unempl.ins.rep. Cch 21,915 Bruce K. Cassidy v. Buddy Adams, Now E. Austin, Jr., Secretary, Cabinet for Human Resources

872 F.2d 729, 1989 U.S. App. LEXIS 4836, 1989 WL 32960
CourtCourt of Appeals for the Sixth Circuit
DecidedApril 11, 1989
Docket86-6175
StatusPublished
Cited by12 cases

This text of 872 F.2d 729 (unempl.ins.rep. Cch 21,915 Bruce K. Cassidy v. Buddy Adams, Now E. Austin, Jr., Secretary, Cabinet for Human Resources) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
unempl.ins.rep. Cch 21,915 Bruce K. Cassidy v. Buddy Adams, Now E. Austin, Jr., Secretary, Cabinet for Human Resources, 872 F.2d 729, 1989 U.S. App. LEXIS 4836, 1989 WL 32960 (6th Cir. 1989).

Opinions

ENGEL, Chief Judge.

Plaintiff Cassidy appeals the decision of the United States District Court for the Western District of Kentucky granting summary judgment in favor of defendant Kentucky Cabinet for Human Resources (the Cabinet) in Cassidy’s civil rights suit brought pursuant to 42 U.S.C. § 1983. Cassidy alleges that the Cabinet recouped overpaid unemployment benefits after the statute of limitations for recoupment had expired, thus violating the “when due” clause of the Social Security Act, 42 U.S.C. § 503(a)(1), and his right to due process under the fourteenth amendment. Cassidy also appeals the district court’s denial of class certification under Fed.R.Civ.P. 23. Because we find that, under Kentucky law, Cassidy had no protectible property interest in the overpayments at the time of attempted recoupment, we affirm the district court’s judgment in its entirety.

I.

In June 1977, plaintiff Cassidy was laid off from his work at Cardwell Roofing Company in Louisville, Kentucky. Cassidy received unemployment insurance benefits after properly filing a claim. In August 1978, the Cabinet issued an adjusted determination that Cassidy had been overpaid $980 between July 1977 and June 1978, an error resting entirely with the Cabinet. At this time, the recoupment of non-fraud overpayments was limited to three years. Ky.Rev.Stat. § 341.415(2). In 1980, the Kentucky Employee Benefits Statute was amended, extending the statute of limitations period to five years. 1980 Ky. Acts ch. 385, § 9. Two years later, in 1982, Cassidy again became unemployed. Relying on the amended five-year limitations period, the Cabinet delayed payment of his unemployment benefits until the $980 overpayment was recouped.

Cassidy brought suit in the United States District Court for the Western District of Kentucky claiming that the delay in payment violated the due process clause of the fourteenth amendment and section 1 of the Ku Klux Klan Act of 1871, 42 U.S.C. § 1983. The district court denied class certification, holding that Cassidy was unlikely to prevail on the merits, and held that Cassidy’s claims were not barred by the eleventh amendment. Relying on Parratt v. Taylor, 451 U.S. 527, 101 S.Ct. 1908, 68 L.Ed.2d 420 (1981), the district court granted summary judgment, holding that Kentucky’s statutory procedures for recoupment satisfied the requirements of procedural due process.1 See Ky.Rev.Stat. § 341.415.

We need not discuss the scope of Kentucky’s post-deprivation due process hearing, because initially we find that Cassidy possessed no property rights in the overpaid benefits; this precludes any violation of procedural due process, substantive due process, or the “when due” clause of the Social Security Act. We hold that recoupment of overpayments in 1982 (when re-coupment would not have been possible under the prior three-year statute of limitations) pursuant to the new five-year statute of limitations (which was enacted in 1980, before the prior three-year statute of limitations had run against Cassidy) deprived Cassidy of no rights protected by the Constitution or laws of the United States. We therefore affirm the judgment of the district court.

II.

The federal unemployment compensation program, set forth at 42 U.S.C. § 501 et seq., is administered largely by the states. The federal government provides each state with partial funding for the unem[731]*731ployment benefits program as long as the state insures “full payment of unemployment compensation when due,” id. § 503(a)(1), and “an opportunity for a fair hearing, before an impartial tribunal, for all individuals whose claims for unemployment compensation are denied.” Id. § 503(a)(3). Congress also provides the states discretion to recover overpaid benefits, but does not require the state to do so in order to receive federal support. Id. § 503(g).2

The Kentucky unemployment compensation program is set forth at Ky.Rev.Stat. § 341 et seq. Originally, the Kentucky legislature provided the administering agency, the Cabinet, with authority to recoup overpaid unemployment benefits within three years of the last day of overpayment.3 However, as we have earlier observed, the Kentucky legislature in 1980 amended the recoupment statute and extended the statute of limitations to five years.4 Therefore, although Cassidy received his over[732]*732payment in 1978 when the three-year statute of limitations was in force, the amended five-year statute of limitation became law while Kentucky still possessed the right of recoupment and before the three-year limitations period on his claim had run.

At the outset, defendant Cabinet argues that the eleventh amendment bars our reaching the merits of this statute of limitations question because its resolution requires extensive analysis of Kentucky law. We reject this argument. Our state law inquiry is guided solely by our need to determine the nature of Cassidy’s property right in the overpayments; this, in turn, is necessary to establish both the scope of Cassidy’s right to receive benefits “when due” under the Social Security Act and his rights under the due process clause of the fourteenth amendment. As this court recognized in Spruytte v. Walters, 753 F.2d 498, 514 (6th Cir.1985):

Although Spruytte’s claim requires us to consider issues of state law, it does not follow that his claim is barred by Pennhurst [State School & Hospital v. Halderman, 465 U.S. 89, 104 S.Ct. 900, 79 L.Ed.2d 67 (1984)]. Spruytte’s complaint alleges a violation of his federal constitutional rights. We decline to endorse the proposition that officials may undermine federal court authority by violating state as well as federal law. Even in Pennhurst the Court remanded the case to determine whether the state officials’ conduct, the same conduct which formed the basis of the state-law claim, violated federal law.

Unlike Pennhurst, the state law which Cassidy alleges was systematically violated may have conferred constitutionally protected property rights. Thus, resolution of the state law question is a prerequisite to resolution of the substantive federal and constitutional questions presented in this appeal.

However, we need not look far to find that Cassidy has no property right in either full unemployment benefits “when due” in 1982 or the overpaid benefits he received. First, 42 U.S.C.

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872 F.2d 729, 1989 U.S. App. LEXIS 4836, 1989 WL 32960, Counsel Stack Legal Research, https://law.counselstack.com/opinion/unemplinsrep-cch-21915-bruce-k-cassidy-v-buddy-adams-now-e-austin-ca6-1989.