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MOORE v. ROSS

December 5, 1980

Wilbert MOORE and Malcolm Turner, individually and on behalf of all others similarly situated, Plaintiffs,
v.
Philip ROSS, individually and as Industrial Commissioner of the State of New York, New York State Department of Labor, Louis Sitkin, individually and as Chairman of the New York State Unemployment Insurance Appeal Board, John A. Rogalin, individually and as a Member of the New York State Unemployment Insurance Appeal Board, James R. Rhone, individually and as a Member of the New York State Unemployment Insurance Appeal Board, Harry Zankel, individually and as a Member of the New York State Unemployment Insurance Appeal Board, and G. Douglas Pugh, individually and as a Member of the New York State Unemployment Insurance Appeal Board, Defendants



The opinion of the court was delivered by: CARTER

This case has been brought as a class action challenging the constitutionality of procedures employed by the New York State Unemployment Insurance Appeal Board ("Appeal Board" or "Board"). Pursuant to the state statutory scheme, N.Y.Labor Law §§ 500 et seq. (McKinney) (1977), unemployment insurance claims are decided by a process comprised of an initial determination and an option of administrative review for unsuccessful claimants. *fn1" The first level of review is a hearing before an Administrative Law Judge ("ALJ") whose decision may be appealed by any affected party to the Appeal Board. The Board has the power to review and reverse the ALJ's findings on all questions of fact and law, and its determinations in turn may be reviewed for substantial evidentiary support in the state courts. N.Y.Labor Law § 624. *fn2"

The two named plaintiffs, Wilbert Moore and Malcolm Turner, are unsuccessful claimants whose applications were initially upheld by the ALJ, and subsequently overturned by the Appeal Board. No appeal has been taken to the state courts. Their complaint is two-fold. *fn3" They argue that the due process clause of the Fourteenth Amendment is violated *fn4" by the Appeal Board in rejecting claims and reversing credibility determinations of a hearing examiner without holding a hearing de novo at which the Board itself is present to see the witnesses and hear their testimony. Plaintiffs contend that the Board's practice of denying claims and reversing a hearing examiner without stating the specific reasons and evidence relied upon for its adverse determination also implicates due process considerations. Plaintiffs argue that these procedures violate due process without regard to any subsequent outcome in the state courts.

In this litigation Moore and Turner seek to represent a class composed of all unsuccessful claimants for unemployment insurance in New York state who have been aggrieved by one or the other of the above practices and procedures of the Appeal Board.

 The parties have stipulated that it is a policy and practice of the Appeal Board 1) to review de novo and make a de novo determination of fact and law on all issues, including credibility, without necessarily holding a further hearing, and 2) to make findings of fact and render opinions and decisions, including reasons, without specifying the evidence relied upon other than a reference to the record and without necessarily making reference to the decision of the ALJ.

 Defendants contend that the Board's decisions in the instant cases fully comport with due process standards, were clearly based on the record in each case and that the reasons for the Board's determinations are self-evident.

 In Moore's case the crucial issue was whether he had had personal compelling reasons for not reporting to work on time or whether his lateness constituted misconduct and therefore a justifiable cause for discharge. The hearing examiner held that Moore's family responsibilities were the cause of his lateness and that no wilful misconduct was involved. *fn5" The Appeal Board reversed, rejecting Moore's claim of personal, compelling reasons for his lateness. *fn6"

 In Turner's case the issue was whether he had called in to report his intended absence or was absent without giving notice in violation of company rules. The hearing examiner accepted Turner's testimony but the Appeal Board rejected it and held that Turner had lost his job because of misconduct. *fn7"

 There are presently three motions before the court. Defendants have moved for judgment on the pleadings, alternatively on the grounds that the court should abstain under the doctrine of Younger v. Harris, 401 U.S. 37, 91 S. Ct. 746, 27 L. Ed. 2d 669 (1971), and that plaintiffs have not presented any actionable claim. Plaintiffs have moved for class certification under Rule 23, F.R.Civ.P., and for summary judgment. Since defendants have relied upon matters not contained in the pleadings to support their motion, and plaintiffs have agreed that defendants' motion is properly treated as one for summary judgment, we will construe the case as presenting cross-motions for summary judgment, as well as a motion for class certification.

 Class certification

 Plaintiffs have moved for class certification under Rule 23(a), F.R.Civ.P., and Rule 23(b)(2), or in the alternative, Rule 23(b)(1)(A) or (B), F.R.Civ.P. Plaintiffs' claims are directed at the practices of the Appeal Board, and not at the statute or regulations pursuant to which the Board acts. While the requirements of Rule 23(a) as to numerosity, commonality, typicality, and adequate representation would seem to be met, certification of the class is not warranted under either Rule 23(b)(2), 23(b)(1)(A) or (B).

 Despite the parties' stipulation as to Appeal Board practices, it is difficult to see how the issues raised here can be decided apart from the facts of each case. Thus, while it is possible that defendants' handling of appeals may in some instances violate due process, it cannot be said that defendants have "acted or refused to act on grounds generally applicable to the class," Rule 23(b)(2), F.R.Civ.P., and thus the prosecution of separate actions, rather than creating a risk of inconsistent adjudications, Rule 23(b)(1)(A), or impairing the ability of absent members to protect their interest, Rule 23(b)(1)(B), would be required to adjudicate the issues raised in each controversy.

 Moreover, unemployment insurance is not a fixed and limited fund in danger of depletion, so the risks referred to in Rule 23(b)(1)(B) are not apposite. Since we can assume that a state agency will comply with due process requirements in all cases even when the requirements are articulated by declaratory judgments in individual actions, see Vulcan Society v. Civil Service Commission, 490 F.2d 387 (2d Cir. 1973); McDonald v. McLucas, 371 F. Supp. 831 (S.D.N.Y.) (Metzner, J.), aff'd, 419 U.S. 987, 95 S. Ct. 297, 42 L. Ed. 2d 261 (1974), there will be no substantial risk of "inconsistent or varying adjudications" tending to establish "incompatible standards of conduct" for defendants. Rule 23(b)(1)(A), F.R.Civ.P. Class certification in this case would do little more than pose a risk of class members being bound by a judgment which does not rightfully apply to them. Manners v. Romney, E.D.N.Y., Civil Action No. 71 Civ. 550, slip opinion at 11-12 (Dooling, J.). Accordingly, the motion for certification is denied, and the cases will be treated as individual claims.

 The issue of abstention

 Defendants' argument for abstention under the doctrine of Younger v. Harris, supra, must be rejected. Although the administration of unemployment insurance programs arguably constitutes a significant state interest, there is presently no on-going proceeding with regard to the Moore and Turner cases in the New York state courts. The mere fact that Moore and Turner could have appealed, or could now appeal to the state courts is not grounds for Younger abstention. See Chung v. Ross, 78 Civ. 949 (S.D.N.Y.1978) (Stewart, J.). Abstention should not be used to impose an exhaustion of remedies requirement on civil plaintiffs raising federal constitutional claims against state administrative bodies, and we do not read Levy v. Lewis, 635 F.2d 960, 2d Cir., 1980, as reaching a contrary result. Unlike Younger and its progeny, e.g. Huffman v. Pursue, Ltd., 420 U.S. 592, 95 S. Ct. 1200, 43 L. Ed. 2d 482 (1975); Juidice v. Vail, 430 U.S. 327, 97 S. Ct. 1211, 51 L. Ed. 2d 376 (1977), both this case and the administrative proceedings below were initiated by the plaintiffs and present no ...


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