IN THE COMMONWEALTH COURT OF PENNSYLVANIA Mark Newell, : Petitioner : : v. : No. 1798 C.D. 2014 : Submitted: February 27, 2015 Unemployment Compensation Board : of Review, : Respondent : BEFORE: HONORABLE RENÉE COHN JUBELIRER, Judge HONORABLE MARY HANNAH LEAVITT, Judge HONORABLE JAMES GARDNER COLINS, Senior Judge OPINION NOT REPORTED MEMORANDUM OPINION BY JUDGE LEAVITT FILED: May 22, 2015 Mark Newell (Claimant) petitions for review of an adjudication of the Unemployment Compensation Board of Review (Board) holding that he was ineligible for Emergency Unemployment Compensation (EUC) 1 benefits he received for the week ending July 27, 2013, because he failed to attend a mandatory reemployment program. In doing so, the Board affirmed the Referee s decision and held that the Referee was not bound by a prior decision by a different Referee finding that Claimant did not have to attend the program. For the reasons that follow, we reverse. 1 EUC benefits are additional federally-funded benefits available to an unemployment compensation claimant under Title IV of the Supplemental Appropriation Act of 2008, Public Law 110-252, 122 Stat. 2323, 4001-4007, 26 U.S.C. 3304 Note (EUC Act).
Claimant received regular unemployment compensation benefits beginning in June 2012 and, after those benefits were exhausted, became eligible for EUC benefits. On June 20, 2013, the Pennsylvania Career Link Office informed Claimant that he was scheduled to attend a Reemployment Eligibility and Assessment (REA) on July 25, 2013, which was mandatory in order for his EUC benefits to continue. The notification stated: If you have returned to work, you do not need to report. However, you must provide the information requested below and return this form immediately to the office shown above. Certified Record Item No. 2 (C.R. ), Department Mandatory REA Meeting Notification, June 20, 2013, at 1. Claimant did not report to the July 25 th REA session and did not return the form. Claimant received another notice, dated July 25, 2013, scheduling an REA session for August 28, 2013. Claimant contacted the Erie UC Service Center to inquire whether he needed to attend because he was working full-time as a real estate agent. A Department representative informed Claimant that he did not have to attend the August 28 th REA session, so he did not attend. On December 10, 2013, the UC Service Center issued a Notice of Determination that Claimant was ineligible for benefits for the weeks ending August 31 through November 16, 2013, because he did not show justifiable cause for not attending the August 28 th REA session. The UC Service Center assessed a non-fraud overpayment. Claimant appealed. On February 24, 2013, Referee S. G. Hess issued a decision identifying the issue as [w]hether [Claimant] failed to participate in the mandatory REA sessions. C.R. 7, Newell v. UCBR, Appeal Number EUC-13-09-C-F992-A, mailed February 24, 2014, at 2. Referee Hess concluded that 2
[C]laimant properly notified the Service Center that he was working full-time and understood that he did not need to participate in the REA sessions. [C]laimant s understanding, in conjunction with the information from the letter he received indicated that he did not need to attend if he was working full time, gives [C]laimant justifiable cause for not attending. Id. Accordingly, Referee Hess reversed the UC Service Center s determination and held that Claimant was eligible for EUC benefits beginning with the claim week ending August 31, 2013. The Department did not appeal Referee Hess decision. On April 6, 2014, the UC Service Center issued a second Notice of Determination that Claimant was ineligible for benefits for the week ending July 27, 2013, because Claimant failed to participate in the mandatory EUC REA session on 7/25/13 because of unknown reasons. Claimant has not shown justifiable cause for failing to participate in the EUC REA session. C.R. 7, Notice of Determination, April 24, 2014, at 1. Claimant appealed, and a hearing was held on June 4, 2014, before Referee Zarin Bengali. Claimant did not attend the hearing but was represented by counsel. Cynthia Murray, a claims examiner, testified by telephone on behalf of the UC Service Center. At the end of the hearing, counsel for Claimant attempted to submit a memorandum of law explaining Claimant s defense of collateral estoppel. Referee Bengali rejected counsel s submission on the basis that all submissions to the Referee had to be made five days prior to the hearing pursuant to 34 Pa. Code. 101.131. 2 2 This regulation states, in relevant part: (Footnote continued on the next page...) 3
On June 5, 2014, Referee Bengali issued a decision affirming the UC Service Center s April 6, 2014, determination. Referee Bengali found that because Claimant failed to attend the first REA session scheduled on July 25, 2013 for unknown reasons his absence was unjustified. Referee s Decision and Order at 2. Accordingly, Referee Bengali held that Claimant was ineligible for EUC benefits for the week ending July 27, 2013, and assessed a $511.00 non-fraud overpayment against Claimant. The Board affirmed and Claimant petitioned for this Court s review. On appeal, 3 Claimant asserts that the Board erred in affirming Referee Bengali s decision for two reasons. First, Claimant contends that Referee Bengali was collaterally estopped from concluding that Claimant s absence from the July 25 th REA session was unjustified because Referee Hess had previously adjudicated that issue in Claimant s favor. Second, Claimant argues that Referee Bengali violated his due process rights by refusing to accept his memorandum of law. (continued...) (e) The tribunal will permit parties a reasonable opportunity to question other parties or witnesses testifying by telephone for the purpose of verifying the identity of the parties or witnesses. Falsification of identity may subject the parties or witnesses to prosecution and punishment. *** (h) A document not provided as required by 101.130(e) (relating to notice of testimony by telephone and use of documents) may not be admitted nor testimony given or taken from it unless consent has been requested from and given by all parties. Testimony taken or given in violation of this subsection will be excluded from consideration, as will the document. 34 Pa. Code. 101.131. 3 This Court s scope of review is limited to a determination of whether constitutional rights were violated, an error of law was committed or whether necessary findings of fact are supported by substantial competent evidence. Key v. Unemployment Compensation Board of Review, 687 A.2d 409, 411 n.2 (Pa. Cmwlth. 1996). 4
Collateral estoppel binds administrative agencies so long as there are identical policies underlying the matter at issue in both proceedings. Cohen v. Workers Compensation Appeal Board (City of Philadelphia), 909 A.2d 1261, 1264 (Pa. 2006). Collateral estoppel precludes a finder of fact from revisiting an issue decided in a prior adjudication when the following four factors are met: (1) The issue decided in the prior adjudication was identical with the one presented in the later actions; (2) there was a final judgment on the merits; (3) the party against whom the plea is asserted was a party or in privity with the party to the prior adjudication; and (4) the party against whom it is asserted has had a full and fair opportunity to litigate the issue in question in a prior action. BMY, a Division of HARSCO Corporation v. Unemployment Compensation Board of Review, 504 A.2d 946, 951 (Pa. Cmwlth. 1986). The parties disagree over whether the first and fourth factors were met in this case. Claimant argues that the issue of whether he justifiably missed the July 25 th REA session was decided by Referee Hess. In support of his position, Claimant explains that Referee Hess framed the issue before him as [w]hether [Claimant] failed to participate in the mandatory REA sessions. Newell v. UCBR, Appeal Number EUC-13-09-C-F992-A, mailed February 24, 2014, at 2 (emphasis added). Claimant emphasizes that Referee Hess used the plural term sessions to mean that he was considering whether Claimant was justified in missing both the July 25 th and August 28 th REA sessions. Claimant argues that had Referee Hess intended to limit his decision to the August 28 th REA session, he would have used the singular word session. The Board counters that Referee Hess decision could not have related to the July 25, 2013, REA session because the only issue before Referee Hess was 5
Claimant s eligibility for the compensable weeks ending August 31 through November 16, 2013. In support, the Board relies on Abington School District v. Unemployment Compensation Board of Review, 533 A.2d 1100 (Pa. Cmwlth. 1987). There, this Court reiterated the fundamental axiom that eligibility for unemployment compensation benefits is determined on a week-to-week basis, and eligibility is determined solely by looking at the relevant claim weeks. Id. at 1104. According to the Board, Claimant s absence from the August 28 th REA session affected his eligibility for the claim week ending August 31, 2013, and his absence from the July 25 th REA session affected his eligibility for the claim week ending July 27, 2013. Therefore, the issues before Referees Hess and Bengali were not identical because they considered Claimant s eligibility for benefits for different claim weeks. The Board mischaracterizes the nature of the issue subject to collateral estoppel. When Referee Bengali considered Claimant s eligibility for EUC benefits for the week ending July 27, 2013, that issue had not been previously adjudicated. However, in order to decide Claimant s eligibility for that period, Referee Bengali had to resolve whether Claimant was in compliance with Sections 4001(i)(1)(B)(i) and 4001(i)(3)(B) of the EUC Act, which require a claimant to participate in reemployment services unless he has justifiable cause for not participating. The EUC Act s mandatory attendance requirement is not tied to a particular claim week. We agree with Claimant that Referee Hess had already adjudicated the issue of his compliance with the EUC Act. 6 Referee Hess use of the word sessions, instead of session, means that he considered and determined whether
Claimant was justified in missing both the July 25 th and August 28 th REA sessions. Furthermore, Referee Hess made findings of fact regarding the July 25 th REA session, demonstrating that his use of the plural term was not an accident. Thus, Referee Hess was ruling on the justifiability of both REA sessions when he held: [Claimant s] understanding in conjunction with the information from the letter he received indicated that he did not need to attend if he was working full-time, gives [Claimant] justifiable cause for not attending. Newell v. UCBR, Appeal Number EUC-13-09-C-F992-A, mailed February 24, 2014, at 2. Regardless of which claim weeks they were addressing, Referees Hess and Bengali considered the same issue of Claimant s compliance with the EUC Act s REA requirement, and that issue controlled the outcome of both matters. The purpose of collateral estoppel is to encourage reliance on past adjudications. Allen v. McCurry, 449 U.S. 90, 94 (1980). The Board undermined that principle by treating the two referee adjudications, which addressed identical facts, as different because they involved different claim weeks. The Board asserts that even if the issues are identical, because the week ending July 27, 2013, was not at issue in the first decision, the party against whom collateral estoppel is being asserted, i.e., the Department, did not have a full and fair opportunity to litigate that issue in the first action. Stated another way, the Board contends that because attendance at the August 28 th REA session was the only session that affected Claimant s eligibility for the claim weeks ending August 28, 2013, through November 6, 2013, the Department had no motivation to challenge Claimant s July 25 th absence. 7
The fact that the Department was not motivated to contest Claimant s justification for missing the July 25 th REA session is not sufficient to show that it lacked a full and fair opportunity to litigate the issue. Rue v. K-Mart Corporation, 713 A.2d 82 (Pa. 1998), is instructive in this regard. There, an employee was fired for allegedly eating some of the employer s inventory without purchasing the items. The employee filed for unemployment benefits. The employer contested the employee s claim and argued that she had committed disqualifying willful misconduct. The referee found that the employee did not steal inventory and ruled in her favor. Later, the employee brought a defamation suit against the employer for telling her co-workers that she had been fired for stealing. Based on the decision of the referee, the trial court granted the employee s motion in limine to prevent the employer from contesting the truth of her claim that she did not steal inventory. According to the trial court, the employer was collaterally estopped from defending the defamation suit by attempting to prove the employee had, in fact, stolen the merchandise. At the conclusion of the trial, the jury awarded the employee $1,490,000 in damages. Our Supreme Court disagreed with the trial court and held that the referee s findings did not preclude the trial court from making its own findings regarding the employee s guilt. The Supreme Court explained that [t]he substantial procedural and economic disparities between unemployment compensation proceedings and later civil proceedings negate the preclusive effect of a Referee s factual findings. Rue, 713 A.2d at 86. The Court held that the employer did not receive a full and fair opportunity to litigate its claim before the referee for two reasons. First, because practice before a referee is meant to be brief 8
and informal, the referee s hearing lacked the procedural safeguards of a civil jury trial. Second, the amount of money in controversy in the two proceedings was significantly different, with the employer having far less incentive to vigorously defend itself in the unemployment compensation matter. These two considerations are not present in the instant dispute. To begin, both disputes went before a Referee. Accordingly, both disputes were governed by the exact same procedural rules and safeguards. Similarly, there is no economic disparity between the two proceedings. Though the two proceedings involved different amounts of benefits, the gulf between the amounts was nowhere near as wide as the gulf in Rue. Because the Department was entitled to the same procedural safeguards before Referee Hess as it was before Referee Bengali, and because the amounts in controversy were not dramatically different, we conclude that the Department had a full and fair opportunity before Referee Hess to litigate the issue of whether Claimant was justified in missing the July 25 th REA session. Accordingly, because all the prongs of the collateral estoppel test are met, we reverse the decision of the Board. 4 MARY HANNAH LEAVITT, Judge 4 Because Claimant prevails on his first issue, we need not consider his second issue regarding Referee Bengali s refusal to accept his post-hearing brief. 9
IN THE COMMONWEALTH COURT OF PENNSYLVANIA Mark Newell, : Petitioner : : v. : No. 1798 C.D. 2014 : Unemployment Compensation Board : of Review, : Respondent : O R D E R AND NOW, this 22 nd day of May, 2015, the order of the Unemployment Compensation Board of Review dated September 5, 2014 in the above-captioned matter is hereby REVERSED. MARY HANNAH LEAVITT, Judge