ABELLEIRA v. CALIFORNIA EMPLOYMENT COMMISSION (1941)

Application for mandate denied.

No opinion.

On Application for Rehearing. Rehearing denied.

We dissent from the order denying a rehearing of petitioners' application for an alternative writ of mandate.

Petitioners filed with the California Unemployment Commission a claim for unemployment benefits for November, 1939, and January, 1940, when they were out of work, and assertedly entitled to unemployment benefits. The claim was referred to the adjustment unit which awarded benefits to petitioners. This determination was affirmed by the referee. From this decision of the referee an appeal was taken to the Commission by certain employers of the petitioners. Section 67 of the Unemployment Act, St.1939, p. 3010, provides in part: ‘If a referee affirms an initial determination allowing benefits, such benefits shall be paid regardless of any appeal which may thereafter be taken, but if such determination is finally reversed no employer's account shall be charged with benefits so paid as to each such determination so reversed.’ Pending the determination of the appeal to the Commission, the employers secured a writ of mandate from the District Court of Appeal restraining the Commission from making benefit payments to petitioners on the ground that petitioners were not entitled to such benefits under the act. This court in Abelleira v. District Court of Appeal, 17 Cal.2d 280, 109 P.2d 942, 132 A.L.R. 715, issued a writ of prohibition restraining the District Court of Appeal from interfering with the payment of benefits after decision by the referee as provided in section 67. Four months after the determination of the referee and while the Abelleira case was still pending in this court, the Unemployment Commission, purporting to act pursuant to section 72 of the act, St.1939, p. 3013, entered an order setting aside the referee's decision and bringing the matter directly before itself for a hearing. Section 72 provides in part: ‘The commission may on its own motion affirm, modify, or set aside any decision of a referee on the basis of the evidence previously submitted in such case, or direct the taking of additional evidence. The commission may remove to itself or transfer to another referee the proceedings on any claim pending before a referee.’ Rule 69.3 promulgated by the Commission provides that the Commission must act within seven days after the decision by the referee to vacate such decision. Following the setting aside of the referee's decision, the Commission refused to make any benefit payments to petitioners. The case is still pending before the Commission. That body has not yet passed upon the questions presented on the appeal, or by the case as taken over by it. Petitioners petitioned this court for an alternative writ of mandate ordering the respondent Commission to show cause why it should not be ordered to make benefit payments to petitioners for the period following the decision of the referee as required by section 67 of the act. This petition was denied without opinion and petitioners now petition for a rehearing.

The allegations set forth in the petition are sufficient to warrant the issuance of the alternative writ. The petition is based upon the decision of this court in the Abelleira case and seeks to make effective what petitioners assert to be the judgment therein. The points of law raised are novel, difficult of solution, and of great importance to employers, employees, and all others who are affected by the operation of the Unemployment Act.

It is impossible at this time to suggest the correct decision which should ultimately be reached, but a few of the more important issues involved may be mentioned:.

(1) Are the provisions of section 67 of the act requiring immediate payment of benefits after affirmance of an award by the referee subject to any implied exceptions?

(2) Does the setting aside of the decision of the referee by the Commission pursuant to section 72 nullify the requirement of continued payments under section 67? If it does, may the Commission exercise this power long after the time specified in the rules of the Commission has expired and long after the time at which the right to benefits would otherwise become fixed?

(3) If illegal payments are wrongfully ordered by the referee, does the Commission possess an inherent power, despite the provisions of section 67, to withhold these payments or to seek their recovery after payment?

(4) In view of the fact that the Commission, after taking the case over on its own motion, has not yet determined the facts upon which the claims of petitioners must rest, are petitioners by virtue of section 67 entitled to payments pending that determination?

These are questions of great significance in view of the general adoption of such laws throughout the United States. The denial by the majority of this court of an alternative writ without revealing the grounds on which section 67 of the act has been held inoperative in the present situation not only casts doubt upon the views expressed in the Abelleira case but leaves the Commission, employers, and employees uncertain as to the meaning and effect of this crucial provision. A hearing should therefore be had and a decision rendered on the merits of the case after careful consideration of the issues.

PER CURIAM.