Opinion
No. A04-781.
Filed February 8, 2005.
Appeal from the Department of Employment and Economic Development, File No. 36 04.
Paul A. Roedl, (pro se relator).
Lee B. Nelson, Department of Employment and Economic Development, (for respondent commissioner).
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2004).
UNPUBLISHED OPINION
Relator challenges the decision by the commissioner's representative that he was not eligible for temporary extended unemployment compensation, and argues that (a) income from unemployment should be considered wage credits for purposes of calculating base period wages because it is taxed by the state and federal governments; (b) the commissioner's representative has a conflict of interest because he is a state employee and the state is reducing positions due to a budget deficit; and (c) relator was denied due process when the representative found he was ineligible for the temporary extended unemployment compensation program. Because unemployment benefits are properly excluded from the computation of wage credits, no conflict of interest exists, and there is no evidence that relator was denied due process, we affirm.
FACTS
Relator Paul Roedl initially applied and was found qualified for unemployment benefits in February 2002. He exhausted those benefits in August of that year and applied for an extension of benefits under the federal Temporary Emergency Unemployment Compensation Act (TEUC) of 2002, Title II, Pub.L. 107-147, 116 Stat. 30 (2002). The extension was approved and relator collected TEUC benefits until October 2002 when he found employment with Andreasen Automotive. He lost his job with Andreasen in May 2003 and established a new unemployment account. A determination of benefits account was created, and set the base period on which his benefits were to be determined. Relator exhausted those benefits in early August 2003 and once again applied for TEUC benefits. This application was denied because relator had not accumulated sufficient wage credits in his account.
Relator appealed, arguing that his unemployment benefits should have been included in the calculation of wage credits because they are considered taxable income. After conducting a telephone conference hearing, an unemployment law judge affirmed. Relator appealed to the commissioner's representative, who held that relator's unemployment benefits are not wage credits, noting that "[w]hile they may be taxable for income tax purposes, unemployment benefits are not wage credits from covered employment for unemployment benefit purposes because unemployment benefit recipients are not performing services under the common law of employer-employee." Accordingly, the commissioner's representative held that relator's weekly and maximum unemployment benefit amounts had been correctly calculated. This certiorari appeal follows.
DECISION I.
On appeal, this court reviews the decision of the commissioner's representative rather than that of the unemployment law judge. Weaver v. Minn. Valley Labs., Inc., 470 N.W.2d 131, 133 (Minn.App. 1991). The standard of review in economic security cases is narrow. McGowan v. Executive Express Transp. Enters., Inc., 420 N.W.2d 592, 594 (Minn. 1988). The factual findings of the commissioner's representative are "viewed in the light most favorable to the decision, and if there is evidence reasonably tending to sustain them, they will not be disturbed." White v. Metro. Med. Ctr., 332 N.W.2d 25, 26 (Minn. 1983). On questions of law, this court is not bound by the commissioner's conclusions, but exercises its independent judgment. Markel v. City of Circle Pines, 479 N.W.2d 382, 384 (Minn. 1992).
Relator argues that, because he pays income taxes on them, his unemployment benefits should be considered "wage credits" for the purpose of determining both the weekly and maximum amounts of unemployment benefits available to him. Determining the meaning of "wage credits" presents a question of statutory construction. Statutory construction is a question of law fully reviewable by this court. Hibbing Educ. Ass'n v. Pub. Employment Relations Bd., 369 N.W.2d 527, 529 (Minn. 1985). Generally, unless otherwise defined, statutory terms "should be construed according to their plain and ordinary meaning." Nadeau v. Austin Mut. Ins. Co., 350 N.W.2d 368, 373 (Minn. 1984).
An applicant's weekly and maximum unemployment benefits are computed based upon the applicant's "wage credits." Minn. Stat. § 268.07, subd. 2(b), (d) (Supp. 2003). "Wage credits" are defined as "the amount of wages paid within an applicant's base period for covered employment." Minn. Stat. § 268.035, subd. 27 (2002). "`Wages' means all compensation for services. . . ." Minn. Stat. § 268.035, subd. 29 (Supp. 2003).
Relator contends that because he is required to pay income taxes on his unemployment benefits, those benefits must be included in the calculation of his wage credits. This argument is misguided; the obligation to pay taxes on income does not, in and of itself, bring that income within the rubric of wage credits. Instead, the relevant question is whether unemployment benefits are rightly considered compensation for services for covered employment. It is clear that they are not. "Service" is defined as "[e]mployment in duties or work for another . . . [;] [w]ork done for others as an occupation or a business[.]" The American Heritage College Dictionary 1246 (3d ed. 2000). Relator's unemployment benefits are not compensation for work done for others; they are payments from the government to assist relator because he lost his job. Moreover, collecting unemployment is not the performance of services or otherwise within the definition of "employment" and "covered employment." See Minn. Stat. § 68.035, subds. 12, 15 (2002) (defining "employment" and "covered employment"). Thus, the commissioner's representative did not err in holding that relator's unemployment benefits should not be considered in calculating his wage credits.
In the telephone conference hearing with the unemployment law judge, relator also suggested that while receiving unemployment benefits, he was employed by the state of Minnesota "as a collector, collecting unemployment."
II.
Relator next argues that because the commissioner's representative and the unemployment law judge are both employees of the state, and because the state is cutting back employee positions due to a budget deficit, both the commissioner's representative and the unemployment law judge have a stake in the outcome of the case, thus creating a conflict of interest. "Parties to an administrative proceeding are entitled to a decision by an unbiased decisionmaker." Buchwald v. Univ. of Minn., 573 N.W.2d 723, 727 (Minn.App. 1998), review denied (Minn. Apr. 14, 1998). This court must begin with the presumption that administrative officials operating in a judicial or quasi-judicial capacity are unbiased and act with honesty and integrity. Schweiker v. McClure, 456 U.S. 188, 195, 102 S. Ct. 1665, 1670 (1982); Withrow v. Larkin, 421 U.S. 35, 47, 95 S. Ct. 1456, 1464 (1975); Buchwald, 573 N.W.2d at 727. This presumption can be overcome by demonstrating a conflict of interest, but the party making the assertion bears the burden of proving that such a conflict exists. Schweiker, 456 U.S. at 196, 102 S. Ct. at 1670; Buchwald, 573 N.W.2d at 727.
Relator misunderstands the source of funding for unemployment benefits. Funds to pay unemployment benefits are maintained in a trust account that is separate from all other public moneys. Minn. Stat. § 268.194 (Supp. 2003) ("There is hereby established as a special state trust fund, separate and apart from all other public money or funds of this state, an unemployment insurance trust fund, that shall be administered by the commissioner exclusively for the payment of unemployment benefits."). Benefits are primarily financed by a dedicated tax on employers. See Minn. Stat. § 268.051 (Supp. 2003) (setting forth the state formula for computing employers' taxes); 26 U.S.C. § 3301 (2000) (setting forth the federal employment tax formula). The state pays into the fund in a manner similar to that of private employers. "[T]he state of Minnesota or its political subdivisions shall reimburse the trust fund the amount of unemployment benefits charged to its reimbursable account. . . ." Minn. Stat. § 268.052, subd. 1 (Supp. 2003). The state and its political subdivisions are "liable for reimbursements [in the] same percentage of the total amount of unemployment benefits paid as the percentage of wage credits from the [state or its subdivisions] is of the total amount of wage credits from all the applicant's base period employers." Minn. Stat. § 268.047, subd. 1 (Supp. 2003). Relator, who was previously employed in the private sector, has presented no evidence regarding to what extent his benefits may be financed by general state funds or any evidence indicating that denying relator benefits would in any way affect the state budget deficit.
The United States Supreme Court has held in a due process context that to successfully claim bias in an administrative adjudication one must "overcome a presumption of honesty and integrity in those serving as adjudicators" and show that the combination of investigative and adjudicative powers in the same individuals poses" a risk of actual bias or prejudgment."
Kennedy v. L.D., 430 N.W.2d 833, 835 (Minn. 1988) (quoting Withrow, 421 U.S. at 47, 95 S. Ct. at 1464).
Here, relator simply asserts a conflict of interest without supplying any supporting evidence or citing to examples of partiality. As a result, relator provides no basis for this court to consider reversal of the commissioner's representative's decision.
III.
Relator's final argument is that the decision of the commissioner's representative to deny TEUC benefits violated relator's right to due process. But relator does not elaborate regarding how his due-process rights were violated by this decision.
"Unemployment benefits are an entitlement protected by the procedural due process requirements of the fourteenth amendment." Schulte v. Transp. Unltd., Inc., 354 N.W.2d 830, 832 (Minn. 1984). Due process requires that a party receive adequate notice and an opportunity to be heard. Id. at 834. Notice is adequate if the content thereof is "reasonably calculated to fairly apprise the prospective claimant that an adverse claim is asserted." Schwartz v. First Trust Co. of St. Paul, 236 Minn. 165, 170, 52 N.W.2d 290, 294 (1952).
Here, relator appealed the calculation of his unemployment benefits to both an unemployment law judge and the commissioner's representative. There is no indication in the record that he was denied adequate notice or an opportunity to be heard. Accordingly, relator has not demonstrated that his right to due process has been violated.