HARD ROCK CAFÉ and GOVERNMENT OF THE VIRGIN ISLANDS, Appellants/Respondents v. SANDRA ROSEMARY LEE, Appellee/Petitioner
Hard Rock Café v. Lee
HODGE, Chief Justice; CABRET, Associate Justice; and SWAN, Associate Justice. SWAN, Associate Justice, concurring in part, dissenting in part.
HARD ROCK CAFÉ and GOVERNMENT OF THE VIRGIN ISLANDS, Appellants/Respondents v. SANDRA ROSEMARY LEE, Appellee/Petitioner
HARD ROCK CAFÉ and GOVERNMENT OF THE VIRGIN ISLANDS, Appellants/Respondents v. SANDRA ROSEMARY LEE, Appellee/Petitioner
S. Ct. Civ. No. 2008-0049
Supreme Court of the Virgin Islands
March 4, 2011
Richard S. Davis, Esq., Assistant Attorney General, St. Thomas, USVI, Attorney for Appellant.
Alexander A. Dawson, Esq., Legal Services of the Virgin Islands, St. Thomas, USVI, Attorney for Appellee.
HODGE, Chief Justice; CABRET, Associate Justice; and SWAN, Associate Justice. SWAN, Associate Justice, concurring in part, dissenting in part.
OPINION OF THE COURT
(March 4, 2011)
HODGE, CJ.
Appellant Government of the Virgin Islands seeks reversal of the Superior Court's May 5, 2008 Order granting a petition for writ of review filed by Appellee Sandra Rosemary Lee and remanding the matter to the Unemployment Division of the Department of Labor for a new hearing. For the reasons that follow, we affirm the portion of the Superior Court's decision which held that the Department of Labor violated Lee's due process rights, but, with respect to all other issues raised by the parties, dismiss the appeal for lack of jurisdiction.
I. FACTUAL AND PROCEDURAL BACKGROUND
In May 2000, Hard Rock Café terminated Lee from her position as a prep cook, which she had held since March 1995. Lee subsequently filed a claim for unemployment benefits with the Virgin Islands Employment Security Agency, but, in a decision mailed on June 1, 2000, her application was denied on the grounds that she had been discharged for absenteeism and tardiness. On June 6, 2000, Lee appealed this determination to the Department of Labor's Appeals and Hearing Unit, which scheduled a hearing for June 23, 2000.
At the June 23,2000 hearing, an administrative law judge ("ALJ") took testimony from both Lee — who appeared pro se — and representatives from Hard Rock Café's management. The hearing was conducted telephonically, with the parties present in St. Thomas and the ALJ presiding from St. Croix. During these proceedings, Hard Rock Café discussed an employee handbook that contained a progressive discipline policy, but its representatives had not brought a copy of the handbook with them to the hearing. In response, the ALJ ordered Hard Rock Café to mail the pertinent part of the handbook to her after the hearing. Although Lee had brought her copy of the handbook with her to the hearing and offered to provide it to Hard Rock Café's witness and to the ALJ, the ALJ observed that Lee likely signed for that handbook and might not want "to give it up," and reiterated that Hard Rock Café should mail the ALJ a copy of the handbook after the hearing. Furthermore, the ALJ, after inquiring as to whether Hard Rock Café kept records of its employees' attendance, ordered Hard Rock Café to also mail copies of Lee's February 10, 2000 and February 22, 2000 time cards after the hearing so that they may be used as evidence. After Lee told the ALJ that she did not recall those dates, did not have copies of these time cards, and that a Hard Rock Café manager had told her that they do not keep records anymore, the ALJ ordered Hard Rock Café to also send copies of the records to Lee. At the conclusion of the hearing, the ALJ re-affirmed that she wanted Hard Rock Café to mail her and Lee a copy of the handbook and its time records.
On July 18, 2000, the ALJ issued a decision, along with findings of fact and conclusions of law, affirming the initial determination that Lee was ineligible for unemployment benefits on the grounds that Lee had committed misconduct by violating Hard Rock Café's attendance policies. Lee filed a motion for reconsideration, which the ALJ denied on August 11, 2000. On August 23, 2000, Lee — now represented by counsel — filed a petition for writ of review of the DOL's decision in the Superior Court. The Superior Court, after considering briefs filed by both Lee and the Government, issued a May 5, 2008 Order reversing the DOL's decision and remanding the matter for a new hearing on the grounds that substantial evidence did not support the ALJ's finding that Lee committed misconduct and that the ALJ's actions deprived her of an opportunity to confront and rebut evidence, thus violating her right to due process under the law. The Government timely filed its notice of appeal on May 29, 2008.
II. DISCUSSION
A. This Court Possesses Partial Jurisdiction Over the Government's Appeal
Prior to considering the merits of an appeal, this Court must first determine if it has jurisdiction over the matter. V.I. Gov't Hosp. and Health Facilities Corp. v. Gov't, 50 V.I. 276, 279 (V.I. 2008). While both the Government and Lee contend in their briefs that this Court possesses jurisdiction to review the Superior Court's May 5, 2008 Order, "it is well established that 'remands to administrative agencies are not ordinarily appealable' as a final judgment on the merits." Gov't of the V.I. v. Crooke, S. Ct. Civ. No. 2007-0109, 2010 V.I. Supreme LEXIS 28, *8 (V.I. Aug. 24, 2010) (quoting United Steelworkers of Am., Local 1913 v. Union R.R. Co., 648 F.2d 905, 909 (3d Cir. 1981)). See also H&H Avionics v. V.I. Port Auth., 52 V.I. 458, 460 (V.I. 2009) (explaining that parties may not stipulate to presence or lack of subject matter jurisdiction). But, as this Court has recently explained in an appeal with a similar procedural posture,
the United States Supreme Court has authorized an extremely narrow exception to the final judgment rule, in the form of the collateral order doctrine. See Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546, 69 S. Ct. 1221, 93 L. Ed. 1528 (1949). "Under the collateral order doctrine, the Supreme Court recognized an exception to the final judgment rule for a small class of prejudgment orders which finally determine claims of right separable from, and collateral to, rights asserted in the action, and are too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated." Enrietto, 49 V.I. at 319 (internal quotations and citations omitted). "To fall within the exception, an order . must conclusively determine the disputed question; . resolve an important issue completely separate from the merits of the action; and . must be effectively unreviewable on appeal from a final judgment." Id. at 319 (citing Richardson-Merrell, Inc., v. Koller, 472 U.S. 424, 430, 105 S. Ct. 2757, 2761, 86 L. Ed. 2d 340 (1985)) (internal quotations omitted)....
[Ajlthough courts have held that litigants may generally not appeal agency remands pursuant to the collateral order doctrine because in most circumstances the trial court's decision will, at some point, become reviewable on appeal, Occidental Petroleum Corp. v. SEC, 873 F.2d 325, 329-30 (D.C. Cir. 1989) (collecting cases), "most circuits have also made an exception to this blanket rule when it is the... agency itself that brings an appeal____because the agency is bound on remand by the standard articulated by the [trial] court and so would not have a chance to appeal from any further judgment, making the [trial] court's determination effectively unreviewable by the agency on remand." Shipbuilders Council of America v. U.S. Coast Guard, 578 F.3d 234, 239 (4th Cir. 2009) (citing Occidental Petroleum Corp., 873 F.2d at 330). See United States v. Alcon Laboratories, 636 F.2d 876, 884-85 (1st Cir. 1981); Director, Office of Workers' Compensation Programs v. Brodka, 643 F.2d 159, 161-63 (3d Cir. 1981), Cohen v. Perales, 412 F.2d 44, 48 (5th Cir. 1969); Stone v. Heckler, 722 F.2d 464, 467 (9th Cir. 1983); Bender v. Clark, 744 F.2d 1424, 1428 (10th Cir. 1984); Huie v. Bowen, 788 F.2d 698, 703 (11th Cir. 1986).
Crooke, 2010 V.I. Supreme LEXIS 28, at *19.
In addition, the United States Court of Appeals for the Third Circuit, though not expressly invoking the collateral order doctrine, found that these three requirements were met in similar cases involving trial court orders remanding matters to an administrative agency because of due process violations. See AJA Assocs. v. Army Corps of Eng'rs, 817 F.2d 1070 (3d Cir. 1987); Union Steelworkers, 648 F.2d at 909. In AJA Associates, the Third Circuit found that a holding that an administrative agency's procedures violated due process constituted an "important legal issue" of "wide-reaching impact" that went beyond the facts of that particular case. AJA Assocs., 817 F.2d at 1073. More significantly, the Third Circuit recognized that a remand to the agency without appellate review of the due process issue "would foreclose appellate review as a practical matter," since it was certain that the matter would either "never return to the courts" if "the Corps grants AJA a permit" or the due process issue "will have become moot" if the agency still denied a permit after holding the hearing in the manner the trial court mandated in its order. Id. Likewise, in United Steelworkers, the Third Circuit found that "[t]he [right to counsel] issue the Railroad raises now . . . will no longer be a subject for Board or district court consideration" because the district court's "revers[al] [of] the Board's determination that Godich was not .denied his right to counsel" and direction that the matter be remanded "for a de novo investigation hearing" would moot , the matter and thus, "[u]nless review is permitted now, the Railroad may be denied a full opportunity to challenge the . . . order later." United Steelworkers, 648 F.2d at 909-10.
Here, as in United Steelworkers and AJA Associates, the three requirements necessary to exercise jurisdiction pursuant to the collateral order doctrine are clearly met with respect to the Superior Court's finding that Lee's due process rights were violated due to the post-hearing submission of evidence. As to the first requirement, the Superior Court's May 8, 2008 Order conclusively determined, without the need for further proceedings before the Superior Court or the DOL, that Lee's due process rights were violated at the June 23, 2000 hearing. With respect to the second requirement, the important legal question of what due process protections apply in the context of a DOL hearing is clearly separate from the merits of the underlying action, which concerns whether Lee is entitled to collect unemployment insurance benefits. Finally, as in Crooke, the instant appeal has not been brought by an individual litigant, but by a governmental agency that, on remand, will be required to conduct a hearing in the manner directed by the Superior Court and — regardless of the ultimate result — will not be able to challenge the Superior Court's due process decision in any future proceeding.
None of these requirements, however, are met with respect to the Superior Court's substantial evidence decision. Importantly, the Superior Court's holding that the DOL's finding that Lee committed misconduct is not supported by substantial evidence is not an important issue separate from the merits of whether Lee is entitled to unemployment benefits. Thus, remand would not moot the issue or otherwise prevent appellate review at a future date. Accordingly, although we possess jurisdiction to review the Superior Court's due process holding, we dismiss for lack of jurisdiction the Government's appeal of the portion of the May 8, 2008 Order that held that the ALJ's finding of misconduct was not supported by substantial evidence.
B. The Superior Court Correctly Held that Lee's Due Process Rights Were Violated
In its appellate brief, the Government first contends that Lee never objected to the ex parte submission of her time sheets or Hard Rock Café's employee handbook during the DOL proceedings, and thus any argument that her due process rights were violated had been Waived. With respect to the merits, the Government argues that Lee's due process rights were not violated because Lee had the opportunity to cross-examine adverse witnesses, to introduce evidence, and to make arguments on her own behalf. Significantly, the Government asserts that the authenticity of the handbook was never in doubt because Lee had presented her copy as evidence at the June 23, 2000 hearing. Since all of these issues involve pure questions of law, this Court exercises plenary review over the Superior Court's decision. See St. Thomas-St. John Bd. of Elections v. Daniel, 49 V.I. 322, 329 (V.I. 2007).
1. Lee Did Not Waive Her Due Process Argument
As a threshold matter, we reject the Government's claim that Lee was barred from raising her due process argument for the first time in her petition for writ of review. This Court recognizes that, in Pichardo v. Benjamin, S.Ct. Civ. No. 2007-0061, 2008 V.I. Supreme LEXIS 25, *7 (V.I. Apr. 16, 2008), aff'd, 613 F.3d 87, 53 V.I. 936 (3d Cir. 2010), we held, in the wrongful discharge context, that the Superior Court lacked jurisdiction to rule on the merits of an issue that had not been raised before the DOL. Moreover, notwithstanding Pichardo, we acknowledge that this Court has repeatedly held that, in a civil case, a litigant must raise an issue at all stages of the.proceeding in order to presérve that issue for appellate review. See, e.g., Madir v. Daniel, 53 V.I. 623, 634-35 (V.I. 2010); Ruiz v. Jung, S.Ct. Civ. No. 2008-0035, 2009 V.I. Supreme LEXIS 43, *11-12 (V.I. Oct. 19, 2009); Spencer v. Navarro, S.Ct. Civ. No. 2007-0069, 2008 V.I. Supreme LEXIS 18, *5 (V.I. June 27, 2008).
These authorities, however, are inapplicable to this case. First, this Court based its decision in Pichardo on the fact that petitions for writ of review of DOL decisions in wrongful discharge cases arise under section 70 of title 24, which expressly provides that "[n]o objection that has not been urged before the Commissioner shall be considered by the Court unless the failure or neglect to urge objection is excused because of extraordinary circumstances." 24 V.I.C. § 70(b). Petitions for writ of review of DOL decisions granting or denying unemployment benefits, however, are brought pursuant to section 306 of title 24, which expressly states that "[ejxceptions to rulings of the hearing examiner shall not be necessary to obtain judicial review," 24 V.I.C. § 306(e)(1), and provides that "[t]he jurisdiction of the reviewing court shall be confined to questions of law, and, in the absence of fraud, the findings of fact by the hearing examiner, if supported by substantial evidence regardless of statutory or common-law rules, shall be conclusive," without precluding the Superior Court from considering issues raised for the first time in a petition for writ of review. 24 V.I.C. § 306(e)(3). In other words, in the unemployment benefits context, the Legislature has expressly abrogated the general rule that a litigant waives any issues that were not raised or objected to in the administrative agency proceeding. Accordingly, since her petition for writ of review arose under section 306, Lee was permitted to argue, for the first time in the Superior Court, that the DOL violated her due process rights.
2. The ALJ's Reliance on Ex Parte Evidence Deprived Lee of a Fair Hearing
Title 24, section 306 of the Virgin Islands Code — which authorizes administrative appeals of initial determinations of unemployment insurance eligibility — requires that the DOL provide "[a] reasonable opportunity for a fair hearing. . . to all parties," although it may "receive and consider evidence without regard to statutory and common-law rules." 24 V.I.C. § 306(c). The United States Supreme Court has held that the right to a fair hearing, in the context of an administrative proceeding to determine eligibility for public benefits, requires that the claimant receive "an effective opportunity to defend by confronting any adverse witnesses and by presenting his own arguments and evidence orally." Goldberg v. Kelly, 397 U.S. 254, 268, 90 S. Ct. 1011, 1020, 25 L. Ed. 2d 287 (1970) (emphasis added). Notably, "the decisionmaker's conclusion as to a recipient's eligibility must rest solely on the legal rules and evidence adduced at the hearing." Id. at 271 (citing Ohio Bell Tel. Co. v. PUC, 301 U.S. 292, 57 S. Ct. 724, 81 L. Ed. 1093 (1937)) (emphasis added).
Here, Lee's due process rights were clearly violated when the ALJ allowed Hard Rock Café to submit the handbook and time sheets into evidence after the hearing had concluded. Although the Government contends that the handbook had been authenticated because Lee had brought her copy of the handbook to the hearing, the ALJ had declined to admit Lee's handbook into evidence, and the record does not indicate that any of the parties relied on Lee's handbook during the telephonic proceedings. Thus, as the Superior Court implies in its May 5, 2008 Order, it is possible that the handbook Hard Rock Café sent to the ALJ after the hearing could have been different from the handbook it provided to Lee during the course of her employment. Therefore, by allowing Hard Rock Café to admit a handbook into evidence after the hearing had concluded, Lee was precluded from inspecting that handbook to determine whether it was identical to her handbook and — if they were not — from cross-examining Hard Rock Café's representatives as to any discrepancies.
Likewise, after the ALJ authorized Hard Rock Café to submit copies of Lee's time sheets after the hearing, Lee informed the ALJ that she had never seen the time sheets, that Hard Rock Café representative had told her "that they do not keep records anymore," and "that they deleted [the time sheets] off of the computer." (J.A. 64-65.) While Lee did not expressly state that the time sheets should not have been admitted into evidence, as a pro se party she is entitled to "greater leeway" when it comes to "follow[ing] the technical rules of pleading and procedure," for it is "inequitable to insist on strict adherence to the rules by a pro se party in such an informal atmosphere when such insistency would result in the loss of a right to due process." Dennie v. Swanston, 51 V.I. 163, 170 (V.I. 2009). Thus, because Lee clearly conveyed her intent to challenge the authenticity of the time sheets, yet the ALJ authorized Hard Rock Café to enter them into evidence on an ex parte basis after the hearing had already concluded, the DOL failed to satisfy the minimum requirements for a fair hearing. Accordingly, we affirm the portion of the Superior Court's May 8,2008 Order which held that the DOL violated Lee's due process rights.
111. CONCLUSION
Pursuant to the collateral order doctrine, this Court possesses jurisdiction to review the portion of the Superior Court's May 8, 2008 Order holding that the DOL violated Lee's due process rights, but not the portion holding that substantial evidence did not support the ALJ's finding that Lee committed misconduct. Because it is well established that the right to a fair hearing — even in the context of an informal administrative proceeding — requires the right to cross-examine evidence, we agree that the ALJ's decision allowing Hard Rock Café to submit an employee handbook and time sheets after the hearing had concluded clearly violated Lee's due process rights. Accordingly, this Court affirms the Superior Court's due process holding and dismisses, for lack of jurisdiction, the Government's appeal of its substantial evidence holding.
Although Hard Rock Café is identified as an appellant in the case caption, it has not filed a notice of appeal, submitted an appellate brief, or otherwise participated in this matter.
The record is silent as to whether Hard Rock Café mailed Lee copies of the handbook and time sheets it had sent to the ALJ.
This Court notes that, although Lee filed her petition for writ of review on August 23,2000 and the Superior Court entered an order authorizing review on February 20,2001, the matter lay completely dormant in the Superior Court between May 25, 2001 and June 19, 2006, when the Superior Court set the matter for calendar call. Although not raised as an issue in this appeal, and thus waived, this Court, as part of its role in the development of the Virgin Islands's "institutional traditions," Pichardo v. V.I. Com'r of of Labor, 613 F.3d 87, 100, 53 V.I.936 (3d Cir. 2010), reminds the Superior Court that the Legislature has mandated that appeals of unemployment benefits decisions "be heard summarily and given precedence over all other civil cases except those arising under the Workers' Compensation Administration Law of the Virgin Islands." 24 V.I.C. § 306(e)(3).
See V.I.S.CT.R. 5(a)(1) ("In a civil case in which an appeal is permitted by law as of right from the Superior Court to the Supreme Court, the notice of appeal required by Rule 4 shall be filed with the Clerk of the Superior Court within thirty days after the date of entry of the judgment or order appealed from; but if the Government of the Virgin Islands or an officer or agency thereof is a party, the notice of appeal may be filed by any party within sixty days after such entry.").
In their briefs, the Government and Lee both cite to section 21 of title 4 of the Virgin Islands Code as the jurisdictional authority for this appeal. Section 21, however, merely establishes the Supreme Court of the Virgin Islands, ánd is silent as to its jurisdiction. While Lee, in addition to invoking section 21, also cites to section 32 of title 4, this statute expressly provides that "[t]he Supreme Court shall have jurisdiction over all appeals arising from final judgments, final decrees or final orders of the Superior Court, or as otherwise provided by law." 4 V.I.C. § 32(a).
We recognize that, under certain circumstances, an order holding that an administrative agency's decision is not supported by substantial evidence and remanding the matter to the agency could constitute a final appealable order under the "practical finality rule" adopted by some appellate courts. But in this case, the Superior Court's holding that the ALJ's finding that Lee committed misconduct was not supported by substantial evidence does not necessarily preclude the DOL from potentially denying benefits to Lee on some other ground. See Rekstad v. First Bank Sys., Inc., 238 F.3d 1259, 1262 (10th Cir. 2001) (collecting cases). In addition, even if we were to assume without deciding that the Superior Court's topical heading "Substantial Evidence Supports the Finding that Petitioner is Entitled to Unemployment Insurance Benefits" — a holding which is never made anywhere in the text of the May 5, 2008 Order — could be construed as a requirement that the DOL award benefits to Lee on remand, the DOL would still — at a minimum — have to determine the exact amount of unemployment benefits that Lee should receive, which, given that almost eleven years have passed since Lee's termination, may not necessarily be a purely ministerial inquiry. See Marshak v. Treadwell, 240 F.3d 184, 190 (3d Cir. 2001) ("Afinding of liability that does not also specify damages is not a final decision.") (collecting cases). Therefore, the Superior Court's May 5, 2008 Order does not constitute a final appealable order even though the Superior Court held that the ALJ's decision to deny benefits based on Lee purportedly committing misconduct was not supported by substantial evidence.
As this Court noted in Crooke, an administrative agency lacks standing to file a petition for writ of review of its own decision in the event none of the parties before it challenge the result of the hearing. See Crooke, 2010 V.I. Supreme LEXIS 28, at *23. Moreover, even if Lee or Hard Rock Café were to file a petition for writ of review after remand, the due process issue would have become moot because the Government would presumably comply with the Superior Court's May 8, 2008 Order on remand. AJA Assocs., 817 F.2d at 1073.
We note that, in her appellate brief, Lee — for the first time on appeal — sets forth an alternate argument in support of the Superior Court's holding that her due process rights were violated. Specifically, Lee argues that her due process rights were also violated because the DOL did not provide her with sufficient notice of the June 23,2000 hearing. However, given our decision to affirm the portion of the Superior Court's May 5, 2008 Order that held that the ex parte submission of evidence violated Lee's due process rights, and to dismiss for lack of jurisdiction the Government's appeal of the portion of the order that held the ALJ's finding that Lee committed misconduct was not supported by substantial evidence, it is not necessary for us to consider Lee's alternate ground for affirming the Superior Court.