Opposition Brief — Doherty v. Pennington

NO. 94-592

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1994

LYNN Q. DOHERTY, Director of the Illinois Department of Employment

Security and successor in office to LOLETA DIDRICKSON and

SALLY WARD, former Directors of the Illinois Department of

Employment Security,

Petitioner,

-VS-

LUELLA PENNINGTON, individually and on behalf of others

similarly situated,

Respondent.

MOTION TO FILE BRIEF IN OPPOSITION TO PETITION

FOR WRIT OF CERTIORARI IN FORMA PAUPERIS

Pursuant to Sup. Ct. R. 39, Respondent, LUELLA PENNINGTON, moves to file her

Brief in Opposition to the Petition For Writ Of Certiorari filed herein. In support thereof,

Pennington offers the attached affidavit evidencing her financial status and states that:

l. She represents a class of claimants who have or will apply for unemployment

insurance in Illinois;

2. She is, and has been represented in this matter, by the Legal Assistance Foundation

of Chicago ("LAFC"), a legal services organization. One of her attorneys, Mr. Jeffrey B. Gilbert,

has been a partner with Johnson, Jones, Snelling & Gilbert since September 16, 1994, but was

employed at LAFC for fifteen years prior thereto. Since his departure from LAFC, Mr. Gilbert

has remained as counsel to Ms. Pennington and the class in this case and is co-counseling with

LAFC;

3. On July 7, 1985, Ms. Pennington moved to file this action in forma pauperis in the

United States District Court for the Northern District of Illinois. That motion was granted on

July 19, 1985.

WHEREFORE, Respondent requests that this Court permit her to proceed in forma

pauperis.

Respectfully submitted,

JEFFREY B. GILBERT

Johnson, Jones, Snelling & Gilbert

343 South Dearborn Street

Suite 1110

Chicago, Illinois 60604

(312) 341-9366

ROBERT E. LEHRER

DORY RAND

Legal Assistance Foundation

of Chicago

343 South Dearborn Street

Suite 700

Chicago, Illinois 60604

(312) 341-1070

Attorneys for Respondent

NO. 94-592

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1994

LYNN Q. DOHERTY, Director of the Illinois Department of Employment

Security and successor in office to LOLETA DIDRICKSON and

SALLY WARD, former Directors of the Illinois Department of

Employment Security,

Petitioner,

-VS-

LUELLA PENNINGTON, individually and on behalf of others

similarly situated,

Respondent.

AFFIDAVIT INSUPPORT OF MOTION TO PROCEED ON

APPEAL IN FORMA PAUPERIS

I, LUELLA PENNINGTON, being first duly sworn, depose and say that | am the

Respondent, in the above-entitled case; that in support of my motion to proceed in this

matter without being required to prepay fees, costs or give security therefor, | state that

because of my poverty | am unable to pay the costs of said proceedings or to give

security therefor; that | believe | am entitled to redress; and that | desire to respond to

the Petition for Certiorari filed by Lynn Q. Doherty and to otherwise defend the Court of

Appeals’ decision should this Court grant the Petition.

| further swear that the responses which | have made to the questions and

instructions below relating to my ability to pay the cost of prosecuting the appear are

true.

1. Are you presently employed? NO

a. If the answer is yes, state the amount of your salary or wages per

annum per month and give the name and address of your employer.

b. if the answer is no, state the date of your last employment and the

amount of the salary and wages per month which you received.

‘ | was last employed part-time in September 1986 when | earned approximately

$4.00 per hour for 20 hours per week, and | received some additional unemployment

insurance benefits for a total of approximately $500.00 per month.

A Have you received within the past twelve months any income from a

business, profession or other form of self-employment, or in the form of rent payments,

interest, dividends, or other source? NO

a. lf the answer is yes; describe each source of income, and state the

amount received from each during the past twelve months.

3. Do you own any cash or checking or savings account? YES

a. if the answer is yes, state the total value of the items owned.

| have a checking account (No. 10000655084) at Merchandise National Bank in

Chicago, Illinois. | receive a month Social Security check in the amount of $467. |

have approximately that amount (or a little more) in the account. When a check is

x

deposited and spend it down through the month until the next check arrives. | also

receive $ Q0- in food stamps every month.

4. Do you own any real estate, stocks, bonds, notes, automobiles, or other

valuable property (excluding ordinary household furnishings and clothing)? NO

a. If the answer is yes, describe the property and state its

approximate vaiue.

5. List the persons who are dependent upon you for support and state your

relationship to those persons.

| have no dependents other than myself.

| understand that a false statement or answer to any questions in this affidavit

will subject me to penalties.for perjury.

7 f) sm

Atta tZ AAW 2 fu

ue LUELLA etnies di

)

SUBSCRIBED AND SWORN to before me this 24 day of LOTMEL/X_, 1994

Rm Bre tks aL " cis

{ “ORCL “OFICIAL SAL" ‘ ( y pan ach Leen) cg \. 7Yoca 1,

ans Fates cd ina j NOTARY PUBLIC

pay ein Expt 12! Jot

e. aI BON IN MCEUCRE AERO ORES EAE

Let the applicant proceed without prepayment of costs or fees or the necessity of

giving security therefor.

NO. 94-592

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1994

LYNN Q. DOHERTY, Director of the lilinois Department of Employment

Security and successor in office to LOLETA DIDRICKSON and

SALLY WARD, former Directors of the Illinois Department of

Employment Security,

Petitioner,

-VS-

LUELLA PENNINGTON, individually and on behalf of others

similarly situated,

Respondent.

On Petition for Writ of Certiorari to the United States

Court of Appeals for the Seventh Circuit

BRIEF IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI

JEFFREY 8. GILBERT

Johnson, Jones, Snelling & Gilbert

343 South Dearborn Street

Suite 1110

Chicago, Illinois 60604

(312) 341-9366

ROBERT E. LEHRER

DORY RAND

Legal Assistance Foundation

of Chicago

343 South Dearborn Street

Suite 700

Chicago, lilinois 60604

(312) 341-1070

Attomeys for Respondent

TABLE OF CONTENTS

Page

Be Oe TIT. sisicshnsikuterasvsscedgribcatiericntsecietessdeindenierabeieesbinon ii

er I IE 250. ssn sides dhvdaadsien intenveanexiaspescubbdaneminstoisncneenonres 1

I. TOME PRUE FOUN PUP TERINY Secicssiccacscntcesvncecdassivnssescvonssseniiveons 1

I. ee I dia pe cage snes Siasdianarncaeinnidendeccathascoienes 2

A. The Operation Of Section 237 Under The IVIA ............ 3

B. The Reason Section 237 Delays Payment Of Benefits:

Wage Record, Wage Request, And Movable Base

Pe No ccse shes ent bqsncpigincnd earpuciaevaied seeiaeedonnrs | 7

. C. Luella Pennington's And The Class Members’ Stories......... 9

UHI. CORES. UPC GORI NGMPUMINIID ssinssiliceticacieessusaiieveneticessnassainatas a

IV. | THE COURSE AND DISPOSITION OF THE PROCEEDINGS

IN THE DISTRICT COURT AND IN THE COURT OF APPEALS 11

REASONS FOR DENTVING THE WRIT nn. cccccccccsccsccccceccccnsccaceeccccees. Bia 14

I. THIS CASE INVOLVES NONE OF THE "SPECIAL AND -

IMPORTANT REASONS" FOR GRANTING WRITS OF

es __ URES iuenretires ase ret pei DACRE Ur IER RCC EN 14

A. The Court Of Appeals’ Decision Will Not Disrupt The

Unemployment Insurance System ....................66cecceeeees. 16

B. The Court of Appeals’ Decision Was Correct .................... 20

SU RNIIOE. icSiiininuissdsudodecsvaiqcivcscocs hating baladaanaalsceti nas ta aise 25

RESPONDENT'S APPENDIX

GLOSSARY

TABLE OF AUTHORITIES

Cases

Brotherhood of Locomotive Firemen v. Bangor & Aroostock

i CRA, SN AD CUED snccenesencessensertveevsseccevesecese

California Department of Human Resources Development v.

Tg gg: SAE aE eee ewes ae

Esparza v. Valdez, 862 F.2d 788 (10th Cir. 1988), cert. denied,

I a

Fleiszig v. Board of Review, 412 Ill. 49, 104 N.E.2d 818 (1952)....

Fusari v. Steinberg, 419 U.S. 379 (1975) «0... cccccccccceceeeeeeeee

Hamilton-Brown Shoe Co. v. Wolf Bros. & Co., 240 U.S. 251

RUS TR SES ROI ae SG Pe One Se

Jenkins v. Bowling, 691 F.2d 1225 (7th Cir. 1982) .............00..00...

McCray v. New York, 461 U.S. 961 (1983) 0.0.0...

Ohio Bureau of Employment Services v. Hodory, 431 U.S. 471

aa el dccgi las aveiapnieisbousuiine

Paschal v. Jackson, 936 F.2d 940 ‘7th Cir. 1991), cert. denied

RCL tee RecN NAP Ae nC

Ross v. Moffitt, 417 U.S. 600 (1974) 0... ccccccecseseeteeees

Rudolph v. United States, 370 U.S. 269 (1962) 000.0. ee.

, 15

, 23

Statutes

Federal:

I sna aopunbioesicenonciinnesenendeceminbionn passim

ilinois:

i ated apdes adeno ambalaeenbaanenmabnaetunes 1

I a deenciaskentnnsbenaabousspionenieasi passim

es ae neetaanoelighohinaiahion 3,4

cc aa lanasceudaniincinnbeanbaainiatinoesomanen Peery 3,4

I SR en AE TC era camino 3

sd sab casuknanibuiabsiondto ma pniviadscinenes . 3

SR PERN Pa held ee eT 3

ERIE TR a UE eR ee RL aPC 3

Other States:

Mass. Ann. Laws ch. 151A, § 1(a), as amended by ch. 26,

§ 6 of the Acts and Resolves of 1992 ......0.......0 eee. . 8

Me. Rev. Stat. Ann. tit. 26, § 1043.3 (1992) 2.0.00... 8

Mich. Comp. Laws § 421.45, as amended by 1994 Mich. Pub.

BNR ERR i SSRN oe nO A oP eC 8

Ohio Rev. Code Ann. § 4141.01(Q) .............ccccccccceeceeeeeeeees a ae

PRE Gere, Cr BS BOG) on. os cccsncvcccecsasceccecoseseseccoscovesscone: | 8

Bee ee te IU Aastra ta sip tuts dincinbaadececeenchauessexeaveseennenonsenens 9

Wash. Rev. Code § 50.04.020 (1991) ..........ccccccccccccccceceeeeeseeeeee 18

Requlations

on 1

SEAR Ser Ee 11

ATL LA 10, 11

a 8 14,15

Miscellaneous

Appendix to Appellants’ Brief in California Dept. of Social

Services v. Java, No. 507 (U.S. Sup. Ct. 1970) oo... 19

Stern, Gressman, Shapiro, Geller, Supreme Court Practice (7th

arcs scycansécnnadadneneveenavee 21

Unemployment Insurance Legislative Policy:

Recommendations for State Legislation, 1962 ................. 24

Unemp. Ins. Rptr. (CCH), {| 3000-3062 (All State Charter)

ESE SR ROSE Ren eas APA IS Rar Ol ett SP eC 17

STATEMENT OF THE CASE

l. THE NATURE OF THE A N

Respondent, Luella Pennington, and the members of the class she represents,

are Claimants for unemployment insurance ("UI") benefits under the Illinois

Unemployment Insurance Act ("IUIA").' 820 ILCS 405/100 et seg. They brought this

case against Petitioner, the Director of the Illinois Department of Employment Security

("Director” of "IDES"), to challenge the statutory definition of "base period" found at

section 237 ("section 237") of the IUIA. 820 ILCS 405/237. The base period is the time

period within which claimants must have earned sufficient wages to qualify for UI

benefits. The claimants argue that the definition of "base period" in section 237 delays

payment of Ul benefits in violation of 42 U.S.C. § 503(a)(1), which requires that a

state's unemployment insurance law provide for "methods of administration ...

reasonably calculated to insure full payment of unemployment compensation when

due" (the “when due" clause), and the Secretary of Labor's regulations implementing

the “when due" clause. 20 C.F.R. pt. 640.

A panel of the Court of Appeals for the Seventh Circuit held, unanimously, that

section 237 defined a "method of administrative" that was subject to the when due

clause. Appendix ("App") 1-24 It then remanded the case to the district court for a

Because this case involves numerous acronyms, a glossary is included at the

end of this brief.

; In addition to the Appendix, which is bound with the Petition For Writ of

Certiorari and which we cite as “App.", we cite to: the Petition itself ("Pet.");

Respondent's Appendix ("Resp. App.") which is attached to this brief; and portions of

the record transmitted to the Court of Appeals, including the trial transcript ("Tr.") and

plaintiffs’ trial exhibits ("“P. Ex.").

1

factual determination as to whether that administrative method complied with the "when

due" clause and the implementing regulations. Id. at 23-4. The Director filed a petition

for rehearing and suggestion for rehearing en banc in the court of appeals, but "no

judge in active service ... requested a vote thereon, and all judges on the original panel

... voted to deny the petition." Id. at 26. Accordingly, the Director's rehearing petition

was denied. Id. at 25-6. .

The panel also denied the Director's motion to stay the mandate pending her

filing of a petition for writ of certiorari in this Court. Resp. App. 1-3. In its ruling on that

motion, the panel observed, among other things, that the Director did not enjoy a

probability of success on the merits of her petition for a writ of certiorari, and that, in

any event, she might ultimately prevail in the litigation on remand. Id. at 2-3.

Accordingly, the appellate court's mandate issued, and the case is proceeding apace in

the district court.

Hl. STATEMENT OF FACTS

Throughout her petition, the Director ignores the most important facts, virtually

all of which are ones to which she stipulated. We present these facts here, citing to the

Stipulations of Fact in Section Ill of the Amended Final Pretrial Order, which are found

in the Appendix at 66-84.° E.g., "Stip. 1 A.1, App. 66-7."

: The citations to Illinois statutes in the Stipulation are to the oid "Illinois Revised

Statutes" ("Ill. Rev. Stat.") which have been replaced by a new codification, "Illinois

Consolidated Statutes” ("ILCS").

2

“A. The Operation Of Section 237 Under The IUIA

In Illinois, an eligible claimant can draw regular UI benefits during a "benefit

year,” which is the one-year period beginning with the Sunday of the week in which she

first files a “valid claim" for benefits. 820 ILCS 405/242; Stip. J A.3, App. 67-8. To file

a valid claim, however, a claimant must have earned sufficient wages during a year

period called the "base period.” Id. at 242 and 500.E.: see Stip. J A.1, App. 66-7.

The claimants do not challenge either the amount of earnings required to qualify

for benefits under the IUIA or section 237's dictate that a claimant must have earned

that amount during a one year period. Rather, the claimants challenge section 237's

definition of that one year period as necessarily including only "the first four of the last

five completed calendar quarters immediately preceding the benefit year” (the "section

237 base period"). Id: at 237; see Stip. J A.4, App. 68. By that definition, section 237

skips both the calendar quarter in which the claimant files his claim (the "filing

quarter"), because that is not a “completed” quarter, and the preceding calendar

’ To be eligible for benefits, a claimant must have earned at least $1600 during

the whole base period and at least $440 outside the calendar quarter in which he

earned the most wages. 820 ILCS 405/500.E; see Stip. 7 A.1, App. 66-7. We call this

the “earnings requirement.”

Whether a claimant has sufficient wages in his base period is resolved by a

“finding” issued pursuant to Section 701 of the IUIA. Id. at 701; see Stip. J A.2, App.

67. If a claimant is monetarily eligible, he is said to have filed a “valid claim." Id. at 242

and 500.E; see Stip. at 7 A2, App. 67

That a claimant has filed a valid claim does not necessarily mean that he will

receive benefits, however, because he can be disqualified based on a non-monetary

“determination” issued pursuant to section 702 of UIA. Id. at 702; see Stip. at J

A.2 n. 4, App. 67. Examples of non-monetary lifications are those that disqualify

Claimants who were "discharged for mi ed with work” or "voluntarily

leaving work without good cause attributable to the employ/er]." See id. at 601 and

602.

a

¥

quarter (the "lag quarter”), because that is the fifth of the five completed calendar

quarters prior to the benefit year. See Stip. 7 A.5, App. 68; Tr. 16-19. Consequently,

when IDES determines whether a claimant has sufficient "qualifying wages," section

237 dictates that it disregard any wages earned by the claimant in both the filing and

the lag quarters.* Id.

Examples illustrate the operation of section 237:

If claimant Smith applied for benefits in the first quarter of 1994, her base period

would be the fourth quarter of 1992 and the first three quarters of 1993. If she earned

$1160 in one of those base period quarters, $400 in another, and $20 in each of the

other two, she would have earned just enough qualifying wages to be eligible for

benefits. See Stip. J A.1. n. 3, App. 67; Tr. 23-4; and 820 ILCS 405/500.E (providing

that, to be eligible for benefits, a claimant must have earned at least $1600 during the

whole base period and at least $440 outside the calendar quarter in which she earned

the most wages).

? As used herein:

(a) "qualifying wages” are the wages that a UI claimant earned during the

Section 237 base period that can, therefore, be used to establish eligibility wnen the

claimant first applies for benefits.

(b) “disregarded wages" are the wages that a Ul claimant earned in either his

lag or filing quarter that cannot be used to establish eligibility when a claimant first

applies for benefits.

(c) “lag quarter eligible claimants" are the class members who need only their

lag quarter wages to become eligible.

(d) “filing quarter eligible claimants" are the class members who need both

their lag and filing quarter wages to become eligible.

4

Consider, in contrast, claimant Jones who, we may assume, also applied for

benefits in the first quarter of 1994 and whose base period would therefore be the

same as that of claimant Jones (the fourth quarter of 1992 and the first three quarters

of 1993). Assume also that claimant Jones earned $1500 in the second base period

quarter (January 1 through March 31, 1993), $400 in the third quarter (April 1 through

June 30, 1993), and $20 in the fourth quarter (July 1 through September 30, 1993), but

none in the first base period quarter (October 1 through December 31, 1992). Assume,

too, that Jones earned $20 in the fifth completed quarter prior to filing (October 1

through December 31, 1993). Since the fifth completed quarter prior to filing is the lag

quarter, the $20 Jones earned in that quarter is disregarded because section 237

dictates that lag quarter wages are not counted in determining eligibility. Jones is,

therefore, ineligible based on her first quarter 1994 claim because, though she earned

more than $1600 in her section 237 base period, she did not earn more than $440

outside the calendar quarter in which her wages were highest. See Stip. J A.5n. 5,

App. 68.

In sum, because of section 237, unless a claimant has sufficient qualifying

wages in the first four of the last five completed calendar quarters, he is ineligible for

benefits when he first becomes unemployed, even if he would have sufficient qualifying

wages if his earnings in the lag and/or filing quarter were counted toward eligibility. Id.

at 76, App. 68. Thus, to use our example, Claimant Smith is eligible when she first

becomes unemployed, but claimant Jones is not, even if though Jones earned wages in

her lag quarter that, if counted, would constitute enough to qualify her for benefits. Id.

q 5, App. 68.

But if a claimant like Jones simply waits until her most recent wages fall into the

first four of the last five calendar quarters as defined by a later dated claim, she

becomes eligible for benefits. Id. Jf] 7-8, App. 68-9. Claimant Jones, for example, will

become eligible for benefits if she wells until the second quarter of 1994 to file a claim,

because a claim filed during that quarter will permit the wages she earned during the

fourth quarter of 1993 to be counted in her base period. Id.

The Director wrongly asserts that the class consists of "claimants who are

monetarily ineligible for benefits." Pet. at 5. She can make that assertion only by

ignoring two of her own stipulations. First, the class definition itself confirms that class -

members are claimants who were denied benefits "solely because part or all of their

wages, otherwise sufficient to satisfy Section 500(E) of the Act, were disregarded by

operation of section 237 of the Act." Stip. at ] B.3.a; App. 71-2 (emphasis added).

Second, the Director has stipulated that wages that are initially disregarded, because

they fall in a claimant's lag and/or filing quarters, become qualifying wages by the

passage of enough time so that they fall within the section 237 base period defined by

the date of her second claim. Id. at 9] A.7 and 8, App. 68-9. Thus, the Director has

admitted that, although class members are treated as ineligible when they first apply for

benefits, they become eligible by doing nothing more than waiting until sufficient time

has passed to file a second claim.

Accordingly, the class does not consist of "claimants who are monetarily

ineligible for benefits." Pet. at 5. It just consists of those who cannot establish their

eligibility until they wait for their lag or filing quarter wages to fall within the base period

defined by section 237.°

B. The Reason Section 237 Delays Payment Of Benefits: Wage

Record, Wage Request, And Movable Base Period Systems

Just as the Director ignores the fact that section 237 delays adjudication of

eligibility, she ignores the reason why section 237 does so. Each state uses one of

three systems for compiling wage data. See Stip. J] C.1-6, App. 72-3. The most

common system, and the one used in Illinois, is the wage record system. Id. at J] C.2,

App. 73; Tr. 23. Many states once used a wage request system, see id. at J C.4, but,

to our knowledge, only New York and New Hampshire still do so. Recently, some wage

record states have begun to use "movable" base periods. Id. at 9 C.6, App. 74; P. Ex.

2.

Under a wage record system, employers that are covered by the state's

unemployment insurance statute report gross wages of all their employees to the state

unemployment security agency ("SESA") on a quarterly basis. Id. at ] C.2, App. 73; Tr.

12, 16. In contrast, under a wage request system, the SESA does not request wage

information of a claimant's employer until the claimant applies for benefits, when her

wages are required to adjudicate her claim. Id. at 9 C.4., App. 73; Tr. 11-16.

: Lag quarter eligible claimants must wait from when they apply in their filing

quarters until the beginning of the next calendar quarter. Tr. 70. Filing quarter eligible

claimants must wait from when they apply in the filing quarter through the whole of the

next full calendar quarter until the beginning of the subsequent quarter to file a valid

claim. Tr. 70-71.

7

A wage record system is characterized by the existence of a gap - which is

commonly called the "lag" period - between the end of a claimant's base period and the

beginning of that claimant's benefit year. Id. at | C.3, App. 73; Tr. 15-20. The Director

has admitted that, in wage record states, "[t]his gap is necessary because time is

required for employers to report wages to the SESA and for the SESA to make that

information available in the local UI offices where claims are first taken and

adjudicated." Id. She has also admitted that, in contrast, SESAs in wage request

states can request the most recent wage information for each claimant. Id. at J C.5,

App. 73-4; Tr. 15-16. Accordingly, in a wage request state, there is no need for a gap

(or at least not a long one) betwéeén the end of the claimant's base period and the

beginning of his benefit year. Id.; Tr. 13-20.

A so-called "movable base period" system retains certain advantages of a wage

record system while minimizing the delay that is experienced, because of the lag

period, by those claimants who need their lag and/or filing quarter wages to qualify for

benefits. See Stip. J C. 6., App. 74; Tr. 27. Under a movable base period system, the

state uses a section 237 base period, except that, when an applicant has insufficient

qualifying wages in that base period, the SESA promptly redetermines the claim based

on the wages earned in the four completed calendar quarters prior to the claim.’ Id.;

: A chart of the base periods used by states as of the trial is Plaintiff's Exhibit ("P.

Ex.") 2. Since that chart was developed, however, Maine, Massachusetts, Michigan

and Rhode Island have adopted "movable" base periods. See Me. Rev. Stat. Ann. tit.

26, § 1043.3 (1992); Mass. Ann. Laws ch. 151A, § 1(a), as amended by ch. 26, § 6 of

the Acts and Resolves of 1992; Mich. Comp. Laws § 421.45, as amended by 1994

Mich. Pub. Act. 162; R.I. Gen. Laws § 28-42-3(10).

8

see e.g., Ohio Rev. Code Ann. § 4141.01(Q); Tr. 25-27. Vermont also moves the base

period to include filing quarter wages earned prior to the claim. 21 V.S.A. § 1301(17).

C. Luella Pennington's And The Class Members’ Stories

Luella Pennington applied for Ul on June 7, 1984 (the second quarter of 1984),

and thereby created a base period of January 1, 1983 to December 31, 1983. Stip., J

B.2; App. 70-1. Pursuant to section 237, the first and second calendar quarters in 1984

were not in her base period, because those were her lag quarter and filing quarter,

respectively. Id. at 4] B.2.b.-d; App. 70-71. Looking only to the wages Pennington had

earned in calendar year 1983, the section 237 base period defined by her June claim,

Pennington was ineligible for benefits. Id. at ] 2.c., App 71. Accordingly, IDES denied

her benefits based on that claim. Id.; P. Ex. 3.

Pennington remained unemployed, however, and filed a second claim for

benefits on or about October 5, 1984. Id. at 9 2.e., App. 71. The section 237 base

period determined by reference to that October claim included the period from January

1 through June 30, 1984. Id. at ]2.f.; App. 71. That is, by the passage of time, the

quarters that had been Pennington's filing and lag quarters when she filed in June,

became base period quarters when she filed in October and, consequently, the wages

that IDES disregarded for purposes of her June claim became qualifying wages for

purposes of her October claim. Id. at ] 2.g., App. 71. She thus became entitied to

receive benefits. Id.; see Pet. at 5 (although "Pennington was denied ... Ul benefits

upon filing her June 1984 claim because she had earned no wages during her base

period[,} ... [Jn October 1984, she [became] ... monetarily eligible for Ul benefits based

9

on her earnings in the first and second quarters of 1984 (App. 71), and she did receive

benefits for the benefit year beginning October 1984 after filing a valid second claim").

To receive Ul benefits, however, Pennington had to wait from June 7 to October

5, 1984, whereas, if IDES had used Pennington's lag quarter wages to determine

eligibility, she would only have had to wait from June 7 until Monday, July 2, 1984 to file

a valid claim. Stip. at ¥ B.2, App. 70-71: Tr. 70-71. Moreover, the Director has

Stipulated that "[b]y definition, section 237 delays the date on which each class member

can file a valid claim in a manner similar to the delay experienced by Pennington as a

result of section 237." Stip. | B.3.b; App. 72.

lil. THE "WHEN DUE" CLAUSE

The when due clause "require[s] that a State [unemployment insurance] law

include provision for such methods of administration as will reasonabl[y] insure the full

payment of unemployment benefits to eligible claimants with the greatest promptness

that is administratively feasible." 20 C.F.R. § 640.3(a). That regulatory standard was

derived from California Department of Human Resources Development v. Java, 402

U.S. 121 (1971), a case in which this Court considered the legality of a provision that

suspended payment of benefits to claimants during the pendency of any appeal by their

former employers. Id. at 122. In a unanimous opinion, the Court held that the provision

violated the "when due" clause because "when due’ was intended to mean at the

earliest stage of unemployment that payments were administratively feasible after

giving both the worker and the employer an opportunity to be heard." Id. at 131.

10

Thus, Java struck down a provision that delayed payment of benefits after an

initial administrative decision that the benefits were due. But the when due clause

requires not only prompt payment of benefits, but also prompt adjudication of claims.

This Court made that clear in another unanimous opinion, Fusari v. Steinberg, 419 U.S.

379 (1975), when it expressly rejected any reading of the “when due” clause under

which "benefits are not ‘due’ ... until administratively deemed payabie." Id. at 388 n. 15.

The Court reasoned that "such a definition of the ‘when due’ requirement of federal law

would leave little vitality to Java and would nullify the congressional intention of

requiring prompt administrative provision of unemployment benefits.” Id.

The Secretary of Labor also interprets the "when due" clause to require not only

“such methods of administration as will reasonabi[y] insure the full payment of

unemployment benefits to eligible claimants with the greatest promptness that is

administratively feasible," 20 C.F.R. § 640.3(a), but also to confirm that, “implicit in

prompt performance with respect to benefit payments is the corresponding need for

promptness by the State in making determinations of eligibility." Id. at § 640.1(a)(2).

IV. | THE COURSE AND DISPOSITION OF THE PROCEEDINGS IN THE

DISTRICT COURT AND IN THE COURT OF APPEALS

Because the "when due" clause governs only the “methods of administration" of

the states' unemployment insurance programs, 42 U.S.C. § 503(a)(1), “applicable

Federal laws provide no authority for the Secretary of Labor to determine the eligibility

of individuals under a State law." 20 C.F.R. § 640.1(a)(2). Accordingly, a state does

not violate the “when due” clause by delaying payment of benefits to enforce provisions

11

that govern eligibility. See, Ohio Bureau of Employment Services v. Hodory, 431 U.S.

471, 482-87 (1977) (provision denying benefits to claimants who were unemployed

"due to a labor dispute" did not violate the "when due” clause).

Before the trial in this case, the district court held - three times - that section 237

was a "method of administration” subject to review for compliance with the when due

clause. App. 43-7, 53-4, 60-3. After the case was tried, however, the district judge

reversed his three earlier rulings and held that "the definition of ‘base period’ in section

237 of the [IUIA] is a valid eligibility requirement and does not violate [the 'when due’

clause]." App. 28, 42.

Eligibility criteria are rules that "define the class of persons eligible for benefits."

Ohio Bureau of Employment Services, 431 U.S. at 486-87. Therefore, in the court of

appeals, the Director argued "that section 237 functions as a measurement of each

claimant's attachment to the work force ... [and] that this function demonstrates that

section 237 is as much an eligibility provision that defines the class of claimants as any

of the state's monetary provisions, such as section 500E's qualifying wages

requirement." App. at 21. She also argued that section 237 is an eligibility criterion

because it “defines what earnings are considered in determining whether benefits are

due." Appellee's Brief in the Seventh Circuit at 31 (emphasis added).

The court of appeals reversed the district court's holding that section 237

defines an eligibility requirement. In rejecting the Director's argument that "section 237

functions as a measurement of each claimant's attachment to the work force," the court

observed that the Director "has conceded in more than one place that the gap created

12

by section 237's base period, in which a claimant's lag quarter wages are not reported,

‘is necessary because some time is required for employers to report wages and for the

[state agency] to make that information available in the local [unemployment insurance]

offices where claims are first taken and adjudicated." App. 21 (citing Stip. ] C.3, App.

73) (other citation omitted).* The court of appeals concluded from that stipulation that

“section 237's base period is essentially an administrative method employed to

accommodate the time needs of a wage record system.” Id.

In rejecting the Director's argument that section 237 is an eligibility criterion

because it "defines what earnings are considered in determining whether benefits are

due," the appellate court observed that, while section 237 instructs IDES to disregard

wages when they fall in the lag or filing quarter, it will later count those same wages

toward a class member's eligibility if he files a second claim in a later quarter. App. 18;

see Stip. J] A.5-8, App. 68-9; see also pp. 6-7 supra (explaining this point).

Accordingly, section 237 does not determine whether IDES counts lag and filing quarter

wages in determining whether benefits are due; it just determines when IDES will count

those wages and, thus, when benefits become due. See App. 18-19.

Having "reverse[d] the decision of the district court that section 237 is an

eligibility provision as a matter of law," App. 24, the panel remanded the case to the

district court for “factual findings and a determination of the issue of section 237's

compliance with the 'when due’ clause and corresponding regulations." Id. at 23-24.

, The Director tries to escape the implicaticins of this admission by arguing that it

was merely an “argument” that she "advanced only in the alternative, assuming for the

sake of argument that the base period was not an eligibility requirement." Pet. at 9, n.

3. But the admission was not made merely in the Director's argument; it is contained in

the Stipulations of Fact and confirmed by uncontroverted testimony. See Tr. 13-20.

13

The court of appeals then denied the Director's rehearing petition, see id. at 25-6, and

her motion for a stay pending tnis Court's decision on her petition for writ of certiorari.

See Resp. App. 1-3. On September 28, 1994, the Director filed her petition for writ of

certiorari.

REASONS FOR DENYING THE WRIT

I. THIS CASE INVOLVES NONE OF THE "SPECIAL AND IMPORTANT

REASONS" FOR GRANTING WRITS OF CERTIORARI

S. Ct. Rule 10 identifies "special and important reasons" that, while "neither

controlling nor fully measuring the Court's discretion,” are the most persuasive bases

for this Court's exercise of its authority to review federal appellate decisions on

petitions for certiorari. Rule 10 sets forth three such particular reasons, and one more

general, "catch-all" reason. The three more particular reasons are when a federal court

of appeals: (1) "has rendered a decision in conflict with the decision of another United

States court of appeals on the same matter or has decided a federal question in a way

in conflict with a state court of last resort", or (2) "has decided a federal question in a

way that conflicts with applicable decisions of this Court”; or (3) "has so far departed

from the accepted and usual course of judicial proceedings, or sanctioned such a

departure by a lower court, as to call for an exercise of this Court's power of

supervision." Id. at subsections (a) and (c).

The Director does not suggest that any such reasons support her petition.

Indeed, she concedes that there is no conflict between the Seventh Circuit's decision

below and a decision of any other federal court of appeals or any state court of last

14

kK KKK KKK ee

resort. Pet. at 7 (characterizing this as "a case of nationwide first impression"). Ard

not only is the court of appeals’ decision not in conflict with any applicable Supreme

Court precedent, but the court of appeals understood its ruling to follow from two

unanimous Supreme Court cases: California Department of Human Resources

Development v. Java, 402 U.S. 121 (1971) and Fusari v. Steinberg, 419 U.S. 379

(1975). See App. at 19-21. Moreover, the Director suggests no irregularity in the

procedures below at ail, let alone any that would require an exercise of this Court's

supervisory authority.

The only reason identified in Rule 10 that the Director even arguably urges as a

basis for this Court to hear this case is that "a United States court of appeals has

decided an important question of federal law which has not been, but should be, settled

by this Court." Rule 10(c). Actually, the Director does not expressly invoke even that

reason as a basis for her petition, but since she asserts that "the decision below

addressed a question of exceptional importance,” Pet. at 7, and since no other reason

is even conceivably applicable, that must be the Rule 10 ground on which she relies.

| "E)xcept in extraordinary cases, [however,] the writ is not issued until final

decree." Hamilton-Brown Shoe Co. v. Wolf Bros. & Co., 240 U.S. 251, 258 (1916).

Thus, that the Director seeks review of a judgment that is not final may "of itself alone”

be a “sufficient ground for denial of ... [her] application." Id.; see Brotherhood of

Locomotive Firemen v. Bangor & Aroostock R. Co., 389 U.S. 327, 328 (1967) (denying

certiorari “because the Court of Appeals remanded the case [and thus] is not ripe for

review by this Court"). Therefore, the Director must overcome a heavy burden to

15

establish that this case presents "an important question of federal law which ... should

be settled by this Court." S. Ct. Rule 10(a). See also, Rudolph v. United States, 370

U.S. 269, 270 (1962) (dismissing writ of certiorari as improvidently granted where

review of issue presented "would be of no importance save to the litigants

themselves").

To meet that burden, the Director argues: (1) that the panel decision “will

cause nationwide disruption in the various states’ unemployment compensation

systems," Pet. at 9 (quoting the Brief [in the court of appeals] for the United States of

America as Amicus Curie at 19-20); and (2) that its decision is "wrong." Id. at 7 ("tlie

decision below ... [is] beyond precedent and contrary to the federal administrative

interpretation ... [and it] extended the scope of the federal mandate of prompt

administration of state unemployment insurance laws to Illinois’ base period

requirement, which measures monetary eligibility for benefits"). Both of those

arguments, however, are wholly without merit.

A. The Court Of Appeals’ Decision Will Not Disrupt The

Unemployment Insurance System

The Director asserts that the court of appeals’ decision will disrupt the nation's

unemployment insurance system because 45 states use a base period definition like

16

Illinois." * But the court of appeals’ decision may not affect, much less disrupt, even |

lilinois’ unemployment insurance program, because the panel remanded the case to the

district court to determine, as a matter of fact, “whether ... [section 237] is compatible

with the ‘when due’ clause." App. 23. Accordingly, the court of appeals’ decision, by

itself, dictates no modification to Illinois’ base period provision, let alone that of any

other state.

The Director argues however that, even if the claimants are not ultimately

successful in convincing the lower federal courts that section 237 is unlawful, that result

“would leave ... [Illinois] - and other similarly situated States - with the continuing need

to litigate and justify base period methodology any time that a creative plaintiff

advances an alternative that the courts had not already conswiered." Pet. at 9. To our

knowledge, however, this is the only pending case in the country raising the issue as to

: Actually the Director tries to inflate that number by her assertion that

“forty-seven other states ... use a base period similar to the one challenged here." Pet.

at 7-8 (quoting Amicus Br. at 18). Deep within the footnote in which she cites the 47

statutes, however, the Director notes that seven of those are states that now "use[] the

type of movable base period advocated by the plaintiff class as an alternative [to

Illinois'’]." Id. n. 2. Thus IDES includes among the statutes that are "similar to" the one

we challenge, seven that are "the type advocated by [us]."

So far as we know, the actual breakdown is as follows: two states, New York and

New Hampshire, still use a wage request system in which no lag period is necessary;

seven states, Maine, Massachusetts, Michigan, Ohio, Rhode Island, Vermont and

Washington, use wage record systems, but they employ movable base periods that

minimize the delay in payment of benefits that is caused by the lag period that

otherwise characterizes such a system; and the other 44 (including Illinois) use wage

record systems with lag periods like the one created by section 237. See Pet. at 8 n. 2.

There are 53 total “states” because the District of Columbia, Puerto Rico and the Virgin

Islands are counted as states. See Unemp. Ins. Rptr. (CCH), J] 3000-3062 (All-State

Charts) (1994).

17

which the Director seeks -~--..: And it is hard to imagine that other plaintiffs will

iump at the chance to ....yace this issue if the Director wins on remand.

Moreover, the panel's ruling does not encourage litigation "any time that a

creative plaintiff advances an alternative that the courts had not already considered.”

Pet. at 9. As the court of appeals noted, the claimants amended their original

complaint, in which they had “alleged that it was administratively feasible ... for IDES to

include as the four-quarter base period both the lag quarter and, if necessary, the filing

quarter ... [to] allege{] only that it would be administratively feasible for IDES to

consider the lag quarter in calculating a claimant's qualifying wages." App. 5-6 (interior

quotations and citation omitted). We did so after our expert witness, Peter Kauffman,

had studied IDES's system and concluded that it would not be administratively feasible

for IDES to include filing quarter wages in determining a claimant's eligibility. "'

Furthermore, Kauffman testified that there were three alternative methods by

which IDES could move the base period to capture lag quarter wages when necessary

to determine a claimant's eligibility, and that Alternatives II and II! are “administratively

feasible" in the sense that, if there was no cheaper alternative, the costs of those

systems would be worth the benefits they would generate to the claimants. Tr. 78-79;

88-89; 700-701. But, as the court of appeals expressly noted, Kauffman testified that

se One other case, Duncan v. Washington, C86-227 (D.C. Wash.) was filed to

contest the system that was once used in the State of Washington. But that case was

dismissed after Washington adopted a movable base period system. See Wash. Rev.

Code § 50.04.020 (1991).

sg Of course, use of lag quarter wages would help filing quarter eligible claimants

since it would allow them to file valid claims three months sooner than under the

current system. See e.g., pp. 9-10 supra describing Ms. Pennington's facts.

18

“the marginal expense of ... [Alternatives II and Ill], in comparison with Alternative |,

exceeded their marginal benefits." App. 8, n. 3. Thus, as accurately described by the

court of appeals, the claimants' evidence supports a narrowly based challenge to the

section 237 base period, not a challenge based on any "conceivable" alternative base

period.

While the possibility that there will be any pee litigation respecting the legality

of section 237 base periods is uncertain, the prospect that there might be such litigation

offers a reason not to grant the writ in this case. This is so because, if, on the one

hand, another federal appellate court disagrees with the panel decision below, it will

create the type of decisional conflict that would crystallize review of the later appellate

decision. See Ruie 10(a); see also, McCray v. New York, 461 U.S. 961, 963 (1983)

(Stevens, J.) (certiorari denied when issue requires "further study" in ower courts

“before it is addressed by this Court"). If, on the other hand, other appellate courts

addressing the issue here agree with the panel decision, that will confirm that the panel

below was correct and thus, strongly suggest that this Court need not allocate its

resources to the resolution of the question the Director presents.

Even if the panel decision below were to give rise to many other cases as the

Director predicts, her contention that such cases "will cause nationwide disruption in

the various states’ unemployment compensation systems," Pet. at 9, does not follow.

After all, the provision that this Court struck down in Java was used in 48 states. See

Appendix to Appellants’ Brief in Java, No. 507 (U.S. Sup. Ct. 1970) at 69-70. Yet the

a a= ‘ . mo | x ’

19

Director offers'no evidence that Java disrupted the nation's unemployment insurance

programs at all.

The contention that court orders requiring some states to modify their base

periods will cause "nationwide disruption” of the unemployment insurance system is

unwarranted in two respects. First, it wrongly impugns the ability of SESAs to modify

the administration of their programs to conform to the requirements of the “when due"

clause. Second, it wrongly suggests that federal district judges will be faithless to their

obligation to "minimize [the] abrasive potential" of prospective remedies. Jenkins v.

Bowling, 691 F.2d 1225, 1234 (7th Cir. 1982); see also, Paschal v. Jackson, 936 F.2d

940 (7th Cir. 1991) (Eleventh Amendment to United States Constitution forbids

payment of retroactive benefits to unemployment compensation wrongly denied such

benefits), cert. denied 112 S. Ct. 992 (1992); Esparza v. Valdez, 862 F.2d 788, 794

(10th Cir. 1988) (same), cert. denied, 492 U.S. 905 (1989).

B. The Court Of Appeals’ Decision Was Correct

The heart of the petition is the Director's argument that the court of appeals was

wrong in concluding that section 237 is an administrative method subject to review for

compliance with the "when due" clause rather than an eligibility provision which is not

subject to that review. Pet. at 10-15. That is a precarious basis on which to ground a

petition for certiorari, however, for the correctness or error of a decision below is not

determinative of this Court's discretion to exercise its certiorari jurisdiction.

Accordingly, this Court has been reluctant to grant certiorari solely to review a decision

that appears to be erroneous. See Ross v. Moffitt, 417 U.S. 600, 616-617 (1974); see

20

generally, Stern, Gressman, Shapiro, Geller, Supreme Court Practice (7th ed. 1993) at

§ 4.17.

In any event, the court of appeals decision is clearly correct: the lag period that

section 237 creates is an administrati. > :..-.hod, not an eligibility criterion:

T As we have explained, to press her contrary argument in the court of

appeals, the Director characterized sale 237 as agvodaion that "defines what

earings are considered in determining whether benefits are due." Appeilees Br. at 31

(emphasis supplied). The court of appeals, however, properly recognized that section

237 does not determine whether IDES counts lag and filing quarter wages in

determining whether benefits are due; rather it determines when IDES will count those

wages and, thus, when benefits become due. App. at 18-22: see pp. 12-13 supra.

In her petition, the Director makes the same argument, but recasts it slightly.

First she notes that both that the earnings requirement and the requirement that these

earnings fall within a one-year period prior to the date of application are legitimate

eligibility criteria that Illinois may enact and modify without concern that its choice might

offend the “when due” clause. Pet. at 10." She then assumes that the "base period"

definition in section 237 is nothing more than the one-year period within which

Claimants must earn at least the minimum earnings, and she therefore characterizes

the base period as a “component” of the earnings requirement. Id. Based on that

assumption, she argues that "[i]f an earnings requirement is not objectionable as an

ws Indeed, as the Director notes, those provisions of the IUIA are not in dispute. Id

("neither the plaintiff class nor the Seventh Circuit disputed that Illinois’ requirement of

certain earnings during some stated time frame is a legitimate measure of eligibility for

UI coverage”).

21

eligibility criterion, the specific components of that criterion should be recognized as

substantive eligibility requirements, rather than methods of administration.” Id.

But the very fact that we challenge neither the earnings requirement nor the

one-year time period, along with the fact that we do challenge some aspect of section

237, confirms that the base period definition in section 237 is not merely a one-year

period during which a claimant's earnings must fall. Rather, the other aspect of section

237, and the one that we do challenge, is the unnecessarily long lag period between

the date on which a claimant's base period ends and the date on which he or she files a

claim.

Moreover, the lag period is not a component part of the earnings requirement.

- That is certain because other states, which necessarily must have some earnings

requirement confined within some time frame, use a wage request system or a movable

base period to eliminate the lag period (or to minimize the delay in paying benefits that

it otherwise causes). Thus, Illinois’ choice to have a relatively long lag period is wholly

independent of its choices as to how much earnings a claimant must have to qualify for

benefits or the length of time during which those wages must have been earned.

While the lag period is not a component part of the earnings requirement, it

surely is a component part of a non-movable wage record system. Indeed, the Director

herself has repeatedly admitted that the "gap between the end of a claimant's base

period ... and the beginning of that claimant's benefit year ... is necessary because

some time is required for employers to report wages and for the [state agency] to make

that information available in the local [unemployment insurance] offices where claims

22

are first taken and adjudicated." Stip. 9 C.3, App. 73; see also, Appellee’s Br. at 42

("Section 237's base period facilitates the State's utilization of wage recording"). And,

as the court of appeals concluded, those admissions confirm that “section 237's base

period is essentially an administrative method employed to accommodate the time

needs of a wage record system. In a world of high-speed information exchange, the lag

quarter would not exist; yet an eligibility requirement like the ‘voluntary leaving’

~ provision [which disqualifies claimants who voluntarily leave work without good cause

attributable to the employer] would. " App. at 21 (citation omitted).

The Director strains to avoid the implication of her admission that the lag

period is an administrative method designed to permit administration of a wage record

system. She does so by arguing that, since eligibility criteria “define the class of

persons eligible for benefits,” Hodory, 431 U.S. at 486-87, “wage requirements during a

base period serve to guarantee a worker's recent attachment to the labor market ...

[and that ijn establishing a threshold earnings qualification, Illinois intended to exclude

from eligibility those claimants who generally have the most tenuous attachment to the

workforce." Pet. at 14. That is surely so, but while that statement explains why states

have earnings requirements, it tells us nothing about why states like Illinois have

relatively long lag periods. Indeed, as the Director has admitted, a lag period does not

“exclude ... claimants ... from eligibility" or otherwise "define the class of persons

eligible for benefits." Hodory, 431 U.S. at 486-87. It just delays the time at which the

state will consider the wages a claimant most recently earned in determining his or her

eligibility. Stip. at I] A.7 and 8, App. 68-9.

23

Furthermore, the Director's argument implicitly concedes that "eligibility criteria

measure a Claimant's ‘continued and current attachment to the labor force."" App. at 18

(quoting Fleiszig v. Board of Review, 412 Ill. 49, 104 N.E.2d 818, 821 (1952)): see

Appellee's Br. at 30, 32. But the lag period "causes class members with relatively

strong attachment to the work force to wait until that attachment has weakened before

they can receive benefits, and onutes some to receive no benefits at all (e.g., claimants

who find employment before the delay created by the lag q’:arter is over)." App. 18-19.

Accordingly, as early as 1962, the Secretary of Labor advised states that “[s]ince

unemployment insurance is designed to compensate wage loss, benefits should be

based upon comparatively recent wages - i.e., the lag between the base period and

benefit year should be as short as possible." Unemployment Insurance Legislative

Policy: Recommendations for State Legislation, 1962, court of appeals’ Appendix item

Vill at 97."

Indeed, the Director herself argues that the base period is an eligibility

requirement because it "defines a worker's recent employment history." Pet. at 14

(emphasis supplied). If that is so, however, Illinois’ use of a base period that creates a

relatively long lag period between the employment history and the date of application,

instead of using a claimant's most recent employment history, is entirely anomalous. A

Stipulated fact resolves that anomaly by confirming that the lag period has nothing to do

” The Director has abandoned the argument that the Secretary's interpretation

confirms that the base period definition in section 237 is an eligibility criterion, except to

characterize the court of appeals’ decision as "contrary to the federal administrative

interpretation.” Pet. at 7. But that glancing and unsupported attack is woefully

inadequate given the court of appeals’ thorough consideration and rejection of the

"deference" argument. App. 12-16.

24

with measuring a Claimant's employment history, but that, instead, it “is necessary

because some time is required for employers to report wages and for the [state agency]

to make that information available in the local [unemployment insurance] offices where

Claims are first taken and adjudicated.” Stip. § C.3, App. 73. And since that is so,

“section 237's base period is essentially an administrative method employed to

accommodate the time needs of a wage record system." App. 21.

CONCLUSION

The petition for certiorari should be denied.

Respectfully submitted,

JEFFREY B. GILBERT

Johnson, Jones, Snelling & Gilbert

343 South Dearborn Street

Suite 1110

Chicago, Illinois 60604

(312) 341-9366

ROBERT E. LEHRER

DORY RAND

Legal Assistance Foundation

of Chicago

343 South Dearborn Street

Suite 700

Chicago, Illinois 60604

(312) 341-1070

25

RESPONDENT'S APPENDIX

Gnhited States Court of Appeals

For the Seventh Circuit

Chicago, Illinois 60604

June 16 , 19.94 .

Before

Hon. KENNETH F. RIPPLE, Circuit Judge

LUELLA PENNINGTON, individually and Appeal from the United

on behalf of other similarly States District Court for

situated persons, the Northern District

Jainuff- ant of Ilinois,

Eastern Division.

No. 92-3725 v.

LOLETA DIDRICKSON’, Director of the No. 85 C 6327

Iiinois Department of Employment Paul E. Plunkett, Judge.

Security

Defendant-Appellee.

ORDER

This case is before the court on the motion of the appellee

to stay the issuance of this court’s mandate while the appellee

seeks review of the judgment of this court by a petition for a

writ of certiorari in the Supreme Court of the United States. By

opinion dated April 11, 1994, this court reversed the judgment of

the district court and held that section 237 of the ‘ilinois

During the pendency of this case, Loleta Didrickson succeeded Sally Ward as

Directors of the Minois Department of Employment Security. Director Didrickson has

been substituted for her predecessor pursuant to Federal Rule of Appellate Procedure

43(c)(1).

No. 92-3725 . Page 2

Unemployment Insurance Act (the "IUIA"), 820 ILCS 405/237, is an

administrative method subject to the "when due” clause of the

Social Security Act, 42 U.S.C. § 503(a)(1), and its corresponding

regulations. We therefore did not accept the appellee’s

characterization of the provision as an eligibility provision

beyond the reach of the "when due" clause. We remanded the case

to the district court for further proceedings to determine

whether section 237 complies with the "when due" clause and the

corresponding regulations. A subsequent petition for rehearing

was denied and no member of the court requested a vote on the

appellee’s suggestion for rehearing en banc.

The standards governing a motion for stay of mandate are set

forth in detail in United States v. Holland, 1 F.3d 454, 456 (7th

Cir. 1993) (Ripple, J., in chambers). Familiarity with that

opinion is presumed and the discussion of the applicable

standards will not be repeated here. In this case, an assessment

of the probability of success in further review must rest on the

plenary discussion of the submissions of the parties in the

unanimous opinion of the panel. It is also worthy of note that

the panel has already reexamined its analysis in its

consideration of the petition for rehearing and declined to alter

its judgment. Moreover, the other members of the court were

invited by the appellee to ask for rehearing en bane and no

member of the court asked for a vote on that suggestion.

Finally, no showing of irreparable harm has been made by the

appellee. The judgment of this court contemplates further

No. 923725 Page 3

~~

proceedings in the district court. In those proceedings, the

district court may determine that section 237 complies with the

"when due" clause.

Accordingly, the motion for stay of mandate is denied.

MOTION DENIED.

GLOSSARY

GLOSSARY

Terms Definitions

App. The appendix bound with the Director's Petition For Writ Of

Certiorari.

benefit year The one-year period beginning with the Sunday of the week

in which a UI claimant first files a valid claim for benefits.

820 ILCS 405/242.

base period The period prior to the date on which a UI claimant files a

claim during which the claimant must have sufficient

earnings to qualify.

class members All claimants for UI benefits under the IUIA who since July

15, 1983, have been, are being or will be denied such

benefits by IDES solely because part or all of their wages,

otherwise sufficient to satisfy Section 500(E) of the IUIA,

were disregarded by operation of section 237 of the IUIA.

determination A decision issued by IDES pursuant to section 702 of the

IUIA, 820 ILCS 405/702, concerning whether a UI claimant

should be denied benefits for any reason other than whether

he has sufficient earnings in his base period to qualify for

benefits.

Director The Director of the Illinois Department of Employment

Security

disregarded wages The wages that a UI claimant earned in either his lag or |

filing quarter that cannot be used to establish eligibility when

the claimant applies for benefits.

earnings requirement The eligibility requirement for receipt of Ul benefits in

lillinois under which, a claimant must have earned at least

$1600 during the whole “base period" and at least $440

outside the calendar quarter in which he earned the most

wages. See 820 ILCS 405/500.E.

filing quarter The quarter in which a UI claimant first files a claim which is

also the sixth quarter after the beginning of the section 237

base period.

A

ee ee ee eB

filing quarter eligible

filing quarter wages

finding

IDES

IUIA

lag period

lag quarter

lag quarter eligible

lag quarter wages

movable base period

Pet.

P. Ex.

The class members who need both their claimants lag and

filing quarter wages to become eligible.

The wages a UI claimant earned in the quarter in which she

files for benefits. Filing quarter wages are disregarded

because of section 237.

A decision issued by IDES pursuant to Section 701 of the

IUIA, 820 ILCS 405/701, concerning whether a UI claimant

has sufficient earnings in his base period to qualify for

benefits.

Illinois Department of Employment Security

Illinois Unemployment Insurance Act, 820 ILCS 405/100 et

seq.

The gap in a wage record state between a claimant's base

period and his benefit year

The completed calendar quarter just prior to a UI claimant's

filing quarter which is also the fifth calendar quarter after the

beginning of the section 237 base period.

The class members who need only their claimants lag

quarter wages to become eligible.

The wages a UI claimant earned in the completed calendar

quarter prior to the quarter in which she files for benefits.

Lag quarter wages are disregarded because of section 237.

A base period system used in which an SESA first looks at

wages earned in the section 237 base period, but for

claimants who lack sufficient qualifying wages in that period,

the SESA then redetermines the claim using wages earned

in the lag quarter and, in Vermont, in the weeks of the filing

quarter prior to the claim.

The Director's Petition For Writ Of Certiorari

Plaintiffs’ trial exhibits

qualifying wages

Resp. App.

Secretary

section 23/

section 237 base

SESA

Stip.

Tr.

UI

valid claim

wage record system.

wage request system

The wages that a Ul claimant earned during the section 237

base period that can, therefore, be used to establish

eligibility when the claimant applies for benefits.

Respondent's Appendix which is attached to this Brief In

Opposition To Petition For Writ Of Certiorari

The United States Secretary of Labor

Section 237 of the IUIA, 820 ILCS 405/237, which defines

the base period used in lilinois.

The first four of the last five period completed calendar

quarters immediately preceding a claimant's benefit year.

State employment security agencies which are the agencies

in each state that administer the Ul program. IDES is the

SESA in Illinois.

The Stipulations Of Fact in Section Ili of the Amended Final

Pretrial Order which is at App. 66-83.

The trial transcript

Unemployment Insurance

A claim for UI filed by a claimant who had sufficient earnings

in his base period to qualify for benefits. See 820 ILCS

405/242 and 500.E.

A system for acquiring wage data to determine eligibility for

UI in which employers that are covered by the state's

unemployment insurance statute report gross wages of all

their employees to the SESA on a quarterly basis, and in

which a "gap" called a "iag period” between the base period

and the benefit year is necessary to permit the employers to

report and the SESA to post claimants’ wages.

A system for acquiring wage data to determine eligibility for

UI in which the SESA does not request wage information of

claimants’ employers until claimants apply for benefits, when

the wages are required to adjudicate claims.

"when due" clause

Section 303(a)(1) of Title Ill of the Social Security Act, 42

U.S.C. § 503(a)(1) which requires that state unemployment

insurance laws provide for "such methods of administration

... aS are found by the Secretary of Labor to be reasonably

calculated to insure full payment of unemployment

compensation when due."

— 3* @

NO. 94-592

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1994

LYNN Q. DOHERTY, Director of the Illinois Department of Employment

Security and successor.in office to LOLETA DIDRICKSON and

SALLY WARD, former Directors of the Illinois Department of

Employment Security,

Petitioner,

-VS-

LUELLA PENNINGTON, individually and on behalf of others

similarly situated,

Respondent.

PROOF OF SERVICE

JEFFREY B. GILBERT, one of the attorneys for Respondent herein, hereby

certifies that on October 27, 1994, copies of the attached MOTION TO FILE BRIEF IN

OPPOSITION TO PETITION FOR WRIT OF CERTIORARI IN FORMA PAUPERIS,

AFFIDAVIT IN SUPPORT OF MOTION TO PROCEED ON APPEAL IN FORMA

PAUPERIS, and BRIEF IN OPPOSITION TO PETITION FOR WRIT OF CERTIORARI

were served upon:

DEBORAH L. ASHSTRAND

Assistant Attorney General

100 West Randolph Street

12th Floor

Chicago, Illinois 60601

Service was by hand-delivery (via messenger).

S

Lippe 3:

Fe / 7 SEFQREY B. GYBERT