Amicus Curiae Brief — Fusari v. Steinberg

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Octoser TERM, 1973 .

No. 73-848

IN THE

Jack A. Fvusari, Commissioner of Labor of the State of Connecticut,

Administrator, Unemployment Compensation Act,

Larry STEINBERG, CECIL PaSKEWITZ, DELIA TRIANA and JUAN MIRANDA,

Appellant,

Appellees.

ON APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF CONNECTICUT

BRIEF AMICI CURIAE OF THE

NATIONAL EMPLOYMENT LAW PROJECT, INC., ET AL.

Dennis R. YEAGER

E. Ricuarp Larson

National Employment Law

Project, Ine.

423 West 115th Street

New York, New York 10027

MarttiE Lovis THOMPSON

STEPHEN E. GO?TT.Lies

Community Action for

Legal Services, Ine.

335 Broadway

New York, New York 10013

C. CHRISTOPHER Brown

DENNIS M. SWEENEY

ALAN S. Davis

Legal Aid Bureau, Ine.

341 North Calvin Street

Baltimore, Maryland 21202

C. LYONEL JONES

Epwarp R. STEGE, JR.

Legal Aid Society of Cleveland

2108 Payne Avenue, N.i.

Suite 728

Cleveland, Ohio 44114

STOEL carat

STEPHEN M. RANDELS

Legal Services Center

_ Rainier Valley Office

3230 Rainier Avenue South

Seattle, Washington 95144

ALAN W. HovusEMAN

Michigan Legal Assistance

Program

Wayne State University

Law School

Detroit, Michigan 48202

Joun. M. Levy

Neighborhood Legal Aid

Society, Ine.

300 East Clay Street

Richmond, Virginia 23241

JerrRY L. Covineton

GEORGE POWELL

IsRAEL GALINDO

GILBERT RopRIGUEZ

Texas Rural Legal Aid, Ine.

216 N. Closner

Edinburg, Texas 78539

“3

AEDES GDI A ATES, BRE Ves PVG I een, Oren oesnmenetes

TABLE OF CONTENTS

PAGE

Interest of the Amici 1

Questions Presented 3

Counterstatement of the Case 4

Summary of Argument 900..00..0000!.c:cccccccscccccsseeseoss-- 7

ARGUMENT:

A. Introduction 11

B. The Due Process Clause of the Fourteenth

Amendment and Section 303(a) of the Social

Security Act Require a Fair Hearing Prior to

the Termination of Unemployment Compen-

sation

1. The Termination of Unemployment Com- ©

pensation Without a Prior Hearing Vio-

lates the Due Process Clause of the Four-

teenth Amendment

a, Unemployment Compensation Is a Prop- |

erty Interest Protected by the Due Proe-

ess Clause of the Fourteenth Amend-

ment

b. The Due Process Weighing Test Re- ’

quires a Full and Fair Hearing Prior

to the Termination of Unemployment

Compensation |.

13 »

PAGE

2. The Termination of Unemployment Com-

pensation Without a Prior Hearing Vio-

lates the “When Due” and “Fair Hearing”

Requirements of the Social Security Act

and Frustrates the Purposes of Congress in

Establishing the Unemployment Compensa-

tion Program ..

a. The “When Due” Requirement and the

Congressional Purposes in Enacting the

Social Security Act Require That Re-

cipients Be Granted a Hearing Prior to

Termination of Their Unemployment

Compensation .... 7

b. Congress Intended That Recipients of

Unemployment Compensation Be Pro-

vided With a Hearing Prior to Termi-

nation of Theic Compensation ..:............. 32

C. The Cour: Below Properly Determined Pres-

ent Connecticut Procedures to Be Inadequate

Under the Due Process Clause of the Four-

teenth Amendment lenis 35

ConcLusion . 41

TABLE OF AUTHORITIES

Cases: | |

Arnett v. Kennedy, —— U.S. ——, 94 S. Ct. 1633

GUID iieehicisticccesicnenndiporcercmnis Leteclpeiibicheniieainactiohennisasiutiies 19, 20

Bell v. Burson, 402 U.S. 535 (L971) -seesscceceeeeecoee ees. 20, 21

Board of Regents of State Colleges v. Roth, 408 U.S.

sce th gL a EO ae passim

a ae meme en et te,

PAGE

Calero-Toledo v. Pearson Yacht Leasing Co., —— U.S.

—, 42 U.S.L.W. 4693 (U.S. May 15, 1974) —............ 18

California Department of Human Resources Develop-

ment v. Java, 402 U.S. 121 (1971) 200. passim

Crow v. California Department of Human Resources

Development, 325 F. Supp. 1314 (N.D. Cal. 1970),

rev'd, 490 F.2d 580 (9th Cir. 1973), petition for cert.

filed, 42 U.S.L.W. 3439 (U.S. Dee. 28, 1973) (No.

73-1015) 11

Doe v. Hodgson, 478 F.2d 637 (2nd Cir.), cert. denied,

414 U.S. 1096 (1973) cone . 1

Edelmzn v. Jordan, —— U.S. ——, 94 S. Ct. 1347

5 A /.) aaenactete nearer tense tiene aL nein NOSE DIES ENTS - 18

Flemming v. Nestor, 363 U.S. 603 (1960) 0002020022... 17

Foard v. Ohio Bureau of Employment Services, No. C

70-302 (N.D. Olnio 1971) 2.2.....eccecesceesecesececccesceesecseceeseeeees 11

Fuentes v. Shevin, 407 U.S. 67 (1972) -......... 17, 18, 19, 23, 34

Gibson v. Berryhill, 411 U.S. 564 (1973) 200 39

Goldberg v. Kelly, 397 U.S. 254 (1970) ...0. passim

Green v. McElroy, 360 U.S. 474 (1959) 00. 35, 39

Hiatt v. Indiana Mmployment Security Division, 247

F. Supp. 218 (N.L'. Ind. 1971), remanded for determi-

_nation of mootness, sub nom., Indiana Employment

Security Division v. Burzey, 409 U.S. 540 (1972) ....11, 12

In re Murchison, 349 U.S. 133 (1955) 0002 eee eee 39

Londoner v. City and County of Den ‘er, 210 U.S. 373

(1908) . 34

Sa SNE ES SIRENS ha PTS SaaS

' iv

A PAGE

McVeigh v. United States, 78 U.S. (11 Wall.) 259

: (1870) ... forssiomes exenontontndaterennmnes icnelabiniicertine 34 2

i Mitchell v. W. T. Grant Co;, ——_U.S. —, 94 S. Ct. ‘

! Re EO) ie eccrine nes 19, 23

¢ Morgan v. United States, 298 U.S. 468 (1936) _..000........ 34

‘ Nash v. Industrial Commission, 389 U.S. 235 (1967) ... 24

a > a

i Powell v. Alabama, 287 U.S. 45 (1932) eccseccsesseceseeee 38

4 Pregent v. New Hampshire Department of Employ-

ment Security, 361 F. Supp. 782 (D. N.H. 1973),

vacated and remanded for determination of moot-

ness, US. , 42 U.S.L.W. 3651 (U.S. May 28,

: TOTO) es 11,12

: Shields v. Utah Idaho Central Railroad Co., 305 U.S.

: SAF CIIIIY cise i 34

: Sniadach v. Family Finance Corp., 395 U.S. 337

(TIGR) nsec wl, 29, 21

Torres v. New York State Dept. of Labor, 321 F. Supp.

; 452 (S.D.N.Y. 1970), vacated and remanded, 402 U.S.

968 (1971), previous decision adhered to, 333 F.

Supp. 341 (S.D.N.Y. 1971), aff'd mem., 405 U.S. 949

(1972), rehearing denied, 410 U.S. 971 (1973) ........ passim

;

: United States v. Illinois Central R.R., 291 U.S. 457

B.S a erie sheeicrenitae tees 34

: Wheeler v. Vermont, 335 F. Supp. 856 (D. Vt. 1971) ....11, 12

} Willner v. Committee on Character and Fitness, 373

TT Oe TT ice ee ee 39

Windsor v. MeVeigh, 93 U.S. 274 (1876) 34

Wong Yang Sung v. MeGrath, 339 U.S. 33 (1950) ........ 39

PAGE

Constitution:

Fourteénth Amendment to the United States Consti-

tution cae com cesesee-PASSIM

Federal Statutes:

Social Security Act

Title I sie tetibiliacee ; 33, 35

‘Title III 4, 9, 32, 35

Tie IVA 33, 35

TI Fa scans coset eceecienaac canta ioeaag neal Campa 33, 35

Title XIV .. « oa

Title XVI 33

- Title XIX 33

§2(a)(4) [42 U.S.C. §302(a) (4) ] a 33

§$§301 et seg. [42 U.S.C. $$501 et seq.) ............... navi £0

§302(a) [42 U.S.C. $502(a) ] 21

§303(a) [42 U.S.C. $503 (a) ] 3, 4,13

§303(a)(1) [42 U.S.C. §$503(a)(1)] .............. 9, 28, 30, 31

_ §303(a)(3) [42 U.S.C. $503 (a) (3) J -.------------------ 6, 9, 32

$§401 et seq. [42 U.S.C. §$§601 et seq.] ............-..------- 15

§$402(a) (4) [42 U.S.C. $602(a) (4)] ...........-..2.-.- ee 33

§§901 et seq. [42 U.S.C. $§1101 et seq.) -...............---- 15

§1002(a) (4) [42 U.S.C. $1202(a) (4) ] 33

State Statutes:

Code of Ala., Title 26, $202 (1940), as amended (Supp.

1974) : 16

Conn. Gen. Stat. ch. 302, §17-82 (1958), as amended

(Supp. 1973) 15

PAGE

Conn. Gen. siat. ch. 302, §17-85 (1958), as amended

SR, TOTO). Siccectcteen- Salis icieticxsnekenneute 15

Conn) Gen. Stat. ch. 567, $31-234 (1958) ............2...22...----2- 26

Conn. Gen. Stat. ch. 567, $31-235 (1958) .............2.......00-00-- 15

Conn. Gen. Stat. ch. 567, §$31-235(2) (1958) .......-24......-.-- 4)

Conn. Gen. Stat. ch. 567, §31-241 (1958), as amended,

Conn. P.A. 339, §14, L. 1974 .......... baitags ae |

Conn. Gen. Stat. ch. 567, §31-242, as amended, Conn.

ri, Bes a Mes I scsi ecceiccnersnriem 6

Conn. Gen. Stat. ch. 567, $31-263 (1958) ..2..2.... ee eeeeeee ee 21

Conn. Gen. Stat. ch. 567, $31-273 (1958), as amended,

TS age Bp EO oy Selttacecns tine neem ion agri cer eI 21

Conn. P.A. 536 §4, L. 1973, amending Conn. Gen. Stat.

om O67, 401-2 Ce) a. ee 22

Cénn. P.A. 339 §1, L. 1974 Nee

Com. PA. 306 $2, l. 194 > 6

a ee Bi BE vie 6

Conn. P.A. 339 §9, L. 1974 ........ iea Io ae 6

Conn. P.A. 339 $10, L. 1974 Si elaine elichcasimasas 6

N.J. Stat. Ann. 43:21-7(d)(1) (1962) as amended

ees TOS) ee. 16

Regulations:

SALT M. Saeco) (19D) on 33

Reh gh RE RUE ULES i (Zoe ee snr een 33

45 C.F.R. §205.10(a) (4) (i) (1973) 0222... aD aces 33

tr eee ate) fie) 33

45 C.F.R. §205.10(a) (6) (i) (1973) sich 33

a0 0 Pa, pee re) Cee) nos 33

CFR. $206.10(a) Gis) (i) (1973). 33

45 C.F.R. §205.10(a) (13) (vi) (1973) ........ 33

feewcnowemaneanamnenare

vii

PAGE

Legislative History:

Conn. State Sen. Proc. (May 7, 1974) ......-..-.....---c---ec-sse0e- +

79 Cong. Rec. 5468 (1935) 16, 25

Hearings on H.R. 4120 Before the House Committee on

Ways and Means, 74th Cong., Ist Sess. 214 (1935) ..... 15

29, 30

Hearings on S. 1130 before the Senate Committee on

Finance, 74th Cong., Ist Sess. 2 (1935) 29

H.R. Rep. No. 615, 74th Cong., Ist Sess. 7 (1935) ....16, 28, 29

Report of the Committee on Economic Security, Hear-

ings on S. 1130 before Senate Committee on Finance,

74th Cong, Ist Sess. 1321-1322 (1935) 16, 29

Report of the House Ways & Means Committee on the

1970 Employment Security Amendments, H.R. Rep.

No. 612, 91st Cong., Ist Sess. 19 (1969) 16

Report of the Senate Finance Committee on the Em-

ployment Security Amendments of 1970, S. Rep. No.

91-752, 91st Cong., 2nd Sess. 24 (1971) 16

S. Rep. No. 628, 74th Cong., Ist Sess. 12 (1935) -........... 15, 28

Textbooks and Pamphlets:

Becker, Adequacy of the Benefit Amount in Unemploy-

ment Insurance (Upjohn Institute for Employment

Bhomeunrcdh, Mim y, LOGE) ncn nics acs ses tiene 26

Connecticut State Department of Lips, Devartnent

Bulletin (Spring, 1973) 28

E. Teple & C. Nowacek, Experience Ratan: Its Objec-

tives, Problems and Economic Implications, 8 Vand.

L. Rev. 376 (1955) . 16

PAGE

H.E.W. Social Rehabilitation Service, “Public Assist-

ance Report, #50: Characteristics of State Public

Assistance Plans, General Provisions—Eligibility,

Assistance, Administration” (1973) ..... 25

United States Department of Labor, Unemployment In-

surance Financial Developments (1972) -..................... 2

United States Department of Labor Handbook of Un-

employment Insurance Financial Data, 1938-1970

(1971) 7 24

United States Department of Labor, Unemployment

Insurance Statistics (March-April, 1974) 2. 26

In THE

Supreme Court of the United States

Octoser TERM, 1973

No. 73-848

<j ;

Jack A. Fusar1, Commissioner of Labor of the State of

Connecticut, Administrator, Unemployment Compensa-

tion Act,

Appellant,

—_—V.—

Larry Stremperc, Ceci, Paskewirz, Detia Triana

and Juan Miranpa,

Appellees.

ON APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF CONNECTICUT

—<—

BRIEF AMICI CURIAE OF THE

NATIONAL EMPLOYMENT LAW PROJECT, INC.,

ET AL.

Interest of the Amici

The National Employment Law Project, Inc., Commu-

nity Action for Legal Services, Inc. of New York, the

Legal Aid Bureau of Baltimore, the Legal Aid Society of

Cleveland, the Legal Services Center of Seattle, the Mich-

igan Legal Assistance Program, the Neighborhood Legal

Aid Society, Inc. of Richmond, and Texas Rural Legal Aid,

Ine. respectfully request the leave of this Court to file the

atthe a bart le TOP Nat

vie ka

accompanying Brief Amici Curiae. The consent of the

parties to this appeal to the filing of this brief has been

obtained.

The amici are interested in this case because each of the

amici is a Legal Services Office funded by the United States

Office of Economic Opportunity and each devotes most of

its time to the representation of indigent individuals.

Indigent clients bring numerous unemployment compensa-

tion cases to Legal Services Oflices, often after benefits

have been terminated without hearing, with the result that

Legal Services Offices devote a very substantial amount

of time to the representation of indigent unemployment

compensation recipients.*

The summary termination of unemployment compensa-

tion benefits and the ensuing delay pending a fair hear-

ing work a major hardship on these unemployment com-

pensation recipients. Because the average wage in the

United States in employment covered by unemployment

compensation was but $155.30 per week in 1972,? and be-

cause, when one becomes unemployed, this income is re-

placed with a benefit which, in 1972, equalled, on the average,

but 35.9% of the earned wage’ and because even this modest

‘In Maryland when unemployment compensation recipients re-

ceive notice of adverse action they also receive a notice (Form

FSA-80i) informing them that they may be entitled to free legal

assistance, togetber with the addresses of the offices of the amicus,

Legal Aid Bureau, Inc., of Baltimore. Approximately 25% of the

caseload of the National Employment Law Project is made up of

unemployment compensation matters in which it is cooperating

with local Legal Services offices.

2 See United States Department of Labor, Manpower Adminis-

tration. Unemployment Insurance Program Letter No. 1251 (Un-

employment Insurance Financial Developments, 1972) at Table 2.

3 Td.

benefit is eliminated by summary benefit terminations, the

amici frequently find themselves representing desperately

poor clients whose benefits have been terminated without

a hearing. The problem of these clients is further exacer-

bated by the long delays in scheduling fair hearings.

The summary termination gf unemployment compensa-

tion benefits imposes additional financial burdens on those

whose financial resources are greatly reduced by unem-

ployment. The additional legal impediment imposed by

shifting to the recipient the burden of securing a reversal

of a summary adverse decision must not be countenanced

in these circumstances. For these reasons the amici urge

affirmance of the decision below.

Questions Presented

A. Does the Due Process Clause of the Fourteenth

Amendment to the United States Constitution require a

fair hearing prior to the termination of unemployment

compensation?

B. Does Section 303(a) of the Social Security Act which

requires payment of unemployment compensation “when

due” and the provision for fair hearings require a fair

hearing prior to the termination of unemployment compen-

sation?

C. Under the Due Process Clause of the Fourteenth

Amendment to the United States Constitution, is the pres-

ent Connecticut “seated interview” procedure an inadequate

procedure for terminating unemployment compensation?

POR DA LIS Aa A AREAL ATR BT DAA ae Ne

Counterstatement of the Case

The State of Connecticut, like other states, participates

in the federal-state program of unemployment compensa-

tion established by Title III of the Social Security Act,

42 U.S.C. §§501 et seg. The Act provides that states par-

ticipating in the program must include provision for:

: “(1) Such methods of administration ... as are

E found by the Secretary of Labor to be reasonably

: caleulated to insure full payment of unemployment

compensation when due; [and]

“(3) Opportunity for a fair hearing, before an im-

partial tribunal, for all individuals whose claims for

unemployment compensation are denied.” Social Se-

curity Act §303(a) [42 U.S.C. $503(a)].

The State of Connecticut has established procedures for

making initial determinations of entitle _ to unemploy-

ment compensation.‘ See Conn. Gen. Stats . 567, §31-241

* Effective October 1, 1974, this procedure for making initial de-

terminations will be further formalized. The Connecticut Un-

employment Insurance Law was amended to provide that the “de-

termination of eligibility by the Administrator or an Examiner shall

be based upon evidence presented in person or in writing at a hear-

ing called for such purpose.” Conn. P.A. 339 §14, L. 1974 amending

Conn. Gen. Stat. ch. 567, §§31-241 (1958). The Sponsor of the

amendment indicated that it was intended to modify the Labor

Commission procedure which provides “a notice to a claimant which

says that he must appear at his preliminary hearing in order to

establish his eligibility for unemployment compensation” Conn.

State Sen. Proc. at 129 (May 7, 1974). The modification was de-

signed to prevent reliance on telephone information to disqualify

claimants at this initial stage and require the Commission to rely

on presentations made in person or on the form the Commission

sends to empl. ‘ers when the recipient attempts to establish eligi-

bility. Id. The defendant-appellant has yet to promulgate regu-

lations implementing this amendment.

(1958), as amended, Conn. P.A. 339 $14 L. 1974. Once a

recipient has been determined to be eligible for compensa-

tion, however, that recipient may have his compensation

terminated by Connecticut without a pre-termination hear-

ing.

In approximately 60 to 70 percent of the terminations,

a recipient’s compensation is terminated for reasons not

related to his previous employment, but because of a de-

termination that the recipient has failed to be “able” to and

“available” for work or to “make reasonable efforts to

obtain work,” Conn. Gen. Stat. ch. 567, §31-235(2) (1958)

(App. 39a).° In these eases, which typically arise when the

recipient reports to pick up his check, the recipient is given

a “seated interview” as soon as a question as to his eli-

gibility is raised (App. 38a). If the result of the seated

interview is adverse to the recipient, his compensation check

is withheld. There is no advance notice of the specific

factual issues to be raised in this interview; no notification

of the right to representation by counsel (or by anyone

else) ; no notice of whatever opportunity may exist to pre-

sent favorable witnesses and documents;.and no oppor-

tunity to confront or cross-examine hostile witnesses (App.

38a, 184a, 185a-186a, 205a and 206a).* After this proceed-

5 See 364 F. Supp. at 925, nu. 7.

6 There are two exceptions to this denial of a pre-termination

hearing where the termination issue involves allegations of a re-

cipient’s failure to be able to and available for work or to make

reasonable efforts to obtain work. The first typically arises where

the recipient’s previous employer raises an issue of the recipient’s

refusal of a job offer by that employer. The second arises where

allegations that a claimant has refused to accept a job referral come

from an employee of the Connecticut State Employment Service.

In these two situations, Connecticut requires that the person making

the allegation on which termination might be based be presert at

the seated interview. See, 364 F. Supp. 925-926. The form of these

procedures, however, is not at issue in the instant case.

1 SEP PORE, HAA Ba YM

ing, in which benefit payments may be terminated, the

recipient must resort to the appeal process in which a

hearing is eventually held.’ It was this seated interview

procedure which was used to terminate the compensation

payments of appellees.

Each of the appellees was initially determined eligible

for benefits but was later denied benefits in a “seated inter-

view” on the grounds of failing to make reasonable efforts

to obtain work. Each requested a hearing and each received

a heafing and a hearing decision after a time ranging from

approximately six weeks, in the case of appellee Miranda,

to six months, in the case of appellee Steinberg. Two of

the three appellees were eventually found to have been

eligible for benefits denied as a consequence of the seated

interview (App. 39a-42a).

7 In Connecticut there was, when this action was filed, a single

level of appeal within Connecticut’s Department of Labor from these

“seated interview” terminations. Conn. Gen. Stat. ch. 567, §31-242,

as amended, Conn, P.A. 339 §15, L. 1974. This appeal process

was intended to extend to the recipient the fair hearing required

by the Social Security Act, 42 U.S.C. §503(a)(3). The hearing

was conducted by a Commissioner of the Connecticut Department

of Labor. Conn. Gen. Stat. ch. 567, §31-242, as amended, Conn. P.A.

339 §15, L. 1974. The State Act was amended (see note 5 supra) to

provide for a two-stage appeal procedure, the first of which would

provide the hearing. Conn. P.A. 339 §§1, 2, 4, 9, 10, L. 1974.

In the future “referees” will provide the hearings now conducted

by the Commissioners. Conn. P.A. 339 §§1, 10, L. 1974.

Summary of Argument

There are four alternative bases for affirming the de-

cision of the Court below: (1) Due process requires that

fair hearings, with adequate provision for notice, prepara-

tion, representation by counsel, confrontation, cross-exam-

ination, and an impartial hearing examiner the scope of

whose’ inquiry and decision must be lintited by the specific

contents of the notice, be held prior to termination of unem-

ployment compensation. (2) The Social Security Act, which

requires payment of unemployment compensation “when

due,” requires such hearings prior to benefit terminations

where determinations not based on such hearings are er-

roneous in a substantial number of cases and there is a long

delay between such determinations and a subsequent hear-

ing decision. (3) The Social Security Act, which requires a

“fair hearing,” requires that such hearing be held prior ‘to

termination of unemployment compensation. (4) The de-

cision of the Court below, which allowed the State of Con-

necticut a number of alternative ways of bringing its pro-

cedures into conformity with the requirements of due proc-

ess, is fully justified in view of the inadequacy of Con-

necticut’s present procedures and the ensuing delay prior

to hearing decisions. Z

As to the first basis for affirming the, decision below it

becomes apparent through application of the traditional

two-step due process analysis that unemployment ¢com-

pensation, as a statutory entitlement and as a contractual

right, is a property interest protected by due process ; and

that in the process of weighing the competing interests

a full due process hearing prior to the termination of com-

ee ee

pensation is required to protect the recipient’s crucial in-

terest in early, adequate compensation.

ven more than welfare assistance, which was recognized

as a property interest by this Court in Goldberg v. Kelly,

397 U.S. 254 (1970), unemployment compensation is a statu-

tory entitlement grounded in federal and state statutes.

More also than the many contractual riglits already recog-

nized as property interests by this Court, unemployment

compensation payments, financed by insurance tax pay-

ments levied on employers, come to unemployed workers

as a “contractual right.”

In weighing the interests to determine the form of the

hearing required by due process, it first becomes apparent

that the State has only the slightest interest in summary

benefit terminations since any benefit payments made pend-

ing a prior hearing must be paid not by the State but by the

Connecticut Unemployment Trust Fund, which is financed

wholly by employer payments, It is apparent that indi-

vidual ‘employers have no interest to protect because

their accounts may not be charged for erroneous pay-

ments. By contrast the workers’ need for compensa-

tion during periods of unemployment is most substantial

This was recognized by Congress and has been acknowl-

edged by this Court, see’California Department of Human

Resources Development v.Java, 402 U.S. 121 (1971). It is

also specifically recognized by Connecticut in its provision

of dependents’ allowances to unemployed workers, and is

accentuated by the unavailability of welfare assistance for

unemployed workers in Connecticut. This need is further

accentuated by the eighteen-week delay between the termi-

‘nation of benefits and the hearing decisions which oe-

curs in 90% of the cases, and the high reversal rate of

. those determinations in the hearings. Balancing these

/ r |

“>

interests requires provision of a full due process hearing

prior to the termination of unemployment compensation.

As to the second and third bases for affirming the decision

below, it is apparent that Congress had a three-fold pur-

pose in mind when it enacted Title II] of the Social Security

Act: providing the worker with subsistence income during

inemployment, stabilizing the economy by maintaining the

workers’ purchasing power, and allowing maximum ability

to search for work.

To accomplish these goals, Congress provided in $4$303

(a)(1) and (3) [42 U.S.C. $$508(a) (1) and (3)j that no

state program would be certifigd by the Secretary of Labor

unless it hrovided for paym@gff™"when due” and a “fair

hearing” hr all individuals denied unemployment compen-

sation. In California Department of Human Resources De-

velopment v. Java, supra, this Court construed the phrase

“when due” in §303(a)(1) to mean “at the earliest stage of

unemployment that’ such payments were administratively

feasible. ...” 402 U.S. at 131. :

The Court below, while considering whether Connecticut's

present procedure allowing for the summary termination

of compensation violated §303(a)(1), concluded that it did

not in reliance on this Court's summary affirmance in Torres

vy. New York State Department of Labor, 405 U.S. 949

(1972). However, in so doing, it failed to attribute full

significance to two important facts: the reversal rate of

determinations of: ineligibility rendered in a seated inter-

view and the delay that occurs before a hearing deci-

sion. Both are significant because together they serve to

deny compensation to many eligible recipients during the

period that Congress intended them to receive compensa-

tion. A high reversal rate coupled with a long delay before

a decision on appeal means that claimants incorrectly deter-

ape «so ee onemenient ws

= ile Bsa ena bale a ie.

Live ie

| ee a)

IP Wat Beek os

mined ineligible are without compensation during a sub-

stantial part of their periods of unemployment, if not all

of it, contrary to Congress’ intent that pay ments be niade

during unemployment.

The phrase “fair hearing,” as used in the Social Security

Act, has been administratively interpreted to require pro-

vision of prior hearings under six Titles of the Social Se-

curity Act. Common sense suggests that Congress intended

to act consistently and that the phrase must have the same

meaning in all Titles of the Act. Likewise, the traditional

meaning ascribed to the phrase “fair hearing” establishes

that Congress intended that the hearing occur prior to

compensation terminations. .

As to the fourth basis for affirming the decision below, the

present Connecticut procedure for benefit terminations, such

as those imposed on appellees, is defective in failing to pro-

vide notice, opportunity to prepare, opportunity for rep-

resentation, opportunity for confrontation, opportunity

for eross-examination and an impartial hearing officer.

The Court below, in viewing this against the long delay

before these due precess requirements were provided, al-

lowed the state four optional methods of remedying the

defects of its procedures: (1) providing prior hearings,

(2) providing hearings more rapidly, (3) increasing the

due process protections available in the present termination

procedure, or (4) paying benefits pending a hearing subject

to recoupment. Thus the State was allowed to adopt any

one or combination of these remedies. The infirmities of

the present procedures, which often result in erroneous

decisions and are only reviewed after a long delay, obvi-

ously required some remedial action and the Court re-

sponded with a fair range of alternative courses of action.

a ened

ARGUMENT

A. Introduction

‘The issues raised on this appeal are not novel to the

lower federal courts or to this Court. In the past three

years, four unanimous three-judge district courts* and one

single-judge district court’ have held that fair hearings

prior to unemployment compensation terminations are re-

quired while one court of appeals, by a split decision,”® and

one three-judge district court, also by a split decision,”

have held that prior hearings are not required. The Court

below, while not requiring a prior hearing, did find Con-

necticut’s present procedure to be inadequate to meet the

requirements of due process.

Prior to the noting of probable jurisdiction in the in-

stant appeal, three of the above cases were acted upon by

8 Pregent v. New Hampshire D.E.S., 361 F. Supp. 782 (D.N.H.

1973) (three-judge court), vacated and remanded for determina-

tion of mootness, 42 U.S.L.W. 3651 (U.S. May 28, 1974); Hiatt

v. Indiana Employment Security Division, 347 F. Supp. 218 (N.D.

Ind. 1971) (three-judge court), remanded for determination of

mootness, sub nom., Indiana Employment Security Division v.

Burney, 409 U.S. 540 (1972); Wheeler v. Vermont, 335 F. Supp.

856 (D. Vt. 1971) (three-judge court) ; Foard v. Ohio Bureau of

Employment Services, No. C 70-302 (N.D. Ohio 1971) (three-judge

court).

° Crow vy. California Department of Human Resources, 325 F.

Supp. 1314 (N.D. Cal. 1970), rev’d, 490 F.2d .580 (9th Cir. 1973),

petition for cert. filed, 42 U.S.L.W. 3439 (U.S. Dee. 28, 1973)

(No. 73-1015).

See note-9, supra.

Torres v. New York State Dept. of Labor, 321 F. Supp. 432

(S.D.N.Y. 1970) (three-judge court), vacated and remanded, 402

U.S. 968 (1971), previous decision adhered to, 333 F. Supp. 341

(1971), aff'd mem., 405 U.S. 949 (19-2), rchearing. denied, 410

U.S. 971 (1973).

Sie ea Tae ee Be tio A TATA lel RENNIE SAO. CM et NAM AL Rik ates

this Court: two of the unanimous three-judge district

court decisions requiring prior hearings were remanded

by this Court for determinations as to mootness,'* while the

split three-judge district court decision in Torres v. New

York State Department of Labor denying a prior hearing

was summarily affirmed by this Court.”

Although this Court has never spoken on the merits of

the unemployment compensation prior hearing issue, this

Court’s summary affirmance in Torres has not been without

significance in the instant case. Constrained by a Second

Cireuit ruling requiring that full precedential weight be

given to a summary affirmance by this Court,"* the Court be-

low found itself unable to hold that Connecticut’s denial of a

prior hearing violated the Social Security Act. However,

the Court did distinguish Torres on the facets [primarily

with regard to the inordinate delay in Connecticut between

the date of the termination and the date of the fair hearings

(see 364 F. Supp. at 934)], in applying the due process

weighing test and concluded that due process requires more

than Connecticut now extends to unemployment compensa-

tion recipients. The Court provided the State with a set of

alternative modifications which would bring the State pro-

cedures into compliance with the requirements of due

process. In reaching this result, the Court noted that were

it “writing on a somewhat cleaner slate, [it] would have

little difficulty in rejecting the reasoning of the district court

in Torres, and concluding, largely for the reasons so ably

set out by Judge Oakes in Wheeler vy. State of Vermont

12 See Pregent and Burney cited in note 8, supra.

‘3 See note 11, supra.

'* See Doe v. Hodgson, 478 F.2d 537, 589 (2nd Cir.), cert. denicd,

414 U.S. 1096 (1973), cited by the three-judge district court below,

364 F. Supp. at 931.

[335 F. Supp. 856 (D. Vt. 1971) (three-judge court) ], that

the Connecticut unemployment compensation procedures .

here challenged conflict with both the Fourteenth Amend-

ment and the Social Security Act.” 364 F. Supp. at 931.

This Court of course is not constrained by its summary

affirmance in Torres, as was the court below. [Recently, this

Court rejected a series of three summary affirmances in

reaching its decision in Edelman vy. Jordan, US. —,

94 S. Ct. 1347, 13859 (1974).]

Unconstrained by Torres, this Court may now under-

take a fresh analysis of the constitutional and statutory

provisions relating to prior hearings in unemployment

compensation. A fair reading of those provisions compels .

the conclusion that prior hearings are required in unem-

ployment compensation. But at the very least, the modest

requirements of the judgment of the Court below should be

affirmed.

B. The Due Process Clause of the Fourteenth Amendment and

Section 303(a) of the Social Security Act Require a Fair

Hearing Prior to the Termination of Unemployment

Compensation

1. The Termination of Unemployment Compensation

Without a Prior Hearing Violates the Due Process

Clause of the Fourteenth Amendment

In Board of Regents of State Colleges v. Roth, 408 U.S.

564 (1972), this Court held that the determination of due

process requirements in any particular context involves a

two-step analysis: In order “to determine whether due

process requirements apply in the first place, we must look

not to the ‘weight’ but to the nature of the interest at

stake.” 408 U.S. at 570-571. Second, once an interest is

found to be protected by due process, a “weighing process”

is necessary to determine the form of hearing required by

iS ih AEE EDL ORG SLE ATR ASSIS BERLE BE IA. a

ee ae

due process to protect that particular interest. 408 U.S. —

at 470.

Application of this analytical approach to the instant

case requires the conclusions: (a) that unemployment com-

pensation, a statutory entitlement and contractual right, in-

tended by Congress to be paid immediately “when due,” is

a property interest warranting due process protection ; and

(b) that when the interests of the State and employers are

balanced against those of the unemployed worker the scale

tips heavily in favor of the worker.

a. Unemployment Compensation Is a Property Interest

Protected by the Due Process Clause of the Four-

teenth Ainendment

In Board of Regents of State Colleges v. Roth, 408 U.S.

564 (1972), this Court defined the parameters of those

interests whose nature is sufficient to invoke the protections

of due process. Noting that a person must have “more

than an abstract need or desire ... more than a unilateral

expectation [for the property] ...” the Court stated that

the person “must, instead, have a legitimate claim of entitle-

ment to it.” 408 U.S. at 577. The Court continued:

“Property interests, of course, are not created by

the Constitution. Rather they are created and their

dimensions are defined by existing rules or understand-

ings that stem from an independent source such as state

law—rules or understandings that secure certain bene-

fits and that support claims of entitlement to those

benefits. Thus the welfare recipients in Goldberg v.

Kelly, supra, had a claim of entitlement to welfare

payments that was grounded in the statute defining

eligibility for them. The recipients had not vet shown

that they were, in fact, within the statutory terms of

eligibility. But we held that they had a right to a

hearing at which they might attempt to do so.” 408

U.S. at 577.

Like welfare benefits, unemployment compensation is a

public benefit program. Both welfare and unemployment

compensation are joint federal-state programs adminis-

tered primarily by the states;° and like welfare entitle-

ment, entitlement to unemployment compensation is

grounded in state statutes defining eligibility for compen-

sation. Another aspect of unemployment compensation

is that it is to be paid to workers during a specific period

of time—the period during which they are unemployed.”

Beyond its characteristics as a public statutory entitle-

ment, unemployment compensation also has private con-

15 For example, 42 U.S.C. §§601 et seq., provide for federal finan-

cial assistance to the states for the state administration of the

AFDC Program so long as the states comply with the federal

statutory conditions set forth therein. :

Similarly, 42 U.S.C. §§901 et seg. and §§1101 ef seq. provide

for federal financial assistance to the states for the state adminis-

tration of unemployment compensation so long as the states comply

with the federal statutory conditions set forth therein.

‘6 For example, AFDC benefits in Connecticut must be paid to

any applicant where the following state statutory conditions of

eligibility are met: The applicant seeking benefits for a depen-

dent child must be unable to furnish suitable support therefor

in his own home; each dependent child must be supported in a

home in Connecticut and an applicant for aid must not have made

an assignment or transfer of property for the purpose of qualify-

ing for the award. Conn. Gen. Stat. ch. 302, §17-85 (1958), as

amended (Supp. 1973). Further, a dependent child must be a

needy child under the age of 18 who has been deprived of parental

support or care due to death, continued absence from home, or

mental or physical incapacity of a parent, and the dependent child

must be living with a qualified relative in a place of residence

maintained by one or more such relatives at his or their own home.

Conn. Gen. Stat. ch. 302, §17-82 (1958), as amended (Supp. 1973).

Similarly, earned unemployment compensation in Connecticut

must be paid to any applicant who meets the statutory conditions

for eligibility. See Conn. Gen. Stat. ch. 967, §31-235.

7 See generally, Hearings on H.R. 4120 before the House Com-

mittee on Ways and Means, 74th Cong., Ist Sess. at 214 (1935) ;

IL.R. Rep. No. 615, 74th Cong., Ist Sess. 7 (1935) ; S. Rep. No. 628,

74th Cong., Ist Sess. 12 (19385).

Fb SEE Nit VR TAR 4

he ARGO TES LIED BERN LARD, NS AERIS CST it

‘

tractual characteristics flowing from its nature as a wage

substitute. To the Congress that created it, unemployment

compensation was not charity; rather it came to an un-

employed worker as a “matter of right.” "* In fact, it was

presented to Congress as a program that would create a

“eontractual right.”’® More recently Congress has char-

acterized unemployment compensation as an “earned mon-

etary entitlement.” *° Behind these characteristics is the re-

ality: unemployment compensation payments are made

from the Unemployment Trust Fund which is financed by

employer contributions.*. The right to such payments is

thus also grounded in a contract—the employment relation-

ship.

18 “The advantages of social insurance over p lief are

many. It does not carry with it the stigma of (charity with its

devastating effect on the morale of our populaNen and its loss

of self-respect. The protection afforded by social insurance

comes to the worker as a matter of right. It is contingent upon

the previous employment and contributions of the worker him-

self and does not involve the social investigation and the means

test which is inevitable in any system of public relief.”

79 Cong. Ree. 5468 (1935) (remarks of Representative Doughton,

Chairman of the House Ways and Means Committee).

'® Report of the Committee on Economie Security, Hearings on

S. 1130 before the Senate Committee on Finance, 74th Cong., 1st

Sess. 1321-1322 (1935).

2° See Report of the Senate Finance Committee on the Employ-

ment Security Amendments of 1970, S. Rep. No. 91-752, 91st Cong.,

2nd Sess. 24 (1971), and Report of the House Ways and Means

Committee on the 1970 Employmeit Security Amendments, H.R.

Rep. No. 612, 91st Cong., Ist Sess. 19 (1969), both relating to

unemployment compensation amendments to the Social Security

Act.

*1 Initially, in nine states, not only the employers but also the

employees themselves made ,contributions toward the unemploy-

ment compensation fund. See, E. Teple and C. Nowacek, E.rperi-

ence Rating: Its Objectives, Problems and Economic Implications,

8 Vand. L. Rey. 376, 380, n. 8 (1955), a practice still followed in

two states: New Jersey, see N.J. Stat. Ann. 43 :21-7(d)(1) (1962),

as amended (Supp. 1974); and Alabama, see Code of Ala., Title

26, §202 (1940), as amended (Supp. 1974).

0 LEE AEET™ OL Oe 08 2 hE

This Court has extended due process protection to both

statutory and contractual property interests. The former

type of property interest, such as statutory entitlements to

welfare benefits, have regularly been accorded due process

protection. See, ¢.g., Goldberg v. Kelly, 397 U.S. 254 (1970) ;

ef. Flemming vy. Nestor, 363 U.S. 603 (1960) (Old Age

Benefits).** Recent examples of the latter are the rights

conveyed by installment sales contracts for such items as

household furnishings at issue in Fuentes v. Shevin, 407

U.S. 67 (1972) and the wage payments at issue in Sniadach

v. Family Finance Corp., 395 U.S. 337 (1969). Unemploy-

ment compensation being both a contractual right and a

statutory entitlement is unquestionably a protected prop-

erty interest.

The nature of this property interest is such that it is

inextricably related to the time at which it is available.

It is an entitlement to receive payments at a certain time,

ie., during unemployment. See p. 28, infra. The prop-

erty interest, by its very nature, is destroyed without due

process if, once payments are found to be due, they are

terminated during unemployment without a hearing first

being held. There can be no doubt that unemployment

compensation is a property interest protected by due proc-

ess and that that interest is an interest in receiving pay-

ments at a specific time.

In fact, this Court has recognized in unemployment com-

pensation an interest sufficient to require the protection

_ 2 Writing for the Court nearly fifteen years ago in Flemming

v. Nestor, 363 U.S. 603 (1960), Mr. Justice Ilarlan stated:

“(T]he interest of a covered employee under the [Social Se-

curity] Act. is of sufficient substance to fall within the pro-

tection from arbitrary governmental action afforded by the

Due Process Clause.” 363 U.S. at 611.

PM ese cere

nial As BO

ASSEN ERR ERE BE te ood LY

We hie ib tebisaacteie ade att SSRaa esas

er ee 2:

of due process. Four years ago, it used entitlement to

unemployment compensation as a springboard to find in

welfare entitlement a property interest sufficient to invoke

due process requirements:

“Relevant constitutional restraints apply as must to

the withdrawal of public assistance benefits as to dis-

qualification for unemployment compensation.” Gold-

berg v. Kelly, 397 U.S. 254, 262 (1970).

Certainly the converse of this proposition is equally valid.

b. The Due Process Weighing Test Requires a Full

and Fair Hearing Prior to the Termination of

Unemployment Compensation

Since unemployment compensation is a property inter-

est sufficient to invoke the protections of due process, it is

necessary to apply the “weighing process” to determine

the form of the hearing required by due process to protect

that interest. Board of Regents of State Colleges v. Roth,

408 U.S. 564, 570 (1972). The determination as to form

generally includes provision for adequate notice, for

_ presentation of evidence, for confrontation and cross-ex-

amination, for right to counsel or other representation, for

‘an impartial decision-maker and for a decision based upon

evidence. Goldberg y. Kelly, 397 U.S. 254, 271 (1970).

‘ While this Court, following a long line of authority, has

held that the hearing is always required prior to depriva-

tion of a property interest, Fuentes v. Shevin, 407 U.S. 67

(1972),* more recent holdings suggest -that the question

2 YPhis Court in Calero-Toledo v. Pearson Yacht Leasing Co.,

—— US. ——, 42 US.L.W. 4963 (U.S. May 15, 1974) recently

acknowledged the validity of this Fuentes analysis by holding that

postponement of notice and hearing is justified only in extraordi-

nary situations.

of the proper timing of the hearing ‘is also to be resolved

in the weighing process, see Mitchell v. W. T. Grant Com-

pany, US. , 94S. Ct. 1895, 1902 (1974); Arnett

v. Kennedy, U.S. ——, 94 S. Ct. 1633 (1974) (Opinion

of Justice Powell, 94 S. Ct. 1633 at 1651). llere, ‘he choice

of one rule or the other has no effect on the outcome: since

there is a property interest, the Fuentes rule requires a

prior hearing; since the interest of the recipient so far out-

weighs any competing interests, the later cases also re-

quire a prior hearing. :

In applying the weighing test in the instant case, par-

ticulaily as to the timing of the hearing, substantial guid-

ance is provided by reviewing the competing interests ac-

cepted or rejected by this Court in several recent due

process decisions. In Sniadach vy. Family Finance Corp.,

395 U.S. 337 (1969) (holding that notice and a hearing

must be provided prior to garnishment of 50% of several

weeks of a wage earner’s wages), this Court concluded that

the interests of a wage earning family in not being “driven

to the wall” by the loss of wages outweighed the interests

of the state in simply preferring a later hearing.

One year later, in Goldberg v. Kelly, 397 U.S, 254 (1970),

this Court held that welfare recipients could not be de-

_ prived of their statutory benefits without a full due process

prior hearing (including provision for notice, confronta-

tion and cross examination, representation, an impartial

decision-maker, and a decision based upon the evidence).

Again the Court concluded that the financial need of the

recipients outweighed the interests of the state in avoiding

increased administrative costs and in paying its own monies

to judgment proof recipients who may be ineligible for the

statutory benefits.

SOO ARO RIS to gt. <

é 20

The following year, in Bell v. Burson, 402 U.S. 535 (1971)

(holding that a judicial hearing on the question of potential

liability for an automobile accident was required before the

license of an uninsured motorist could be temporarily sus-

pended) this Court found that the interests of the holder —

of a driver’s license in retaining that license outweighed

the interests of the state in protecting an injured third

party from the possibility of an unsatisfied judgment and.

in avoiding the additional administrative expense of pro-

viding the prior judicial hearing on the issue of liability.

And last Term in Arnett v. Kennedy, US. , 94

S. Ct: 1633 (1974) (holding that a full evidentiary hearing

was not required prior to the suspension of a disruptive |

and unsatisfactory employee), Justicés Powell and Black-

mun pointed out in their concurring opinion that the em-

ployee’s interest in uninterrupted employment was satisfied

by the notice and partial hearing procedures provided prior

to suspension and by the back pay award available upon

reinstatement, and that the employee's interest in a full-

‘scale prior due process hearing was outweighed by the gov-

ernment’s interest and the publie’s interest in maintaining

employee efficiency and discipline (“Prolonged retention of

a disruptive or otherwise unsatisfactory employee can

adversely affect discipline and morale in the workplace,

foster disharmony, and ultimately impair the efficiency of

an office or agency.” 94 8. Ct. at 1651).

Two principles relevant to the instant case may be drawn

from the foregoing cases: First, the need for the property

interest must be concrete just as the government’s failure

to provide full due process procedures prior to the taking

must also be based on a concrete need. Seeond, government

efforts to avoid projected administrative expenses incurred

oa a Chere

5 21

: ” 4

in providing the requirement of due process cannot alone

outweigh the conerete needs of tlrose with protected inter-

ests.

Closer examination of the interests to be weighed here

compels the conclusion that the unemployed worker’s need

is great and virtually identical to that of the welfare re-

cipient, while the competing interests are minimal. Look-

ing first to the State’s interests, it is apparent that the

State cannot assert avoidance of administrative costs here

when similar interests were outweighed by the driver’s

need in Bell y. Burson, supra, and the wage earner’s need

in Sniadach v. Family Finance Corp., swpre. Here, the

State would not even pay whatever incréased administra-

tive costs, if any, would occur.** Nor edn the State assert

a drain on its treasury from erroneously paid compensation,

an interest which was truly present but insufficient in Gold-

berg, when compensation payments here emanate not from -

the State but from the employer-funded Unemployment

Trust Fund.” Further, erroneously paid compensation may

be recouped or set off from workers who subsequently

survive their period of need and rejoin the labor foree,”*

compare Goldberg vy. Kelly, 397 U.S, 254, 266, where the

recipients were assumed to be judgment-proof,

Nor do the employers have an interest sufficient to out-

weigh that of the recipient. First, assuming that there

might be some slight increase in the general unemployment

*4 42 U.S.C. §502(a) provides for federal “payment to each state

which has an unemployment compensation law [in such amounts

as are] necessary for the proper administration of such law.” The

federal government is not harmed because it pays these amounts

from a tax on employers. i‘;

*° Conn. Gen. Stat. ch. 567, §31-263 (1958).

“Conn. Gen. Stat. ch. 567, §31-273 (1958), as amended, Conn.

P.A. 339 §33, L. 1974.

at ee aa

PRR NAA Bree 95

a eit Saat

GI CTSA AP Me WIBLGADV INES A mens be ae

compensation tax rate as a consequence of requiring prior

hearings, the vague, generalized interest that all employers

have, collectively, in maintaining a low contribution rate

cannot outweigh the specifie and direct harm to the indi-

vidual recipient resulting from long, often erroneous, bene-

fit denials. Under Conn. P.A. 536 §4, L. 1973,°which es-

tablishes contribution rates, there is a possible general tax

rate adjustment of from —.4% to a maximum of +.9% of

taxable payrolls that affects the Fund as a whole. Em-

ployers have no more interest in this adjustment to the

over-all contribution than a member of the general public

has in any tax increase.. Moreover, the ability of the State

to recoup erroneous payments greatly reduces the possi-

bility of rate increases resulting from provision of prior

hearings.” ' ; ;

Second, the individual employer whose contribution rate

will not be increased by benefit payments, see Conn. P.A.

536 $4, L. 1973, amending Conn. Gen. Stat. ch. 567, §31-225

(1958), does not have any real interest in delaying benefit

payments pending a hearing. If the award was correct in

the first place, there is obviously no harm to the employer.

If it was erroneous, the employer is not harmed since the

state may not charge benefits for which the recipient was

ineligible to his*”account. See Conn. P.A. 536 $5, L. 1973. As

Justice Douglas observed in California Department of Hu-

man Resources Development v. Java, 402 U.S. 121, 135

(1971):

“An employer’s account is not finally charged with

benefit payments until after he has exhausted all ap-

peals in the administrative chain and also obtained

judicial review. If he wins at any appellate level, he

is not charged with any benefits paid to his former

employee pending his appeal.” a

The same is true in Connecticut. ‘

3? Id.

Unlike the recipient, the employer does not suffer imme-

diate termination of an important, and, for many recipients,

exclusive source of income. Thus, unlike the creditors in

Fuentes vy. Shevin, 407 U.S. 67 (1972), and in Mitchell vy,

W. T. Grant Co., US. ——, 94S. Ct. 1895 (1974), the

employers here have no direct interest in the termination

of benefits without prior hearings.

_ By contrast, the need of unemployed workers for their

compensation is substantial. While it is true that eligi-

bility for compensation is not based on_a formal means test,

as is welfare, it is also apparent that unemployment com-

pensation, enacted during the Great Depression, is de-

signed to remedy the frequently destitute circumstances of

newly unemployed workers and their families. The severe

* The interests of the creditor in Mitchell v. W. T. Grant Co.,

— US. ——, 94 S. Ct. 1895 (1974), are particularly inapposite

to the minimal interests of the individual empleyers in the instant

case. In Mitchell, this Court noted four factors which weighed

heavily in swinging the balancing process toward protecting the

ereditor’s interests. First, the Mitchell creditor's interest was in

merchandise whose resale value “will steadily decline as it is used

[by the buyer] over a period of time;” thus the creditor's interest

could be “irretriévably eroded” during even a short period of

buyer possession pending a fair hearing. 94 S. Ct. at 1900. See-

ond, the Court noted that, “there is the real risk that the buyer

. .. Will conceal or transfer the merchandise to the damage of the

seller.” 94S. ('t. at 1900. By contrast, neither of these financial

considerations are present in the instant case since the employer

is concerned at most with a possible small future tax increase.

See p. 22, supra. The third factor in Mitchell was the mini-

mal “risk that the writ will be wrongfully issued by a judge.”

94 S.Ct. at 1901. Here, however, not only is there no pretense of

judicial safeguards, but moreover the record discloses that approxi-

mately 19-26% of the terminations are wrong. See note 35, infra.

And, finally, in Mitchell, the buyer could “immediately have a full

hearing .. . thus cutting toa bare minimum the time of creditor

or court supervised possession.” 94S. Ct. at 1901. Again, by con-

trast, there is no immediate hearing here but rather an eighteen-

week delay in ninety per cent of the cases. See note 32, infra.

| Od

financial need which serves as the basis for the unemploy-

ment compensation progran’ was specifically recognized by

this Court in California Department of Human Resources

Development v. Java, 402 U.S. 121, iliaae coe and in

Nash v. Industrial Commission, 389 U.s. 235, 239 (1967),

(where this Court emphasized that termination of unem-

ployment compensation would cause the recipient to “risk

financial ruin.”)*’ It was also recognized by the Court

below: i 4

“Recent statistics suggest thatthe average unem-

ployment compensation recipient is hardly well-off, In

a 1970, the average wage covered by unemployment in-

. i é urance in the U oe States was $141.09; in Connecti-

eut, it was $149.76. The average weekly benefit in that

year in the United States was $50.31, or 35.7°° of the

average covered wage; in Connecticut, it was $60.26,

or 40.2% of the wage. United States Department of

Labor, Handbook of Unemployment Insurance Finan-

cial Data 1938-1970 at 139 (1971).” 364 F. Supp. at

936, n. 26.

The argument that the resulting need is of less con-

sequence because those found ineligible may be eligible

for welfare, see Torres v. New York State Department of

Labor, 321 F. Supp. 432 (S.D.N.Y..1971), is particularly

29 In Java, this Court stated:

“A kind of ‘need’ is present in the statutory scheme for insur-

ance, however, to the extent that any ‘salary replacement’

insurance fulfills a need caused by lost employment.” 402

U.S. at 130.

The Court also stated:

“Unemployment benefits provide cash to a newly unemployed

worker ‘at a time when otherwise he would have nothing to

spend,’ serving to maintain the recipient at subsistence levels

without the necessity of his turning to welfare or private

charity.” 402 U.S. at 131-132 (footnote omitted).

litle

inapposite in this situation. First, it is a highly question-

able public policy to force those eligible for unemployment

compensation by virtue of long attachment te the work

‘Yorce to become welfare recipients. See California Depart-

ment of Human Resources Development v. Java, 402 US. 3

121, 131 (1971). It was precisely to avoid this result that 7

Congress established the tmemployvment compensation pro- ;

gram. See 79 Cong. Ree. 5468 (1935), quoted at note 29,

supra. Second, Congress enacted the Social Security Act

as a single comprehensive package of economic benefits.

Different benefits were established for different purposes.

The comprehensive scheme is frustrated to the extent that

states, to avoid paying one type of benefit, adopt policies

that require reliance on other types of benefits ayailable

under the Act. But this is the inevitable result of foreing

reliance on welfare for long periods during which unem-

ployment compensation is due, a particularly inefficient pol-

jey where erroneously withheld uncmplovment benefits will

eventually be repaid,-often long after the period of need

expires, Finally, many unemployed workers are unable to

qualify for welfare benefits in Connecticut. Since Connecti.

cut does not participate in the Aid for Dependent Children-

Unemployed Parent Program,’ this form of welfare as-

sistance is altogether unavailable to the unemployed. This.

means that families headed by unemployed males would

not be eligible for federally-assisted welfare benefits. in ;

Connecticut.

SRL ON RS

°° See 364 F. Supp. at 934. It should be noted that Connecticut

by failing to participate in the AFDC-U Program places itself with :

the majority of the states. Recent statisties on AFDC-U participa- 4

tion reveal that of fifty-four jurisdictions, thirty do not participate

while only twenty-four do. H.E.W. Social Rehabilitation Se ce,

“Public Assistance Report, #50: Characteristics of State Public !

Assistance Plans, General Provisions—Eligibility, Assistance, Ad-

ministration” (1973).

‘

Further evidence of the financial need of unemyloved

workers and their families is found in the statistics on de-

pendents’ allowances, a flat grant payment for each depen-

dent, which in Conneeticut is added to the unemployment

compensation payments normally received by the worker.*'

During the period July, 1972 to June, 1973, 149,895 new

unemployed workers éstablished their eligibility for benefits

in Connecticut. United States Department of Labor, Un-

employment Insurance Statistics Table 9, p. 16 (AMareh-

April, 1974). Of these, 33.6°° reeeived dependents’ allow-

ances. /d. at p. 16. Of those receiving such allowances,

over 60° had two or mcre dependents and more than 40%

had three or more dependents. /d. Table 10(a), p. 18.

Dependents’ allowances durite this period totalled $7,-

929,164. Id. Table 11, p. 19. Connecticut’s unemployment

compensation program ean hardly be characterized as one

where compensation is granted on a basis divoreed from,

need.

But the most compelling fact to be ba!anced in the weigh-

ing process may well be the eighteen weeks that elapse be-

tween a request for a hearing and a decision based on the

hearing in 90°¢ of the cases in Connecticut. This long

*t Conn. Gen. Stat. ch. 567 §21-234 (1958). See generally Becker,

Adcquacy of the Benefit Amount in Unemployment Insurance 53

(Upjohn Institute for Employment Research, May. 1961). .

8° This statistie and others were related in detail by the Court

below:

“The record indicates that of the 461 intrastate appeals dis-

posed of in Connecticut during December of 1972, fully 414

took at least 101 days between the time an appeal was filed

and the date a final decision was reached. Put in percentage

terms, this means that about 89.8% of all appeals took over

100 days to decide. And, the figures indicate that 61.4% of

all appeals take over 125 days to dispose of, while 29.5% con-

sumed over 150 days before the Commissioner’s decision. Fig-

ures from other months strongly suggest that the December

figures are not unrepresentative.” 364 F. Supp. at 934 (foot-

notes omitted).

delay altogether frustrates the intent of Congress “to give

prompt if only partial replacement. of wages to the un-

employed, to enable workers ‘to tide themselves over

until they get back to their old work or find other employ-

ment without having to resort to relief.” California De-

partment of Human Resources De velopment vy. Java, 402

U.S. 121, 131 (1971) (footnote omitted).

It is during the period of unemployment that the worker

and his family experience the most severe level of depriva-

tion. A subsequeat lump sum payment of illegally with-

held compensation, eighteen weeks later and at a time

when the worker and his family may have extricated them-

selves from their poverty through new employment, does

little to assist.the unemployed worker and his family during

their period of greatest need, and even less to satisfy the

legislative intent of providing early compensation to the

worker. But that is part of the definition of this property

interest; it is an interest in receiving benefits while un-

employed. This interest can be protected only by requiring

a full and fair due process hearing prior to the termination

of unemployment compensation.

2. The Termination of Unemployment Compensation

. Without a Prior Hearing Violates the “When Due”

and “Fair Hearing” Requirements of the Social Se-

curity Act and Frustrates the Purposes of Congress

in Establishing the Unemployment Conipensation

Program 7

a. The “When Due” Requirement and the Congres-

sional Purpose in Enacting the Social Security Act

Require That Recipients Be Granted a Hearing

Prior to Termination of Their Unemployment

Compensation

The Court below rejected the proposition that Connecti-

cut’s seated interview system violated the requirement of

aati |

42 U.S.C. S508(a)(1) that compensation be paid “when

due,” on the grounds that it was bound by this Court's

summary affirmance in Torres v. New York State Depart-

ment of Labor, 405 U.S. 949 (1972), see 864 FL Supp. 922,

937. Although this Court of course is not bound by its sum-

mary affirmance in Torres,’ and thus may examine this

issue anew, it is noteworthy that the Court below failed to

attribute proper significance to two important facts in the

instant case. First, the large number of reversals of Con-

necticut’s seated interview determinations indicate that

large numbers ef unemployed workers to whom compensa-

tion is “due” are denied that compensation for periods

which, because the delay in reaching most hearing decisions

in Connecticut is greater than the average period of un-

employment, are often as long as or longer than the period

of eligibility (7.c., the duration of unemployment or the

entire period “when due”).** Second, the purpose of the

unemployment compensation program is frustrated both

by long delays before payment of benefits and by the er-

roneous benefit terminations.

In establishing unemployment compensation, Congress

sought to accomplish three objectives in the hope of lessen-

ing the deleterious effeets of rising unemployment. Con-

gress sought, first, to provide the unemployed worker with

a subsistence income during his periods of unemployment.

H.R. Rep. No. 615, 74th Cong., Ist Sess. 7 (1935): 8S. Rep.

No. 628, 74th Cong., Ist Sess., 12 (1985); Statement of

3 See discussion at p. 13, supra.

“The average length of unemployment covered by unemploy-

ment compensation in 1973 in Connecticut was 9.3 weeks. Con-

necticut State Department of Labor, Department Bulletin at 14-15

(Spring, 1973). By contrast, 90° of the cases reach a decision

based on a hearing after 18 weeks have expired. See note 32, supra.

29g

Federal Relief Administrator and Member. of the Com-

Inittee on Economic Security, Hearings on H.R. 4120 before

the House Committee on Ways and Means, 74th Cong., Ist

Sess., 214 (1935); Report of the Committee on Economie

Security, Hearings on S. 1130 before the Senate Com-

mittee on Finance, 74th Cong., Ist Sess., 1321-1322 (1935) ;

see also California Department of Human Resources De-

velopment v. Java, 402 U.S. 121. 130-132 (1971). A denial

of compensation during a substantial portion of a worker’s

period of unemployment does not accomplish this purpose.

Second, Congress established the unemployment eom-

pensation program to stabilize the economy by maintaining

the purchasing power of the unemployed worker. See H.R.

Rep. No. 615, 74th Cong., Ist Sess. 7 (1935); Java, supra,

402 U.S. at 132-133. The intent of Congress to stabilize the

economy was expressed by Senator Robert F. Wagner,

sponsor of the Social Security Act, before the Senate Com-

mittee on Finance:

“The chief merit of unemployment insurance, how-

ever, is that it will exert a profound influence upon the

stabilization of industry .... The transfer of purchas-

ing power by benefit payments when danger threatens

will float the business ship off the shoals of depression

to the seaway of prosperity.” Hearings on S. 1130

before the Senate Committee on Finance, 74th Cong.,

Ist Sess. 2 (1935).

Obviously, “danger threatens” during the period of unem-

ployment, not when it passes. Without payment of compen-

sation during this period, neither the worker nor the econ-

omy can benefit.

Third, Congress through the unemployment compensation

program sought to assist the unemployed worker in his

search for employment. Commenting on this purpose of

the Social Security Aét before the House Ways and Means

Committee, the Federal Emergency Relief Administrator

stated that:

“LT his | Act] covers a great many thousands of peo-

ple who are thrown out of work suddenly. It is essen-

tial that they be permitted to look for a’ job. They

should not be doing anything else but looking for a

job. We felt that tw that period of 215 to 3 months

the beneficiartes should get av insurance benefit in

cash.” Hearings on H.R. 4120 before the House Com-

mittee on Ways and Means, 74th Cong., Ist Sess. at,

214 (1935) (statement by Harry L. Hopkins, Federal)

Kimergency Relief Administrator) (emphasis added).

During each week that compensation i; denied, the unem-

fon]

ployed worker's search for employment is inhibited.

In light of this three-fold purpose, this Court construed

§$303(a)(1) of the Act and concluded that:

“(T]he word ‘due’... means the time when pay-

ments are first administratively allowed as a result

of a hearing of waich both parties have notice and are

permitted to present their respective positions; any

other construction would fail to meet the objective of

early substitute compensation during unemployment.

Paying compensation to an unemployed worker

promptly after an initial determination of eligibility

accomplishes the congressional purposes ... of avoid-

ing resort to welfare and stabilizing consumer de-

mands: delaying compensation until months have

elapsed defeats these purposes. It seems clear there-

fore that [this] procedure, which suspends payments

. after an initial determination of eligibility has been

made, is not ‘reasonably calculated to insure full pay-

ment of unemployment compensation when due.’ ”

California Department of Human Resources Develop-

ment v. Java, 402 U.S. 121, 133 (1971).

‘ 31

In Java, this Court tound that termination of benefits

pon an employer's appeal was very likely to deprive an

eligible recipient of his benefits during his period of unem-

ployment. 402 U.S. at 133-134. Similarly, the. high re-

versal rate here® results ina substantial munber of claim-

ants being deprived of benefits to which they are rightfully

entitled for a period which is longer than the average period

of unemployment of 9.3 weeks in Connecticut. Sec note 34,

supra.

In Torres v. New York State Department of Labor, 333

F. Supp. 341 (1971), aff'd mem., 409 U.S. 949 (1972), re-

hearing denied, 410 U.S. 971 (1975), the Court coneluded

that, as the result of NewsYork’s benefit termination pro-

cedure, benefits could not be said to be “due” for purposes

of 42 U.S.C. §503(a)(1) because the agency had determined

them not to be “due.” But this reasoning, if it is accepted,

has no application here where so many of the seated inter-

view decisions adverse to recipients are erroneous and ben-

efits are due. Likewise, the delay in making hearing

decisions means that recipients ia Connecticut are forced

to bear the risk of possible error during their unemploy-

ment. If there is a strong congressional policy favoring

early payment of benefits, it would seem that benefits prop-

erly would be determined not to be due only in the ultimate,

relatively error free hearing now provided by Connecticut.

*” The following figures were noted by the court below while dis-

cussing Connecticut’s reversal rates:

“For the period of July, 1971 to June 1. 1972. there were

6034 claimant appeals, and 1706 of those were resolved in

favor of claimants for a reversal figure of about 21.6%. In

the period from July, 1972 to October, 1972, there were 769

reversals out of 2959 claimant appeals, or about 26.0%. In the

three-month period from January, 1973 through March, 1973.

there Were 1759 claimant appeals, and 342 reversals, or a rate

of about 19.4%.” 364 F. Supp. at 936, n. 28.

Thus it is only after the “fair hearing” required by Section

303(a)(3) of the Social Security Act that benefits can be

terminated because no longer due.

As this Court stated in California Department of Human

Resources Development vy. Java, supra:

“Probably no program could be devised to make in-

surance payments available precisely on the nearest

payday following*the termination, but to the extent

that this was administratively feasible that must be

pees as What Congress was trying to : asia

2 U.S. at 130.

Consequently, any administrative procedure which un-

necessarily postpones the receipt of compensation by eligi-

ble claimants frustrates “what Congress sought to accom-

plish.” As California's procedure considered in Java was —

deficient in this respect, so too is Connecticut’s.

To remedy this defect and to accomplish the objectives of

the Social Security Act, the recipient of unemployment

compensation must be afforded timely payments. This

treatment can be achieved only by a hearing prior to ter-

mination to insure that all eligible recipients receive pay-

ments “when due,” as Congress intended.

b. Congress Intended That Recipients of Unemploy-

ment Compensation Be Provided With a Hearing

Prior to Termination of Their Compensation

As enacted, Title III of the Social Security Act specifi-

eally requires that states provide an “[o]pportunity for a

fair hearing, before an impartial tribunal, for all individ-

uals whose claims for unemployment compensation are

denied.” 42 U.S.C. §503(a)(3). ,Likewise, provision was

made in Titles 1, IV-A, and X of the Act for fair hearings”

in the benefit programs established by those Titles. The

fair hearing provisions of these Titles and of the more

recently enacted Titles XIV, XVI and XIX have been inter-

preted by the United States Department of Health, Educa-

tion and Welfare (“H.E.W.") to require prior heariags

that “meet the due process standards set forth in tne United

States Supreme Court decision in Goldberg vy. Kelly, 397

U.S. 254 (1970).” 45 (LER. §205.10(a) (1) (ii) (1973).

Under these programs, in “cases of intended action to

discontinue, terminate, suspend or reduve assistance,” *7

the state or local agency must provide timely and adequate

notice,** an opportunity for a hearing,” an impartial

decision-maker,“ opportunity for presentation of the re-

cipient’s case by the claimant or his representative" and

opportunity for confrontation and cross-examination of ad-

verse witnesses.** H.E.W. regulaticns also require that, in

situations involving questions of fact, benefits be paid until

a decision based on a hearing is rendered.“

This measurement of the state hearings established under

the “fair hearing” requirement of the various Titles of the

Social Security Act against the standards of due process

5° See §2(a) (4). 42 U.S.C. $302(a)(4) (old age assistance) ;

§$402(a) (4), 422 U.S.C. §$602(a) (4) ‘aid to dependent children) ;

$1002 (a) (4). 42 U.S.C, §1202(a) (4) (aid to the blind).

45 C.F.R. §205.10(a) (4).

* Id., §205.10(a) (4) (i) (1973).

Id., §205.10(a) (5).

Td., §205.10(a) (9).

"" Id., §205.10(a) (13) (ii).

* Td., §205.10(a) (13) (vi).

** Id., §205.10(a) (6) (i).

established in Goldberg vy. Kelly, Supra, is in consonance

with the standards by wiich hearmgs were traditionally

measured at the time Congress passed the Social Security

Act. At the time of that enactment, it had been traditionally

held that, for a hearing to comport with the requirements

of due process, it must be held prior to the deprivation of

property. See, c.g., United Sfates ve Ilinoixs Central RR,

2OL ULS. 457 (1934) (hearing necessary before rate change

by Interstate Commerce Commission can be effective);

Londoner vy. City and County of Denver, 210 US. 808

(1908) (due process hearing must be held prior to assess-

ment of taxes by state administrative board); Windsor

v. McVeigh, 93 U.S. 274 (1876) (due process hearing must

be held prior to issuance of decree of condemnation) ; see

also McVeigh v. United States, 78 U.S. (11 Wall.) 259

(1870).

There is no indication that Congress intended anything

other than conformity with traditional notions of due

process when it required -a fair hearing for all persons

denied unemployment compensation. As this Court stated

‘in Shields v. Utah Idaho Central Railroad Co., 305 U.S. 177

(1938), quoting from Morgan vy. United States, 298 U.S.

468, 480 (1936):

“The requirement of a ‘hearing’ has obvious ret-

erence to the ‘tradition of judicial proceedings .. .’

(T]he: manifest purpose in requiring a hearing is to

comply with the requirements of due process upon

which the parties affected by: the determination of an

administrative body are entitled to insist.” 305 U.S.

at 182.

Traditionally a due process hearing oceurs before the prop-

erty in question is forfeited. Board of Regents of State

Colleges v. Roth, 408 U.S. 564, 570, n. 7 (1973): Fuentes v.

Shevin, 407 U.S. 67 (1972). There is little reason to believe

that Congress required fair hearings in unemployvinent

compensation without requiring those hearings to comply

with the requirements of due process. Indeed, as noted by

this Court in Greene ve MeKlroy, 360 U.S. 474. (1959). in

Watters of statutory interpretation it is assumed “that

Congress or the President intended to afford those affected

by the action the traditional safeguards of due process.”

860 US. at 507. Morcover, Congress must have intended

to act consistently. Since there is certainly no indication

that Congress intended the nature of the “fair hearings”

established under each of the Titles of the Social Security

Ast to differ depending upon which federal] ageney adminis-

tered the program, H.E.W.'s constitutionally correct. in-

terpretation of the fair hearing requirement of Titles 1,

IV-A, and X, which were enacted at the same time as

Title 111, must also be adopted with respect to the Title II]

“fair hearing” provision.

€. The Court Below Properly Determined Present Connecticut

Procedures to Be Inadequate Under the Due Process

Clause of the Fourteenth Amendment

The Court below declined to require the State of Con-

necticut to provide a full prior hearing. Instead, the Court

provided the State with various alternative means of bring-

due process. The Court held that the State could, alterna-

tively, provide expeditee de roro hearings, provide initial

hearing procedures meeting minimum standards of fairness

or, where rapid and fair de noro review would be unduly

burdensome, pay the disputed benefits while reserving the

right to set such benefits off against fiture compensation

payments, see 364 F. Supp. 922, 937-38. It also noted that

the State could do away with the seated interview and pay

benefits pending a hearing, see 364 F. Supp. 922, 936 n. 27.

= 36 ;

In short, the Court found that the procedural inadequacy of

Connecticut’s present termination procedure, coupled with

the long delays ineident to the holding of hearings, resulted

in a violation of due process. The Court did not adopt a

rigid rule requiring full-scale due process prior hearings

in all circumstances.

The Court reviewed the present procedure for benefit ter-

minations and concluded that the procedure did not result

in discharge of due process obliggtions beeause: (1) there

was Virtually no advance notice of the “seated interview”

or of the precise issue which would be raised; (2) there

was no opportunity to prepare arguments or present sup-~

porting witnesses and doctunents; (3) there was no oppor-

tunity to confront and cross-examine adverse witnesses;

(+) there was no opportunity to consult counsel; and (5)

the fact-finding examiner, not being limited by a precise

notion of the charges against the recipient, could base his

decision on a wide range of rationales not necessarily re-

lated to the issue originally presented to the recipient.

See 364. F. Supp. 922, 935. Coupled with the inadequacy

of this initial termination procedure, the Court relied

upon the hearing decision delay as a further source for

its coneern with the treatment Connecticut aceords reeip-

ients in the first instance. See 364 F. Supp. 922, 933-934.

It also bbars repeating that a very substantial proportion

of the non-due process determinations are eventually re-

versed. On the basis of these factors and a balancing of

the interests of the State and the recipient, the Court

properly concluded that the State should make some of the

adjustments it suggested.

In the circumstances, it would have been difficult for the

Court to do otherwise. The record is replete with evidence

that complex, subjective factual issues frequently arise at

2 TROL cs a

the “seated interview” which results in benefit. termination

(App. at 54a-58a, 77a-Sva, 11 Tae! ISaj; sce also 364 F. Supp.

Y22, 936. Yet this interview is hopelessly inadequate

because :

(1) The unemployed worker is subjected to this inter-

view without adequate advance notice although one of the

basie requirements of due process is fair and adequate

notice of: the charges made, see, e.g. Goldberg v. Kelly,

3897 U.S. 254, 267-268 (1970). The recipient has no notice

of the issues to be raised until he reports to the unemploy-

ment compensation office and even then receives no precise

notice of the issues involved. 364 F. Supp. 922, 935. More-

over, the fact finder may ¢o beyond the record of the

interview in making his decision. 364 F. Supp. 922, 935.

Since there are no fixed standards by which even the ex-

aminer can measure the accuracy of his determinations

(App. 76a-77a) there is no possibility of adequate notice

to the claimant as to the specifie issues which may be raised

against him.

The appellant attempts to find a remedy for this defect

in the fact that the recipient has general knowledge that

he must report every two weeks, Brief of Appellant at

16. Yet this notice is altogether inadequate because it is

not until after the recipient arrives at the unemployment

compensation office that he is informed of any specific al-

leged inadequacy in his search for work. As the State con-

cedes, new factual issues can be raised when the recipient

reports, Brief of Appellant at 14.

(2) Recipients: are not provided with adequate oppor-

tunity for representation by counsel, although representa-

tion is also a basic requirement of duo process, see, ¢.g.,

Goldberg v. Kelly, 397 U.S. 254, 270-71 (1970) (“Counsel

Ee few nome

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can help delineate the issues, present the factual conten-

tions in an orderly manner, conduct cross-examination, and

generally safeguard the interests of the recipient’); ef.

Powell y. Alabama, 287 U.S. 45, 68-69 (1982). While it is

true that there is no specific prohibition on representation

by counsel here, Brief of Appellant at 21, neither is there

any specific notice to the recipient that he has the right

to counsel. It is not too speculative to suggest that the

typicaleworker would not think of his need for counsel in

the few minutes between his being informed that he must -

participate in a seated interview and the time that he

moves to the head of the line for that interview. Even if

he did think of it, there is no requirement that he be given

time to obtain counsel before the interview. Appellant’s

claim that a worker may, if he chooses, bring counsel with

him every time he reports, Brief of Appellant at 18, is

not only patently ridiculous as suggested by the Court

below,** but it also concedes the total absence of notice

in the State procedure. What has been said of the oppor-

tunity to retain counsel is also true for the other elements

of due process that require adequate opportunity for

advance preparation such as the presentation of friendly

witnesses and the presentation of documentary evidence.

(3) Recipients are also denied the right of confrontation

and cross-examination, another necessary element of due

process, see, e.g., Goldberg v. Kelly, 397 U.S. 254, 270

(1970) (“Welfare recipients must therefore be given an

opportunity to confront and cross-examine the witnesses

* The Court below soundly rejected this claim by stating:

“The claimant surely cannot be expected to bring counsel

and witnesses to every bi-weekly claims session on the off

chance that a ‘seated interview’ will result.” 364 F. Supp. at

935, n. 25,

relied on by the department”); Willner y. Cammittee on

Character and Fitness, 373 US. 96, 103-104 (1963) ; Greene

Vv. Meklroy, 360 US. 474, 496-497 (1959). The State's

denial of confrontation and cross- -cxalination is most

vividly illustrated by the examiners’ practice of gathering

information against recipients by telephoning so-called

uninterested employers, Brief for Appellant at 19, a prae-

tice which the State concedes provides “no opportunity for

confrontation by the claimant.” /d.

(4) Finally, the record also demonstrates the absence

of an impartial decision maker, another basic requirement

of due process, see, e.g., Goldbe rg NV. Welly, 397 U.S. 254,

271 (1970) (“of course, an inpartial decision maker is

essential”); Gibson y. Berryhill, 411 U.S. 564, 579 (1973) ;

In re Murchison, 349 U.S. 133. 188 (1955); Wong Yang

Sung v. McGrath, 339 U.S. 33, 45-46 (1950). In the Con-

necticut procedure, the seated interview examiner, although

denoted a “Fact Finding Examiner,” sits in the position

of an inquisitor who seeks to aan information which

might indicate that the worker is not eligible for his ecom-

pensation (App. 88a). Indeed, the lack of impartiality in

this procedure is suggested by the State’s own reference

to the subsequent fait hearing procedure provided by the

Unemployment Compensation Commission, which is de-

seribed as “a completely independent entity separate and

apart from the defendant and the Employment Security

Division,” Brief of Appellant at 5.

No doubt these procedural infirmities in the Connecticut

seated interview have much to do with the high rate of

error in decisions based on seated interviews, When they

are viewed from the perspective of the recipients who must

PPR LE LISS ee

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regase:

wait long periods of time before being given the oppor-

tunity to fairly present their cases and endure the conse-

quent hardship, the holding of the Court below emerges as

a modest response to a clear-cut denial of due process.

As noted above, a balancing of the competing interests

af the recipient and the employer tips decidedly in favor

of the recipient. See; pp. 18-27 supra. Amici, like the Court

below, have difficulty discerning what interests the State

could possibly have sufficieat to justify refusal to adopt that

Court’s proposals. Surely long delays in benefit payments

do not help the State. Surely, too, an increase in the proce-

dural proprieties at the seated interview would riot be un-

duly burdensome. These points are necessarily true a

fortiori since it has already been shown that the burdens

incident to holding a prior hearing are not sufficient to out-

weigh the interest of the recipient in early and correct bene-

fit determinations. Finally, to the extent the State follows

the suggestion of the Court below that the State may

comply with the requirements of due process by processing

requests for hearings more expeditiously, the State will

reduce the amount of benefits paid to recipients pending

hearings.

In view of the hardships imposed by the present Con-

necticut procedures, the inadequacy of those procedures to

meet minimal requirements of fairness, and the inconse-

quential burden imposed on the State by the decision of

the Court below, the Court’s modest proposals for securing

due process rights to recipients are most appropriate and

should be affirmed by this Court.

CONCLUSION

For the foregoing reasons the decision of the Court

below should be affirmed.

Dated: New York, N. Y,

July 19, 1974

Respectfully submitted, .

DENNIs R. YEAGER

E. Ricuarp Larson

National Employment Law

Project, Ine.

423 West 118th Street

New York, New York 10027

Martrig Lovis Tuompson

STEPHEN E. Gorrures

Community Action for

Legal Services, Ine.

335 Broadway

New York, New York 10013

(. CHRISTOPHER Brown

DENNIS M. SWEENEY

ALAN S. Davis

Legal Aid Bureau, Ine.

— 341 North Calvin Street

Baltimore, Maryland 21202

C. LYONEL JONES

Epwarp R. STEGE, Jr.

Legal Aid Society of Cleveland

2108 Payne Avenue, N.E.

Suite 728

Cleveland, Ohio 44114

STEPHEN M. RanpeEts

Legal Services Center

Rainier Valley Office

_ 3230 Rainier Avenue South

Seattle, Washington 98144

ALAN W. Hovseman

Michigan Legal Assistance

Program

Wayne State University

Law School

Detroit, Michigan 48202

Joun M.. Levy

Neighborhood Legal Aid

Society, Ine.

300 East Clay Street

Richmond, Virginia 2324]

Jerry L. Covineton

GEORGE POWELL

ISRAEL GALINDO

GILBERT RopriGvEz

Texas Rural Legal Aid, Inc.

216 N. Closner

Edinburg, Texas 78539

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