California Hospital Ass'n v. Unemployment Insurance Appeals Board

[272]Opinion

COBEY, Acting P. J. Defendant, California Unemployment Insurance Appeals Board (hereafter Board),1 appeals from a summary judgment in declaratory relief in favor of plaintiffs, California Hospital Association and South Coast Community Hospital (hereafter CHA). The summary judgment challenged requires that: (1) the Board accept all timely appeals filed by so-called cost-reimbursement employers2 from prior determinations of eligibility of claimants affecting these employers and dispose of the appeals on their merits; (2) if such an employer prevails in an appeal, all benefit payments to the claimant shall cease as of the date of the final appellate decision and the obligation of employer to fund prospective benefits to the claimant shall then likewise cease; and (3) Precedent Benefit Decision of the Board No. PB234, Case No. 75-8576, Lupe Beard, claimant, being contrary to law, shall be of no further force and effect.3

The sole question on this appeal is the correct interpretation of section 1335, subdivision (b), with respect to reimbursement employers. It reads and has always read essentially as follows: “If an appeal is filed, benefits with respect to the period prior to the final decision on the appeal shall be paid only after such decision, except that: [If]. . . (b) If a referee affirms a determination allowing benefits, such benefits shall be promptly paid regardless of any appeal which may thereafter be taken, and regardless of any action taken under section 1336 or otherwise by the director, appeals board, or other administrative body or by any court. [f| If such determination is finally reversed, no employer’s account shall be [273]charged with benefits paid because of that determination.”4 (Italics added.)

CHA interprets this subdivision, which codifies the so-called double affirmation rule, as applying only to interim benefits—i.e., benefits paid during the appellate process and therefore as not preventing the cessation of the payments of benefits following the rendition of a final decision on appeal denying eligibility for benefits on the part of a particular claimant.

The Board has adopted the policy of dismissing all appeals by reimbursement employers following double affirmation of adverse eligibility decisions affecting them on the ground that under its aforementioned Precedent Benefit Decision (No. PB234, Case No. 75-8576, Lupe Beard, claimant) it cannot afford a reimbursement employer (as contrasted with a reserve account employer) any relief because it cannot transfer the charges for the benefits involved, if it determines them to have been paid to an ineligible claimant, from the employer’s individual reserve account to the general balancing account since, as previously mentioned, the reimbursement employer has no individual reserve account to be relieved of these charges and does not contribute to the balancing account to which these charges would otherwise be transferred. Moreover section 803, subdivision (c), expressly makes all the noncharging of employers’ reserve accounts provisions (expressly §§ 1030, 1031, 1032 and 1032.5) inapplicable to reimbursement employers.