Appeals promptness after the Fusari decision

UIPL 8-75

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In reply refer
U.S. DEPARTMENT OF LABOR
to MURL
Manpower Administration
Washington, D. C. 20213
April 10, 1975
UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 8-75 TO : ALL STATE EMPLOYMENT SECURITY AGENCIES SUBJECT : The U.S. Supreme Court's Decision of January 14, 1975, in Fusari, Commissioner of Labor v. Steinberg et al.
PURPOSE : To inform the States of the Supreme Court's decision in the Steinberg case and the implications of the Decision for State's Appeals Promptness Performance.
Attached is a copy of the U.S. Supreme Court's January 17, 1975 decision in the Steinberg case. In this decision, the Supreme Court has indicated clearly its view that the legal and constitutional acceptability of State unemployment benefit determination procedures depends largely on the speed and adequacy of the State's benefit appeals process.
The issue before the Court was the procedure to be followed in cases where new issues arise during a claims series. Did Connecticut's informal determination procedure satisfy the requirements of the due process clause of the Fourteenth Amendment to the U.S. Constitution and the requirements of section 303(a)(1) of the Social Security Act? Or, instead, was the State required to provide the claimant with a full evidentiary hearing before it could suspend further benefit payment to him?
A three-judge U.S. District Court in a decision made September 17, 1973, had enjoined the Connecticut agency from denying claimants' benefits under its existing nonmonetary determination procedures without first providing a constitutionally sufficient hearing.
Connecticut appealed to the U.S. Supreme Court. That Court found that at the time of the District Court decision, Connecticut's benefit appeals ending before the Supreme Court, however, the Connecticut legislature revised the benefit appeals structure, substituting a two-tiered appeals system of a referee section staffed with full-time, civil service appointed referees and a Governor-appointed board of review, for a one-tier system in which benefit appeals were heard and decided by commissioners, each appointed by the Governor for a specific term to handle benefit appeals in a specified geographic district.
Recognizing that Connecticut's revised appeals structure was clearly designed to accelerate the benefit appeals program and to improve its fairness, the Supreme Court vacated the District Court's judgment and remanded the case for reconsideration in the light of the changes in the Connecticut law.
In its decision, the Court observed:
". . . the District Court placed substantive reliance on the length of time required to obtain administrative review of the examiner's decision. The amendments to Connecticut are designed to remedy this problem." The Supreme Court concluded,
"In this context, the possible length of wrongful deprivation of unemployment benefits is an important factor in assessing the impact of official action on the private interests . . . Prompt and adequate administrative review provides an opportunity for consideration and correction of errors made in initial eligibility determinations. Thus the rapidity of administrative review is a significant factor in assessing the sufficiency of the entire process. The record, of course, provides no indication of the promptness and adequacy of review under the new system. We are unable, therefore, to decide the appeal on its merits." (Emphasis added.) The implication of the Steinberg decision for the States is clear. In effect, the Court has advised that unless benefit appeals are handled promptly, States must face the prospect Of major and costly changes in determination procedures, to provide at least some of the elements of a full "due process" hearing, before making a determination of new issues.
The Court's decision makes crucial the need for all States to meet and maintain at least the levels of appeals performance prescribed in the Secretary's Appeals Promptness Standard.
Every effort will be made to continue to provide adequate resources and technical assistance to the States to assure acceptable levels of appeals performance, in both quality and promptness.
FLOYD E. EDWARDS
Associate Manpower Administrator for Field Direction and Management
1

UIPL 8-75

Attachment:
The U.S. Supreme Court's Decision of January 14, 1975, in Fusari, Commissioner of Labor v. Steinberg et al.

2

The separate Supreme Court Fusari opinion is reproduced on pages 3–11 of the linked official PDF; it is not transcribed here.