Court Opinion

ID: 3620415
Source: CourtListenerOpinion
Date Created: 2016-07-06 00:02:20.905921+00
Date Added: 2024-06-11T13:46:36.995306
License: Public Domain

[EDITORS' NOTE:  THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 8 
The complaint in each of the actions herein asks for a declaratory judgment that the New York unemployment insurance law (Laws of 1935, ch. 468; Labor Law, art. 18; Cons. Laws, ch. 31) is unconstitutional under both the Federal and the State Constitutions.
The plaintiffs moved for judgment on the pleadings under rule 112 of the Rules of Civil Practice, and the court in the first two cases granted the motions to the extent of holding that subdivision 2 of section 504 of the statute violates section 6 of article I of the New York Constitution, and section 1 of the Fourteenth Amendment to the Federal Constitution. The court upheld the statute otherwise and granted judgment in favor of the defendants to that extent.
In a companion case, Associated Industries of New York State,Inc., v. Department of Labor et al., the Special Term, after issue joined, adjudged the said act to be unconstitutional and void in its entirety as depriving the plaintiff of its property without due process of law, and denying to it the equal protection of the law. These cases come directly to this court, pursuant to subdivision 3 of section 588 of the Civil Practice Act, a constitutional question being solely presented for review. We do not share the doubts expressed by these Special Terms.
The courts can take judicial notice of the fact that unemployment for the last five or six years has been a very acute problem for State and Federal government. There have always been from earliest times the poor and unfortunate whom the State has had to support by means of money raised by taxation. We have had our homes for the poor and the infirm, hospitals, infirmaries and many and various means for taking care of those who could not take care of themselves. The institutions housing our insane have grown to be an enormous expense, illustrating that the legality of the expenditure of public moneys for vast numbers of those who were without means of support or help has never been questioned. *Page 9 
Another problem has faced society which has been a source of study, discussion, agitation and planning. Unemployment, from whatever cause, has increased enormously in every part of the country, if not throughout the world. Is there any means possible to provide against unemployment, the loss of work, with its serious consequences to the family, to the children and to the public at large? When such a matter becomes general and affects the whole body politic, a situation has arisen which requires the exercise of the reserve power of the State, if there be a practical solution. Some have suggested that for the periodical recurrence of panics and hard times, the actuary might be able to work out a scheme of insurance. We need not pause to determine whether this can be done or not. The fact is that in the past few years enormous sums of State and Federal money have been spent to keep housed and alive the families of those out of work who could not get employment. Such help was absolutely necessary, and it would be a strange kind of government, in fact no government at all, which could not give help in such trouble.
The Legislature of the State, acting after investigation and study and upon the report of experts, has proposed what seems to it a better plan. Instead of solely taxing all the people directly it has passed a law whereby employers are taxed for the help of the unemployed, the sums thus paid being cast upon the public generally through the natural increase in the prices of commodities. Whether relief be under this new law of the Legislature or under the dole system the public at large pays the bill.
We may concede that much of unemployment is due to other factors than business depression. Just what does cause slumps in business, panics and unemployment has never been satisfactorily explained, but a very large percentage of those who are out of work have lost their jobs or positions by reason of poor business conditions and hard times. I can see, therefore, nothing unreasonable or unconstitutional in the legislative act which seeks *Page 10 
to meet the evils and dangers of unemployment in the future by raising a fund through taxation of employers generally.
This act in brief taxes a certain class of employers three per cent on their payrolls. This class of employer includes those who have employed at least four persons within each of thirteen or more calendar weeks in the year 1935, or any subsequent calendar year. The employment of farm labor, of one's spouse or minor child, or employment in certain charities are excluded.
Unequal protection of the laws and unfair classification are charged against this act because employers who have had no unemployment are obliged to contribute to a fund to help those who have lost positions in failing or bankrupt businesses; also because the line is drawn at four employees instead of including all and any employer. We do not think that this narrow view is required by any constitutional provision. People have to live and when they cannot support themselves someone has to look after them. When able-bodied, willing men cannot find work they may be treated as a class, irrespective of their particular calling or trade. The peril to the State arises from unemployment generally not from any particular class of workers. So likewise, employers generally are not so unrelated to the unemployment problem as to make a moderate tax upon their payrolls unreasonable or arbitrary. As stated before, unemployment and business conditions generally are to a large extent linked together. Reasonable classification has been explained in Truax v. Corrigan
(257 U.S. 312, p. 337). Quoting from Southern Ry. Co. v. Greene
(216 U.S. 400, 417), the court said: "While reasonable classification is permitted, without doing violence to the equal protection of the laws, such classification must be based upon some real and substantial distinction, bearing a reasonable and just relation to the things in respect to which such classification is imposed; and classification cannot be arbitrarily made without any substantial basis." *Page 11 
That the purpose of this law is to help those who have worked when they could get work — the working class at present out of work — is apparent from the limitation to the benefits. Section 503 of the act reads as follows:
"Liability for payment of benefits. 1. Benefits shall be paid from the fund to each unemployed employee entitled thereto.
"2. Benefits shall become payable two years from the date on which contributions by employers become payable under this article.
"3. No employee shall be entitled to any benefits unless he
"(a) is suffering total unemployment as defined in this article; and
"(b) has, as provided in this article, registered as totally unemployed and reported for work or otherwise given notice of the continuance of his unemployment; and
"(c) has had not less than ninety days of employment as defined in this article within the twelve months preceding the day on which benefits are to commence, or (in the alternative) unless he has had not less than one hundred and thirty days of employment during the twenty-four months preceding the day on which benefits are to commence; and
"(d) in no case shall the fund be liable to pay benefits to an employee for any unemployment occurring more than twelve months after the date on which such employee was in employment, and in no case in which the claim for benefit has not been filed in the local state employment office as provided in section five hundred and ten, subdivision three, within two years of the last day of employment preceding the period for which such claim is made.
"(e) The fund shall pay benefits to employees in the ratio of one week of benefit for each fifteen days of employment within the fifty-two weeks preceding the beginning of the payment of benefits." *Page 12 
Further limitations are found in the sections following:
"§ 504. Waiting period. 1. An employee shall be entitled to benefits on account of unemployment which continues subsequent to a waiting period of three weeks after notification of unemployment: Provided that not more than five weeks of unemployment for which no benefit is paid shall be required as a waiting period within any calendar year (except as otherwise provided under subdivision two of this section). No week of unemployment shall count as a waiting period in any case except weeks of unemployment as to which notification of unemployment has been given.
"2. An employee shall not be entitled to benefits except for unemployment which continues subsequent to a waiting period of ten weeks:
"(a) if he has lost his employment through misconduct in connection with his employment; or
"(b) if he has lost his employment because of a strike, lockout or other industrial controversy in the establishment in which he was employed.
"§ 505. Amount of benefits. 1. Benefits shall be payable on account of total unemployment after the specified waiting period at the rate of fifty per centum of the employee's full-time weekly wages, but not to exceed a maximum of fifteen dollars per week, nor to be less than a minimum of five dollars per week. * * *
"§ 506. Disqualification for benefits. 1. No benefits shall be payable to any employee who refuses to accept an offer of employment for which he is reasonably fitted by training and experience, including employments not subject to this article; provided, however, that no employee otherwise qualified to receive benefits shall lose the right to benefits by reason of a refusal to accept employment if
"(a) acceptance of such employment would either require the employee to join a company union or would interfere with his joining or retaining membership in any labor organization; or *Page 13 
"(b) there is a strike, lockout or other industrial controversy in the establishment in which the employment is offered; or
"(c) the employment is either not within the state or at an unreasonable distance from his residence, or travel to and from the place of employment involves expense substantially greater than that required in his former employment unless the expense be provided for; or
"(d) the wages, hours and conditions offered are substantially less favorable to the employee than those prevailing for similar work in the locality, or are such as tend to depress wages or working conditions.
"§ 507. Limitation of amount of benefits. The total amount of benefits to which an employee shall be entitled in any consecutive fifty-two weeks shall not exceed sixteen times his benefit for one week of total unemployment."
Seasonal occupations are to be provided for by rules and regulations after further investigation.
What shall we say about this act? At least it is an attempt to solve a great and pressing problem in government. We have had such problems thrust upon our attention arising out of emergencies such as the rent laws (People ex rel. Durham RealtyCorp. v. La Fetra, 230 N.Y. 429), the housing laws (Adler v.Deegan, 251 N.Y. 467), and the milk laws (People v. Nebbia,262 N.Y. 259). The Legislature seeks to meet the future now without waiting for the emergency to arise. Can it do so? Unless there is something radically wrong, striking at the very fundamentals of constitutional government, courts should not interfere with these attempts in the exercise of the reserve power of the State to meet dangers which threaten the entire common weal and affect every home. No large body of men and women can be without work and the body politic be healthy.
The fund, known as the Unemployment Insurance Fund, created under this law, is to be deposited in or *Page 14 
invested in the obligations of the unemployment trust fund of the United States government. This is merely a form of security, the moneys never leaving the power or control of the State authorities. Whether we consider such legislation as we have here a tax measure or an exercise of the police power seems to me to be immaterial. Power in the State must exist to meet such situations, and it can only be met by raising funds to tide over the unemployment period. Money must be obtained and it does not seem at all arbitrary to confine the tax to a business and employment out of which the difficulty principally arises.
It is said that this is taxation for the benefit of a special class, not the public at large, and thus the purpose is essentially private. The Legislature, after investigation, has found the facts to be that those who are to receive benefits under the act are the ones most likely to be out of employment in times of depression. The courts cannot investigate these facts and should not attempt to do so. The briefs submitted show that the classification or selection made by the Legislature has followed investigation and has sought to reach the weakest spot. Experience may show this to be a mistake. No law can act with certainty; it measures reasonable probabilities. "Judicial inquiry does not concern itself with the accuracy of the legislative finding, but only with the question whether it so lacks any reasonable basis as to be arbitrary. (Standard OilCo. v. Marysville, 279 U.S. 582, 586, 587.)" (Mr. Justice ROBERTS in Borden's Farm Products Co. v. Ten Eyck,297 U.S. 251, 263.)
Fault is also found, perhaps with some justification, with the benefit allowed, after a period of ten weeks' idleness, to those who have been discharged or left because of strikes. Here again the Legislature must exercise its judgment, and a full scheme or plan cannot be condemned because the courts may not approve of certain details. *Page 15 
So too, the right to refuse other work of a certain kind when offered has come in for criticism. There may be a diversity of views as to the wisdom of these provisions, but again, these are not matters for the courts to consider unless they become so extreme as to become arbitrary.
Whether or not the Legislature should pass such a law or whether it will afford the remedy or the relief predicted for it, is a matter for fair argument but not for argument in a court of law. Here we are dealing simply with the power of the Legislature to meet a growing danger and peril to a large number of our fellow citizens, and we can find nothing in the act itself which is so arbitrary or unreasonable as to show that it deprives any employer of his property without due process of law or denies to him the equal protection of the laws.
I am of the opinion that the decision in Railroad RetirementBoard v. Alton R.R. Co. (295 U.S. 330) is not applicable here. The Railroad Retirement Act of June 27, 1934, held to be unconstitutional, related to the pensioning of a certain class of employees. It could not be sustained as a police regulation or within the police power as no such power exists in the Federal government and the act failed to come within the field of interstate commerce as stated in the opinion. Even the police power of the State might fall far short of enabling the Legislatures of the States to provide for pensioning employees in favored industries or employment.
In the first two above-entitled actions, the judgments in so far as appealed from by the plaintiffs should be affirmed, without costs; and the judgments in so far as appealed from by the defendants should be reversed, without costs, and plaintiffs' motions for judgment on the pleadings denied, without costs, and final judgment ordered herein in favor of defendants and against the plaintiffs dismissing the complaints herein upon the merits, without costs, and adjudging and declaring that as to the plaintiffs chapter 468 of the Laws of 1935 of the *Page 16 
State of New York does not in any respect violate section 6 of article I of the Constitution of the State of New York and does not in any respect violate section 1 of the Fourteenth Amendment to the Constitution of the United States and does not violate any other provision of the Constitution of the State of New York and does not violate any other provision of the Constitution of the United States.
A question under the Federal Constitution was presented and necessarily passed upon by this court. The plaintiffs contended that chapter 468 of the Laws of 1935 of the State of New York is repugnant to section 1 of the Fourteenth Amendment to the Constitution of the United States. This court held the aforesaid law of the State of New York is not repugnant to section 1 of said Fourteenth Amendment to the Constitution of the United States.
In the third above-entitled action, the judgment should be reversed and the complaint dismissed, without costs, and motion for judgment on the pleadings denied, without costs.
A question under the Federal Constitution was presented and necessarily passed upon by this court. It was contended by the plaintiff that chapter 468 of the Laws of 1935 of the State of New York is repugnant to section 1 of the Fourteenth Amendment to the Constitution of the United States. This court held the aforesaid law of the State of New York is not repugnant to section 1 of the Fourteenth Amendment to the Constitution of the United States.