Crow v. California Department of Human Resources Development

DUNIWAY, Circuit Judge

(concurring and dissenting).

I concur in the holding that the case is not moot, but I cannot agree that appellant and the class of persons whom she represents are not entitled to a due process type hearing before their right to unemployment insurance benefits may be terminated.

I do not believe that the majority has successfully distinguished Goldberg v. Kelly, 1970, 397 U.S. 254, 90 S.Ct. 1011, *585 23 L.Ed.2d 287. I think that Goldberg is directly in point here and that it requires affirmance of the judgment of the district court. The majority attempts to distinguish Goldberg on several grounds. I consider them seriatim.

First, the majority says that the decision to terminate Ms. Crow’s benefits was based on information that she furnished, and not on third party information. In so holding, the majority disagrees with a contrary finding by the district judge, which I believe to be fully supported by the record and not clearly erroneous. There was a factual dispute as to what occurred at Ms. Crow’s job interview, and the examiner apparently relied on information furnished by the employer’s interviewer. Ms. Crow had no chance to confront and question him on the crucial questions: did he offer her a job and did she refuse it? Ms. Crow said that she had not been offered a job (R. 125); the interviewer apparently reported that he had offered the job and she had refused it. (R. 127, 128-9, 131) The judge’s finding (325 F.Supp. at 1318, 1319) is supported by the record.

Second, the majority says that there was no misapplication of policies or rules in this case. Again, I am compelled by the record to disagree. The theory is that Ms. Crow “precluded” employment by telling the employer’s job interviewer that she would leave the employer’s job if she could get higher pay elsewhere. Ms. Crow had been earning $2.75 per hour. The prospective job paid $2.20. She told the Department interviewer that “the wage sounded pretty low and [she] was told by the interviewer that perhaps if she did interview for the job, she might be able to obtain a higher starting wage.” (R. 88) Under Benefit Decision 6429 of the California Unemployment Insurance Appeals Board, Ms. Crow should have been told that $2.75 was too much to demand from Goodwill. As the Appeals Board referee said, “If her demands are considered unreasonable, the claimant should be advised of that fact so that she will have an opportunity to pattern her demands to the prevailing wage.” (R. 91) Thus, the blame for Ms. Crow’s misfortunes arising from her telling the truth rests on her Department interviewer, who neglected to follow a policy promulgated by the California Unemployment Insurance Appeals Board.

Third, the majority says that “the Goldberg rationale is based, at least in part, upon the fact that a welfare recipient will, upon termination, be faced with a grievous loss. No such loss exists in this situation.” I cannot agree. No doubt it is true that some wage-earners who are covered by unemployment insurance have other resources with which to support themselves while looking for another job. But I believe that we can take judicial notice that the vast majority of wage-earners, especially those in low paid jobs, have no such resources, but are wholly dependent for their and their families’ livelihood upon their wages. Loss of a job, like pre-judgment garnishment, “may as a practical matter drive a wage-earning family to the wall” (Sniadach v. Family Finance Corp., 1969, 395 U.S. 337, 341-342, 89 S.Ct. 1820, 1822, 23 L.Ed.2d 349). For most wage-earners, loss of a job is more than a “grievous loss”; it is a calamity. The trial judge found that Ms. Crow suffered “serious injury” (325 F.Supp. at 1318, and see R. 18-21). The majority does not quarrel with this finding. Assuming that “grievous loss” is required, I am unable to distinguish it from “serious injury” in this context. Ms. Crow suffered the same kind of loss that the plaintiffs in Goldberg suffered, loss of necessary income.

Fourth, the majority says that the source of funds used to pay unemployment benefits is different from the source of funds used to pay welfare; and that the state’s interest in unemployment compensation is different because it is that of a stakeholder, rather than a benefactor.

Again, I am unable to agree. The source of the funds in both cases is taxes. In the case of welfare, the taxes are *586 levied on the public as a whole. In the case of unemployment compensation, the taxes are levied on the wage-earners’ employers. This would seem to me to give to wage-earners an even greater stake in the funds than welfare recipients have in funds appropriated for welfare payments. If relevant at all (and the majority does not tell us how it is relevant), the difference strengthens rather than weakens the claim to due process asserted by Ms. Crow and those whom she represents. Moreover, the state is no mere stakeholder; it owns the money that it collects and the Federal government contributes to the funds. As in Goldberg, the benefits here involved “are a matter of statutory entitlement for persons qualified to receive them.” (397 U.S. at 262, 90 S.Ct. at 1017.)

Furthermore, one purpose of unemployment insurance is to prevent people from going on welfare; it serves “to maintain the recipient at subsistence levels without the necessity of his turning to welfare or private charity.” California Human Resources Dept. v. Java, 1971, 402 U.S. 121, 131-132, 91 S.Ct. 1347, 1354, 28 L.Ed.2d 666. The two programs are intertwined, both provide aid to people unable to work, and there is no reason to distinguish them for purposes of this case. As the Supreme Court has said, in discussing unemployment insurance benefits, “the payments to the employees were not made to discharge any liability or obligation of [the employer], but to carry out a policy of social betterment for the benefit of the entire state.” N.L.R.B. v. Gullett Gin Co., 1951, 340 U.S. 361, 364, 71 S.Ct. 337, 340, 95 L.Ed. 337. And in Goldberg, the Court went out of its way to suggest that “[r]elevant constitutional restraints apply as much to the withdrawal of public assistance benefits as to disqualification for unemployment compensation.” 397 U.S. at 262, 90 S. Ct. at 1017.

I conclude that Goldberg is squarely in point and that it requires a due process type hearing before unemployment compensation is terminated, at which there is an opportunity to confront and question a third party who has furnished information upon which the Department relies. See 397 U.S. at pp. 267-268, 269-270, 90 S.Ct. 1011.

I find nothing to the contrary in Richardson v. Perales, 1971, 402 U.S. 389, 91 S.Ct. 1420, 28 L.Ed.2d 842, cited by the majority. There, the Court carefully distinguishes Goldberg (402 U.S. at 406-407, 91 S.Ct. 1420).

I would affirm.