Harrigan v. Smith

18 V.I. 14, 1980 U.S. Dist. LEXIS 8961
District Court, Virgin Islands·Decided October 24, 1980·No. Civil No. 79-164·Published·Cited by 1 cases

Opinion

CHRISTIAN, Chief Judge

OPINION

This cause is before the Court on a petition for review of the hearing examiner’s decision affirming a determination by the Virgin Islands Employment Security Agency hereinafter “Employment Agency” that the petitioner was not entitled to an adjustment of unemployment insurance payments received during 1975 and 1976. 24 V.I.C. § 306(e). Petitioner asserts that the hearing examiner’s decision should be overturned because 24 V.I.C. § 305(g)(2), that limits the time during which benefits can be recomputed to a period of one year from the date of determination of insured status, is unconstitutional on its face and as applied to this case. This Court finds the petitioner’s constitutional arguments to be without merit and therefore affirms the hearing examiner’s decision.

FACTS

The facts in the case at bar were never disputed by the parties. Prior to January 1, 1978, the Virgin Islands Unemployment Insurance Act provided that the maximum weekly benefit amount payable to any insured worker would be an amount equal to 66 2/3 percent of the Virgin Islands average weekly wage, an amount to be recomputed on January 1st of each year. 24 V.I.C. § 303(b)(3). In late January or early February of 1977 (the exact date is not known) the Employment Agency discovered that there had been no recomputation of the maximum weekly benefit amount for several years. Accordingly, claimants entitled to receive the maximum weekly benefit amount during those years had been underpaid. Relying on the opinion of the Attorney General, the Director of the Employment Agency determined that his authority to make adjustment payments was limited to those claimants who had filed claims on or after January 1, 1976. The Attorney General basqd his decision on 24 V.I.C. § 305(g)(2), which provides in pertinent part:

[17] At any time within 1 year from the date of a determination of insured status, the Director on his own motion may reconsider such determination if he finds that an error in computation or identity has occurred in connection therewith ....

Petitioner filed her initial claim for unemployment insurance benefits in November of 1975, and collected insurance payments for 26 weeks thereafter. The maximum weekly benefit amount to which a claimant is entitled is established at the time an initial claim is filed, and this limitation remains valid for a period of twelve months thereafter. 24 V.I.C. § 303(b)(3). Therefore, the maximum weekly benefit amount prevailing in November of 1975 was applied to the benefits received by the petitioner in 1976. The maximum weekly benefit amount for 1975 was improperly computed to be $82 per week, rather than $100 a week, and thus petitioner was underpaid $468 during a 26-week period, as she was entitled to the maximqm amount. However, petitioner’s requests for adjustment payments were denied by the Employment Agency, and this decision was affirmed by the hearing examiner, on the grounds that the Director had no authority to make adjustment payments to those claimants who filed initial claims for benefits prior to January 1, 1976. 24 V.I.C. § 305(g)(2).

I. PREEMPTION

Petitioner’s first contention is that 24 V.I.C. § 305(g)(2) is void because it is preempted by controlling federal law. Petitioner’s analysis begins with the fact that 24 V.I.C. § 305(g)(2) is a provision of the Virgin Islands Unemployment Insurance Act which, in turn, is an element of a Federal-State1 cooperative unemployment insurance program. All such programs are financed in part by grants from the United States pursuant to the Social Security Act, 42 U.S.C. §§ 501-503. Furthermore, these grants to territorial unemployment insurance programs are expressly made conditional upon the program conforming with federal standards. 42 U.S.C. § 503(a). One of the federal requirements is that the local methods of administration be “found by the Secretary of Labor to be reasonably calculated to insure full payment of unemployment compensation when due.” 42 U.S.C. § 503(a)(1). (Emphasis added.) Petitioner argues that the one-year limitation on the Employment Agency Director’s power to recompute benefits, provided for in 24 V.I.C. § 305(g)(2), is incon[18] sistent with the “when due” language of 42 U.S.C. § 503(a)(1), and therefore 24 V.I.C. § 305(g)(2) is preempted by federal law. This Court finds that the two sections are compatible and, therefore, no preemption has occurred.

The Supreme Court construed the “when due” language of 42 U.S.C. § 503(a)(1) in California Human Resources Dep’t v. Java, 402 U.S. 121 (1971). In that case, the Court evaluated the California procedure which suspended unemployment benefits while the claimant’s employer appealed the initial determination of the claimant’s eligibility. The Court first noted that the intent of Congress was to make payments available at the earliest stage of unemployment that is administratively feasible, so that a substitute for wages is rapidly provided. Id. at 131. Accordingly, the Court determined that the “when due” language meant that payments must be made once the eligibility for benefits has been approved at a hearing of which both parties have notice and an opportunity to be heard. Id. at 133. The Court thus found California’s provision for suspension of unemployment benefits during appeal in conflict with 42 U.S.C. § 503(a)(1). Id. at 135.

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Harrigan v. Smith, 18 V.I. 14, 1980 U.S. Dist. LEXIS 8961 (vid 1980).

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