NO. 91-603
IN THE SUPREME COURT OF THE STATE OF MONTANA
1993
BARBARA J. SCHNEEMAN,
Petitioner and Appellant,
THE STATE OF MONTANA, DEPARTMENT
OF LABOR AND INDUSTRY, and
NORTHERN PLAZA LIMITED PARTNERSHIP,
a Colorado limited Partnership,
d/b/a THE RADISSON NORTHERN HOTEL,
Respondent and Respondent.
APPEAL FROM: District Court of the Thirteenth Judicial District,
In and for the County of Yellowstone,
The Honorable G. Todd Baugh, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Timothy J. Whalen; Whalen & Whalen, Billings,
Montana
For Respondent:
Daniel B. McGregor, Department of Labor and
Industry, Helena, Montana
Submitted on Briefs: May 14, 1992
Decided: March 10, 1993
Filed:
Justice Karla M. Gray delivered the Opinion of the Court.
Appellant Barbara Schneeman (Schneeman) appeals from a
Memorandum Order of the Thirteenth Judicial District, Yellowstone
County, which affirmed a Board of Labor Appealst determination that
she was ineligible for unemployment compensation benefits. We
affirm.
Schneeman raises the following procedural issues on appeal:
Did the District Court improperly deny Schneeman an
opportunity to present the appeal of her unemployment insurance
claim:
1) By refusing to allow her to engage in discovery and
present evidence in connection with hex constitutional and state
law claim of entitlement to a fair and impartial hearing and
decision on her unemployment claim; and
2) By ruling on her petition for judicial review without
giving her an opportunity t a brief and argue the merits of that
portion of her appeal?
Because the issues raised by Schneeman are procedural in
nature, only a short recitation of the underlying facts is
necessary. Schneeman began working for the Radisson Northern Hotel
as an account executive in the marketing department in August 1989.
She was eventually assigned responsibility for the state and
federal government accounts and the community association account.
Rer initial performance evaluations indicated that she was
performing satisfactorily. However, problems developed between
Schneeman and her fellow employees and supervisors. Her supervisor
2
eventually determined that she should undergo a "retraining"
process during which her actions would be closely monitored.
Before the process began, Schneeman terminated her employment
effective June 6, 1990, in response to what she considered a
tlconstructive
termination of [her] employment." Her supervisor did
not request that she leave or discharge her; her position remained
available to her at the time she terminated her employment.
Schneeman filed a Claimant's Discharge Statement with the
local office of the Benefits Bureau of the Unemployment Insurance
Division of the Department of Labor and Industry. The deputy
awarded Schneeman benefits after finding that her "separation [from
employment] was with good cause attributable to the empl~yrnent.~'
Her employer appealed to the appeals referee, who reversed the
deputy. On appeal, the Board of Labor Appeals (Board) adopted as
its own the findings and decision of the referee. The District
Court subsequently affirmed the Board's decision.
Did the District Court err in refusing to allow discovery and
an evidentiary hearing?
Before the District Court, Schneeman sought to conduct
discovery and present evidence in support of the following claims
which she alleged in her petition for judicial review:
8. [Tlhe actions of the Board violated the
constitutional rights of the petitioner to due process of
law:
9. The history of decisions of the Appeals Referee in
this case support a violation of Section 39-51-305, MCA
providing for the appointment of an impartial Appeals
Referee for the necessary and proper administration of
the unemployment insurance laws;
...
conceding that these issues were not raised in any earlier stage of
the process, Schneeman argues that she could not have raised them,
especially the due process claim, at the agency level. She argues
that neither the appeals referee nor the Board had jurisdiction to
pass on constitutional questions or whether their actions satisfied
the requirements of 5 39-51-305, MCA. She relies on 9 2-4-703,
MCA, a provision of the Montana Administrative Procedure Act
(MAPA), which allows for the presentation of additional evidence
during judicial review of a contested case if the evidence is
material and there is a good reason for failure to present it in
the proceedings before the agency.
In City of Billings v. State Bd. of Labor Appeals (1983), 204
Mont. 38, 663 P.2d 1167, this Court held that the provisions of
MAPA do not apply to judicial review of a claim for unemployment
insurance benefits before the Board of Labor Appeals. In detailing
the reasons MAPA does not apply, we noted that by its own terms
MAPA is inapplicable where, as with the unemployment insurance
laws, a complete procedure exists for handling claims, including a
procedure for judicial review. Section 2-4-107, MCA. We have
followed and relied on City of Billinqs in numerous cases. See
Decker Coal Co. v. Employment Sec. Div. (1983), 205 Mont. 1, 667
P.2d 923; Gypsy Highview Gathering System, Inc. v. Stokes (1986),
221 Mont. 11, 716 P.2d 620; Zimmer-Jackson Assoc., Inc. v.
Department of Labor and Indus. (1988), 231 Mont. 357, 752 P.2d 1095
(citing Gygsv Hiqhview) . See also Ward v. Johnson (1990), 242
Mont. 225, 790 P.2d 483 ( 5 39-51-241O(5), MCA, limits scope of
judicial review of Board of Labor Appeals decision).
Schneeman relies on Slayter v. Employment Sec. Div. (19841,
208 Mont. 166, 676 P.2d 220, to argue that MAPA does apply to
judicial review of an unemployment insurance claim, and that she is
entitled to present evidence before the District Court pursuant to
5 2-4-703, MCA. It is true that we departed from City of Billinqs
in Slavter in stating that the judicial review section of MAPA, 5
2-4-704, MCA, Itelaboratest1 the judicial review provisions of the
on
unemployment insurance laws. Slavter, 676 P.2d at 222. We did
not, however, go so far as to extend any other provisions of MAPA,
including 5 2-4-703, MCA, to judicial review of an unemployment
insurance claim. Therefore, we do not find Schneeman's argument
persuasive. Furthermore we expressly overrule that portion of
Slayter that states that MAPA elaborates on the standard of
judicial review of a claim for unemployment insurance benefits.
Moreover, notwithstanding the fact that MAPA does not apply,
Schneeman was not entitled to discovery or an evidentiary hearing
for other reasons. We first address Schneeman's claim that the
requirements of 3 39-51-305, MCA, were not satisfied. Section 39-
51-305, MCA, entitles Schneeman to an impartial appeals referee:
Department to appoint appeals referees. To hear and
decide disputed claims, the department shall appoint such
impartial salaried appeals referees as are necessary for
the proper administration of this chapter in accordance
with 39-51-304. No person shall participate on behalf of
the department in any case in which he is an interested
party. The department may designate alternates to serve
in the absence or disqualification of an appeals referee.
She contends that the referee who heard her claim was not impartial
and that she was entitled to pursue discovery and present evidence
on that issue during her judicial review proceeding in the District
Court. However, Montana law and the administrative rules
promulgated by the Department of Labor and Industry provided
Schneeman with the means of addressing her claim of bias long
before she reached the district court level.
Title 24, Chapter 11 of the Administrative Rules of Montana
pertains to the Unemployment Insurance Division. More
specifically, 24.11.319, ARM, sets forth a procedure for the
disqualification of an appeals referee pursuant to 5 2-4-611, MCA.
Section 2-4-611, MCA, provides in pertinent part:
Hearing examiners - ... disqualification of hearing
examiners and agency members.
(4) On the filing by a party, hearing examiner, or
agency member in good faith of a timely and sufficient
affidavit of personal bias, lack of independence,
disqualification by law, or other disqualification of a
hearing examiner or agency member, the agency shall
determine the matter as a part of the record and decision
in the case. The agency may disqualify the hearing
examiner or agency member and request another hearing
examiner pursuant to subsection (2) or assign another
hearing examiner from within the agency. The affidavit
must state the facts and the reasons for the belief that
the hearing examiner should be disqualified and must be
filed not less than 10 days before the original date set
for the hearing.
This procedure provides a claimant with an opportunity to raise and
support the issue of claimed bias of an appeals referee; it also
provides a means by which the issue can be determined timely and on
the record. Schneeman failed to raise the issue of the referee's
bias as required, and in the absence of a timely request for
disqualification, the matter could not properly be raised or
addressed in the District Court. In re Sorini (1986), 220 Mont.
459, 462, 717 P.2d 7, 9.
We now address Schneemanls claim that the Board was not
impartial and, as a result, her right to due process was violated.
The requirements of due process apply to administrative agencies.
See Montana Power Co. v. Public Serv. Comm'n (1983), 206 Mont. 359,
671 P.2d 604. A judicial body, not an administrative body, is the
proper forum to decide constitutional questions, Jarussi v. Board
of Trustees (l983), 204 Mont. 131, 135-136, 664 P.2d 316, 318,
especially the constitutionality of its own actions, Hays v. State
Dept. of Business Reg. (Fla. Dist. Ct. ~ p p .1982), 418 So.2d 331,
332. However, we have stated that "where the statutes provide for
judicial review of a particular order made or agreed upon by a
prejudiced commissioner there is no denial of due process."
Cascade County Consumers Assoc. v. Public S e n . Commln (1964), 144
Mont. 169, 191, 394 P.2d 856, 867, cert. denied, 380 U.S. 909
(1965). Thus, even assuming a lack of impartiality by members of
the Board, the availability of judicial review of the Board's
decision mandates our conclusion that Schneeman has not been denied
due process.
We also note in this regard that Schneeman does not challenge
the District Court's determination that there was substantial
credible evidence to support the determination of the Board. Her
claims of bias at the agency level are irrelevant where the
District Court independently determines there was substantial
credible evidence t o support the denial of benefits. See Cascade
County Consumers Assoc.
We hold that the District Court did not err in refusing
Schneeman's request to conduct discovery and hold an evidentiary
hearing.
I1
Did the District Court deny Schneeman an opportunity to argue
the merits of her petition for judicial review?
At the time she filed her petition, schneeman did not file a
brief on the merits of t h e issues contained therein. Nor did she
file a brief in support of her claim that the Boardfs decision was
not supported by substantial credible evidence at any other time
during the proceedings. Her only brief related to her request for
discovery and an evidentiary hearing. The District Court s
Memorandum Order determined all of the issues before it. In
addition to denying her request f o r discovery and a n evidentiary
hearing, the c o u r t determined, after an examination of the record,
that substantial credible evidence existed to support the Board's
determination. Schneeman claims that the District Court denied her
the opportunity to argue the merits of the various allegations
contained in her petition because it ruled on those at the same
time it ruled on her request for discovery and an evidentiary
hearing, before she had the opportunity to brief the other issues.
We conclude that Schneemanls claim fails for two reasons.
First, she had ample opportunity to address the issues she raised.
Schneeman filed her petition for judicial review on November 30,
1990. On February 4, 1991, the court issued a briefing schedule
requiring Schneeman to file her brief in support of her petition by
April 26, 1991, with a response by the State due by May 17, 1991,
and her reply by May 28, 1991. Schneeman did not file her brief as
ordered, but now asserts that failure was due to her attorney's
presence at the legislative session. However, she did not request
a modification of the briefing schedule at any time although she
had almost three months notice of the briefing deadlines. The State
timely filed its brief in opposition to her petition pursuant to
the court's briefing schedule.
According to Schneeman, on June 3, 1991, over a month after
her initial brief was due, the court's law clerk requested a brief
on the issues of discovery and an evidentiary hearing. That brief
was due by June 28, 1991, with the State's brief due ten to twenty
days later. Schneeman argues that this constituted a change in the
original briefing schedule. However, nothing in the record
indicates that Schneeman requested, or that the court anticipated
or granted, a change in the original schedule.
During the ten months between the time the District Court
issued its original briefing schedule and the time it entered its
Memorandum Order, Schneeman neither requested a modification or
extension of the original briefing schedule nor requested oral
argument as specifically provided for in the briefing schedule.
She cannot now complain that her failure to brief or argue is the
court's responsibility rather than her own.
Schneeman also appears to argue that the fact that she filed
an amended petition after the court set the briefing schedule
nullified the original schedule. This contention is without merit.
The amended petition only identified her employer as a party. Her
employer was not served with the amended petition nor did it appear
before the District Court. The amended answer contained nothing
new.
Schneeman's claim that she was denied an opportunity to argue
the merits of her petition also fails for another reason. She
ultimately wanted the District Court to determine that substantial
credible evidence did not exist to support the Board's
determination that she was not entitled to unemployment benefits.
Schneeman appears to argue to this Court that she was waiting on
the District Court's ruling on her right to an evidentiary hearing
before she submitted argument on this ultimate issue. However, her
argument to the District Court on the issue of lack of record
support for the Board's determination did not hinge on anything she
might discover; that issue was to be decided on the record made
before the agency. Therefore, she could have presented her
argument on this issue without delay. In any event, the District
Court examined the record and determined that it contained
sufficient evidence to support the Board's decision. As noted
above, Schneeman does not assert error in this regard.
We hold that the District Court did not deny Schneeman an
opportunity to argue the merits of her petition for judicial
review.
Affirmed.
We concur:
d
WA
chief '~ustice