Commonwealth, Unemployment Compensation Board of Review v. Ceja

ROBERTS, Justice

concurring.

I concur in the judgment that the order of the Commonwealth Court must be affirmed. The uncorroborated hearsay evidence presented by the employer, Department of Revenue, clearly did not meet the employer’s burden of proving willful misconduct on the part of appellee which would bar unemployment compensation benefits. See Walker v. Unemployment Compensation Board of Review, 27 Pa.Cmwlth. 522 , 367 A.2d 366 (1976).

The opinion of Mr. Justice Kauffman reaches this obvious result through the announcement of new “guidelines” to govern administrative hearings. These “guidelines” are utterly unnecessary as demonstrated by the affirmance of the Commonwealth Court’s order. Further, Mr. Justice Kauff-man provides no guidance as to how these “guidelines” should be applied. The “guidelines” are to be applied on a “case by case basis” using “simple common-sense analysis,” 427 A.2d at 642, resulting “in some proceedings [where] circumstantial guarantees of reliability will suffice to render *615 uncorroborated hearsay competent,” 427 A.2d at 640 (emphasis added). Not only do these “guidelines” escape comprehension, they also invite confusion and lack of uniformity both in the conduct of administrative hearings and in judicial review of such hearings.

That confusion will result is evident from the application of Mr. Justice Kauffman’s “guidelines” to the facts of this case. The “guidelines” require that (1) all hearsay evidence, even if objected to, is “generally” admissible and that (2) hearsay alone can be relied upon as support for a factual finding, even if not corroborated, if either the proponent establishes “some foundation” for the hearsay’s reliability or reliability is “apparent on its face.” 427 A.2d at 642-644. Applied to the facts of this case, these “guidelines” should clearly result in an adverse determination to appellee and reversal, rather than affirmance, of the Commonwealth Court’s order. None of the documents introduced at appel-lee’s hearing were objected to, and even if objected to, all would have been properly admitted. The documents were prepared close in time to the events they purport to relate, were kept as part of the employer’s records and included two eyewitness accounts of the allegedly “willful misconduct” in dispute. Thus, under Mr. Justice Kauffman’s theory, there is “some foundation” for the hearsay’s reliability.

Although Mr. Justice Kauffman’s own “common-sense analysis” of the trustworthiness of these documents results in a determination favorable to appellee, the result is in no respect mandated by the application of the suggested “guidelines.” Thus, as vividly illustrated by this case, each administrative determination as to the sufficiency of hearsay evidence, under the novel approach proposed today, would be potentially subject to appeal for an appellate determination of “common-sense.” However, because appellate courts do not function as fact-finders, there inevitably would be widely disparate and irreconcilable administrative adjudications.

*616 The suggested “guidelines” would discard this Commonwealth’s long-standing requirement that administrative findings must be supported by some evidence that would be admissible over objection in a court of law. See, e. g., Walker v. Unemployment Compensation Board of Review, supra; Unemployment Compensation Board of Review v. Stiles, 19 Pa.Cmwlth. 38 , 340 A.2d 594 (1975); Pellegrino v. Unemployment Compensation Board of Review, 8 Pa. Cmwlth. 486, 303 A.2d 875 (1973); Glen Alden Coal Co. v. Unemployment Compensation Board of Review, 168 Pa.Super. 534 , 79 A.2d 796 (1951); Phillips v. Unemployment Compensation Board of Review, 152 Pa.Super. 75 , 30 A.2d 718 (1943); McCauley v. Imperial Woolen Co., 261 Pa. 312 , 104 A. 617 (1918). As a result, these “guidelines” would deny claimants in administrative proceedings the due process protections regarding admissibility of hearsay evidence which are afforded civil litigants who proceed to trial. The “routine” nature of administrative proceedings and the need for summary adjudications, to which the opinion of Mr. Justice Kauffman refers, cannot justify such a deprivation. To the claimant the administrative hearing is not “routine.” Often it is the proceeding which will determine his very livelihood, a fundamental property right protected by the due process requirements of the United States and Pennsylvania Constitutions.

The present evidentiary rules which govern administrative proceedings in this Commonwealth recognize that a claimant may waive objection to the admissibility of hearsay evidence. However, should the claimant assert the right of cross-examination by objecting to the admission of hearsay evidence, his constitutional right must be recognized. Moreover, where objection is not made, as is often the case in uncounseled proceedings, the fairness of the adjudicatory process is assured by requiring that an administrative decision cannot rest solely upon hearsay. The hearing examiner may use the hearsay evidence in reaching a decision, but hearsay relied upon must be corroborated by competent evidence. Since claimants in administrative proceedings are *617 often unrepresented by counsel this minimal requirement is salutary indeed. *

The fact that an administrative adjudication need be supported by no more than “substantial evidence” to withstand judicial review further displays the need for protection against the decision-maker’s sole reliance on unsworn statements not subject to cross-examination. The “opportunity to challenge the hearsay documents,” 427 A.2d at 644, to which Mr. Justice Kauffman refers, is indeed a hollow opportunity. Without the ability to cross-examine his accusers, the claimant can counter only with denials, which hardly have the same probative effect. Compare Peters v. United States, 408 F.2d 719 , 187 Ct.Cl. 63 (1969) with Jacobowitz v. United States, 424 F.2d 555 , 191 Ct.Cl. 444 (1970). For this reason, our administrative rules of evidence, unlike the suggested “guidelines,” have always required that an agency adjudication be supported by some competent evidence which the claimant has not been deprived of the right to cross-examine.

Richardson v. Perales, 402 U.S. 389 , 91 S.Ct. 1420 , 28 L.Ed.2d 842 (1971), upon which the opinion of Mr. Justice Kauffman relies, does not support his position that in all administrative proceedings hearsay alone should be permitted to support a determination adverse to the claimant. In Perales , the United States Supreme Court held that unsworn medical reports, uncorroborated and admitted despite objection by the claimant, could constitute “substantial evidence” in a social security disability hearing “when the claimant has not exercised his right to subpoena the reporting physician and thereby provide himself with the opportunity for cross-examination of the physician.” Id. at 402 , 91 S.Ct. at 1428 . The Court based its holding on two critical factors: (1) social *618 security medical reports prepared by independent agency physician consultants had long been recognized as unbiased, reliable and probative and (2) the claimant had a right pursuant to agency regulations to subpoena the reporting physicians. Further, the claimant not only had the right, but had exercised the right, to a supplemental hearing after the first agency hearing was completed.

These factors are neither present on this record nor generally applicable to administrative hearings in this Commonwealth. In the case now before the Court, the fair adjudication of appellee’s alleged “willful misconduct,” the subject to which the hearsay documents relate, clearly requires a determination of the credibility and veracity of the authors of those documents. Unlike the reports in Perales , the documents cannot be said to be unbiased. Further, the Board of Compensation Review alone, and not the claimant, has the right to subpoena witnesses. 43 P.S. § 826. Manifestly, the opinion of Mr. Justice Kauffman errs in relying on the limited holding of Perales as authority for a general rule of admissibility of all objected-to hearsay, even when the special considerations present in Perales do not exist.

Moreover, notwithstanding the implications of Perales , it is contrary to our jurisprudence to require an individual to call adverse witnesses against himself. The burden of proving willful misconduct is on the employer, McLean v. Unemployment Compensation Board of Review, 476 Pa. 617 , 383 A.2d 533 (1978), and thus he must prove his own case.

To the extent that hearsay is admitted, the constitutional ‘■rights of confrontation and cross-examination are denied. Thus, any modification of our rules against hearsay should be made cautiously, if at all. In the absence of any error below, this case most certainly does not provide the proper vehicle for modification, nor does the opinion of Mr. Justice Kauffman provide the proper direction.

LARSEN and FLAHERTY, JJ., join in this concurring opinion.

Notwithstanding the contrary implication of the opinion of Mr. Justice Kauffman, the weight of authority supports adherence to the “legal residuum rule.” See Schwartz, Administrative Law § 117 (1976) and 1 Cooper, State Administrative Law 406-10 (1965), which together cite thirty-one jurisdictions that apply the present Pennsylvania rule. Further, the rule is strongly endorsed by Professor Schwartz, supra at §§ 114-21.