Case Title: Holton v. Department of Employment & Training

Citation: 178 Vt. 147, 2005 VT 42, 878 A.2d 1051

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 2005-04-01T00:00:00Z

Document:
Holton v. Dept. of Employment & Training  (2003-535); 178 Vt. 147; 
878 A.2d 1051

2005 VT 42

[Filed 01-Apr-2005]

  NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.

                                 2005 VT 42

                                No. 2003-535

  Steven Holton                            Supreme Court

                                           On Appeal from
      v.                                   Employment Security Board

  Department of Employment and Training    October Term, 2004
  (Town of Vernon, Employer)

  Anne V. Ginevan, Chair

  Richard C. Carroll and Jonathan D. Secrest of Kristensen, Cummings,
  Phillips, & Carroll, P.C., Brattleboro, for Defendant-Appellant 
  Town of Vernon.

  William H. Sorrell, Attorney General, and Bridget C. Asay, Assistant
  Attorney General, Montpelier, for Defendant-Appellee.

  PRESENT:  Dooley, Johnson, Skoglund and Reiber, JJ., and Allen, C.J.
            (Ret.), Specially Assigned

        
       ¶  1.     JOHNSON, J.   Employer, Town of Vernon, appeals from the
  Employment Security Board's decision to award unemployment benefits to a
  former town employee that the town claims was ineligible to receive
  benefits.  The Department of Employment and Training (Department) has
  already paid all the disputed benefits to the former employee pursuant to
  the Board's decision and related state and federal law requiring prompt
  payment of benefits to a claimant after the first adversarial
  administrative determination that the claimant is eligible.  The Department
  therefore moves to dismiss the appeal as moot because, as a result of
  Vernon's special self-selected status as a noncontributing employer under
  the unemployment statute, Vernon must reimburse the Department for all
  benefits paid to former town employees, including, but not limited to,
  those benefits "paid but denied on appeal" and "benefits paid in error." 21
  V.S.A. § 1321(f).  Thus, the Department asserts that Vernon no longer has a
  legally cognizable stake in the outcome of the case because it will have to
  pay the Department regardless of whether it wins or loses on appeal. 
  Vernon concedes that the appeal is moot; however, it claims that the appeal
  fits within the exception to the mootness doctrine for cases that are
  capable of repetition yet evade review, and also raises a number of
  statutory and constitutional objections to the Department's decision to pay
  the disputed benefits prior to Vernon's appeal to this Court.  We reject
  Vernon's arguments and dismiss the appeal as moot.

       ¶  2.     Vernon's former employee, Steven Holton, filed for
  unemployment compensation benefits on May 17, 2003.  In June 2003, the
  claims adjudicator determined that Holton voluntarily ended his employment
  as a Vernon police officer without good cause attributable to the town.  As
  a result, Holton was disqualified for benefits. See 21 V.S.A. §
  1344(a)(2)(A) (disqualifying employee for benefits upon finding that
  employee left last employing unit voluntarily without good cause
  attributable to employer). 

       ¶  3.     In July, Holton appealed to the chief appeals referee. The
  referee held a telephone hearing on the claim, taking testimony from
  Holton, his former supervisor, and the chairperson of the Vernon
  Selectboard.  A couple of weeks after the hearing, the referee sustained
  the claims adjudicator's decision.  Six days later, claimant appealed that
  decision to the Employment Security Board.
   
       ¶  4.     Vernon chose not to participate in the Board's hearing. 
  Pursuant to its rules, the Board took no new evidence, but did hear
  argument from Holton.  The Board reversed the appeals referee's decision,
  and decreed that Holton's  "[c]laims are allowed for and subsequent to the
  week ending May 17, 2003."  The notice of entry that accompanied the
  Board's decision stated that it "would become final unless an interested
  party appeals the Decision to the Vermont Supreme Court by filing a Notice
  of Appeal . . . within 30 days of the date of entry of the Board's
  decision." 

       ¶  5.     The Department began paying the disputed funds to Holton
  soon after the Board's October 21, 2003 decision.  The Department made the
  payments over a six-week period from October 25, 2003 through November 29,
  2003.  Vernon timely filed its notice of appeal on November 18, 2003,
  shortly before the Department made the last payments to Holton.  The
  Department argues, and Vernon concedes, that Vernon's appeal became moot as
  soon as the last payment was made to Holton.

       ¶  6.     Though Vernon concedes that its case is now moot, Vernon
  claims that its case fits within the exception to the mootness doctrine for
  cases that are capable of repetition yet evade review.  Vernon further
  asserts that the Department acted improperly and without statutory
  authority when it disbursed benefits to Holton during the pendency of
  Vernon's appeal, thereby precluding appellate review of the Board's
  decision.  Vernon also presents an alternative claim that assumes the
  unemployment statutes do authorize the Department's benefits payout, but
  argues that the effect of such a statutory scheme in rendering Vernon's
  appeal moot results in a deprivation of its constitutional rights to due
  process and equal protection of the law.  A review of the federal-state
  cooperative unemployment insurance system will illustrate how Vernon's
  claim became moot, and why none of its statutory or constitutional claims
  entitle it to relief.

        
                                     I.

       ¶  7.     The Legislature enacted Vermont's unemployment statutes in
  correlation with the federal social security and unemployment tax acts.  21
  V.S.A. § 1384.  Vermont's unemployment compensation program is, therefore,
  part of the federal-state cooperative unemployment insurance program that
  is funded in part by grants to Vermont from the United States.  See 42
  U.S.C. § 1101(c)(1)(A) (providing for payments to states for assistance in
  administering their unemployment compensation programs).  To qualify for
  this federal aid, Vermont must receive annual certification from the U.S.
  Secretary of Labor indicating that, among other things, Vermont's methods
  of administering its unemployment program are "reasonably calculated to
  insure full payment of unemployment compensation when due."  42 U.S.C. §
  503(a)(1).
   
       ¶  8.     The U.S. Supreme Court has interpreted the "when due"
  language of § 503 to mean "the time when payments are first
  administratively allowed as a result of a hearing of which both parties
  have notice and are permitted to present their respective positions."  Cal.
  Dep't of Human Res. Dev. v. Java,