Kelly v. Nordberg

• Court: Court of Appeals for the First Circuit
• Decided: August 17, 1993
• Docket: 93-1138
• Status: Published

Opinion

USCA1 Opinion

August 17, 1993
                                [NOT FOR PUBLICATION]

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT

                                 ____________________

No. 93-1138 

                                   DANNY M. KELLY,

                                Plaintiff, Appellant,

                                          v.

                              NILES L. NORDBERG, ET AL.,

                                Defendants, Appellees.

____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                     [Hon. William G. Young, U.S. District Judge]
                                             ___________________

                                 ____________________

                                        Before

                                 Breyer, Chief Judge,
                                         ___________
                           Selya and Stahl, Circuit Judges.
                                            ______________

                                 ____________________

            Danny M. Kelly on brief pro se.
            ______________
            Scott   Harshbarger,  Attorney   General,  and   Steve   Berenson,
            ___________________                              ________________
        Assistant  Attorney General,  on Memorandum  in Support  of Appellee's
        Motion for Summary Affirmance, for appellee.

____________________

____________________

Per Curiam.      The narrow question  before us  is
                      __________

            whether   plaintiff   was    required   to   exhaust    state

            administrative remedies before bringing this suit.  Plaintiff

            appears  pro se seeking  unspecified damages,  injunctive and
                     ___ __

            declaratory  relief against  the Massachusetts  Department of

            Employment and Training's ("DET's") practice of disqualifying

            for unemployment benefits those persons who travel outside of

            the State for the  dual purpose of seeking work  and engaging

            in other activities.  The district court granted to defendant

            a  judgment on the pleadings.   We vacate  and remand without

            prejudice to consideration of any other issue in the case. 

                      A  grant of judgment on the pleadings is subject to

            plenary review.   International  Paper Co.  v. Jay,  928 F.2d
                              ________________________     ___

            480, 482 (1st Cir. 1991).  We  accept as true all of the non-

            movant's   factual  allegations   and  draw   all  reasonable

            inferences  in his  favor.   Santiago  de  Castro v.  Morales
                                         ____________________     _______

            Medina, 943 F.2d 129, 130 (1st Cir. 1991).  We are aided here
            ______

            by the  parties' apparent agreement as  to the administrative

            posture of plaintiff's claim. 

                      According to the complaint, plaintiff was qualified

            to receive  unemployment benefits of $282  per week beginning

            in  September,  1991, after  he lost  his  job as  a software

            engineer at  Wang Laboratories.    He sought  new  employment

            locally  and  in  the midwest.    When  he  filed a  required

            periodic claim  for benefits in December,  1991, he certified

            that  he would be in Chicago, Illinois from December 23, 1991

            until January 5, 1992.  He alleged that his reason for travel

            was to  look for work  and to visit  family and friends.   He

also certified that  while he  was there  he actively  sought

            work, and was "available" for employment.1  

                      The DET  denied plaintiff any benefits  for the two

            weeks he was  in Chicago because  of the dual purpose  of his

            trip.   According  to both  parties' pleadings,  the agency's

            rule, as reflected in  its "Service Representative Handbook,"

            is  that a  claimant  who travels  or  stays outside  of  the

            registration area must do so "for the SOLE purpose of seeking

            new  employment or  reporting for  a pre-arranged job  or job

            interview" in order  to qualify for  benefits.2  Answer  Exh.

            D., Complaint   7.   Based on plaintiff's written  answers to

            questions  about his  trip,  a DET  adjudicator decided  that

            plaintiff's trip "did  not meet the  requirements of the  law

____________________

            1.    Under Massachusetts'  Employment  Security  Law, to  be
            eligible  for  unemployment compensation  during  any week  a
            claimant must provide evidence  to the employment office that
            he  is available for and actively engaged in a systematic and
            sustained effort to obtain work.  M.G.L. c. 151A,    24, 30.

            2.        The  record  does  not  explain  DET's   rulemaking
            practices,  but we  note a  suggestion in  the case  law that
            agency  rules   relating   to  eligibility   are   frequently
            incorporated  into  circulars,   rather  than  the  Code   of
            Massachusetts Regulations ("CMR").   See Grand v. Director of
                                                 ___ _____    ___________
            the Div.  of  Employment Sec.,  393  Mass. 477,  480-81,  472
            _____________________________
            N.E.2d 250,  252 (1984)  (rejecting claimant's  argument that
            review  examiner   acted  without  standards   when  he  held
            claimant's  job search  to  be  inadequate, because  agency's
            circularized  notice "constitutes a guideline or standard set
            forth by the division").  We  note, too, rules in the CMR for
            interstate claims subject to plans approved by the Interstate
            Conference of  Employment Security Agencies.   See 430 C.M.R.
                                                           ___
               4.02,  4.05; see  also M.G.L.  c. 151A,    66.   There are
                            _________
            insufficient facts in this record to determine the relevancy,
            if any, of the codified rules.       

                                         -3-

because . . . looking for employment was not the sole purpose

            of the trip."  Answer   7, Exh. D.

                      Under M.G.L. c. 151A,    39(b), a claimant may seek

            reconsideration  of  the   DET's  initial  determination   by

            requesting  a de novo hearing  before a review  examiner.  In
                          __ ____

            the  absence of such a request,  the initial determination is

            final.   The  parties agree  that plaintiff  did  not request

            agency review, but the DET  spontaneously treated plaintiff's

            correspondence as a notice of appeal, advising plaintiff of a

            hearing  date.   Plaintiff  did not  appear at  the scheduled

            hearing and did not respond to  a further notice from the DET

            offering to  consider any  justifications for his  failure to

            appear.  DET dismissed the appeal.    

                      Plaintiff  instead  filed  this  complaint  pro  se
                                                                  ___  __

            alleging that DET's  travel rule unconstitutionally infringed

            on  his right  to travel  and to  enjoy the same  benefits as

            lifelong residents  of  Massachusetts.3   Defendant  answered

            and  moved for judgment on  the pleadings on  the ground that

            plaintiff had failed to  exhaust his administrative  remedies

____________________

            3.  Claimants who remained in the State were allowed benefits
            if they actively sought work "at least three days  a week and
            made  at least four  job contacts/week," according  to a 1984
            Supreme Judicial Court opinion.  Grand, 393 Mass. at 481, 472
                                             _____
            N.E. at  252.   The record  before us offers  no facts  as to
            DET's current eligibility  rules for those who  remain in the
            state while seeking  work, facts against  which any claim  of
            unequal treatment  necessarily must  be measured.   Without a
            full  record we  imply no  opinion as to  the ability  of the
            instant claim towithstand a motion to dismiss on the merits. 

                                         -4-

and  failed to state a claim.   At the hearing on the motion,

            the  judge inquired whether DET was still willing to afford a

            hearing  on  plaintiff's claim  and  gave  DET two  weeks  to

            respond  to the  question.4  DET  answered with  an affidavit

            stating that it  would reschedule a hearing  if the plaintiff

            showed  satisfactory  reasons  for  his  initial  failure  to

            appear.   The  judge then  dismissed the  instant  action for

            failure to  exhaust administrative remedies, "in  view of the

            Commissioner's  willingness to  afford what  appears to  be a

            meaningful hearing on the merits."

                      We  sense  in  the  district  court's  decision  an

            attempt  to  fashion an  equitable  solution  to a  practical

            dilemma.   The DET procedure strikes us as affording to a pro
                                                                      ___

            se  plaintiff  the  benefit   of  a  fast,  streamlined,  and
            __

            certainly less expensive  procedure for litigating the  issue

            he  urges  upon the  federal  courts.5   Moreover,  requiring

            exhaustion  of administrative  remedies normally  "serves the

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            4.  Since the parties have  not provided a transcript of  the
            hearing,  our  understanding  of  the  proceedings  below  is
            limited to the judge's abbreviated written orders.  

            5.   Plaintiff maintains that an agency factual hearing would
            be  futile since the examiner  would have no  power to change
            the DET's admitted policy, only  to award benefits.  However,
            state law also provides  a subsequent discretionary appeal to
            the Board  of Review, which is expressly  empowered to search
            the record  for errors  of law  as well as  fact.   M.G.L. c.
            151A,     40,  41.   And  claimants  are further  afforded  a
            streamlined method for appeal  to the state's district courts
            where jurisdiction includes any constitutional errors, errors
            of law or procedure.   M.G.L. c. 151A,   42;  M.G.L. c. 30,  
            14(7). 

                                         -5-

interests   of  accuracy,  efficiency,  agency  autonomy  and

            judicial economy."  Ezratty v. Puerto Rico, 648 F.2d 770, 774
                                _______    ___________

            (1st  Cir. 1981).  While  common sense would  seem to dictate

            that  plaintiff ought to avail himself of the benefits of the

            state forum, plaintiff  here adamantly insists, as  he did in

            his  memorandum below,  that  he has  deliberately chosen  to

            bypass the state's procedure in favor of a federal forum.    

The court  cannot  insist on  exhaustion  of  state

            remedies as a prerequisite to a  federal suit, however, where

            Congress  has left  that choice  to  the plaintiff.   Reading

            plaintiff's complaint liberally, especially  in light of  his

            pro se status, it appears to assert a claim under 42 U.S.C.  
            ___ __

            1983,  in that  plaintiff  alleges that  the state  defendant

            adopted a policy which violates his right to equal protection

            of  the  laws,  and   impedes  his  constitutional  right  to

            interstate travel.6   It may  also be read  as attempting  to

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            6.  We  emphasize again that the record is too slim to assess
            the ability of these  claims to withstand a proper  motion to
            dismiss on the merits.   We have before us  no information on
            basic issues  like the actual  burden, if any,  on interstate
            travel  or commerce  and the  state's legitimate  interest or
            need   for  the  rule.     Moreover  the  factual  basis  for
            plaintiff's unequal  treatment claim is not  clear, see supra
                                                                ___ _____
            n.3.  See generally Hooper v. Bernalillo County Assessor, 472
                  _____________ ______    __________________________
            U.S. 612, 624 (1985);  Zobel v. Williams, 457 U.S.  55, 58-65
                                   _____    ________
            (1982); Jones  v. Helms, 452 U.S. 412, 417-22 (1981); Shapiro
                    _____     _____                               _______
            v.  Thompson,  394 U.S.  618  (1969)  (overruled in  part  on
                ________
            another  gnd  by Edelman  v. Jordan,  416 U.S.  1000 (1974));
                             _______     ______
            Edwards  v.  California, 314  U.S.  160  (1941); Crandall  v.
            _______      __________                          ________
            Nevada, 73 U.S. (6 Wall.)  35 (1868).   We observe  only that
            ______
            general federal question jurisdiction is sufficiently pleaded

                                         -6-

state a claim for  violation by state officials of  Title III

            of  the Social  Security Act,  42  U.S.C.    503(a)(1), which

            requires  states  receiving  federal  funds  to  provide  for

            "methods of administration  . . .  that are . .  . reasonably

            calculated   to   assure   full   payment   of   unemployment

            compensation  when  due."     The  courts  have  consistently

            recognized a private  right of action for equitable relief to

            enforce this provision.7      

____________________

            under 28  U.S.C.   1331.   See Charles  A. Wright et.  al., 5
                                       ___
            Federal Practice and Procedure   1209 (2d Ed. Supp. 1993).   
            ______________________________

7.    See California Dep't  of Human Resources  Dev. v. Java,
                  ___ __________________________________________    ____
            402  U.S. 121  (1971); Ohio  Bureau of  Employment  Servs. v.
                                   ___________________________________
            Hodory,  431 U.S. 471 (1977).  Though the statute contains no
            ______
            language  allowing   a  private   action,  to  assure   state
            compliance, the  result makes "practical sense."   Jenkins v.
                                                               _______
            Bowling, 691 F.2d 1225,  1228 (7th Cir. 1982); see  also Shaw
            _______                                        _________ ____
            v.  Valdez,  819 F.2d  965  (10th  Cir. 1987);  Wilkinson  v.
                ______                                      _________
            Abrams, 627 F.2d 650 (3d Cir. 1980); Pennington v. Ward, 1989
            ______                               __________    ____
            U.S. Dist. LEXIS  7651, at  *2 (N.D. Ill.)  (citing Maine  v.
                                                                _____
            Thiboutot, 448 U.S. 1  (1980) for point that    1983 embraces
            _________
            claims  that state  defendants  violated  rights  secured  by
            statute); Brewer  v. Cantrell,  622 F.  Supp. 1320  (W.D. Va.
                      ______     ________
            1985), aff'd without op., 796 F.2d 472 (4th Cir. 1986). 
                   _________________

                  Payment  "when  due"  is  interpreted  by  the  federal
            regulations  to mean  with "the  greatest promptness  that is
            administratively feasible,"  20 C.F.R.    640.3(a).   We have
            not been offered a direct explanation of DET's  procedure for
            handling  travel  claims, but  its  brief  suggests that  the
            travel  rule is  an initial  administrative "rule  of thumb."
            DET states  that despite the  "sole purpose" language  in the
            rule and  the dual  purpose of plaintiff's  trip, plaintiff's
            benefits  could have been reinstated at a factual hearing.  A
            review examiner,  we are told, could have weighed evidence of
            the comparative time plaintiff devoted to seeking work versus
            the time he spent on  personal matters to arrive at a  result
            different from that  mandated by the  rule.  We read  this as
            implying that DET initially  denies benefits to claimants who
            travel  for  a dual  purpose  as an  administrative  "rule of

                                         -7-

"It is now firmly settled that exhaustion or resort

            to state remedies is not  a prerequisite to a    1983 claim."

            Miller  v. Hull,  878 F.2d  523 (1st  Cir.) (citing  Patsy v.
            ______     ____                                      _____

            Board  of Regents,  457 U.S. 496  (1982)), cert.  denied, 493
            _________________                          _____________

            U.S. 976 (1989).  A section 1983 claimant who alleges that he

            has  been injured  by an  unconstitutional practice  need not

            pursue  state  administrative   remedies  "but  may   proceed

            directly to  federal  court" in  order to  press his  claims.

            Kercado-Melendez v. Aponte-Roque, 829 F.2d 255, 260 (1st Cir.
            ________________    ____________

            1987) (while abstention may be warranted where a civil rights

            plaintiff seeks  to  use the  federal  courts to  nullify  an

            ongoing  coercive state  proceeding, where  the  plaintiff is

            given the option  to initiate a  state proceeding, the  Patsy
                                                                    _____

            rule  prevails), cert.  denied, 486  U.S. 1044  (1988).   Cf.
                             _____________                            ___

            Darby  v. Cisneros,  1993 U.S.  LEXIS 4246  at *15  (June 21,
            _____     ________

            1993) (in suit under the APA  federal courts do not have  the

            authority to  require a plaintiff  to exhaust  administrative

            remedies   where   neither    statute   nor   rules   mandate

____________________

            thumb"  subject  to change  on  appeal  in individual  cases.
            Whether this  procedure  is one  sufficiently  calculated  to
            result  in payment "when due" within the meaning of 42 U.S.C.
               503(a)(1),  is  a  fact specific  issue  which  we  cannot
            meaningfully assess on the rudimentary record before us.  See
                                                                      ___
            Fusari v.  Steinberg, 419 U.S. 379, 387, 389 (1975).  Nor can
            ______     _________
            we determine the relevancy,  if any, of the   federal statute
            encouraging certain  interstate  payments and  procedures  on
            behalf  of  unemployed  workers  who  relocate while  seeking
            employment.  See 26  U.S.C.   3304(B)(9); see also  M.G.L. c.
                         ___                          ________
            151A,   66.

-8-

administrative appeals  in order to render  the agency action

            final, citing Patsy with approval). 
                          _____

                      And the cases recognizing a private right of action

            to  enforce 42  U.S.C.    503 leave  little doubt  that state

            administrative  exhaustion  cannot  be  required   where  the

            challenge is  to a state  rule that allegedly  conflicts with

            the "payment . . . when due" provision.  See, e.g., Java, 402
                                                     _________  ____

            U.S. at  121 (where  private plaintiffs brought  class action

            challenging   state   practice  of   suspending  unemployment

            benefits pending appeal, suit commenced before conclusion  of

            administrative hearings allowed, without discussion); Wheeler
                                                                  _______

            v. Vermont, 335 F.  Supp. 856, 860 (D. Vt.  1971) (exhaustion
               _______

            of state administrative remedies  not required where claimant

            challenges  agency's  initial  redetermination  practice  and

            terminates  benefits  before  a hearing);  cf.  International
                                                       ___  _____________

            Union, UAW  v.  Brock,  477 U.S.  274  (1986)  (citing  cases
            __________      _____

            decided under  42  U.S.C.    503  for holding  that  Eleventh

            Amendment does  not  bar  suits  challenging  application  of

            federal guidelines  to benefit claims, even though individual

            eligibility for benefits may be confined to state processes);

            Shaw  v. Valdez,  819  F.2d 965,  966  n.2 (10th  Cir.  1987)
            ____     ______

            (availability of state judicial remedies does not bar private

            suit challenging state's notice provisions under    503(a)(3)

            where deprivation  is allegedly caused  by established  state

            procedure, rather than random or unauthorized act).    

-9-

Exhaustion  is  not required  in  cases challenging

            systemwide errors at the initial benefits determination stage

            because  of  the  economic  aims  of  the  statute.    Prompt

            replacement  of  wages is  vital  to  effectuate "[b]oth  the

            humane   (or   redistributive)  objectives   of  unemployment

            insurance  and  its  macroeconomic objective  (dampening  the

            business  cycle by keeping up  the purchasing power of people

            laid off  in a recession). .  ."   Jenkins, 691  F.2d at 1229
                                               _______

            (Posner, J.);  see also Java,  402 U.S. at  131-32 (Congress'
                           ________ ____

            intention in enacting   503(a)(1) was to assure both purposes

            by  making payments available  at the earliest  stage that is

            administratively feasible).  While  individual administrative

            appeals may  effectively correct errors in  individual cases,

            the process may  not result in speedy  correction of systemic

            errors at  the initial determination stage.   Cf. Schoolcraft
                                                          ___ ___________

            v. Sullivan, 971 F.2d  81, 87 (8th Cir. 1992)  (under statute
               ________

            allowing  discretionary  waiver  of exhaustion  requirements,

            applying similar reasoning to waive requirement).   

                      In conclusion we decide here only the exhaustion of

            remedies issue presented to us.  We express no opinion on any

            other   question   of  justiciability,   including  standing,

            ripeness,  mootness, or  the  like.    And as  our  footnotes

            repeatedly emphasize we  express no opinion on  the merits of

            plaintiff's claims,  the desirability of  the relief  sought,

-10-

nor  the ability of these claims to withstand a proper motion

            for summary judgment or other dismissal on the merits. 

                      Vacated and remanded.
                      _______     ________

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