What’s On Their Minds: How to Vest Jurisdiction in an Unemployment Compensation Appeal. Marcus H. Pryor II v. Director, Ohio Department of Job and Family Services.

Update: On May 11, 2016, the Supreme Court of Ohio handed down a merit decision in this case. Read the analysis here.

“Hasn’t the General Assembly created some confusion by saying the only requirement is to file a timely notice of appeal to vest jurisdiction in the court?” Justice O’Donnell to counsel for the Director

On January 27, 2016, the Supreme Court of Ohio heard oral argument in the case of Marcus H. Pryor II v. Director, Ohio Department of Job and Family Services, 2015-0770. At issue in this case is whether the failure to name all interested parties in the notice of appeal from an unemployment compensation decision divests the trial court of subject matter jurisdiction. The court accepted the case on both conflict certification and discretionary appeal, and consolidated the two.

Certified Conflict Question

“When appealing an unemployment compensation decision to the trial court, are the requirements contained in R.C. 4141.282(D), which explains how to name the parties, mandatory requirements necessary to perfect the appeal and vest the trial court with jurisdiction?”

Case Background

Marcus Pryor served as a combat medic and was honorably discharged from the United States Army. Pryor then applied for and was granted unemployment benefits. About seven months later, the Director of the Ohio Department of Job and Family Services (“Director”) issued a re-determination disallowing benefits, resulting in a $10,800 overpayment. Pryor appealed the re-determination, and a hearing was held before a hearing officer. The Department of the Army, Pryor’s former employer did not appear. The hearing officer upheld the re-determination and repayment requirement, as did the Unemployment Compensation Review Commission.

Pryor timely appealed to the Summit County Court of Common Pleas, and instructed the clerk to serve the complaint on the Director of ODJSF and the Department of the Army, but did not name the Department of the Army in his notice of appeal. Because of the failure to list all “interested parties,” the trial court dismissed Pryor’s motion for lack of subject matter jurisdiction.

Pryor appealed this decision to the Ninth District Court of Appeals. In a unanimous opinion, the Ninth District found that the plain language of R.C. 4141.282(C) vests jurisdiction in a trial court so long as a timely appeal is filed, and any defects in the notice could be addressed by the appropriate rules of civil procedure. The appeals court acknowledged its decision conflicted with those of a number of courts of appeals (those are listed here) and certified a conflict.

Read the oral argument preview of the case here.

Key Statutes and Precedent

R.C. 4141.282 (Appeal to Common Pleas Court From Final Decision of Unemployment Review Commission)

(C) Perfecting the Appeal

The timely filing of the notice of appeal shall be the only act required to perfect the appeal and vest jurisdiction in the court. The notice of appeal shall identify the decision appealed from.

(D) Interested Parties

The commission shall provide on its final decision the names and addresses of all interested parties. The appellant shall name all interested parties as appellees in the notice of appeal. The director of job and family services is always an interested party and shall be named as an appellee in the notice of appeal.

R.C. 4141.01 (I) “Interested party” means the director and any party to whom notice of a determination of an application for benefit rights or a claim for benefits is required to be given under section 4141.28 of the Revised Code.

R.C. 4141.28 (Determination of benefit rights and claims for benefits)

Zier v. Bur. of Unemp. Comp., 151 Ohio St. 123, (1949) (An appeal based on a statute can only be perfected in the mode prescribed by the statute. Under earlier version of unemployment compensation appeal statute, party-naming non-jurisdictional.)

Spencer v. Freight Handlers, Inc., 2012-Ohio-880 (Statutory requirements that a party appealing from an Industrial Commission order name the administrator of the Bureau of Workers’ Compensation as a party to the appeal and serve the administrator with the notice of appeal are not jurisdictional requirements.)

At Oral Argument

Arguing Counsel

Peter T. Reed, Deputy Solicitor, Columbus, for Appellant Director, Ohio Department of Job and Family Services.

Marcus H. Pryor II, Mogadore, Pro Se, Appellee.

Kathleen C. McGarvey, The Legal Aid Society of Columbus, for Amici Ohio Legal Services Programs, in support of Appellee Pryor.

Director’s Argument

The General Assembly defines and limits jurisdiction over administrative appeals. The party-naming requirement here is one such limit.

The text of R.C. 4141.282 makes the notice of appeal jurisdictional and says the appellant shall name all appellees in the notice of appeal. In Spencer (a workers’ compensation appeal), the court told the General Assembly to use such “notice shall” language to indicate that a party-naming requirement is jurisdictional. The General Assembly made that change in the statute involved in this case.  The court should thus construe the “shall name” requirement in subsection (D) as a jurisdictional requirement.

The statute sets forth four notice requirements– it must be filed in a timely manner, it must be filed in the right court, it must name the decision appealed from, and it must name all the right parties. Both the claimant and the employer must name all interested  parties.

The text provides a number of reasons why the party-naming provision is jurisdictional. First and foremost, the statute itself says the notice of appeal is jurisdictional. Second, it uses parallel “shall” language in both subsection (C) and (D). The language “notice shall” makes it jurisdictional. All parties must be listed in the notice of appeal. That is not a difficult requirement. It is basic caption information–what is the decision being appealed from; who are the parties. And what is jurisdictional cannot be changed or fixed by the civil rules. It is not a notice pleading kind of requirement.

This court has said repeatedly that when the General Assembly makes something jurisdictional, those requirements must be complied with. And this court has said a number of times that administrative appeals are different from other proceedings, in that jurisdictional requirements have to be strictly complied with.

In this case the jurisdictional requirement was not met because of the failure to name the Department of the Army in the notice of appeal. If the right parties are not named, there is no notice at all. In 2001, the legislature made two changes to this statute–it expressly said appellant must name all interested parties, and must do so in the notice of appeal. If the statute says notice has to include something, then that makes it jurisdictional. If notice is jurisdictional, then content requirements are jurisdictional. Content requirements are indicated by using the imperative “shall.”

In all these cases the employer is going to be a party because it is the employer who can tell the court the reason for separation from the employer.

A claimant uncertain about how to effectuate an appeal has many places to look for help. He could have looked again at the commission report, and the caption, which doesn’t expressly say “here are all the interested parties,” but it lists the parties in that appeal. He could have looked at the statute. Or he could have looked at the guide for unemployment claimants, which mentions that the employer is an interested party and provides a toll free hotline for any questions about how to file the notice of appeal.

Pryor’s Argument

The dispute being appealed was a mistake by the Director, not the Army. At the time of the appeal the Army was no longer an interested party, but was served to keep them apprised of what was going on. The Army did not participate at the administrative or trial court level. But they were notified by being served with the notice of appeal in the case.

Under the plain language of subsection (C) of the statute, all that is required to perfect jurisdiction is to timely file the notice of appeal. That was fully complied with. The requirements of Subsection (D) do not get incorporated into Subsection (C). The Director argues that it is easy for the appellant to name all interested parties. It was not easy for me, because as far as I could tell the Army was not interested. The dispute was between me and the Director. I saw no reason to drag the U.S. Army into the Summit County Court of Common Pleas.

The Review Commission’s decision states who gets its decision, but did not highlight or identify the Army as an interested party. The Review Commission must tell me, the appellant, who the interested parties are, and then it is my responsibility as the appellant, to name those parties in the notice of appeal.

I wanted to keep the Army abreast of the situation which is why I had them served. The only person I was 100% sure was an interested party was the Director, which is why I named the Director in the notice of appeal. Erring on the side of caution, I also served the Army.

It is a fundamental tenet of judicial review to hear cases on their merits. The appeals court should be affirmed in this case, and the case sent back for a determination on the merits.

Argument of Amici Ohio Legal Services in Support of Pryor

The Ohio Legal Services amici were granted time to share oral argument with Pryor.

There is no bright law rule for employers as interested parties, such as there is for the Director. This is not a simple issue, and the majority of claimants are pro se. Not all unemployment disputes necessarily involve the employer.

The statute involved in this case goes further and is clearer than the one involved in Spencer. Subsection (C) is the only section necessary to vest jurisdiction with the common pleas court. R.C. 4141.282 says the filing of the notice of appeal shall be the only act required to perfect the appeal, and then it goes further and says, “and vest jurisdiction with the court.” In case there was any confusion, the legislature went further to make it clear that this is the only act necessary to vest jurisdiction with the court, so this is not comparable to Spencer. Furthermore, the drafters put headings into this statute. Subsection (C) carries the heading, “perfecting the appeal.” Strict compliance is required here, but that means strict compliance with subsection (C), which Mr. Pryor met.

It is true that the names and addresses of interested parties were listed in the Commission decision, but they were not identified as interested parties in any way. That is why, to make this statute simpler, the legislature moved the interested party language out of the paragraph on perfecting the appeal, deleted the definition of interested party from that section, and moved it to its own section.  If this court determines Section (D) is a jurisdictional requirement, it would have a grossly unfair outcome on unemployment claimants. Only Section (C) is required to vest jurisdiction. Interested parties and the naming of those parties is not required, and can be amended or fixed at a later date.

What Was On Their Minds

Subsections C and D of R.C. 4141.282

The language in (C) is, “timely filing of the notice of appeal shall be the only act required to perfect the notice of appeal and vest jurisdiction in the court,” noted Justice French. So why doesn’t that answer this question simply?

Since Ohio is a notice pleading state, why isn’t it enough to file the notice, state what is being appealed, and do it timely, asked Justice O’Neill? Is there room here for substantial compliance?

Wasn’t the requirement in Subsection (C) met, asked Justice O’Donnell? Can a notice of appeal be amended? Is this a matter of first impression for this court?

Doesn’t the requirement in Subsection (D) that “appellant shall name all interested parties” make doing so jurisdictional, asked Chief Justice O’Connor? Are there cases that fail to name interested parties in the caption that are allowed to proceed? Are there litigants who don’t get it right but courts allow them to have a do-over? I’m presuming the Director gets named with regularity? If the court of appeals is correct, isn’t this something for the legislature, not the court, to fix? Didn’t the legislature follow this court’s directive in other cases about using jurisdictional language?

Interested Parties

Did the Director name the interested parties in the notice of appeal, asked Justice French? Did the employer participate in the hearing? To determine who were interested parties, the claimant would not only have had to go to the statute relating to the appeal, he would have also had to go to R.C. 4141.01(I), then to R.C. 4141.28 and at that point he would have seen it was the employer that had to be named, she commented. Did the Agency fully and properly comply in this case?

Can’t an argument be made that the only person who is an adverse, interested party is the Director, asked Chief Justice O’Connor? Later she asked, wasn’t the Army still a player because under federal law the Army had to reimburse the Director? Was the Army listed on the redetermination document? Isn’t the determination of who the interested parties are statutory, not a judgmental decision by the claimant-appellant? What would happen if the Director weren’t named?

Is “interested party” a statutorily defined term, asked Justice Lanzinger?

Where are the interested parties named, asked Justice Pfeifer? In what document?

The Commission Decision

Is the Commission required to name the interested parties when they issue their final decision, asked Justice French? Do they specifically identify the parties as interested parties? (When counsel for the director answered no, she asked why that was fair to appellants). Why shouldn’t the Commission have to do that?

Were the names and addresses of the interested parties included in the commission’s decision, asked Chief Justice O’Connor? Isn’t that a trigger to name the Army as an interested party in the notice of appeal?

The Notice of Appeal

How could the Army be notified if the claimant-appellant didn’t file the notice with their name on it with the court, asked Chief Justice O’Connor? (answer: by serving them with the notice.) Was that service effectuated (answer: yes). Wouldn’t the claimant want to err on the side of caution and include the Army? Is there any penalty for including the Army in the caption?

Why would the claimant have the Army served but not name them as a party, asked Justice O’Neill?

Generally the subject matter jurisdiction of the common pleas court is broad, noted Justice Lanzinger. Does this statute restrict the common pleas court’s jurisdiction?

Pryor’s benefits

Were the eight months of benefits received unauthorized, asked Chief Justice O’Connor? Did the Army appeal the initial grant of benefits? Wasn’t the Army still a player after the redetermination because under federal law the Army had to reimburse the Director?

The Civil Rules

Do the civil rules apply here, asked Justice Lanzinger? Is this a special proceeding? Are there procedural remedies for a defective notice?

How it Looks from the Bleachers

To Professor Bettman

Like a win for Pryor, despite a one-Justice crusade by Chief Justice O’Connor, in support of the Director’s position.

Despite a fifty minute argument, the basic disagreement here is very simple-whether compliance with R.C. 4141.282 (C), which requires timely filing the notice of appeal and identifying the decision appealed from, is good enough to vest jurisdiction in the common pleas court, or whether R.C. 4141.182(D) must be met, which requires the appellant to name all interested parties as appellees in the notice of appeal.

While I suspect the legislature may well have intended for the requirements of subsection (D) to be met for jurisdiction to vest, I think the way the statute is written, and in particular, the use of the heading “Perfecting the Appeal” in Subsection (C), and the specific language, “the timely filing of the notice of appeal shall be the only act required to perfect the appeal and vest jurisdiction in the court” is going to persuade a majority of the justices that literal compliance with Subsection (C) is enough to perfect the appeal and vest jurisdiction in the common pleas court. This is what Pryor did, and what he argued. This was also the holding of the court of appeals.

Justice French seemed most strongly supportive of this position. She made the point about compliance with Subsection (C), albeit in a question, first thing out of the box. She really pressed on how and where a claimant could even ascertain who was an interested party. When counsel for the Director answered one of the Chief’s questions that it was a “no-brainer that the employer is part of the appeal,” French interrupted him in the sharpest tone I recall hearing from her, saying, “wait a minute, I don’t think it’s a no brainer.”  Justice French was very critical of where a claimant can find the list of interested parties, and how difficult it is to figure this out.  I suspect the Commission may change its paperwork on this, even if the Director prevails.

Justice O’Donnell also seemed to find compliance with subsection (C) enough, particularly in light of the heading in that statute, “perfecting the notice of appeal.” And I think Justices Pfeifer and Lanzinger (author of the much referenced Spencer decision) will go along with this position.

The Chief clearly believes Pryor had to name the Department of the Army as an appellee in his notice of appeal to vest jurisdiction in the common pleas court in this case, per Subsection (D), and failed to do so. The Chief pretty much single handedly carried the questioning for this position. I’d say Pryor’s service in the Army served him well, in withstanding a relentless barrage of questions from the Chief in good stead and good grace.  It was clear that the panel admired and liked  him (just recently sworn in as a lawyer in November of 2015.) And his amicus counsel supplemented his argument quite nicely.

To Student Contributor Austin LiPuma

Counsel for the Director immediately asserts that the jurisdictional requirement is clear when reviewing and applying the statute properly. An excellent point is brought up early on in the argument that is never fully answered—if the reviewing commission is forcing claimants to list every interested party shouldn’t the commission provide notice of who each interested party is to largely pro se claimants? This goose and gander proposition from Justice French comes up numerous times throughout the argument. Regardless, the discretion to limit jurisdiction from administrative appeals is solely left up to the General Assembly and it has spoken on this issue. The civil rules do not change this premise nor alter the express requirements statutorily created. The court has ruled on several occasions that administrative appeals are different in this respect and strict compliance with the applicable statute permitting appeal must be followed. Pryor did not submit a valid notice as he did not list proper parties. Therefore, he did not comply with the statute and jurisdiction did not vest.

Pryor, arguing on behalf of himself, first clarifies how he personally experienced the process leading up to his unemployment benefits appeal. From Pryor’s perspective, this was not a controversy caused by the Army, therefore he did not find it necessary to list the Army in the notice. The retroactive denial decided by the Director was the issue at hand and, from his vantage point, did not implicate the Army. While is undisputed that the Army was not listed as a party, it is also undisputed that the Army was properly served with the notice. The naming requirement is directory as it guides parties on the proper way to proceed with a case. The broad nature of subject matter jurisdiction coupled with the specific prong mandating that a “timely noticed be filed” should be sufficient in vesting jurisdiction in a common pleas court. Pryor did not have much traction with this facet of his argument as he should have erred on the side of caution and listed the Army in his notice. Ohio Legal Services, as amici, proffered that “interested parties” is not clearly defined. The rewrite of the statute was supposed to facilitate appellants’ access to courts not unduly interfere with it. If strict compliance is necessary than both the agency and the claimant should comply with the statute. Finally, this issue solely turns on a trial court vesting jurisdiction. Pryor’s complaint can still be dismissed on other grounds.

This case is tough to call as there are several competing interests between court access, statutory interpretation, and rule application. Chief Justice O’Connor ostensibly will be backing the Director, as her questions generally supported the Director’s argument. Justices French and Pfeifer appear to be in Pryor’s corner. This will be close regardless of the final decision but I’m calling it in (a limited way) in favor of Pryor. The court will not write a sweeping rule that allows claimants to disregard the naming requirements of interested parties but will find that Pryor did comply based on the information he was supplied (along with the fact that the Army was served).

 

 

 

 

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