City of Billings v. State Board of Labor Appeals

No. 82-106

I N TIIE SUPREME COURT OF THC STATE OF M N A A
O T N

1983

CITY O BILLINGS,
F

P e t i t i o n e r and R e s p o n d e n t ,

STATE O ;lONTANA BOARD O LABOR APPEALS,
F F
M N A A STATE DEPARTMENT O LABOR AlJD
O T N F
IiJDUSTRY AND 325 MEMBERS O LOCAL # 1 9 0 , e t a l . ,
F

R e s p o n d e n t s and A p p e l l a n t s ,

and

DECKER COAL COMPANY,

Intervenor.

Appeal from: D i s t r i c t Court of t h e T h i r t e e n t h J u d i c i a l D i s t r i c t ,
I n and f o r t h e County o f Y e l l o w s t o n e ,
The 13onorable R o b e r t H . W i l s o n , J u d g e p r e s i d i n g .

Counsel of Record:

For Appellants:

H i l l e y & L o r i n g ; E m i l i e L o r i n g , G r e a t F a l l s , Ploiitana
R. S c o t t C u r r e y , D e p t . o f L a b o r , H e l e n a , Montana

For Respondent:

Kenneth D. P e t e r s o n , B i l l i n g s , Montana

For I n t e r v e n o r :

Holland & H a r t ; Carey E. M a t o v i c h , B i l l i n g s , Montana

Submitted: March 2 4 , 1983

Decided : May 1 0 , 1 9 8 3

Filed;
MAY I r: 1983

Clerk
Mr. Justice John C. Sheehy delivered the Opinion of the
Court.

Appellants (claimants) appeal from a decision of the
District Court, Thirteenth Judicial District, Yellowstone
County, which in effect held that the claimants were not
entitled to unemployment insurance benefits.
We find two principal issues arise in this appeal. The
first is procedural (raised by us) , whether MAPA (Montana
Administrative Procedure Act) applies to agency and court
handling of claims for unemployment insurance benefits (for
brevity "claims") . The second issue is substantive, whether
a stoppage of work occurred which disqualified claimants for
benefits.
We hold that MAPA does not apply to the determination of
such claims; and that the claimants in this case are entitled
to unemployment insurance benefits.
On April 24, 1980, 379 employees of the City of Billings
went on strike. The strike was settled on May 10, 1980, and
the striking employees returned to work on May 12, 1980.
During the strike, 325 employees filed claims. A deputy of
the Department of Labor and Industry made an initial
determination that the claimants were not eligible for
unemployment insurance benefits because a stoppage of work
occurred during the strike. (Section 39-51-2305, MCA.)
The adverse decision of the deputy was appealed by the
claimants to an appeals referee who sustained the deputy's
decision, finding that a work stoppage existed. The
claimants appealed the decision of the appeals referee to the
Roard of Labor Appeals. After reviewing the record before
the appeals referee, and hearing argument, the Roard reversed
the decision of the appeals referee, finding that there was
not a sufficient work stoppage to disqualify the claimants.
The decision of the Board of Labor Appeals in turn was
appealed by the City of Billings to the District Court.
After receiving briefs and hearing oral argument, the
District Court reinstated the decision of the appeals
referee.
Thereafter the District Court entered judgment holding
that there was a work stoppage in the City of Billings as
contemplated by law due to the strike, and that the claimants
were disqualified from receipt of unemployment insurance
benefits for the period of the strike because of the work
stoppage.
The judgment of the District Court has been appealed by
the claimants to this Court.
DOES MAPA APPLY TO CLAIMS FOR UNEMPLOYMENT INSURANCE
BENEFITS ?
We note that the statutory scheme at the agency level
for handling unemployment insurance benefits claims has been
the same with slight variations since the Unemployment
Insurance Law was first enacted in 1937 (Ch. 137, 5 6, Laws
of Montana (1937)). Since its enactment, the law has
provided for an initial determination of claims by a deputy,
for an appeal from the deputy to an appeals tribunal or
appeals referee, and for an appeal from the appeals tribunal
or referee to the State Unemployment Compensation Commission,
and since executive reorganization in 1971, to the Board of
Labor Appeals. The original enactment (Ch. 137, S 6, Laws of
Montana (1937)) also provided for District Court review from
the [commission's] determination and provided that in the
District Court, the findings of the commission as to facts,
if supported bv the evidence and in the absence of fraud,
were deemed to be conclusive, and the review jurisdiction of
the District Court was confined to questions of law.
There is contained within the Unemployment Insurance Law
itself, without regard to MAPA, a complete procedure for
hearing and determining disputed claims for unemployment
insurance benefits, beginning with the deputy and ending in
the Montana Supreme Court.
Under the Unemployment Insurance Law, the initial
determination of a claim is to be made by a deputy of the
Department of Labor and Industry. Section 39-51-2402, MCA.
An adverse decision by the deputy may be appealed to an
appeals referee. Section 39-51-2402 (4), MCA. After a
hearing, the appeals referee is required to make findings and
conclusions promptly and on the basis thereof affirm, modify,
or reverse the deputy's determination. Section 39-51--2403,
MCA .
Any interested party dissatisfied with the decision of
an appeals referee may appea.1-to the Board of Labor Appeals.
Section 39-51-2404, MCA. An appeal from the Board's decision
to the District Court may be had under the provisions of
section 39-51-2410, MCA. The decision of the District Court
may be appealed to the Supreme Court of Montana in like
manner as other civil cases. Section 39-51-2410(6), MCA.
In this case, however, the District Court applied the
provisions of MAPA, particularly section 2-4-621, MCA,
instead of applying the Unemployment Insurance Law. In
reversing the holding of the Board of Labor Appeals, the
District Court stated here:
"The Board of Labor Appeals is held to the same
standard of review as is this Court. The Board
cannot. substitute its judgment for that of the
 appeals referee as to the weight of the evidence on
questions of fact. The board may reverse or modify
the decision of the appea.1~ referee only if
substantial rights of the parties have been
prejudiced because such administrative findings and
conclusions are clearly erroneous in view of the
reliable, probative and substantial evidence on the
whole record. (Yanzick v. School District, February
1, 1982, 39 St.Rep. 191).'
I

Thus the District Court determined, and the City here
contends, that the Board of Labor Appeals could not reject or
modify the findings of fact of the appeals referee unless the
Board first determined from a review of the complete record
that the findings of fact of the appeals referee were not
based upon competent, substantial evidence or that the
proceedings on which the findings were based did not comply
with essential requirements of law.
There is no statutory basis in the unemployment
insurance law upon which the District Court could have relied
in placing such a fence around the power of the Board of
Labor Appeals to review a decision by an appeals referee.
Section 39-51-2404, MCA, provides:
"Appeal to - Board.
the Any interested party
dissatisfied with a decision of an appeals referee
is entitled to appeal to the board. The department
will promptly transmit all records pertinent to the
appeal to the board. When a decision is rendered.
by the board with copies of such decision to all
interested parties, including the department, that
decision shall become final unless an interested
party requests a rehearing or initiates judicial
review . . ."
There is no limitation upon the Board's power of review in
that paragraph. We are guided., however, by companion
statutes which determine the function of the board. In
section 39-51-310, MCA, it is said:
"Function of Board. The board shall act in a
quasi-judicTal capacity for the hearing of disputes
concerning the administration of Montana's
unemployment insurance laws."
 Under the Executive Reorganizati.on Act, the Roard of
Labor Appeals is a quasi-judicial board. Section 2-15-1704,
MCA. The functions of a quasi-judicial board are defined in
section 2-15-102 (9), MCA, and they include:
"'Quasi-judicial function' means an adjudicatory
function exercised by an agency, involving the
exercise of judgment and discretion in making
determinations in controversies. The term includes
but is not limited to the functions of
interpreting, applying, and enforcing existing
rules and laws;. . .
determining rights and
interests of adverse parties; evaluating and
passing on facts;. ..
adopting procedural rules;
holding hearings, and any other act necessary to
the performance of a quasi-judicial function."
The holding of the District Court here as to the review
power of the Board of Labor Appeals stripped the Board of its
quasi-judicial function. Obviously, by statute, the Roard of
Labor Appeals, in determining disputed claims, acts in a
quasi-judicial capacity since it is a. quasi-judicial board.
Section 39-51-310, MCA. The fundamental purpose of the
Supreme Court ascertain and give effect possible
the intention of the legislature in construing the
Unemployment Insurance Law (McCarthy v. Unemployment
Compensation Commission (1963), 143 Mont. 134, 387 ~ . 2 d
438)). We therefore determine that the Board of Labor
Appeals is not confined in its review of disputed benefits
claims to the restrictions imposed by the District Court in
this case.
As a quasi-judicial board, the Board of Labor Appeals
may consider not only the record made before the appeals
referee, but new evidence produced at the board hea-ring.
Manifestation of this is found in section 24.7.306,
~dministrative Rules of Montana (A.R.M.), which provides:
"(1) The board shall include in the record and
consider as evidence all records of the Division
that are material to the issues. The board shall
 also consider any new material evidence introduced.
at the board hearing by interested pa.rties. As
soon as possible after the hearing, the board shall
render a written decision which shall state the
findings of fact and the reasons for the decision.
Copies of such decision shall be mailed to all
interested parties."
It is easy to demonstrate tha.t MAPA does not apply to
claims for unemployment insurance benefits. To begin with,
FiPA itself excepts from its provisions procedures imposed by
other statutes or otherwise recognized law. Section 2-4-107,
MCA. Since there is a complete procedure for the handling of
claims under the Unemployment Insurance Law, MAPA by its
terms does not apply.
Moreover, an examination of the underlying statutes and
provisions in MAPA for hearing contested cases will show that
the MAPA provisions are unworkable when an attempt is made to
apply them to claims for unemployment insurance benefits.
MAPA is silent as to whether a. deputy should make an original
determination of a claim. In a contested claim under MAPA, a
hearing examiner may be appointed (section 2-4-611, MCA) who
must proceed to a hearing (section 2-4-612, MCA). In a
contested case, where the ma.jority of the agency officials
who must make the final decision who have not heard the case,
there must be a "proposal for a decision" by the hearing
examiner. Section 2-4-621, MCA. The District Court relied
on section 2-4-621, MCA, in holding that the Board of Labor
Appeals may not reject or modify the appeals referee decision
unless the Board determined "that the findings of fa.ct were
not based upon competent substantial evidence." However,
section 2-4-621, MCA, can only apply when an agency is
sitting in review of a "proposal for decision" by a hearing
examiner. In this case, the decision of the appeals referee
was not a "proposal for decision;" it was a definitive
holding adverse to the claimants, which if not appealed,
would have become final in its effect.
Actually, it is the District Court itself which is
strictly limited under the unemployment insurance law in its
review of the decision of the Board of Labor Appeals.
Section 39-51-2410(5), MCA, provides:
"In any judicial proceeding under 39-51-2406
through 39-51-2410, the findings of the board as to
facts, if supported by evidence and in the absence
of fraud, shall be conclusive and the jurisdiction
of said court shall be confined to questions of law
... 11

Here the District Court, in reviewing the Board's
decision, did not follow the provisions of section
39-51-2410(5), MCA, by determining if the findings of the
Board were supported by evidence. Instead, it applied an
incorrect interpretation of statutory law to determine that
the Board had no power to overturn the fact-findings of the
appeals referee. Plainly, this constituted error.
DID A STOPPAGE OF WORK OCCUR WHICH DISQUALIFIEE CLAIMANTS?
In appeals to this Court, when we determine that the
District Court applied an incorrect interpretation of law or
overlooked a statute in determining facts, we ordinarily,
instead of determining the ultimate conclusion ourselves,
remand to the District Court for further proceedings under
the correct interpretation of law or statute. Two factors
militate against such action here.
First, it is the intent of the Unemployment Insurance
Law that claims for benefits be given a.ccelerated judicial
attention. The District Court is required to hear appeals
from the Board of Labor Appeals in a summary manner, giving
precedence to all other civil cases except for those arising
under the Workers' Compensation law. Section 39-51-2410 (5),
MCA. Obviously, the legislature intended that claims for
unemployment benefits be given the quickest possible judicial
determination.
Secondly, the District Court in this case did not end
with determining that the Board of Labor Appeals had no power
to set aside the fact-findings of the appeals referee. The
District Court went further and concluded that the decision
of the appeals referee (not the Board) was not clearly
erroneous and that there was substantial evidence in the
record to support the decision of the appeals referee. Thus
the District Court has predetermined an issue which
ordinarily we would remand for determination. The judgment
of the District Court determined that "there was a work
stoppage" which disqualified the claimants from benefits.
The Board of Labor Appeals had determined that "the evidence
overwhelmingly establishes that within the meaning of the
term 'stoppage of work'. . . there was no significant
reduction in the ultimate services performed to the residents
of Billings. " The appeal by the claimants to this Court
squarely places upon us the duty to determine if the findings
of the Board are supported by evidence as set forth in
section 39-51-2410(5), MCA, and if so, whether the Board
properly applied the law to those facts.
Essentially, the Board of Labor Appeals determined that
during the short period of the strike, supervisory personnel
of the City were able to take over the governmental services
provided by the City to the public and that such services
were not reduced in any substantial degree.
The Board found "the evidence establishes that the
critical government functions of providing police and fire
protection, sewage disposal, and water, were not diminished
in any significant amount, if at all, but such services were
furnished to the public without any significant interruption
or diminution no matter how they may have been furnished."
We find the record supports the board in those findings.
With respect to sewage, there were garbage collection
points set up to which residents had to walk or carry
garbage, but apart from that there was no pile-up of garbage
on the streets in the manner that other cities have suffered.
The Board further found "the evidence does establish
that there was some delay in patching holes in the streets
and some delay in performing work in the public parks,
however, there is not any evidence to establish that the
public's enjoyment of the parks was in any way interrupted or
reduced or that on a long-term basis, there was any
diminution in the maintenance and upkeep thereof." Our
search of the record reveals nothing to negate these
findings.
Going on, the Board found "although there was some
reduction in the bus service, the evidence supports the
finding and it is the finding of this Board that
approximately 90 percent of the passengers that are
ordinarily served in a period other than a strike were served
during the course of the strike." The record shows that
although the number of bus runs were reduced from 11 each day
to 7 each day, those runs that were maintained during the
strike were the runs that a-ccomodated rush-hour traffic;
therefore the 9 0 percent figure found by the Board is valid
and was testified to in the record.
Next the Board found, "there was no diminution in the
services furnished to the public insofar as the functioning
of the cemetery is concerned." The finding states the
record.
The Board found "the evidence further establishes that
upon the return to work even by office personnel, there was
no backlog of paperwork to be performed upon their return.
We find this is undisputed in the record.
The Board found "although it is suggested by the appeals
referee that there had to be a stoppage of work where there
are this many people in the governmental agency out on a
labor dispute, the conclusion is equally fair to say,
considering the short period of the strike, that the
supervisory personnel without people to supervise were
capable of carrying on these functions." The statements by
the appeals referee and by the Board are merely
argumentative.
Again the Board found "the evidence further establishes
that many of the people who are working for the City are in a
caretaker or watchtaker type of function and there were no
emergencies that came about and caused disruption to the
service to the public during the short period of the strike."
These findings are supported. There were several kinds of
jobs which required routine checking of machines or gauges,
water tests, greasing, oiling and patching and other such
functions which, while postponed, or performed partially by
supervisory personnel, resulted in no disruption of service
to the public. At least the record does not show any such
disruption.
The City had argued before the appeals referee, based
upon testimony from its management personnel, that the
man-hours (the City's expression) available to it had been
reduced by the strike. The City supplied lists of large
reductions of work hours performed in its civil departments
to show there was a stoppage of work. The appeals referee
adopted the City's contentions in this regard. The Board of
Labor Appeals rejected that methodology saying that the
percentages were not supported in any substantial degree when
looked upon from the standpoint of the services furnished to
the public by the government of the City of Billings.
Since we find that the essential facts found by the
Board of Labor Appeals are supported by substantial evidence
in the record, the question that remains to us is did the
Board properly determine that there was not a "stoppage of
work" as that term is used. in the unemployment insurance law.
The applicable statute is section 39-51-2305(1), MCA.
"Effective April 1, 1977, an individual shall be
disqualified for benefits for any week with respect
to which the department finds that his total
unemployment is due to a stoppage of work which
exists because of a labor dispute at the factory,
establishment, or other premises at which he is or
was last employed . . ."

In examining the statute, note that the inclusion of the
phrase "stoppage of work" by the legislature is not intended
to be a synonym for "strike," or "lockout." If the
legislature meant that a striking or locked out employee
would be disqualified for benefits it had only to eliminate
the phrase "stoppage of work" so as to make the section read
that the individual is disqualified for benefits if his total
unemployment is "because of a labor dispute at the factory."
When the legislature inserted the words "due to a stoppage of
work," it meant that the factors to be considered in
connection with disqualification meant more than that the
individual claimant was on strike, or locked out in a labor
dispute. There may be a labor dispute, and yet no stoppage
of work.
Montana has aligned itself with the majority of courts
holding on the question that the phrase "stoppage of work"
refers to the employers' operations rather than to the
individual employee's work. Continenta.1 Oil Company v. Board
of Labor Appeals (1978), 178 Mont. 143, 582 P.2d 1236. This
so-called "American rule" allows strikers to collect benefits
so long as their activities have not substantially curtailed
the productive operations of their employer. See New York
Telephone Company v. New York Department of Labor (1979), 440
U.S. 51-9, 99 S.Ct. 1328, 59 L.Ed.2d 553, note 24; Hawaiian
Telephone Company v. Hawaii Department of Labor and
Industrial Relations (D. Haw. 1976), 405 F.Supp. 275,
287-288, cert.den. 435 U.S. 943, 98 S.Ct. 1522, 55 L.Ed.2d.
539.
Application of the American rule under statutes similar

to Montana's stoppage of work provision brought about the
constitutional question of whether the Supremacy Clause of
Art. VI of the United States Constitution was contravened by
disrupting the operation of federal labor policy requiring
state neutrality in the collective bargaining process. The
question is answered in the Ninth Circuit by virtue of the
decision of Hawaiian Telephone Company v. State of Hawaii
(9th Cir. 1980), 614 F.2d 1197, cert.den. (U.S.) 100 S.Ct.
2965, 64 L.Ed.2d 840 (1981). In that case it was held that
federal policy did not preempt the adoption of a work
stoppage statute in the state of Hawaii.
As the federal court noted in Hawaiian Telephone, supra,
the wisdom or even the fairness of such economic legislation
is not before us, nor do we pass upon its merits. The
determination of legislative economic policy is for the
legislature, not us. What the legislature has granted, it
can take away. We note that after the New Mexico Supreme
Court had interpreted the phrase "stoppage of work" to mean a
substantial curtailment of the employers productive
operations (Albuquerque Express v. Employment Security
Commission (1975), 88 N.M. 596, 544 P.2d 1161), New Mexico
amended its laws to eliminate the work stoppage language.
N.M. Stat. Annot. 51-1-7(D) (1979).
Even so, courts have divided on how to apply the
"substantial curtailment" interpretation of stoppage of work.
See 61 A.L.R.3d 693. The case we find nearly analogous to
the case at bar is Cumberland and Allegheny Gas Company v.
Hatcher (W.V. 1963), 130 S.E.2d 115. In that case, a gas
company claimed an 80 percent curtailment in its overall
activities based on the proportionate relation of the number
of employees affected by the lockout to the total number of
employees of the company in all categories including
supervisory, managerial and clerical employees. The gas
company claimed that during the period no work was done on
meter changes, there was no handling of routine service
orders, no domestic meter-reading work was performed, no work
was performed on constructing new lines, or the renewal of
old lines, no meter tasks were performed, no routine
inspection work, installation of parts on customer's
appliances, nor houseline plumbing was performed. All
maintenance and building work ceased during the entire period
and all engineering and design work ceased. Nevertheless,
the West Virginia Court found that there was no substantial
showing of unfulfilled customer demands or unfulfilled
requirements in those categories during the lockout, nor any
accumulated backlog of work or services requiring overtime or
additional personnel after the lockout, nor any reduction in
the service and delivery of gas to the company's customers.
Moreover, the West Virginia Court saw no distinction between
a pub1i.c utility supplying natural gas to its customers and
other types of employers. In the same manner, we see no
distinction in applying the stoppage of work American rule to
a governmental employer, as distinguished from any other type
of employer.
West Virginia a.lso noted the same kind of problem that
we have in the case at bar:
"A determination of the existence or nonexistence
of a stoppage of work in a case of this nature must
necessarily depend upon the facts of each case. It
cannot be determined solely on the basis of the
proportionate number of employees affected. It is
conceivable that in some situations, a strike or
lockout affecting relatively few employees would
produce a stoppage of work if such men were
employed in the performance of duties of such vital
nature that their unemployment would result in a
substantial curtailment of the normal overall
activities or operations of the employer. On the
other hand, in other situations, the unemployment
of a proportionately greater number of employees
might have no substantial effect on the normal
activities of the employer. In some situations, a
substantial curtailment of work in a single
category or department of the employer's operations
might be of such vital a nature as to result in a
substantial curtailment of the employer's overall
activities if all categories or departments were of
an interdependent nature; while, conceivably, in
another and different situation, a complete
cessation of work in a single category or
department of some incidental or minor nature might
produce no appreciable curtailment of the overall
operations of the employer."
We hold therefore, that the Board of Labor Appeals in
this case correctly determined the application of the phrase
"stoppage of work." The City of Billings is engaged in
delivering municipal government services to persons and
property within its jurisdiction. In objecting to the claims
of the claimants, it has failed to establish a substantial
curtailment of its normal operations in delivering such
governmental services. It cannot be said, therefore, as a
legal proposition under the Unemployment Insurance Law, that
there was a stoppage of work brought about by the strike. We
hold that the Board of Labor Appeals correctly applied the
correct rule of law to the findings of fact which it made on
substantial evidence.
Accordingly, the judgment of the District Court is
reversed and the order of the Board of Labor Appeals is
reinstated.

We Concur:

Chief Justice

Justices
Mr. J u s t i c e J o h n Conway H a r r i s o n c o n c u r r i n g :

I concur, b u t d e s i r e t o d r a w o n e p o i n t t o t h e a t t e n t i o n of

the legislature,. as was done in New Mexico in the case of
A l b u q u e r q u e E x p r e s s v. Employment S e c u r i t y Commission ( 1 9 7 5 ) , 8 8

N.M. 596, 554 P.2d 1161. The fact t h a t we have a r r i v e d at a
s i t u a t i o n t o the law p r e s e n t e d t o us where i n i n t e r p r e t i n g the

p h r a s e "work s t o p p a g e " w e may w e l l be c r e a t i n g e c o n o m i c p r o b l e m s

f o r a l l employers.
It is q u i t e p o s s i b l e and f o r e s e e a b l e , t h a t i n a case w h e r e

t h e N a t i o n a l Guard is c a l l e d d u r i n g a work s t o p p a g e to p e r f o r m
t h e s e r v i c e s of m u n i c i p a l or s t a t e e m p l o y e e s , t h a t t h e r e c o u l d be
a f i n d i n g by t h e Board o f L a b o r A p p e a l s t h a t t h e r e was no sub-

s t a n t i a l c u r t a i l m e n t of normal o p e r a t i o n s i n d e l i v e r i n g govern-

mental services. I c a n n o t b e l i e v e t h a t s u c h was t h e l e g i s l a t i v e

i n t e n t i n g i v i n g t o t h e Board o f L a b o r A p p e a l s s u c h p o w e r .
Mr. C h i e f J u s t i c e Frank I . H a s w e l l , d i s s e n t i n g :

I would v a c a t e t h e judgment of t h e D i s t r i c t C o u r t and

remand t h i s c a s e f o r d e c i s i o n under t h e c o r r e c t s t a n d a r d o f
review. I n m v i e w , t h e m a j o r i t y o f t h i s C o u r t have u s u r p e d
y
the statutory function of the District Court in appeals
under t h e Unemployment Compensation A c t .

The e s s e n t i a l f a c t s of t h i s c a s e b e a r r e p e a t i n g . The

deputy in the department examined the claims and found
c l a i m a n t s i n e l i g i b l e f o r unemployment c o m p e n s a t i o n b e n e f i t s

because there had been a work stoppage in the City of
Billings. Thereafter , following an extensive hearing in

which t e s t i m o n y was taken, written exhibits received and
briefs filed, the appeals referee entered findings t o the

same e f f e c t . Finally, t h e Board of Labor A p p e a l s , on t h e
same record, entered contrary findings that t h e r e was no

work s t o p p a g e and o r d e r e d unemployment c o m p e n s a t i o n b e n e f i t s
paid. The m a t t e r was a p p e a l e d t o t h e D i s t r i c t C o u r t , who

reviewed the decision of the appeals referee, found
" r e l i a b l e , p r o b a t i v e and s u b s t a n t i a l e v i d e n c e on t h e whole

record1' s u p p o r t i n g t h e d e c i s i o n of t h e a p p e a l s r e f e r e e and
t h a t s u c h d e c i s i o n was n o t " c l e a r l y e r r o n e o u s , " r e v e r s e d t h e
d e c i s i o n of t h e Board of Labor A p p e a l s , and r e i n s t a t e d t h e
decision of the appeals referee. The judgment of the

D i s t r i c t C o u r t h a s been a p p e a l e d t o u s f o r r e v i e w .
The c o r r e c t s t a t u t o r y s t a n d a r d of judicial r e v i e w by
t h e D i s t r i c t Court provides i n p e r t i n e n t p a r t :
" I n any j u d i c i a l p r o c e e d i n g . . . the
f i n d i n g s of t h e board [ o f l a b o r a p p e a l s ]
a s t o t h e f a c t s , i f s u p p o r t e d by e v i d e n c e
and i n t h e a b s e n c e of f r a u d , s h a l l be
c o n c l u s i v e and t h e j u r i s d i c t i o n o f s a i d
[ d i s t r i c t ] c o u r t s h a l l be confined t o
q u e s t i o n s of law . . ." S e c t i o n 39-51-
2410 ( 5 ) , MCA. [ B r a c k e t e d words i n s e r t e d . ]
 The District Court did not apply this standard of

judicial review. Instead, the District Court applied t h e

review procedure in t h e Montana Administrative Procedures

Act, c o n s i d e r e d t h e a p p e a l s r e f e r e e t o be t h e f a c t - f i n d e r ,
f o u n d h i s d e c i s i o n s u p p o r t e d by s u b s t a n t i a l e v i d e n c e a n d n o t
c l e a r l y e r r o n e o u s , a n d r e v e r s e d t h e B o a r d o f Labor A p p e a l s .

If t h e s t a t u t o r y a p p e a l p r o c e d u r e means a n y t h i n g , it

r e q u i r e s t h e District Court t o review t h e evidence under t h e
proper standard of judicial review in the f i r s t instance,

d e t e r m i n e w h e t h e r t h e f i n d i n g s o f f a c t by t h e Board o f Labor
A p p e a l s a r e s u p p o r t e d by t h e e v i d e n c e , a n d a p p l y t h e l a w on

eligibility for unemployment compensation benefits. This
function requires t h e District Court t o e x e r c i s e its discre-

t i o n i n d e t e r m i n i n g what a r e f i n d i n g s o f f a c t and what a r e
c o n c l u s i o n s of l a w . More s p e c i f i c a l l y , is t h e e x i s t e n c e o f

a work s t o p p a g e a q u e s t i o n of f a c t o r a c o n c l u s i o n of law
under the Unemployment Compensation Act? We, in turn,

review t h e D i s t r i c t C o u r t judgment t o d e t e r m i n e whether t h e
District Court abused its d i s c r e t i o n .

The m a j o r i t y have by-passed the statutory appeal
procedure i n t h e name o f expediency and their conclusion

t h a t t h e D i s t r i c t C o u r t h a s p r e d e t e r m i n e d t h e i s s u e o f work
stoppage. I n s o d o i n g , t h e y have e l i m i n a t e d t h e d i s c r e t i o n

lodged in the D i s t r i c t Court and assumed that discretion
themselves.
I f i n d no a u t h o r i t y i n t h e Unemployment C o m p e n s a t i o n
A c t t h a t p e r m i t s t h e Board o f Labor A p p e a l s t o make f i n d i n g s

d i r e c t l y c o n t r a r y t o t h e a p p e a l s r e f e r e e o n t h e same, iden-
t i c a l e v i d e n c e . The m a j o r i t y h a v e h e l d , a t l e a s t by i m p l i c a -

tion, that t h e Board o f Labor Appeals can redetermine de
novo the credibility of witnesses, the weight to be given
their testimony, and what the evidence proves without regard
to the findings of the department deputy or the appeals
referee. In so doing, they have created an omnipotent
agency of government evading judicial review.
In this case the Board of Labor Appeals has made no
finding on six of the departments of the City of Billings--
specifically, the sanitation department, the traffic depart-
ment, the library, the airport, the department of support
services, and the city-county planning department. Instead,
the Board of Labor Appeals has made general findings that
the critical governmental functions of providing police and
fire protection, sewage disposal and water were not
diminished in any significant amount. What are "critical
governmental functions" and what is the meaning of "any
significant amount"? The Board of Labor Appeals has also
made a general finding that there was no significant reduc-
tion in services as a whole and no evidence that entire
services to the City were diminished 10 percent. The Board
also found that there was no significant reduction in ser-
vices to the City of Billings and that supervisory personnel
with no one to supervise could carry on the functions. This
is tantamount to a finding that the 379 striking employees
performed no significant services to the people of Billings.
The appeals referee, on the other hand, found that in
the sanitation department twenty-eight routes are normally
serviced but only eight could be serviced because of lack of
manpower and that homeowners had to haul their garbage to
collection points in parks or to the dump. The appeals
referee also found that the street department usually used
200 t o n s o f a s p h a l t e a c h week t o patch the potholes, but

t h a t d u r i n g t h e s t r i k e o n l y two t o n s were used and t h a t t h e
s t r e e t sweeping and c l e a n i n g c o u l d n o t be p e r f o r m e d . The

appeals referee found that bus s e r v i c e was c u r t a i l e d and
some r o u t e s and s c h e d u l e s were abandoned and t h a t d u r i n g t h e

s t r i k e t h e r e were 22,750 fewer p a s s e n g e r s t h a n n o r m a l l y r i d e
t h e buses. The a p p e a l s r e f e r e e found that l i b r a r y hours

were r e d u c e d and some l i b r a r y programs d i s c o n t i n u e d .
The f o r e g o i n g a r e examples of t h e c o n t r a r y f i n d i n g s of

t h e a p p e a l s r e f e r e e and t h e Board of Labor A p p e a l s on t h e
same e v i d e n c e . Who c a n s a y w i t h c e r t a i n t y what a r e f i n d i n g s
of f a c t and what a r e c o n c l u s i o n s of law? T h i s is t h e func-
t i o n of t h e D i s t r i c t C o u r t , and o u r f u n c t i o n i s t o d e t e r m i n e

whether t h e D i s t r i c t C o u r t abused i t s d i s c r e t i o n .

For t h e f o r e g o i n g r e a s o n s , I would remand t h e c a s e t o
the District Court for judicial r e v i e w under the correct

s t a n d a r d of r e v i e w .

q& 4\WU@,
Chief J u s t i c e

Mr. J u s t i c e L. C. Gulbrandson:
I concur i n t h e foregoing

i b l r . J u s t i c e F r e d J. Weber :

I concur i n t h e foregoing d i s s e n t o f Chief J u s t i c e Haswell.