*1 Richmond Virginia Employment Dennis Klimko Commission. 5, 1976.
March Record No. 750018.
Present, theAll Justices. & IV brief), Hall Warren, Wm. George Warren, (Hall, in error. plaintiff *2 P. (Andrew General
W. Thomas Assistant Hudson, Attorney in error. defendant Miller, brief), on General, Attorney J., delivered the of the court. Poff, opinion Commission a decision of the Appealing Virginia Employment contends (VEC) court, (claimant) Dennis Klimko trial upheld by first, benefits that “the of continued expectation compensation entitled to” worker amounts to a vested unemployed and Amendment of the Fourteenth procedural process protection second, that “the scheme ... for utilized appel- terminating him lant’s denied benefits” on-going unemployment such protection.
On 31, October 1971, claimant, a resident of County, Arlington lost his as an “office service technician” Singer- job equipment Ohio, Friden Later, Division. to moved his residence Youngstown, and filed a with the claim for unemployment compensation (the local office of the Ohio Bureau of Compensation Unemployment 1971, 31, Ohio bureau). The claim was effective October approved week.1 VEC commenced rate of at the $59 per payments 1The involv is a federal-state venture unemployment compensation system joint a tax on certain interstate The Commonwealth of ing operations. Virginia imposes §§ 60.1-70, seq. state Unem Code et The are in the revenues employers. deposited to the federal Unemployment Fund and later transferred ployment Compensation § 60.1-107 Trust Fund established Act. See Code (Repl. under Social Security § 1973); a tax on also levies employers, Vol. U.S.C. federal government 1104. §§ 3301, seq., to et a credit for taxes U.S.C. entitled to paid employers § § a state See 26 U.S.C. 3302. fund certified under 26 U.S.C. unemployment certification, however, To obtain a a reduce or compensa such state deny because tion to an a in another State because he files claim ... employee “solely 3304(a) § he resides in another State at the time he files claim. . . .” U.S.C. ... (A). (9) a state’s If the of Labor Treasury certifies to the secretary Secretary see 42 U.S.C. contain certain laws unemployment compensation provisions, required § 303, its unem- administering the federal will the costs of state government pay § §§ 301, seq. (Repl. 60.1-44 et Under Code ployment Vol. laws. 42 U.S.C. 1973), action, appropri- VEC is directed such adoption to “take through standards, rules, necessary bemay ate administrative methods and regulations, under provisions secure to this and its citizens all available State advantages . . .” the Social Act that relate compensation. Security unemployment credit, Code 60.1-43 To to take the federal tax enable employers advantage 1973) with into certain agreements Vol. authorizes VEC to enter (Repl. reciprocal Plan”, Benefit “Interstate other states. All states in what is called the participate claimant 9, to whom 1972,
On February Youngstown employer “office was as an referred the Ohio bureau offered claimant job Ohio bureau machine serviceman”. refused the offer. The Claimant interview. Claimant notified claimant to attend ap- an oral statement and made explaining peared February writ- his reasons. examiner reduced statement The fact-finding that, in his former it. Claimant said position, ing, signed month, the he was $600 company paid paid approximately per use insurance, on his he was full-time medical given premiums be new was $500 car. In the claimant’s salary job, company while month, his insurance were not to paid, per premiums truck, he was to he was to have the use of his required employer’s could that “I his own car of the time. stated to use Claimant just part this offer of work because these employer wages.” accept start $500 advised the examiner per “pay telephone hire, because was worth it after month, and more pay employee *3 stated that did The “local ES claimant have supervisor” experience”. in rate the rate of offered was the area. pay prevailing “Fact in a bureau summarized this information The Ohio Finding VEC. statement to and claimant’s and forwarded the report Report” a that the made data, these VEC Based job finding deputy upon without and was refused was “suitable offered good employment” 28, 1972, dated rendered a determination cause. The February deputy 1973), § “this claimant Vol. that, 60.1-58(c) under Code (Repl. Feb- were terminated effective Benefits subject disqualification”. con- was interview 1972, the week in which 13, fact-finding ruary ducted. 2, 1972, on March filed a “Notice of Interstate
Claimant Appeal” schedule another bureau to Ohio and VEC hearing. requested 31, March was held on claimant, the formal notice to After hearing reasons that, in addition to claimant testified At that 1972. hearing, regulations, after administrative patterned each has and for adopted purpose, Unempl. Rptr., CCH, Benefits. See IB Ins. Draft for Interstate Regulations (1975) have draft adopted regu- [hereinafter “CCH”]. and Ohio Virginia (issued See Rules and Compensation Affecting Unemployment Regulations lations. (issued VEC) Bureau of Compensation of the Unemployment and Regulations by regulations, bureau). a claimant Under these IB 5221. the Ohio CCH 11 by state, even though the “liable” in which he eligible, benefits from the state collect state, claims and on interstate state. Procedures he in the other “agent” resides See II The at Part B. agent regulations. are prescribed by reciprocal infra appeals rights; the claimant’s simply make authority concerning no decisions state has state to the liable forwards its information interview and conducts its laws. and the claimant’s pays determines rights which according felt his that he one of the refusal was reasons for previously assigned, new The trained the skills the job required. properly examiner of this was transmitted to VEC transcript hearing appeals 1972, who rendered a on 11, decision deputy’s April affirming determination. decision,
From this filed a second interstate claimant April appeal 15, 1972, 1972. scheduled VEC in Richmond for May and notice was sent to did at the hear- Claimant claimant. appear decision the decision 16, 1972, dated VEC affirmed ing, by June examiner and terminated benefits effective appeals February 1972, the week in which “to work claimant refused suitable accept .. . offered him”. 60.1-58(c). 16, 1975, Code On July peti- tioned the trial court review of the decision. Commission’s court ruled trial that VEC’s “actions . . with . comport requirements of struck claimant’s review process” petition from the docket.
Our
constitutional due
from
process
deep
guarantees spring
ancient
In
1224-25),
roots.
29 of
of
(issue
Carta
chapter
Magna
free man shall be taken or
or
King
“[n]o
promised
imprisoned,
freehold, or his
. . unless
lawful
liberties .
deprived
by
Peers,
of his
or
the law
of the land.” Statutes
judgment
Large
by
England
1810).
Great Britain
(Thomas
Tomlins ed.
first
recordation
“due
of law”
found in
phrase
chap
ter 3 of 28 Edw. Ill (1354): “no man
. shall
of Land
. .
out
put
or
. .
Tenement.
nor
Death,
without
Answer
put
being brought
due Process of Law.”
Id.
Coke construed the
phrases “by
law of the land” and “due
of law” as
terms meaning
equivalent
indictment or
and lawfull men ...
“by
presentment
good
writ
Coke,
of the common law.” 1
The Institutes
the Laws
originall
(1797).
The “writ
was the
England
which
originall”
*4
process
of
civil actions were
Thus,
instituted
the
courts.
King’s
conceptually
“due
After
functionally,
process”
originally purely procedural.
ratification
the
Amendment,
of
Fifth
the due
clause was
process
ap
well as
limitation
the substantive
of
content
plied
upon
statutory
(1915);
See,
enactments.
v.
The due clauses Fifth and Fourteenth Amendments process both and substantive constraints apply procedural upon deprivations of Whether a interest “liberty” “property”. particular liberty 754
or
interest no
interest is
longer depends upon
property
protected
“wooden distinction”
whether
or a
for the
it is “right”
“privilege”,
Re-
Board
between the two has been
rejected”.
“fully
finally
(1972).
v.
408
571
Roth,
U.S.
gents
aof
When
due
property
respecting deprivation
procedural
process
interest
Court
two-step inquiry.
Supreme
pursues
challenged,
v.
Board
(1975);
Goss v.
Pursuing two-step inquiry, benefits is tation of continued pro- compensation unemployment tected interest. property
I. word dimensions of the context, In a constitutional the connotative definition used are than the lay “property” greater corporeal interests man. “The Court has . . . made clear that pro property actual owner well tected due extend beyond by procedural omitted). Board estate, chattels, (Footnote of real ship money.” has been v. U.S. at Procedural Roth, 408 571-72. Regents Inc. creditors, to North Finishing, extended attachments Georgia Snia (1975); v. Inc., 419 601 Di-Chem, garnishments, wage a driver’s (1969); to 337 dach v. Finance 395 U.S. Family Corp., a tax (1971); to U.S. 535 license Bell v. 402 Burson, exemp suspension, (1958); to 513 denial, v. 357 U.S. Randall, right tion Speiser U.S. 207 403 v. Connell Higginbotham, employment, government U.S. 551 350 Education, Board Sloc hower v. (1971); Higher (1952); compare 183 344 U.S. v. Wieman (1956); Updegraff, an uninter (1974); Kennedy, Arnett v. right welfare and to the education, supra; Goss Lopez, rupted (1970). U.S. 254 benefits, Kelly, Goldberg v. never has Yet, unemploy- explicitly Supreme benefits process protection.3 ment enjoy procedural of the laws and constitutionality facial Here, challenge does regulations. Java, Development 402 U.S. Dep’t Human Resources In California which held court decision district (1971), a three-judge reviewed the Court interest and that protected unemployment Act, 303(a)(1) the Social Security violated employed termination
755 Such a however, seems in its in Fusari v. holding implicit, language 419 U.S. reh. Steinberg, (1975). There, 420 U.S. denied, 955 district court that de- Connecticut’s three-judge procedures termining continuing eligibility unemployment compensation benefits decision, violated the due clause. that process Following state revised its remanded for recon- Court procedures. Supreme sideration in of the that “we can light changes. only Noting specu- late how the new and that “it would be . . . system might operate” difficult to assessthe due question procedural process”, Powell, court, for an unanimous said: speaking
“Identification of the dictates of due con- requires precise sideration of both the function involved governmental pri- vate interests affected omitted). official action.” (Citations 419 U.S. at 389.
While of the was the sufficiency procedures only process ques before Court, tion this a tacit language acknowledg appears ment that of continued expectation unemployment compensation constitute a interest within the protection 4 of the Constitution. process guarantees courts “must look not to the
Evaluating
‘weight’
question,
to the nature
Roth,
at
v.
408
stake.” Board Regents
U.S. at
And
fact that
570-71.
must be
“[t]he
guided by
they
Court’s view has
been
as a
long
property deprivation
de
account
its
whether
minimis,
irrelevant to the
gravity
question
503(a)(1)
(1970),
42 U.S.C.
which
state
“reasonably
provides
procedures
full
when
calculated
insure
due”.
payment
unemployment
compensation
was reversed and the case
on the
the Court
statutory
remanded
judgment
question;
did
reach the constitutional
issue.
(1963),
Verner,
in Sherbert
374
398
on which
Nor
that issue decided
v.
There,
not,
held that a state could
of its
relies.
the Court
application
laws,
a First Amendment
to free exercise
unemployment
infringe
of religion.
Department
Labor,
See also
New York State
Torres v.
321 F.
Supp.
(S.D.N.Y.
(1971),
remanded,
prior decision adhered
1971),
vacated and
II. remains “Once it is determined that process applies, question (1972). what is due.” Brewer, Morrissey process uti- scheme that “the Claimant divides contention that he First, he lized” denied him due into two says parts. constitutional dimensions to, denied, was a entitled but hearing Second, his benefits. 28 decision pi-eceding terminating February was consti- March 31 asserts that the hearing post-termination incident to he was denied certain defective because rights tutionally an adversary hearing.
A. must of some sort “whether hearing Addressing question in his be held any ‘taking’ employee’s property before be- before is available occurs, full taking even hearing job in final”, White, dissenting comes concurring part said: Arnett v. supra, Kennedy, part nonfinal before to a “In claims preliminary passing upon hearing full has been the usual rule this hearing deprivations, at some time suffices. ‘We that no have hearing repeatedly as the so requi- long stage preliminary required order becomes administrative final site is held before hearing concerned, sufficient, where effective.’ ‘It is rights only property there some is at judi- stage opportunity omitted). cial determination.’” (Citations a case in- (1974), In Mitchell W. Grant U.S. 600 T. Co., chattels, was held no volving sequestration prior hearing *7 did a debtor evidentiary hearing argued appeal subsequent of cases cited a list of satisfy long process guarantees. Speaking debtor, the the Court said: by be had stand for that a must the
“[T]hey merely hearing proposition before one is deal all of his do not finally deprived property with the for a a and im- where full need pretermination hearing mediate The rule has is usual post-termination hearing provided. involved, been mere ‘[w]here only rights postponement the of not a denial of due if the judicial process, oppor- enquiry of is ade- ultimate determination tunity given judicial liability ” (Citations omitted). 416 U.S. quate.’ In the recent case of North Inc. Di-Chem, v. Georgia Finishing, a debtor the due an ex Inc., supra, challenged process sufficiency statute. The ex attachment Court parte parte Supreme compared statute invalidated in Fuentes v. with the ex Shevin, supra, replevin statute in Mitchell W. parte T. Grant Co., sequestration upheld that, noted in court the statute seller Fuentes, supra. permitted without under a writ issued the clerk repossess goods hearing court, while in the statute Mitchell, an affidavit required justifying writ, issuance the writ an “immediate after by judge, hearing seizure”, and dissolution writ absent the writ. proof justifying this Based North ruled “the court Georgia comparison, upon had official seizures carried out without been notice and without op- other for a or mistaken against safeguard reposses- portunity hearing deciden- added). sion.” 419 U.S. this ratio at 606. (Emphasis Applying benefits, di to the it would context of unemployment compensation seem that there is no constitutional of any pretermination requirement where there are mistaken termination hearing safeguards against benefits. true,
It is in a asserts, has held that the Court Supreme limited number of cases that a must hearing pro- pretermination vided, even where Speaking post-termination hearing provided. cases, of these White said in Arnett v. 416 U.S. Kennedy, at 188: “In has whether Court assessing prior hearing required, looked how interests asserted asserting legitimate party the need it, would be fur- hearing, party opposing thered hindered.” This test”, first in & Restaurant announced “balancing Cafeteria
Workers v. (1961), was in Gold 367 U.S. McElroy, applied that, with berg Kelly, supra. Goldberg respect entitlement benefits, to welfare “only pre-termination evidentiary .. . provides process” explained:
“Thus, the crucial
factor
this
in the
context—a factor
present
case
contractor,
blacklisted
government
discharged gov-
ernment
a tax
or virt-
denied
employee,
taxpayer
exemption,
else
ually anyone
whose
ended
entitlements are
governmental
[em-
aid
of a
termination of
resolution
added]—is
phasis
pending
over
an eligible
controversy
eligibility may
[emphasis
deprive
means which to live while waits.”
text] recipient
very
*8
While the concluded that this “brutal need” outweighed interests in and ad- fiscal “countervailing governmental conserving resources”, ministrative that not recognized every property is of such a nature. need, interest of worker an whose
Concerning unemployed is benefits are terminated similar to that unemployment compensation of a worker whose is terminated. In Arnett v. Ken government job nedy, Powell, 416 U.S. at said: concurring, “Since would be reinstated awarded if appellee backpay claim, on the merits of his actual would prevails appellee’s injury in- consist of a his income during temporary interruption terim. To could sure, be even a of income temporary interruption a serious loss But the constitute instances. many possible depriva- tion is less than involved severe in Goldberg, considerably where termination of welfare benefits to the example, recipient would contrast, have occurred in face of ‘brutal need.’ . . . By well resources have to overcome public employee may independent and he be secure in the able to any temporary hardship, job may sector. he will be bene- for welfare private Alternatively, eligible fits.”
See also Mathews v. at 4231. Eldridge, supra, test”, the interest of an unem- Applying “balancing legitimate worker in flow of ployed receiving uninterrupted during of entitlement must be all inter- period weighed against legitimate ests of the Conservation of the fisc is such an in- government. public terest. The actuarial Trust Fund integrity Unemployment whose tax finance important it; to the extent employers payments benefits are recovered,5 and not taxes in- erroneously paid may creased; to the extent taxes increased, consumer prices increased. The of the fund is also ongoing solvency important covered entitled to every benefits. employee presently potentially For the sake of commerce and an efficient in- productive economy, terests to the has an interest important public government large, workers return to as soon insuring unemployed employment as reasonably practicable. interests, we believe balance Weighing countervailing lies in favor of the case, In such government public large. indicate that when involving only property rights, precedents sufficient constitutionally post-termination hearing provided, does not mandate a categorically pretermination hearing there are mistaken termination. safeguards against
B. We now consider, first, whether the interview other were an pretermination procedures adequate “safeguard against mistaken” termination, and, second, whether the post-termination were sufficient. appellate procedures constitutionally when, The risk of here, non-recovery heightened the claimant resides out side the of the “liable” jurisdiction state.
760 of the
Challenging
adequacy
pretermination procedures,
held that
claimant relies
on
v. Kelly, supra. Goldberg
Goldberg
again
notice
the welfare
must
afforded “timely
recipient
adequate
termination”;
for a
an
reasons
detailing
opportunity
proposed
“an
and “state his
appear personally
confront and cross-examine the
position orally”;
opportunity
coun
to retained
witnesses”;
the right
a decision
maker”;
to “an
decision
sel;
right
right
impartial
adduced at
based
on the
rules and evidence
the hearing”;
“solely
legal
and its
to a
of the reasons for the decision
statement
The form and like the features hearing, hearing, timing context”, were “the crucial factor in this i.e., premised upon Because, said, as we have “brutal need” of the welfare recipient. need of the claimant here is not so brutal and the countervailing public that a interests are of we pre- preponderate, Goldberg-type opinion termination a due process imperative. then, is what are pertinent procedures required. inquiry, the extent “Whether any procedural depends protections ”
to which loss.’ an will be ‘condemned to suffer individual grievous Due (Citations U.S. at omitted). 408 481. Brewer, Morrissey pro- cess “no substantial form of requires particular procedure; protects 333, (1938). Due NLRB Mackay Co., rights.” pro- cess form of technical, “are not nor is any particular requirements 325 U.S. Inland Council v. Empire Millis, procedure necessary.” (1945). “The nature of due negates any concept very sit- inflexible imaginable procedures every universally applicable uation.” & Restaurant Workers v. McElroy, Cafeteria 895. There, students
Claimant relies Goss v. Lopez, supra. heavily upon were assumed without notice or The Court suspended prior hearing. “that the will not be suspension stayed [post-suspension] pending edu- and that the student will lose his meanwhile hearing, irreparably benefits”,6 certain 581-82, cational 419 U.S. at fn. and ruled that were Specifically, pre-suspension constitutionally required. held that “due . .. that the student the Court given process requires and, he denies oral or written notice him if charges against them, an of the evidence the authorities have and op- explanation U.S. at his side of the story.” portunity present 6 Here, show that termi loss is not proceedings irreparable; post-termination entitlement, erroneous, a limits of nation was within the his period may, See Code date benefits retroactive to the of termination. 60.1-62. be awarded its the Court said: Explicating holding,
“There need be no between time ‘notice’ is and delay given the time of the In the of cases the hearing. great majority discipli- narian discuss the misconduct with the stu- may informally alleged dent that, minutes after it has We in occurred. hold only being an to his of the facts at this dis- version given opportunity explain cussion, the and student first be told he is accused of what doing what the basis of the accusation is. . ..
“We short of the Due Process Clause stop construing require, in connection with short countrywide, hearings suspensions counsel, must afford the to con- student the to secure opportunity front and call cross-examine witnesses or to supporting charge, his own witnesses to his of the incident. Brief version verify discipli- case each such almost countless. To in nary suspensions impose even admin- truncated well overwhelm trial-type procedures might istrative cost and, facilities in resources, many places by diverting more than it would save .” 419 in educational effectiveness. .. at 582-83.
The Ohio bureau claimant interview notice of gave and advised an him of the refused that he had unjustifiably charge offer of suitable in Gold- Unlike welfare employment. recipient claimant and stated “his side berg, story” appeared person His statement, oral was considered transcribed and orally. signed, maker”, VEC “an the termina- decision before deputy, impartial tion decision was rendered. We hold that the proced- pretermination ures were an mistaken termination “adequate safeguard” against that while those did not include all of features pre- scribed de- standards satisfied Goldberg, they fully Here, fined in Goss. as in “the Mathews, prescribed procedures an claimant with effective asserting only provide action, claim assure a administrative but also right prior any review, before as well as to judicial evidentiary hearing, subsequent omitted). 44 (Citation the denial of his claim becomes final.” U.S.L.W. at 4233. “whether the turn
We now to the question put mus held can meet constitutional hearing actually [post-termination] first, “the because ter.” He contends that he denied process, and, the same finder and maker . . . fact decision not] [were person”, second, confronta- because he afforded historic was not “the tion of adverse witnesses.” cross-examination essential”,
While “an Goldberg decison maker is impartial 485- Brewer, 397 U.S. at see also Kelly, Morrissey decision is not the fact-finder essential impartiality maker be Morrissey the same and we read do not Goldberg person, hold that such is essential to due identity process. relevant contention, second we look to the claimant’s
Considering laws and Both and Ohio regulations. regulations expressly Virginia in- with “reasonable ... in connection require cooperation appealed terstate benefit IB (Ohio); claims.” CCH 5227 10 CCH (Va.). 1 of of Review” Ohio’s “Rules the Board
Chapter provides on initial within State of Ohio appeals “[proceedings shall further claims in cases interstate *11 appeals involving be rules these Rules of Procedure”. IB CCH 5313. governed by be defined in notice shall inter that alia, given Chapter provide, . . . “at least (7) seven calendar the date of to days any prior forth, the and time and of the setting specifying place proceedings, brief, held”; the to be heard and issues the to proceedings affirmation”; “shall be that “the under oath testimony proceed- . . . shall be “file of the Administrator recorded”; and the ings shall be shall be made a “the of the record”. While proceedings part have all each shall informal . . interested and his . party representative and cross- of fair examination rights hearing, including right other and witnesses, examination of to right and testimony present files, evidence, documents, examine to reports right inspect and evidence, and records to received in testimony right present rebuttal, the other evidence in and right subpoenas explanation witnesses and evidence and the argu- right present documentary 8 IB ment.” CCH and function has After the state agent completed § merits, see on the Code has rendered its decision VEC appellate full authorized claimant is 1973), dissatisfied Vol. 60.1-64 (Repl. § Vol. 1973). review under Code 60.1-67 (Repl. judicial and cross-ex- confrontation did If claimant not enjoy incident other rights that he was any not denied does contend Claimant determination. or judicial to an evidentiary hearing IX, X, context with Regulation entitled read “Appeals”, VEC Regulation as the Claimants”, when Virginia, similar procedures “Interstate provides entitled 5109, 5110. 10 CCH state, on interstate appeals. conducts DU hearings agent animation or of the other under the laws available him any rights was, it because were him; denied regulations, they insofar as the them. discloses, record he did not because pursue only
We hold that the pretermination procedures post-termination satisfied the due mandate of the Fourteenth Amendment.
“In under this any judicial proceedings chapter, findings Commission ab- facts, as to the and in the evidence supported by sence court fraud, shall be of such conclusive, and the jurisdiction shall be confined court Code 60.1-67. trial law.” questions held that filed VEC’s factual Record were findings “supported in the case”. We agree, judgment
Affirmed. J., concurring. Carrico, I concur in extent Poif, to the opinion only
that it assumes a in the of continued expectation benefits and then holds process requirements are satisfied pretermination post-termination in this however, case. I concurrence, do wish applicable my construed as exists a with the that there agreement prop- proposition interest in the of continued benefits. erty expectation Indeed, I with that strongly disagree proposition. in this Cochran, JJ.,
Harrison, concurring join Compton, opinion.