Sioux City Brick & Tile Co. v. Employment Appeal BoardSioux City Brick & Tile Co. v. Employment Appeal Board
Upon judicial review of a decision of the Employment Appeal Board (EAB), the district court reversed the action of the agency. Because we believe the district court erred, we reverse and remand.
I. Background facts and proceedings. Prior to May 1983, Thompson, Ruring, Palmer, Ingalls and McCarthy (the claimants) were employed by Ballou Brick Company, which was then a subsidiary of Sioux City Brick & Tile Company. The two companies merged in January 1987. Because Sioux City Brick & Tile is the successor of Ballou, we will refer to it as the claimants’ employer.
The claimants were laid off from their jobs in May 1983. Each claimant subsequently collected unemployment compensation benefits from Job Service of Iowa. The employer’s account with Job Service was charged for the cost of the benefits.
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Sometime after being laid off, the claimants filed an unfair labor practice complaint against the employer with the National Labor Relations Board (NLRB). The claimants eventually prevailed against the employer on the complaint, and the NLRB issued an order requiring the employer to pay the claimants back pay. The employer and the claimants negotiated a settlement as to the amount of back pay necessary to
The employer notified Job Service of these back pay awards and requested that Job Service recover the unemployment compensation benefits paid the claimants.
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The claimants’ contested cases were assigned separate hearing numbers. Because the cases turned on the same facts, the claimants and the employer agreed that all five cases should be consolidated for hearing before the Job Service hearing officer.
At the hearing, the claimants and the employer agreed that the claimants had received unemployment compensation benefits, and that the NLRB had awarded the claimants compensatory back pay. The parties disagreed, however, as to overlap of the unemployment compensation benefits and the back pay awards. The claimants argued that the back pay awards were not exactly duplicative of the unemployment compensation benefits they had received because some of the back pay related to weeks in which they had not claimed unemployment compensation benefits, 2 and also because the back pay awards included items of nonwage compensation.
The hearing officer issued a nearly identical, but separate, decision on each claimant’s appeal.
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Analogizing this case to an initial determination of benefits entitlement case under Iowa Code section 96.6(2), the hearing officer ruled that for benefits to be recoverable under
By five separate notices of appeal, the employer timely appealed the decision of the hearing officer in each claimant’s contested case to the EAB.
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The employer applied for rehearing in all five cases.
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The employer filed its petition for judicial review of Thompson’s contested case on April 27, serving Thompson, his attorney, and the EAB.
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On May 18, the employer moved the court for leave to amend its petition for judicial review. By amendment of its petition, the employer sought to incorporate all five contested cases involved in this appeal into one judicial review proceeding. The employer argued that the five contested cases had been consolidated into one, so that its timely filing of a petition for judicial review in Thompson’s case adequately preserved its right to judicial review in all five cases.
The claimants and the EAB resisted the employer’s motion. They argued that the five contested cases were separate, although consolidated for hearing before the agency, and that because more than thirty days had passed since the EAB’s denial of rehearing in all of the cases, the employer’s petition for judicial review of the contested cases other than Thompson’s was untimely.
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The motion for leave to amend was granted by the court, without explanation, on August 8.
In its decision on the petition for judicial review, the district court first found as a fact — contrary to the finding of the agency — that there was temporal overlap between the unemployment compensation benefits paid the claimants and the NLRB back pay awards. The court did not address the agency’s allocation of the burden of proof of recoverability to the employer. The court then held that the EAB had erred in its interpretation of
The claimants appealed to this court.
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II.
Judicial review jurisdiction over actions of the Employment Appeal Board.
On appeal from a district court judgment in a judicial review proceeding, our task is to determine whether the district court correctly applied the law. Like the district court, we apply the standards of Iowa Code section 17A.19(8) to the agency action. If our conclusions match those
The threshold question is whether the district court had authority to review the action of the Employment Appeal Board in the contested cases other than Thompson’s. 5
A. The agency action at issue. At the outset, we reject the employer’s contention that this case involves review of only one, and not five, agency actions. Each of the five claimants separately applied for unemployment compensation benefits. They collected different amounts of benefits for different weeks. They were eventually issued separate notices of overpayment, none of which referred to the situation of any other claimant. When each claimant separately contested the notice of overpayment issued in his case, the agency assigned a separate hearing number to each case. Although the cases were consolidated for hearing before the hearing officer to avoid duplication of effort, a separate, written decision was rendered in each claimant’s case, not only by the hearing officer but also throughout the intra-agency appeals. In short, the claimants are not coparties to a single agency action; their contested cases are similar but, at the same time, separate.
B.
Timeliness of the petition for judicial review.
The Employment Appeal Board is a division of the department of inspections and appeals empowered to hear and decide contested cases under Iowa Code chapter 96, the Iowa Employment Security Law.
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If a party files an application under section 17A.16, subsection 2, for rehearing with the agency, the petition for judicial review must be filed within thirty days after that application has been denied or deemed denied.
In this case, the employer's application for rehearing with the agency under section 17A.16(2) was denied by the agency in all five contested cases on March 29, 1988. To be timely, the employer’s petition for judicial review of the agency’s actions must have been filed within thirty days of that date, that is, by April 28. Timely petition to the district court is a jurisdictional prerequisite for judicial review of final agency action.
See Ford Motor Co. v. Iowa Dep’t of Transp.,
The original petition for judicial review in this case was filed on April 27. This petition, which was timely but mentioned only Thompson’s case, did not invoke the judicial review jurisdiction of the district court over any agency action other than that in Thompson’s contested case. The employer failed to file a petition for judicial review in the cases of the other four claimants before the time for such filing passed on April 28. The question is whether the employer can avoid the consequences of this failure by amending the timely petition for judicial review in Thompson’s case so as to pull the other four claimants’ cases into the judicial review proceeding in Thompson’s case. The obvious answer, we think, is that such an amendment is not permissible.
A court has broad discretion to grant a motion for leave to amend the pleadings in a matter pending before it.
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We conclude that the district court exceeded its authority by granting the employer leave to amend its petition in this case. Because the employer failed to timely file a petition for judicial review in any case other than Thompson’s, the district court lacked authority to review the agency action in any case other than Thompson’s. 6
III. The judicial review of Thompson’s contested case. The question remaining is whether the district court was correct in reversing the agency action in Thompson's case. Although Thompson argues that the agency must be affirmed because of the two affirmance rule of Iowa Code section 96.6(2), 7 a ground not urged before the district court, we need not consider that proposition because a more fundamental problem inheres in the judgment of the district court. The record shows that the court erred in this judicial review proceeding by failing to give weight to one of the agency’s key findings of fact.
As Thompson and the EAB point out, the agency’s decision to reverse the notice of overpayment in Thompson’s case was based on two findings of fact which, if supported by substantial evidence in the agency record, are binding on the courts.
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The record shows that after allocating the burden of proving recoverability of benefits to the employer, the agency found that a portion of the back pay awarded to Thompson was compensation for lost wages, and a portion of the award was compensation for nonwage items. The employer had failed to show what portion of the back pay was for what type of compensation. Additionally, the agency found that the employer had failed to establish temporal overlap of the unemployment compensation benefits and the back pay .awards. Applying the law to these facts, the agency ruled that the employer had failed to prove that the unemployment compensation benefits paid Thompson should be recovered under Iowa Code section 96.-3(8).
Although the allocation of the burden of proof in a benefit recovery case under
Just as the employer has the burden of proving disqualification of an otherwise eligible claimant in an initial determination of benefits entitlement case, we think the employer should have the burden of proving recoverability of benefits from an otherwise eligible claimant in a
As previously noted, the agency found as a fact that the employer had failed to establish either what portion of the back pay was wages and what portion was nonwage compensation, or the extent of temporal overlap between the unemployment compensation benefits and the back pay award. Both of these findings are supported by substantial evidence in the agency record as a whole.
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In reversing the agency action in Thompson’s case, the district court did not give weight to the agency’s finding of fact that temporal overlap was not established. Instead, the court found that temporal overlap was established. On the record before us, which is the same record that was before the district court, we cannot say that temporal overlap was proven as a matter of law. Although the evidence in the record is vague and somewhat conflicting on this point, the agency’s finding of no temporal overlap must be respected and upheld. The district court erred by not doing so.
IV. Disposition. The judgment of the district court is reversed. The case is remanded with instructions to dismiss the petition for judicial review of the contested cases other than Thompson’s for lack of authority to hear the case, and to affirm the agency action in Thompson’s contested ease.
Costs on appeal are taxed to the employer.
REVERSED AND REMANDED.
Notes
. The benefits recovery proceedings in this case were begun in 1987, although each claimant’s initial entitlement to benefits was determined under 1983 law. In 1986, our legislature moved the enabling law concerning the EAB from Iowa Code chapter 96 to chapter 10A. See 1986 Iowa Acts ch. 1245, §§ 515-23. The other parts of chapter 96 relevant to this case were unchanged. For the sake of clarity, we will use the 1987 Iowa Code throughout our opinion.
. In other words, the claimants argued that the unemployment compensation benefits paid to them and the back pay awarded to them did not have "temporal overlap.”
. The decisions varied in that the amount of benefits at stake differed between the claimants. In addition, Thompson's case involved a dispute as to whether the notice of overpayment had been timely contested. The hearing officer determined that all the notices of overpayment had been timely contested. That determination is not challenged here.
. The governing law in this case is clearly Iowa Code
Back pay. If an individual receives benefits for a period of unemployment and subsequently receives a payment for the same period from the individual’s employer in the form of or in lieu of back pay, the benefits shall be recovered.
(Emphasis added.)
. We agree with the parties and the district court that the court’s judicial review jurisdiction over Thompson’s case was properly invoked.
. This case illustrates the distinction between “lack of subject matter jurisdiction” and "lack of authority to hear a particular case” as pointed out in
Christie v. Rolscreen Co.,
. Iowa Code
If a hearing officer affirms a decision of the representative, or the appeal board affirms a decision of the hearing officer allowing benefits, the benefits shall be paid regardless of any appeal which is thereafter taken, but if the decision is finally reversed, no employer’s account shall be charged with benefits so paid.
We note, in passing, that Iowa Code
. We also note that in a benefits recovery case under Iowa Code