to make.
And, it here chose not to provide for fairness or for hearing procedures.
We contend it, as long as they concede that their construction is not one that they contend the statutorily required.
Indeed, the contrary interpretation is required that a fair hearing must be provided here.
Also, what is significant we hinge on the word “finding,” the Congress used the word “findings,” they did not use another word.
This is a contextual word and in the context of unemployment compensation, the word “findings” is very fairly mean, can mean findings after a hearing.
Additionally, we looked very strongly to the dominant legislative theme of providing unemployment compensation to Federal employees, that dominant scheme is simply to make employees equal to stay in private employees.
Provide them with the same terms and conditions of employment, as provided to other employees.
So, I should note that this Court need not declare the statute unconstitutional, that the proper statutory construction here does require -- that a hearing be provided to the appellants.
I should also note that this Court of course has reviewed many cases of statutory construction, which it involved questions of due process, where the due process considered an issue.
Justice Byron R. White: What I was asking particularly Mr. Larson, 42 U.S.C. 503 says that “The secretarial labor makes no certification, unless he finds the law of the state provides opportunity for a fair hearing before an impartial tribunal for all individuals whose claims for unemployment compensation are denied.”
And, my question was is that the statute in which you rely?
Mr. E. Richard Larson: That is one of the statutes which we rely on very definitely.
That is the most clear statement made by the congress with regard to the provision of fair hearing, but there are a host of other avenues which lead to the same conclusion that a hearing must be provided.
I noticed my time has expired, I would like to save whatever time I have left for rebuttal.
Justice Harry A. Blackmun: Mr. Larson, let me ask you one question, leave me out of the wilderness, isn’t there a little jurisdictional problem so far as the Federal appellees are concerned here?
Mr. E. Richard Larson: I do not think there is Mr. Justice Blackmun I --
Justice Harry A. Blackmun: Well, didn’t the District Court decide against you so far as the Federal employees are concerned?
Mr. E. Richard Larson: Yes, the District Court did.
I think the District Court of course is clearly wrong and 1908 decision by this Court on mandamus, under 1361 jurisdiction makes clear that common law or the relief available to common law mandamus includes corrective orders against Federal officials who have violated the constitution.
And what the District Court did was it held that -- it determined there was no mandamus jurisdiction over the Federal defendants and consequently did not reach the constitutional issues as to Federal defendants, but I would submit that Garfield, a decision more than 60 years old reached by this Court, makes clear that the mandamus remedy extends to the corrective orders against unconstitutional activity.
Justice Harry A. Blackmun: Well, Federal courts usually don’t so clearly misstep as to jurisdiction and --
Mr. E. Richard Larson: I submit they did in this case Your Honor.
I should also note that the Federal District Court dismissed the lack of jurisdiction under 1343 (3).
Now, we contend through a joint participation theory of this Federal state program that the Federal government is in joint participation with the state appellees and accordingly are properly named as defendants under 1343 (3).
Unknown Speaker: What about 1337?
Mr. E. Richard Larson: We did not alleged that in our complaint.
Justice Harry A. Blackmun: Isn’t that pretty good, to statute into figure?
If you did (Voice Overlap)
Justice William H. Rehnquist: Where do you get joint participation here between the state and Federal employees?
My impression of the state’s position was that they’re perfectly willing to give you whatever the Federal government provides by statute.
They’re willing to give you the benefit of their full hearing, if they’re not precluded by the Federal Statute.
They really have no dispute with you at all.
Mr. E. Richard Larson: Well, that‘s of course the position they have taken in argument with us, but you must remember that they of course denied a fair hearing to appellants Christian and Green in this case.
If they have not been -- their cooperation, their agreement with the Federal defendants or Federal appellees in this action, a joint participation which is clear through the statute both Section 8502 and 8504 made clear that the Federal government assigns all wages, all claims, to the state and that the state is to operate the program.
I think also a quote from Shapiro v. Thompson is appropriate where the court stated that Congress is without power to compel state cooperation in a program, in a joint Federal state program, which violates the Equal Protection Clause.
Now, this is a joint Federal state program and the unquestioned by this pursuant to Federal law.
But, it is the state actually, which has denied the Fair Hearing Act.
I notice my time is up.
Chief Justice Warren E. Burger: Mr. Evans.
Argument of Mark L. Evans
Mr. Mark L. Evans: Mr. Chief Justice and may it please the Court.
Before addressing the constitutional issues that Mr. Larson has discussed, I would like to raise an alternative ground for affirmance, which I think will permit this Court to decide the case without reaching the constitutional issues.
The appellants stand before this Court in this posture, they are attacking the constitutional adequacy of procedures that they have never invoked.
Under familiar principles requiring exhaustion of administrative remedies, their claim should not be entertained.
To understand why we take this position, it is necessary to have a clear understanding of what the procedures are, that are provided by the regulations and those governing regulations are set out of pages 33 to 38 of our brief.
The stage is set for these procedures, of course, when an applicant or unemployment compensation submits an application to a State Unemployment Compensation Board.
The State Unemployment Compensation Board thereupon seeks information from the Federal employing agency, with respect to the employee service, including most particularly for this case, the reasons for his termination.
Now, if a discharged probationary employee, which is what we have in this case, is denied unemployment compensation, because of the stated of reason for his discharge, he has the following procedures available to him.
First, under section 609.22 of the regulations, which appears at page 36.
He may obtain from the employing agency any information he needs relating to the basis for the Federal finding, the Federal finding being the reason stated for his discharge.
Under section 609.8, which is two pages earlier on page 34, the employing agency must furnish this information in writing and I add right here that for appellant Green, if he wished to know who it was who observed him drinking at the time he was observed drinking, he was free to ask the question and get a response in writing.
Second, under 609.23 which is at the bottom of the page 36, top of page 37, the employee may file a written request for reconsideration and correction of the findings that have been submitted to the state agency and he may submit together without request any information he has to support his request.
Again, referring back to page, the preceding page at 609.9, the agency must consider all the information submitted.
It must review its findings.
It must correct any errors, and at most in affirm, modify, or reverse whatever the findings are affected.
Justice William H. Rehnquist: What book are referring to Mr. Evans?
Mr. Mark L. Evans: Pardon me? I’m referring to the government’s brief in this case, the appendix short brief.
Justice Byron R. White: That of course is all of paper proceeding.
Mr. Mark L. Evans: This is all a paper proceeding.
Justice Byron R. White: So, that we suggest is at least as good as the initial statement.
Mr. Mark L. Evans: Yes, I think that is right.
Well, this is not -- yes, that’s a fair statement.
If there is a correction that is made by the state, be the Federal employee agency.
The agency had required to submit this to the state and the state if the corrections looked like the entitled the employee to a re-determination, the state is required by the regulation to make that re-determination.
Justice Byron R. White: And, what’s this mean, affirm, modify, or reverse any or all of its Federal findings in writing, so it affirms in what’s it do?
Mr. Mark L. Evans: Well, it just sends the same slip.
It's in first placing we've considered and affirmed or sustain or modify --
Justice Byron R. White: Let’s say, we modify it’s more elaborate or let’s say reverse, I suppose, it’s still more like it.
Mr. Mark L. Evans: That's right.
Justice Byron R. White: But, if they affirm to send the same old slip back to the state that’s the end of the matter, isn’t it?
Mr. Mark L. Evans: That’s the end of the matter.
Justice Byron R. White: The state may not go behind that?
Mr. Mark L. Evans: That’s right.
Now, I emphasize that --
Justice Byron R. White: Well, but so at least the so-called full due process hearing is not available to this area.
Mr. Mark L. Evans: That’s absolutely right, we don’t claim that the full due process hearing’s are, not that we claim there is no due process so, right it is implicated, but I’ll turn to that in a moment, but right now I’m just trying to point the existing procedures, whether valid or invalid under the constitution were never invoked (Voice Overlap)
Justice Byron R. White: Well, he can't be heard to complain, unless he’s at least exhausted these first.
Mr. Mark L. Evans: Well, that’s my point.
Justice Potter Stewart: Was this argument made to the District Court?
Mr. Mark L. Evans: The argument was not, so far as I can tell, made to the District Court.
It was made in our briefs in this Court, at pages 8 and 23, and --
Justice Byron R. White: Were you involved in the, not you but --
Mr. Mark L. Evans: Yes.
Justice Byron R. White: Oh? You are?
Mr. Mark L. Evans: Yes, we are parties, but we -- the Federal defendants in that case were dismissed on subject matter jurisdiction grounds, and I might add in response to Mr. Justice Blackmun’s question, Mr. Larson’s right, we do not contest jurisdiction on the mandamus statute.
Unknown Speaker: Of course you can’t stipulate to it (Voice Overlap)
Mr. Mark L. Evans: No, I concede that I can't stipulate to jurisdiction.
These are in any event the procedures, the corrective procedures that are available and were involved.
And, it’s important to consider how they might have operated in these cases if they had been invoked.
Appellant Christian was terminated after six months of employment as a letter carrier, because of a history of unauthorized absences, which climaxed in two instances, in which she was two days, in which she was absent without notifying her supervisor.
This is after she had been warned and had been placed on a restricted sick list, which required her to bring in an authorized medical excuse for any further absences.
And, upon the receipt by the state board of this information, the determination was made that she would not be eligible for unemployment compensation, because the fact amounted to a voluntary quitting without good cause that is under state law these facts are led to the conclusion that she provoked her discharged by the final two absences.
Justice Byron R. White: Of course Mr. Evans, your argument, this argument and not exhaustion, no matter how I gather your position is, no matter how meritorious the due process times maybe, not entitled to have a determined here, because they didn’t exhaust this case.
Mr. Mark L. Evans: That is my point, that’s right.
Justice Potter Stewart: But you say as far as you know, this argument was never made to the District Court?
Mr. Mark L. Evans: It was never made to the District Court, as far as I can determine, Mr. Justice Stewart, but it is an alternative ground for affirmance and I think we’re entitled to present here and I think that this Court is entitled to consider the argument in disposing of the case.
Justice Potter Stewart: Well, maybe instead of our considering it, we should set it back to the District Court to consider it.
Mr. Mark L. Evans: Well, it’s a possibility, I don’t think it requires any factual inquiry that would be more appropriate for District Court.
It seems to me that kind of question that can be decided on the basis of what’s before this Court and there’s no real benefit to be gained by remanding it for the purpose.
Justice Potter Stewart: Well, do you claim that this procedure is still available and it either Mrs. Christian or Mr. Green could now get a re-determination under these procedures.
Mr. Mark L. Evans: That is problematic Mr. Justice (Voice Overlap)
Justice Potter Stewart: Of a reason for termination that would not foreclose that from State unemployment compensation?
Mr. Mark L. Evans: It presents a problem, the regulations provide that the employing agency shall make any corrections that if fines must be made within one year, now obviously the year is past as a consequence of a litigation, it maybe impossible.
I would think that their deregulations might limply be construed in these cases to permit to exhaust these procedures if they sought to do so, on remand or on their own.
After the denial of the claim of Christian’s claim, she was given a copy of findings and then, as she states in her affidavit, which appears in the appendix of pages 15 and 18.
She sets out her disagreement with the underlying facts that were transmitted to the state agency.
She claimed that she failed to report her absences in the original, in the older absences, because she couldn’t find a telephone that was in working order in her neighborhood to call in.
And, she said that the last two absences were required by compelling family circumstance, and then in fact she had asked her older daughter to make a telephone call to her supervisor.
And, in fact her daughter said that she had done so.
Well, these are precisely the kinds of new facts, new information that the regulations contemplate being submitted to the agency for their consideration, that was never done here, so the agency never had the chance to consider these new facts.
If in fact, the facts whereas stated by appellant Christian, she might as well submitted (Voice Overlap)
Justice Thurgood Marshall: Does the record show that that record was done?
Mr. Mark L. Evans: The record, I suppose is blank on the point, but I --
Justice Thurgood Marshall: Well, how could we assume that it wasn’t done?
Mr. Mark L. Evans: It wasn’t done.
I believe the record is clear as a matter of fact that it wasn’t done.
I don’t know where I can point to it, but there's never been any suggestion by anyone that it has been done.
Justice Thurgood Marshall: Well, I think before I could say somebody was guilty of exhausted their remedies, I don’t know whether they did or didn’t.
Mr. Mark L. Evans: Well, it’s clear -- well, I can't put my finger on it.
Justice Thurgood Marshall: Not being unreasonable in that?
Mr. Mark L. Evans: I think Mr. Larson will concede that this was not done.
I don’t think it’s a factual issue here.
Justice Thurgood Marshall: In fact you are conceding right now. The records didn’t say it positively --
Mr. Mark L. Evans: I could say it, but I don’t think I can point it to you -– point it out to you in the record, but the reason I can't point out to you in the record is that the issue wasn’t presented.
The only thing there is in the record that’s of relevance here --
Justice Thurgood Marshall: Well, if you present factual point to this Court, I don’t think this Court can decide a factual point.
Mr. Mark L. Evans: The complaint and the agreed upon material and statement of material facts, as to which there was no dispute.
I make it clear that appellants have not sought any relief from the employing agency, although they recognize that the procedures exist.
They make no mention of any fact of having exhausted those procedures.
Justice Thurgood Marshall: Is there anything in there that said they did or did not?
That is my only point.
Mr. Mark L. Evans: There’s nothing in there that says they did.
Justice William H. Rehnquist: Mr. Evans --
Justice Thurgood Marshall: Did not?
Mr. Mark L. Evans: That’s right.
Justice William H. Rehnquist: -- The plaintiffs brought this action, didn’t they?
They were (Voice Overlap) -- did they alleged in their complaint that they exhausted their (Voice Overlap)?
Mr. Mark L. Evans: They did not.
Although again, in their complaint they took cognizance of the existence of these procedures, there was no allegation that they were invoked.
Justice Thurgood Marshall: But, if you’d raise that point, at that time they might have.
(Voice Overlap) now to raise it, where there’s no way for them to answer it.
Mr. Mark L. Evans: Well, as I said, I think the regulations might be construed to permit them to exhaust their remedies even now, even though they -- I mean the time has elapsed because of litigation, but I think that they would be permitted an opportunity to undergo those procedures.
The same situation is present in the case of appellant Green, who was discharged for drinking before flight duty. He claims and his unemployment compensation was denied on the ground of that he was discharged from misconduct under state law.
And, he claims again, he’s innocent of these charges, but he never bothered to give his employer the benefit of any exculpatory information he may have nor he take advantage of the opportunity he had to get the information, he claims he didn’t have to make the judgment with.
In these circumstances, in our view, the appellants should not be heard to complain of corrective procedures, if they haven’t invoked.
The exhaustion principle has traditionally been required, because of what this Court in McKart v. United States called the practical notions of judicial efficiency.
If Christian and Green had invoked the procedures it may be that their employing agencies would have agreed that they had a mistake and would have corrected the findings.
If that were the result, this Court or no court would have had to intervene.
There would have been no judicial issue.
Justice William H. Rehnquist: Well, if exhaustion is a matter of defense, I suppose Justice Marshall is quite right that some of the government should’ve raised by way of an answer to the complaint.
On the other hand, if it’s a prerequisite of being able to proceed with an adjudication, then I suppose the plaintiff has to alleged.
Did you have any citations as to whether which side the line it’s on.
Mr. Mark L. Evans: I don’t have any citations, Mr. Justice Rehnquist.
I believe it ought to be the burden of the plaintiffs to make the allegation.
But, I say again, while the issue maybe somewhat ambiguous in the state of the record here, I don’t think there's any legitimate factual dispute over it.
I think Mr. Larson will concede that there's no question if they didn’t exhaust these procedures.
Justice William H. Rehnquist: Well, of course, that’s kind of tough to ask opposing counsel to concede something that’s outside the record.
Mr. Mark L. Evans: Well, see if the problem is that there's nothing in the record to suggest that they did exhaust it, and you know there's nothing in the record to suggest they didn’t either, but I guess the question comes down to where the burden lies, and I think I’ve --
Justice Thurgood Marshall: Does my question come down that the facts that are needed for these should have been presented in the lower court and since, you are raising them, why didn’t you raise it then, instead of raising it now?
Mr. Mark L. Evans: Well, it maybe that the --
Justice Thurgood Marshall: Why didn’t you raise it below?
Mr. Mark L. Evans: I wasn’t there below and I don’t know what went into their --
Justice Thurgood Marshall: But, you’re responsible for it.
Mr. Mark L. Evans: Yes, I’m certainly am.
I think that the thrust of the government’s response to the suit in the court of below was there was no subject matter jurisdiction and they responded on the merits to the constitutional claims and they succeeded on the jurisdictional issues and the constitutional claims of course were not addressed with respect to the Federal defendants in this case.
There's a corollary notion to that of judicial efficiency that impels, that suggest that this Court opt not to entertain the issue at this time, and that is the notion of administrative autonomy, which requires that an agency to give them a chance to correct its own errors.
Here, no such chance was given.
The only response that the appellants have made to this argument incidentally, is contained in a footnote and their reply brief, as a matter of fact, that might be where they indicated that they didn’t exhaust the procedures.
Well, they say in the footnote these problems, “The appellees also contend that appellants cannot complain about the constitutional inadequacy of the Federal appellees ex parte procedure."
This is I’m reading by the way from page 8 of their reply brief, since they did not utilize the ex parte corrective procedures.
Such an allegation is wholly without merit, where as here, the adequacy of the administrative procedure is the very issue to be resolved.
Justice Potter Stewart: That’s – I’ve read that on page 9, footnote 6.
Mr. Mark L. Evans: I have them on page 8, footnote 6, but I don’t have the printed brief that may explain the differences, I’m sorry.
So to the --
Justice Thurgood Marshall: (Inaudible)
Mr. Mark L. Evans: Well, the inference is available on any event that they have not in fact, exhausted the procedures.
I don’t want to press it anymore, because as you say there's nothing definitive that I can point to in the record.
Yes, Mr. Justice.
Unknown Speaker: I don’t know whether you reached this, but I would like to have it clarified.
I am looking at bottom of page 11 of the (inaudible) brief.
I’d like to read you a sentence, the last sentence.
“The consequence of permitting probationary employers to litigate the reasons for their discharge, are extensively merely to determine their eligibility of unemployment benefits would be to overturn the settle principle that a probationary employee does not have the right to contest the propriety of his discharge.”
I take it back then is that the principle that you say is settled and is conceded by your opponent is that a probationary employee maybe discharged even without cause, and with or without a hearing, no hearing as a matter of fact.
And I understand your brief to say that if we decide the case against the government on this issue that this will then become a precedent that will overturn the settled practice with respect to the discharge of probationary employees.
Now, if that so please tell me why?
Mr. Mark L. Evans: Well, I think it’s probably an over statement Mr. Justice.
There is of course, an analytical distinction between a hearing, with respect to the reasons for discharge, as it relates to unemployment compensation and a hearing with respect the validity of a discharged looking towards reinstatement.
And, there's no question that they’re separate, but the thrust of the statement, while it may have been an over statement, I think is accurate.
One of the reasons why a hearing would be inadvisable.
And, one of the reasons why a hearing is not provided, I think is that with respect to probationary employees, there needs to be the greatest amount of flexibility in an effort to weed out before an employee gets tenured status, incompetent and unsuitable employees, because of the importance of having abled people administering the government’s vital programs.
Once a man becomes tenured, it’s very difficult to remove them.
And, there are--the whole panoply procedures and just because of that extra protection he gets, it’s necessary that there be a great flexibility at the early stage.
Now, a hearing on the reasons for discharge of a probationary employee is going to have an impact on the decisions of supervisor’s make necessarily.
It’s not because the issue is one of reinstatement, but the fact of the matter is that a hearing, the prospect of a hearing is likely to be at deterrent to a supervisor, just because he realized that there's a great deal of manpower that has to go into it, a great deal of preparation.
His decision in a sense is going to be put on the line, even though there's not going to be an reinstatement that’ll result from it.
There is going to be a psychological impact and it will, I think, inhibit the flexibility, that I think is so essential.
So, in answer to your question, there is a relationship, though is not an analytically clear one.
Unknown Speaker: That’s it.
Mr. Mark L. Evans: I’d like to turn briefly to the statutory interpretation question.
Mr. Justice Brennan, I should note to your benefit I think, that the issue turns not on the section that you had read, it turns on Section 8506 of Title 5, which set forth at our brief, at pages 31 and 32.
Justice William J. Brennan: That’s the one isn’t it that authorizes the statement of reasons or something?
Mr. Mark L. Evans: That's right, that’s the one that requires the Federal employing agency to respond to a request from a state agency, by giving the findings, as what the word is.
Now, that the issue really turns on whether findings implies a hearing.
It seems to me plain that the findings doesn’t have that implication.
What it means here is simply a determination after an inquiry.
It has no implication one way or the other as to the form that inquiry would take.
And, you know when Congress has had a desire to require a hearing, it is not difficult to do so ambiguously and I should mention in the very next section, in 8507, which is not reprinted in the briefs, 8507 deals with the right of a state agency or the secretary of labor to recoup compensation paid to an employee who made a false statement, if he first finds that there has been a false statement made.
Now, what that says is “A finding by a state agency or the secretary maybe made only after an opportunity for a fair hearing.”
In the very next section, using the exact same words, they found it necessary to add only after a hearing.
I think that makes it quite clear that congress did not contemplate it, that there necessarily be a hearing preceding the findings that are referred to 8506.
Mr. Larson is correct in saying that we do not say this is the only possible interpretation of the statute.
I think a lot of the policy of unemployment statutes that the appellants set forth in their brief may well give this Court the option if it came to that of reading the statute to require a hearing, if it was necessary to preserve its constitutionality.
The point is however, that this a reading of the statute by the agency principally responsible for administering it, that we think it’s permissible and that we think ought to be respective, unless there’s a constitutional problem.
There are really two constitutional issues here, one is a due process issue and one is an equal protection issue and our position is that in neither argument is valid.
To start with a due process issue, we believe that the due process clause is not even implicated.
It provides that there no person shall be deprived of life, liberty or property without due process of law.
There’s no question that the appellants have not been deprived of life.
They don’t assert that they’ve been deprived of liberty, and so the question is whether there is a property right at stake.
Our position is that the property right in unemployment compensation benefits, like the right to continued employment in the Roth case is defined by the rules and understandings, under which the benefit is granted.
In Roth, the rules and understandings where contained in the terms of the appointment.
In this case, the rules and understanding are contained within the terms of the statutes in governing regulations.
And, those statutes and governing regulations made clear that the procedures available for correcting errors is the only procedure and that is the only way, one can correct errors that they find are made.
So, when one seeks unemployment compensation benefits, one seeks them with the understanding, that if there are errors in the Federal findings, they can be corrected by one method and one method only.
In these circumstance, there is no property right, unless the procedures that are specified have some sense been denied to the person.
I can think of one example that might serve to make the point, suppose at Congress enacted a statute granting benefits to victims of crime, provided that the administrator should first find on the basis of an application that has been submitted and on the basis of certified hospital and police records that in fact, the person was injured in the course of a violent crime.
And, supposed further, that the administrator’s determination were made unreviewable, except that the applicant after a denial of his application, might inquire further of the administrator, as to the further--as the basis of the denial and might seek reconsideration.
Now, this is basically what we have here, and I think it’s clear that there would be no due process right, no legitimate entitlement that an applicant who had been injured, who claimed to be have been injured in a course of a violent crime, would have to a due process hearing before the denial.
This is because the right, as Congress has to find it, includes only the procedures of Congress has specified.
Justice Potter Stewart: Now, has Congress has defined the right however to the statutory entitlement of unemployment compensation, it’s required that the state system, give an opportunity for a fair hearing before an impartial tribunal for all individuals, whose claims for unemployment compensation are denied, now those are the terms of state unemployment compensation.
Mr. Mark L. Evans: Mr. Justice Stewart that language comes from, I believe, Title 42, which is the Social Security Act, which of course does set up the standards, by which the secretary will approve state unemployment compensation plans, but that is quite different than the statutory scheme that was created from unemployment compensation for Federal employees.
Justice Potter Stewart: Or basically Federal employees were to be given the benefits that these state statutes give to other unemployed.
Mr. Mark L. Evans: That’s right, except that the statute quite clearly said that the information that is submitted to the state agency by the Federal employing agency shall be binding and conclusive.
There is no ambiguity about that, there maybe some ambiguity about whether the Federal government needs first to give them hearing, before they transmit the findings or after they’ve transmitted their findings.
Chief Justice Warren E. Burger: You’re saying that modifies the other provisions?
Mr. Mark L. Evans: That’s right.
It’s -- the statutory scheme that’s been set up for the Federal employees makes special provision for this.
Justice Potter Stewart: It didn’t say the information shall be binding and conclusive.
Mr. Mark L. Evans: It says the --
Justice Potter Stewart: Didn’t say the findings somewhere?
Mr. Mark L. Evans: The findings made --
Justice Potter Stewart: Where?
Mr. Mark L. Evans: I’m sorry on page 32 of our brief, which is Section 8506, towards the middle of the page.
Findings made in accordance with the regulations are final and conclusive for the purpose of Section 850 -- now, there is no question that the findings here were made in accordance with the regulations.
Justice Potter Stewart: Well, is the question about whether or not they were findings, we both know that -- (Voice Overlap)
Mr. Mark L. Evans: Well, there is a statutory question, I’ve dealt with that.
But, assuming that the secretary’s reading is correct, and that or permissible, I should say.
And, that the findings needn’t be predicated upon a hearing.
It seems to me quite clear that Congress has made it clear that they’ve defined the right to make with the condition that these findings will be conclusive enough, be open for further litigation.
I’d like to touch very briefly on the equal protection arguments.
There has been suggestion that there is a constitutional impermissible discrimination between state employees and private employees who are given full benefits.
And, between probationary Federal employees who were not given full benefits.
But again, these statutes had been setup different times, for different purposes and it seems to me our perfectly proper for Congress to draw, to strike a different balance in the context of federally funded benefits, when you’re dealing with Federal employing agency.
The Congress might reasonably determine that it was too much of a burden on the Federal government to require it to respond with hearings, in every case.
And, especially where they are giving us an alternative.
And, at least on its face, so far as we can tell from this case, an adequate way of correcting the errors might have been made.
Unknown Speaker: Mr. Evens, do I understand the agency has now gone along with the District of Columbia decision of the Smith case, is it?
Mr. Mark L. Evans: Yes, it is, shortly after the Smith case was decided the Secretary of Labor amended his regulations to provide that an employee who has resigned, a probationary employee, who has resigned and who disputes the findings of the Federal employing agency may have a hearing.
Now, there is a reason for that too.
In the case of a discharged employee, there is no question as to what the reasons were, I mean it’s within the Federal government’s competence to know what it was in it’s own mind when it discharged an employee.
When an employee resigns however, for example, if he resigns saying that he resigned, because it was too cold to work in that building, and the fact is from the Federal standpoint that he was resigned three days after he was told he was going to be terminated or might be terminated.
There's no way to resolve definitively what was in the employee’s mind.
And, if he wishes to commit in that point and show that what is in his mind is that the room was cold, that’s available to him, under the regulations.
There’s one other, of course, one other distinction that is between the treatment of probationary employees and permanent employees.
And, I think that the difference is they’re relate not to the statute, which gives them no permanent employees, no greater rights to hearing, to prevent to the findings are final and conclusive.
But, it relates to their different Civil Service status, they have a right to hearing with respect to their continued tenure and if it turns out after that hearing that the findings needed to be corrected, well the regulations specified that the agency must correct findings if it determines that there was an error within a year.
But, the purpose of the hearing is not to challenge the findings for unemployment compensation, but solely to challenge the validity of the discharge.
So again, if there's a distinction between them and in light of all these, we submit that the decision below should be affirmed.
Chief Justice Warren E. Burger: I think you’re time is consumed Mr. Larson. (Voice Overlap)
Rebuttal of E. Richard Larson
Mr. E. Richard Larson: If I may make one comment about this last one?
Chief Justice Warren E. Burger: Yes,
Mr. E. Richard Larson: We did note --
Chief Justice Warren E. Burger: Would you get to microphone so we’ll get on the record?
Mr. E. Richard Larson: As pointed out by Mr. Evans on page 9, note 6 of our reply brief, this Court held last term that were the adequacy of the administrative procedure is the issued to resolve, exhaustion is not required.
Chief Justice Warren E. Burger: Thank you gentlemen.
The case is submitted.