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GALVAN v. LEVINE

July 5, 1972

Vincente GALVAN and Marcelino Torres, Plaintiffs,
v.
Louis K. LEVINE, Industrial Commissioner of the State of New York, Defendant



The opinion of the court was delivered by: TYLER

TYLER, District Judge.

Following the last hearing in this case before the statutory court and the subsequent memorandum thereof dated February 15, 1972, counsel for the parties responded with a stipulation, by the terms of which they elected to have this court decide their motion and cross motion, respectively, for summary judgment on the basis of the present record, including documents and transcripts of examinations before trial.

By various interstate agreements, New York State unemployment benefits may be collected by a claimant who has moved away from New York. Every claimant's eligibility for unemployment insurance benefits is partially determined by the New York Labor Law, McKinney's Consol. Laws, c. 31, § 591 which provides in pertinent part as follows:

 
"1. Unemployment. Benefits shall be paid only to a claimant who is totally unemployed and who is unable to engage in his usual employment or in any other for which he is reasonably fitted by training and experience.
 
2. Availability and capability. No benefits shall be payable to any claimant who is not capable of work or who is not ready, willing and able to work in his usual employment or in any other for which he is reasonably fitted by training and experience."

 Pursuant to § 591, for many years the policy of the Commissioner has been that benefits are not paid to a claimant who: (1) leaves the labor market area in which he was last employed, and (2) moves his residence to another labor market area where there are no reasonable opportunities of obtaining work for which he is qualified by training and experience. The policy is founded on the determination that a person who insulates himself from any reasonable opportunity of employment is not truly available for work within the meaning of § 591(2).

 Beginning in late 1967, following a series of decisions of the New York State Department of Labor Unemployment Insurance Appeal Board,* the defendant, who is charged with administering the Unemployment Insurance Law, and his agents decided that a claimant's removal to an area of "high persistent unemployment" was convincing evidence that he had moved to an area where there was no reasonable opportunity of obtaining work. Accordingly, unless he possesses an occupational skill for which there is a particular demand, such a claimant is now deemed unavailable for work and denied benefits. Important to the implementation of this policy, as will be seen infra, is the definition of "high persistent unemployment" adopted and used by defendant and his agents.

 Plaintiffs have never claimed that any New York statute as such is in violation of the federal Constitution or federal statutory law. As the briefs and the present record indicate, plaintiffs, after full discovery to their satisfaction, no longer make any claim that the policy of the Commissioner set out above is unconstitutional. Rather, they challenge the defendant's definition of an area of "high persistent unemployment" as one having a current unemployment rate of twelve percent or more. Specifically, plaintiffs argue that the "twelve percent rule" and its use by state officials violates the equal protection clause of the Fourteenth Amendment because it: (1) intentionally discriminates against Puerto Rican Americans in that it was promulgated to apply, and does apply, only to Puerto Rico, and not to other areas of twelve percent unemployment; (2) has been arbitrarily and intentionally applied to Puerto Rican claimants and no other claimants; and (3) has a dramatic discriminatory impact upon Puerto Rican claimants.

 Because of the apparently substantial constitutional questions raised, see the memorandum dated September 3, 1970 filed by the writer, a three judge court was convened to hear and determine this controversy. Since that time, and after the last hearing in this case on February 15, 1972, this statutory court, on its own initiative, has had occasion to reconsider whether the issues presented on these cross motions for summary judgment should be heard before a single judge or a three judge panel pursuant to 28 U.S.C. § 2281. *fn1" Passing for the moment the comments of those critics of the three judge court statute to the effect that it represents a potential trap for unwary litigants and an unnecessary burden on the administration of the federal courts, e.g. Comment, The Three Judge Federal Court in Constitutional Litigation: A Procedural Anachronism, 1960, 27 U. Chi. L. Rev. 555; suffice it to say that this case presents an excellent example of the conceptual and technical problems which the statute engenders. As it did earlier with regard to the statewide policy of the Commissioner, this court assumes for present purposes that the twelve percent rule which is an extension of that policy, is a "legislative action" in character to which the state has given its sanction, thus making the rule a "statute" within the meaning of 28 U.S.C. § 2281. cf. Lathrop v. Donohue, 367 U.S. 820, 824-827, 81 S. Ct. 1826, 6 L. Ed. 2d 1191 (1961) (court order integrating state bar a "statute" within 28 U.S.C. § 1257); see A.F. of L. v. Watson, 327 U.S. 582, 592-593, 66 S. Ct. 761, 90 L. Ed. 873 (1945); Oklahoma Natural Gas Co. v. Russell, 261 U.S. 290, 292, 43 S. Ct. 353, 67 L. Ed. 659 (1923); Law Students Civil Rights Research Coun., Inc. v. Wadmond, 299 F. Supp. 117 (S.D.N.Y., 1969), aff'd 401 U.S. 154, 91 S. Ct. 720, 27 L. Ed. 2d 749 (1970). It is true that in adopting the twelve percent rule to enforce the provisions of § 591, the Commissioner was not acting under a specific delegation of authority by the legislature. As was stated in Lathrop v. Donohue, however, "the absence of such a delegation does not preclude consideration of the exercise of authority as a statute." supra, 367 U.S. at 825, 81 S. Ct. at 1828. It is clear that the Commissioner was acting under a state statute, and that the broad provisions of § 591 had to be given specific meaning and content by the Commissioner. As such, the Commissioner's rule regulates eligibility benefits for unemployment insurance benefits and has all the characteristics of legislation.

 Plaintiff's contentions that the twelve percent rule is itself unconstitutional in that it was promulgated with discriminatory intent and has a discriminatory impact must be decided by a three judge court. The third claim of plaintiffs that the twelve percent rule is applied or administered in a discriminatory fashion does not require a ruling on the constitutionality of the "statute" and could therefore be heard by a single judge. See Phillips v. United States, 312 U.S. 246, 61 S. Ct. 480, 85 L. Ed. 800 (1941); Wright, Federal Courts 190 (2d ed., 1970). Recent decisions of the Supreme Court have, however, upheld the authority of a three judge court to hear non-constitutional claims affecting the validity of a statute also attacked on constitutional grounds. See Florida Lime & Avocado Growers, Inc. v. Jacobsen, 362 U.S. 73, 80 S. Ct. 568, 4 L. Ed. 2d 568 (1960); Rosado v. Wyman, 397 U.S. 397, 90 S. Ct. 1207, 25 L. Ed. 2d 442 (1970). Although Jacobsen and Wyman involved statutory and constitutional attacks on a state statute, the principle of pendent jurisdiction is equally applicable to the three attacks on this statute. Reasons of judicial efficiency dictate such an approach in the present case, where all three judges have heard the entire case, especially since all three claims presented by plaintiffs derive from a common nucleus of operative facts. cf. United Mine Workers of America v. Gibbs, 383 U.S. 715, 86 S. Ct. 1130, 16 L. Ed. 2d 218 (1966). Additionally, resolution of the discriminatory application claim by a single judge and of the two constitutional claims by a three judge panel might result in two separate appeals, one to the Supreme Court and the other to the Court of Appeals. See, generally, Law Students Civil Rights Research Coun., Inc. v. Wadmond, supra. In any event, where the three judge court has heard the entire case, "sound policy" warrants the three judge panel, in its discretion, to decide the related issue over which jurisdiction is at most debatable. See Law Students Civil Rights Research Coun., Inc. v. Wadmond, supra, 299 F. Supp. at 129.

 Plaintiffs have also attacked the validity of the twelve percent rule under Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d et seq. Although a three judge court can entertain an attack on a state statute upon federal statutory and constitutional grounds, Rosado v. Wyman, supra, the statutory claim should be decided first and, for reasons of judicial economy, probably by a single judge. Wyman v. Rothstein, 398 U.S. 275, 90 S. Ct. 1582, 26 L. Ed. 2d 218 (1970); Rosado v. Wyman, supra. Here, however, decision on the statutory claim practically requires resolution of the constitutional issues or claims. Since the primary reason for adoption of the three judge court statute was to create a "court of special dignity" to hear constitutional attacks on state laws, Wright, Federal Courts 188 (2d ed., 1970), it would be anomalous for a single judge to decide the constitutional issues under the guise of deciding the statutory claim. It would also be an empty gesture for this three judge court to decide the statutory claim first. The statutory claim was added by amendment of the complaint on December 3, 1971, many months after this court was convened and had considered the substantial constitutional claims. Also, for the most part, Title VI merely reiterates the obligations imposed by the Fourteenth Amendment. Withal, it serves no useful purpose to refrain from first reaching the constitutional issues. Thus, we resolve as a statutory court to decide first the non-statutory issues in this case. In this connection, we refer to previous findings of fact in this case, see Galvan v. Catherwood, 324 F. Supp. 1016 (S.D.N.Y., 1971), and proceed to additional findings necessary to resolve these issues.

 As stated, it is the adoption of the twelve percent rule and its implementation since December, 1967 of which plaintiffs complain. As the following chart indicates, approximately 20,000 Puerto Rican American claimants for unemployment insurance benefits were disqualified from receiving such benefits under the aforementioned rule in the two years for which figures are available. The chart below which is compiled from defendant's records indicates all claims filed from Puerto Rico from 1965 through 1969, the number granted and denied and the number denied because the claimant was "unavailable" for employment: % of Total % of Claims Den. Total Den. for Total for Year Claims Granted Denied Unavail'ty Clms. Den. Unavail'ty 1965 23,003 17,670 5,333 unknown 23% /-- 1966 24,680 19,353 5,328 unknown 22% /-- 1967 26,138 20,100 6,038 unknown 23% /-- 1968 31,095 17,398 13,697 9,169 44% 29% 1969 25,862 10,754 14,108 10,145 54% 39%

 In 1968, which was the first year of the twelve percent rule's operation, denials of unemployment insurance benefits rose from 6,038 in 1967 to 13,697. The figure increased in 1969 to 14,108, notwithstanding a decrease in the total number of applications. That these increases in denials were a result of the twelve percent rule is not denied by defendant's witnesses. See depositions of Edward J. Bruso and Karel Ficek.

 Application and operation of the twelve percent rule in Puerto Rico for Puerto Rican American claimants is to be contrasted with the record of claims by claimants within the State of New York and other parts of the continental United States. Without extensive discussion, it should be noted that from December, 1967, the effective date of the twelve percent rule, the Industrial Commissioner's office has not denied benefits to a claimant who has moved to any other area of the continental United States, save for two claimants, a married couple, filing from Santa Cruz, California in 1970. This is so even though there are 108,745 claims indicated by the record as being received from persons moving to other out-of-New York areas in 1968 and 1969. This excludes, of course, the unknown number of claims from such claimants during the years ...


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