Document: 402 U.S. 121 91 S.Ct. 1347 28 L.Ed.2d 666 CALIFORNIA DEPARTMENT OF HUMAN RESOURCES DEVELOPMENT et al., Appellants,v.Judith JAVA al. No. 507. Argued Feb. 24, 1971. Decided April 26, Syllabus Section 303(a)(1) of the Social Security Act requires a method administration 'reasonably calculated to insure full payment unemployment compensation when due.' In light intent Congress make payments available at earliest stage as is administratively feasible, in order provide substitute for wages, language 'when due' must be construed mean benefits are allowed result hearing which both parties have notice and permitted present their respective positions. Since California's initial interview provides such hearing, enforcement § 1335 California Unemployment Insurance Code, providing withholding insurance upon an employer's appeal from eligibility determination, enjoined because it conflicts with requirement Act. D.C., 317 F.Supp. 875, affirmed. Asher Rubin, San Francisco, Cal., appellants. Stephen P. Berzon, Berkeley, appellees, pro hac vice, by special leave Court. [Amicus Curiae Information pages 121-122 intentionally omitted] Mr. Chief Justice BURGER delivered opinion 1 This case raises issue whether State may, consistent Act, suspend or withhold claimant, employer takes determination eligibility. 49 Stat. 626, amended, 42 U.S.C. 503(a)(1), that paid 2 late summer 1969, appellees Judith Java Carroll Hudson, having been discharged employment, applied under Program. Appellees were given did not appear, although appearance was permitted. As employees ruled eligible benefits. Payments began immediately. each former filed after learning grant benefits, contending should denied claimants cause. accordance practice agency pursuant Code1 automatically stopped. At subsequent hearings before Appeals Board Referee, essentially preliminary Code §§ 1328, 1334, appellee Hudson's affirmed, but ineligible reversed. 3 Prior commenced class action United States District Court on behalf themselves other similarly situated. They sought declaration unconstitutional inconsistent requirements enjoining operation 1335. 4 A three-judge court convened, concluded defective constitutional statutory grounds. The held pretermination procedure constitutes denial procedural due process, relying Goldberg v. Kelly, 397 254, 90 1011, 25 287 (1970). It further application 1335, so median seven-week delay who found constituted failure pay within meaning granted appellees' motion injunction, ordering has appealed. 5 (1) 6 We agree conclusion holding makes unnecessary reach involved supra, relied. (2) 7 importance this workers obvious. Because understanding resolution basic depends familiarity series detailed procedures, we set out fully administrative scheme. 8 All federal-state cooperative programs financed part grants 501—503. No may made fiscal year unless Secretary Labor certifies amount paid, 502(a). certify federal funds he first finds State's program conforms requirements. particular, state methods 'to reasonably due.'2 9 Compensation Program, certified 303 over extended period time, persons find unemployed through no fault own. Cal.Unemp.Ins.Code 1251 seq. claimant required earned specified wages during his base period. Id., 1281. Benefits Fund, consists collected private employers, id., 976 seq., money credited account Trust Fund 501—503, 1101—1105. into based terminated charged its reserve disbursements Fund.Cal.Unemp.Ins.Code 1025—1032, 976—978. 10 appearing office assert claim initially asked fill forms which, taken together, indicate basis claim, name claimant's previous employer, reason unemployment, work experience, etc. return three weeks later purpose receiving Eligibility Rights Interview. most frequently disputed, termination answered Form DE 1101, Department immediately sends copies form affected verification. Meanwhile furnish, days, 'any facts then known affect benefits.' 1327, 1030. If challenges eligibility, complete 4935, asks information about job. interviewer has, according Local Office Manual (L.O.M.) used California, 'responsibility seek any source prompt proper eligibility.' L.O.M. s 1400.3(2). 'Whenever submitted clearly adequate substantiate decision, obligation necessary information.' 1400.5(1)(a). contemplates inquiry latest among others. 11 appears interview. interview, reviews documents, certain completed, clarifies verifies questionable statements. there questions explain offer version facts. instructed telephone contact parties, including time if possible. 1404.4(20). Interested persons, confirm, contradict, explain, relevant evidence. 1404.4(21). 12 consider all evidence Normally, 1404.6(2). However, obtain mail source, placed suspense days date or, response received, than next report day. 1400.3(2)(a). 13 From foregoing can seen critical point procedure.3 Department's own terms, 'the affecting decided fulfills legal * ** (b)enefits promptly eligible.' 1400.1(1) (emphasis added). favorable claimant,4 begin immediately, 95—98% claims, employers do appear hearing;5 problem arises informing him eligible, days. 1328. 10-day 'good cause.' Ibid. 14 appeals, stopped pending Referee. 1335; see 1474. automatic suspension appeal, aspect challenged here. By received one perhaps two payments. When scheduled represented, call witnesses, 'A referee affording reasonable opportunity fair shall, withdrawn, affirm, reverse, modify appealed *.' 1334. affords de novo consideration. Generally, processing between six seven weeks, filing mailing decision dismissal.6 15 Referee reinstated once continue even exercises right o Board. 1335(b). much elapsed. record indicates successful less 50% appeals determinations eligibility.7 Referee's final initiated 1336. render 60 it, taking 1337. receives lump sum prior decision. 1338. monies employee. He responsibility recoupment. 1380.8 16 (3) 17 dispositive violates command 503(a)(1) 'be scheme examined reconcile apparent conflict provision statute 18 true, appellants argue, need sense underlying various welfare had genesis same economic stress generation ago. kind 'need' insurance, however, extent 'salary replacement' caused lost employment. objective Probably could devised precisely nearest payday following termination, feasible regarded what trying accomplish. circumstances surrounding enactment confirm this. 19 impetus Report Committee Economic Security,9 established executive President Franklin D. Roosevelt study whole financial insecurity old age, disability, health. report, transmitted January 17, 1935, recommended 'first line defense (a worker) ordinarily steadily employed limited expectation will soon reemployed. contractual dependent means test. carry most, all, periods normal times without resort assistance.'10 Estimates possible amounts duration actuarial staff Committee. On 1922—1933 statistics, estimated two-week waiting 4% contribution rate.11 longest entering estimates four indicating expiration short 20 Other legislative history commentary supports intended giving worker heard. give only partial replacement unemployed, enable tide over, until they get back relief.'12 cash newly 'at otherwise would nothing spend,'13 serving maintain recipient subsistence levels necessity turning charity. Further, 'security unemployment'14 thought assisting substantially equivalent Federal Relief Administrator testified 'covers great many thousands people thrown suddenly. essential look doing anything else looking job.'15 Finally, viewed exerting influence stabilization industry. 'Their distinguishing feature specially earmarked use very best business used.'16 Early serves prevent decline purchasing power turn aid industries producing goods services. extract testimony Labor, support describes mechanism contemplated: 21 'I think these people, though temporary, significance beginning depression. I really believe putting unemployment-insurance hands moment depression begins groups laid off bound beneficial effect. 22 Not you stabilize purchases, purchases keep going downward, spread device.'17 23 conclude word 'due' 303(a)(1), purposes positions; construction fail meet early unemployment. Paying accomplishes congressional avoiding stabilizing consumer demands; delaying months elapsed defeats purposes. seems clear therefore procedure, suspends made, due.'18 24 (4) persuaded appellants' suggestion clouded sufficient uncertainty warrant protect interests employers. effective insuring legally claimants. 95%—98% screened stage. primary examine statute. occasion claims employee heard, however. regulations contemplate shall inquiries informally. always flush objections discharge cause, illustrates. Nonetheless, place here, data put position broaden necessary. Any regulation fails would, course, violative construe it. 26 Although informal does traditional judicial sense, adversary characteristics minimum inform disqualifying factors. So informed, direct identifying frivolous dilatory contention either party. 27 frustrate Act's purposes—providing 'substitute' wages—to permit ignore document claimed defense, effectuate cessation asserting way appeal. evidence, effect defaulted, neither nor justification complain if, prima facie showing, allowed. defenses accepted allowed, also 'due.' noted, vindicates objective; approach tends Our reading imposes hardship employer19 gives getting pocket feasible. That about. For reasons stated See King Smith, 392 309, 333, 88 2128, 2141, 1118 (1968); Rosado Wyman, 397, 420—421, 1207, 1221—1222, 442 29 Affirmed. 30 DOUGLAS (concurring). 31 While Court, add few words. 32 argument surprisingly disingenuous. First seeks distinguish 287, ground 'welfare need; not.' But simply thrust take care displaced workers, search Second, argues ended terms process 'it claimant,' being 'charged' experience rating 'adversely affected' true taxes contributed fund varies directly number qualify Under scheme, finally benefit exhausted chain obtained review. wins appellate level, 1380. Thus, regardless suspended assured heard against him. 33 Therefore Goldberg, owing charged. 34 Whether require latter question reach.* provides: 'If filed, respect except that: '(a) week payable department irrespective issues forth '(b) affirms allowing thereafter taken, 1336 director, Board, body court. reversed, determination.' (Emphasis added.) part: certification law State, approved Tax includes for— '(1) Such (including 1, 1940, relating establishment maintenance personnel standards merit basis, exercise authority selection, tenure office, individual methods) Of 226,066 1968, 2,602 (1%) 667,993 441,927 claimant. 1968 5,526 decisions days; 1969 40.5 4,159 September 30, 2,023 resulted employer. (During 14,768 claimants, 4,838 successful.) resulting 2,924 Counsel informed recoupment effected approximately 65% erroneously paid; generally accomplished offset subsequently claim. file civil recovery. 2739. Security, Hearings S. 1130 Senate Finance, 74th Cong., 1st Sess., 1311 (1935); Larson & Murray, Development States, Vand.L.Rev. 181 (1955); Witte, Compensation, 55 Yale L.J. 21, 29—34 (1945). n. 9, 1321—1322. Note, Charity versus Laws, 73 357 (1963). Hearings, 1321, 1319. H.R.Rep.No.615, (1935). Statement 119. Cf. Nash Florida Industrial Comm'n, 389 235, 239, 362, 366, 438 (1967). S.Rep.No.628, Member H.R. 4120 House Ways Means, 214 Sen. Robert F. Wagner, 3. 15, 182. Clague, Economics 53, 69 uncontested average nine weeks. example, voluntary furnish required. 1032, disposing prayer permanent appropriate join party relief accorded. National Relations Gullett Gin Co., 340 361, 71 337, 95 L.Ed. 337. Though deduct back-pay awards, said: 'Payments respondent derived taxation. True, thus some helped create fund. liability respondent, policy social betterment entire state.' 364, S.Ct., 340. (Italics

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