Holton v. Department of Employment & Training

Holton v. Dept. of Employment & Training  (2003-535); 178 Vt. 147; 
878 A.2d 1051

2005 VT 42

[Filed 01-Apr-2005]

  NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.


                                 2005 VT 42

                                No. 2003-535


  Steven Holton                            Supreme Court

                                           On Appeal from
      v.                                   Employment Security Board


  Department of Employment and Training    October Term, 2004
  (Town of Vernon, Employer)


  Anne V. Ginevan, Chair

  Richard C. Carroll and Jonathan D. Secrest of Kristensen, Cummings,
  Phillips, & Carroll, P.C., Brattleboro, for Defendant-Appellant 
  Town of Vernon.

  William H. Sorrell, Attorney General, and Bridget C. Asay, Assistant
  Attorney General, Montpelier, for Defendant-Appellee.


  PRESENT:  Dooley, Johnson, Skoglund and Reiber, JJ., and Allen, C.J.
            (Ret.), Specially Assigned

        
       ¶  1.     JOHNSON, J.   Employer, Town of Vernon, appeals from the
  Employment Security Board's decision to award unemployment benefits to a
  former town employee that the town claims was ineligible to receive
  benefits.  The Department of Employment and Training (Department) has
  already paid all the disputed benefits to the former employee pursuant to
  the Board's decision and related state and federal law requiring prompt
  payment of benefits to a claimant after the first adversarial
  administrative determination that the claimant is eligible.  The Department
  therefore moves to dismiss the appeal as moot because, as a result of
  Vernon's special self-selected status as a noncontributing employer under
  the unemployment statute, Vernon must reimburse the Department for all
  benefits paid to former town employees, including, but not limited to,
  those benefits "paid but denied on appeal" and "benefits paid in error." 21
  V.S.A. § 1321(f).  Thus, the Department asserts that Vernon no longer has a
  legally cognizable stake in the outcome of the case because it will have to
  pay the Department regardless of whether it wins or loses on appeal. 
  Vernon concedes that the appeal is moot; however, it claims that the appeal
  fits within the exception to the mootness doctrine for cases that are
  capable of repetition yet evade review, and also raises a number of
  statutory and constitutional objections to the Department's decision to pay
  the disputed benefits prior to Vernon's appeal to this Court.  We reject
  Vernon's arguments and dismiss the appeal as moot.

       ¶  2.     Vernon's former employee, Steven Holton, filed for
  unemployment compensation benefits on May 17, 2003.  In June 2003, the
  claims adjudicator determined that Holton voluntarily ended his employment
  as a Vernon police officer without good cause attributable to the town.  As
  a result, Holton was disqualified for benefits. See 21 V.S.A. §
  1344(a)(2)(A) (disqualifying employee for benefits upon finding that
  employee left last employing unit voluntarily without good cause
  attributable to employer). 

       ¶  3.     In July, Holton appealed to the chief appeals referee. The
  referee held a telephone hearing on the claim, taking testimony from
  Holton, his former supervisor, and the chairperson of the Vernon
  Selectboard.  A couple of weeks after the hearing, the referee sustained
  the claims adjudicator's decision.  Six days later, claimant appealed that
  decision to the Employment Security Board.
   
       ¶  4.     Vernon chose not to participate in the Board's hearing. 
  Pursuant to its rules, the Board took no new evidence, but did hear
  argument from Holton.  The Board reversed the appeals referee's decision,
  and decreed that Holton's  "[c]laims are allowed for and subsequent to the
  week ending May 17, 2003."  The notice of entry that accompanied the
  Board's decision stated that it "would become final unless an interested
  party appeals the Decision to the Vermont Supreme Court by filing a Notice
  of Appeal . . . within 30 days of the date of entry of the Board's
  decision." 

       ¶  5.     The Department began paying the disputed funds to Holton
  soon after the Board's October 21, 2003 decision.  The Department made the
  payments over a six-week period from October 25, 2003 through November 29,
  2003.  Vernon timely filed its notice of appeal on November 18, 2003,
  shortly before the Department made the last payments to Holton.  The
  Department argues, and Vernon concedes, that Vernon's appeal became moot as
  soon as the last payment was made to Holton.

       ¶  6.     Though Vernon concedes that its case is now moot, Vernon
  claims that its case fits within the exception to the mootness doctrine for
  cases that are capable of repetition yet evade review.  Vernon further
  asserts that the Department acted improperly and without statutory
  authority when it disbursed benefits to Holton during the pendency of
  Vernon's appeal, thereby precluding appellate review of the Board's
  decision.  Vernon also presents an alternative claim that assumes the
  unemployment statutes do authorize the Department's benefits payout, but
  argues that the effect of such a statutory scheme in rendering Vernon's
  appeal moot results in a deprivation of its constitutional rights to due
  process and equal protection of the law.  A review of the federal-state
  cooperative unemployment insurance system will illustrate how Vernon's
  claim became moot, and why none of its statutory or constitutional claims
  entitle it to relief.

        
                                     I.

       ¶  7.     The Legislature enacted Vermont's unemployment statutes in
  correlation with the federal social security and unemployment tax acts.  21
  V.S.A. § 1384.  Vermont's unemployment compensation program is, therefore,
  part of the federal-state cooperative unemployment insurance program that
  is funded in part by grants to Vermont from the United States.  See 42
  U.S.C. § 1101(c)(1)(A) (providing for payments to states for assistance in
  administering their unemployment compensation programs).  To qualify for
  this federal aid, Vermont must receive annual certification from the U.S.
  Secretary of Labor indicating that, among other things, Vermont's methods
  of administering its unemployment program are "reasonably calculated to
  insure full payment of unemployment compensation when due."  42 U.S.C. §
  503(a)(1).
   
       ¶  8.     The U.S. Supreme Court has interpreted the "when due"
  language of § 503 to mean "the time when payments are first
  administratively allowed as a result of a hearing of which both parties
  have notice and are permitted to present their respective positions."  Cal.
  Dep't of Human Res. Dev. v. Java, 402 U.S. 121, 133 (1971); accord Fusari
  v. Steinberg, 419 U.S. 379, 387-88 (1975) ("The basic thrust of the
  statutory 'when due' requirement is timeliness."(footnote omitted)).  In so
  holding, the Court struck down a California procedure that suspended
  payments during the pendency of an employer's appeal.  Java, 402 U.S.  at
  133.(FN1)  The U.S. Court of Appeals for the Third Circuit interpreted the
  "when due" statutory language in light of Java and Fusari, and concluded
  that "[t]he critical factor is timely payment to all eligible persons,
  whether their eligibility is upheld initially or only after one or more
  appeals."  Wilkinson v. Abrams, 627 F.2d 650, 661 n.14 (3rd Cir. 1980)
  (Emphasis in original.).

       ¶  9.     The Department points out that Vermont law is entirely
  consistent with federal law on this point.  Vermont's statute provides that
  an authorized representative of the Commissioner of Labor shall (1) "pass
  upon each claim for benefits as provided in this chapter" and (2) "promptly
  award such benefits as shall be found to be payable under the provisions of
  this chapter."  21 V.S.A. § 1348(a).  The "provisions" of Title 21, Chapter
  17 include appeals to the referee and the Board.  Id. §§ 1348(a), 1349. 
  Accordingly, the statutory requirement that the Department promptly award
  benefits applies equally to benefits found payable at all levels of the
  administrative process.

       ¶  10.     The grants provided by the federal government make up only
  a part of the overall unemployment compensation fund from which the
  Department draws to pay benefits to qualified workers who become
  unemployed.  The remainder of the money used to pay unemployment benefits
  comes from public and private employers in the state.  
          
       ¶  11.     Municipalities like Vernon are provided with two options
  for meeting their obligations under Vermont's unemployment compensation
  law.  The first option is to be treated as a contributing employer.  See
  id. § 1321(e) (outlining computation of employer's experience rating). 
  Contributing employers are required to pay regular contributions to the
  unemployment compensation fund administered by the Department.  Id. §
  1321(a).  These contributions, also commonly referred to as unemployment
  taxes, are calculated using a complex formula based on the amount of wages
  the employer pays out and the employer's experience rating record of claims
  against the employer by former employees.  Id. §§ 1324, 1325(a).  Claims
  awarded to former employees of a contributing employer are paid directly by
  the fund with no further reimbursement from the employer, although the
  claim is counted against the employer for purposes of its experience rating
  record.  21 V.S.A. § 1325. 

       ¶  12.     The second option, open only to governmental employers and
  nonprofit corporations, is to be a noncontributing employer.  Id. §
  1321(e).  These employers do not pay regular unemployment taxes into the
  fund, but the fund pays for claims by their former employees.  Id.
  Accordingly, noncontributing employers must reimburse the fund for every
  dollar in benefits paid to their former employees.  Id.

       ¶  13.     Municipalities that elect to be noncontributing employers
  enjoy an advantage over contributing employers because, unlike contributing
  employers who must pay the fund even during periods when none of their
  former employees make claims against them, noncontributing employers pay
  only when the fund pays benefits to one of their former employees.  This
  self-selected status is not, however, without some drawbacks because the
  statute requires noncontributing employers to reimburse the fund for "such
  amounts as the commissioner finds to be due under this chapter, including
  but not limited to benefits paid but denied on appeal or benefits paid in
  error."  Id. § 1321(f) (emphasis added).

                                     II.
   
       ¶  14.     The requirement that the Department promptly pay Holton
  after the Board's decision, in conjunction with the statutory reimbursement
  provision in § 1321(f), and the unpredictable time lapse between the
  beginning of the relatively short payout period and the hearing on appeal
  caused this case to become moot.  A case becomes moot when the parties
  cease to maintain a legally cognizable interest in the outcome of the case. 
  State v. Fernald, 168 Vt. 620, 621, 723 A.2d 1145, 1146 (1998) (mem.).  The
  mootness doctrine derives its force from the Vermont Constitution, which,
  like its federal counterpart, limits the authority of the courts to the
  determination of actual, live controversies between adverse litigants.  See
  In re Opinion of the Justices, 115 Vt. 524, 529, 64 A.2d 169, 172 (1949)
  (holding that the Vermont Constitution grants jurisdiction over only actual
  controversies).  Therefore, mootness  generally precludes appellate review. 
  State v. Gundlah, 160 Vt. 193, 196, 624 A.2d 368, 370 (1993).  When
  mootness is raised, we must inquire, " 'whether decision of a once living
  dispute continues to be justified by a sufficient prospect that the
  decision will have an impact on the parties.' "  All Cycle, Inc. v.
  Chittenden Solid Waste Dist., 164 Vt. 428, 432, 670 A.2d 800, 803 (1995)
  (quoting 13A C. Wright, et al., Federal Practice & Procedure § 3533, at 212
  (1984)).  

       ¶  15.     At this stage, we fail to see what impact a decision of
  Vernon's appeal would have on the parties.  By disbursing all the funds
  awarded to Holton, the Department has deprived Vernon of any financial
  stake in the outcome of this case because, even if Vernon were to prevail
  in this Court, the Department would exercise its authority under § 1321(f)
  to collect reimbursement from Vernon for all the benefits "paid but denied
  on appeal" to Holton.  Moreover, Vernon need not fear further liability as
  a result of the Board's decision because § 1353 prohibits the collateral
  use of  "[a]ny determination, redetermination, finding of fact, conclusion
  of law, decision, final order, or final judgment entered or made by . . .
  the employment security board" in any "separate or subsequent action." 
  Accordingly, Vernon's appeal is moot for lack of any stake in its outcome.
   
       ¶  16.     Though Vernon recognizes that its appeal is technically
  moot, it suggests that it fits within the exception to the mootness
  doctrine for cases that are capable of repetition yet evade review.  When
  the case is not a class action, this exception is limited to situations
  where: (1) the duration of the challenged action was so brief that it could
  not be fully litigated before it expired, and (2) there is a reasonable
  expectation or a demonstrated probability that the appellant will be
  subject to the same action again.  Fernald, 168 Vt. at 621, 723 A.2d  at
  1146.  We have held that the second prong of this test requires a showing
  of reasonable likelihood that the fact pattern presented will be repeated. 
  Id.; Gundlah, 160 Vt. at 196, 624 A.2d  at 370.  For example, in In re P.S.,
  167 Vt. 63, 68, 702 A.2d 98, 101 (1997), we declined to apply this
  exception to an appeal from a moot order of nonhospitalization revocation
  because the findings on which the order was based were specific to the
  facts existing at an earlier time, and any future revocations would be
  based on new fact patterns.  Recently, in Wild v. Brooks, we rejected the
  plaintiff's claim that his nuisance suit against a temporarily shut-down
  shooting range was capable of repetition yet evading review.  2004 VT 74, ¶
  13, 15 Vt. L. Wk. 239, 862 A.2d 225.  We reasoned that the plaintiff would
  not be subject to the "same" action when the shooting range resumed
  operations because it was required to do so under new operating conditions
  that were sufficiently different from the old ones; thus, any opinion based
  on the superseded conditions would be advisory.   Id. ¶¶ 12-14.
   
       ¶  17.     The Board decision that Vernon now appeals is based on a
  specific set of facts that are not reasonably likely to recur.  The Board's
  decision turned on the question of whether certain threatening statements
  made by Vernon's police chief to Holton warranted Holton's resignation. 
  These statements were made in the context of a long-simmering and public
  dispute between claimant and the police chief.(FN2)  Vernon notes that it
  employs a relatively large workforce-ninety employees in 2003-and thus
  reasonably expects that it will "again have cause to challenge the
  unemployment compensation claim of an employee."  While no doubt true, this
  general statement does not show how any future claim by a different
  employee will likely present a repetition of the fact pattern underlying
  the present claim.  Accordingly, Vernon has not met its burden of
  establishing that its case fits within a recognized exception to the
  mootness doctrine; we cannot, therefore, review its appeal on the merits.

                                    III.
   
       ¶  18.     In response to the State's motion to dismiss on mootness
  grounds, Vernon raises several statutory and constitutional objections to
  the Department's benefits-payment policy that resulted in the mootness
  problem here.  The Department contends that we should treat these arguments
  as waived because Vernon did not raise these arguments prior to appeal, and
  even then, omitted them in its principal brief.  See, e.g., In re White,
  172 Vt. 335, 343, 779 A.2d 1264, 1270 (2001) (reaffirming rule that Court
  will not address arguments not properly preserved for appeal); Bigelow v.
  Dep't of Taxes, 163 Vt. 33, 37-38, 652 A.2d 985, 988 (1994) (treating issue
  not raised in principal brief as waived).  The Department's waiver argument
  ignores the fact that Vernon's statutory and constitutional claims became
  germane to this appeal only after the Board rendered its decision and the
  Department began payments.  Both the claims adjudicator and the appeals
  referee had vindicated Vernon's position by denying Holton's claim.  The
  issues before the Board related solely to the correctness of these prior
  decisions, not to the broader questions of whether the unemployment
  compensation statute justifies the Department's benefits payout practices,
  and if so, whether the statutes violate Vernon's constitutional rights. 
  The Department has not even shown that such questions fall within the
  Board's jurisdiction.  See 21 V.S.A. § 1349 (describing the Board's
  appellate jurisdiction).  The appeal did not become moot until the
  Department made the last benefits payment to Holton eleven days after
  Vernon filed its notice of appeal to this Court.  The Department first
  called mootness to the Court's attention on January 26, 2000-four days
  after Vernon filed its principal brief.  Under these circumstances, we
  conclude that Vernon's statutory and constitutional challenges to the
  Department's procedure were appropriately made for the first time in
  response to the Department's motion to dismiss on mootness grounds, and we
  will address them accordingly.

                                     A.

       ¶  19.     Vernon claims that the Department exceeded its authority
  under the unemployment compensation statute when it disbursed the funds to
  Holton.  The Department acknowledges that disbursement of unemployment
  compensation funds can be made only within the limits imposed by the
  statute, In re Platt, 130 Vt. 329, 331, 292 A.2d 822, 824 (1972), but
  maintains that the controlling state and federal statutes fully support its
  action.  We conclude that the Department acted within its authority when it
  made the disbursement to Holton.

       ¶  20.     After considering the statutory language discussed supra,
  part I, we find no support for Vernon's assertion that the prompt awarding
  requirement in § 1348 is limited to initial benefit determinations, and
  does not apply to benefit awards found payable by the referee or the Board. 
  As we noted, the plain language applies to benefits found payable at all
  levels of the administrative process, including those benefits first
  awarded by the Board on appeal.  This reading of the statute is also
  consistent with the federal requirement that benefits be paid at "the time
  when payments are first administratively allowed as a result of a hearing
  of which both parties have notice and are permitted to present their
  respective positions."  Java, 402 U.S.  at 133.  Though Vernon chose not to
  participate, the Board's decision satisfies the Java criteria.  
   
       ¶  21.     Vernon nonetheless contends that the language in § 1348
  requires only that the Department make a prompt decision on each claim, and
  not that it actually disburse disputed funds once the claimant receives a
  favorable decision.  The Department points out that § 1348(a)'s requirement
  that the commissioner's representative "pass upon each claim" is sufficient
  to accomplish this purpose.  Thus, Vernon's construction would render §
  1348(a)'s command to promptly award "benefits as shall be found payable" as
  surplusage.  Our rules of statutory construction require us to consider the
  statute as a whole giving effect to a statute's every word, sentence, and
  clause, when possible.  Woolaver v. State, 2003 VT 71, ¶ 21, 175 Vt. 397,
  833 A.2d 849.  Moreover, we have repeatedly recognized that the
  unemployment statutes must be construed liberally in favor of claimants so
  as to best effectuate their purpose of removing the economic disabilities
  and distress resulting from involuntary unemployment.  E.g., Howard v.
  Dep't of Employment & Training, 153 Vt. 614, 616, 572 A.2d 931, 932 (1990). 
  Finally, we are hesitant to give the statute a construction that may
  conflict with the requirements of federal law cited above, thereby
  jeopardizing Vermont's eligibility for federal contributions in the
  operation of its unemployment compensation program.  This consideration is
  strengthened by the express statutory references to the correlation between
  the federal law and Vermont's law.  21 V.S.A. § 1384.  Accordingly, we must
  reject Vernon's construction, and conclude that the Department was both
  authorized and required to disburse the funds to Holton after the Board
  found them payable.
   
       ¶  22.     Section 1321(f) further supports our interpretation.  As
  noted, this provision makes  noncontributing employers like Vernon liable
  to the Department for "benefits paid but denied on appeal."  21 V.S.A. §
  1321(f).  By enacting this provision, the Legislature expressly
  contemplated  that benefits would be paid pending appellate review, and
  that benefits paid might later be denied.  Though the Legislature may not
  have envisioned the effect that such disbursements could have in mooting
  cases like this one where all the benefits due are paid prior to the
  appeal, the statute still contains the authority to make the 
  disbursement.(FN3)
   
       ¶  23.     Vernon argues that § 1321(f) conflicts with the right of
  appeal to the Supreme Court contained in § 1349, which provides that the
  decision of the Board "shall be final unless an appeal to the supreme court
  is taken."  The Department counters by correctly pointing out that any
  litigant's appeal can become moot because of "intervening factors or the
  passage of time."   Furthermore, § 1349 applies generally to all parties,
  including employees, contributing employers, and noncontributing employers. 
  Of these three, only noncontributing employers will face potential mootness
  problems.  When a claimant appeals a denial to this Court, the claimant
  will ordinarily retain a stake in the outcome because the claimant will be
  entitled to compensation if the claimant's appeal succeeds.  A contributing
  employer also retains a stake in an appeal challenging a Board decision
  that grants benefits to one of its former employees because the employer's
  future rate of contribution will be affected by any claim that is charged
  to its experience-rating record.  See 21 V.S.A. § 1325 (explaining how a
  contributing employer's experience rating record is calculated).  Thus, a
  contributing employer has a financial incentive to ensure that its record
  is not affected by claims from employees who should have been disqualified
  from receiving benefits.  While this system puts some noncontributing
  employers wishing to appeal from the Board at a comparative disadvantage to
  contributing employers, it must be remembered that Vernon had, and still
  has, the opportunity to choose its status within this system, and that its
  choice comes with the relative advantage of not having to make regular
  unemployment tax payments.  Supra ¶¶ 6-7.  

                                     B.

       ¶  24.     In light of our conclusion that the unemployment statutes
  authorized the Department's disbursement to Holton following the Board's
  decision in his favor, we now address Vernon's claim that this result
  deprives it of due process.  Vernon cites City of Burlington v. Department
  of Employment & Training, for the proposition that noncontributing
  employers have the same Fourteenth Amendment due process rights in the
  granting or denying of unemployment benefits as do employees.  148 Vt. 151,
  158, 530 A.2d 573, 577 (1987).  In that case, we affirmed the Board's
  decision that the noncontributing employers' due process rights were
  violated when they were not given notice and an opportunity to be heard at
  the hearings where their liability for unemployment benefits was first
  determined. Id. at 157-58, 530 A.2d  at 577.  We further held that the
  remedy the Board fashioned for this violation also failed to satisfy the
  requirements of due process because, in ordering a new hearing, the Board
  improperly placed the burden of proof on the employer.  Id. at 158-59, 530 A.2d  at 578  We also faulted the Board's procedure on remand because the
  new hearing would occur a year after the events relating to the claims took
  place, and would therefore place the employer in a "significantly more
  difficult" position to challenge the claims than it would have been at a
  hearing conducted at the time when the claims were first filed.  Id.  
   
       ¶  25.     But Vernon concedes that, unlike the employers in City of
  Burlington, it was given notice and an opportunity to participate in the
  administrative process before a neutral decisionmaker.  In fact, Vernon
  participated in the evidentiary hearing conducted by the appeals referee,
  but chose not to participate in the hearing before the Board where its
  liability was ultimately determined.  An employer who has received two
  opportunities to participate in administrative proceedings prior to the
  determination of its liability has received all the process it was due
  under the federal constitution, and nothing in City of Burlington is to the
  contrary.

       ¶  26.     In making its due process argument, Vernon has not claimed
  that the administrative procedures used to determine its liability were
  somehow deficient in terms of their procedural fairness.  This is an
  element of its burden in showing a procedural due process violation of the
  U.S. Constitution.  Matthews v. Eldridge, 424 U.S. 319, 335 (1976)
  (evaluating fairness of administrative procedure for due process purposes
  based on the risk that procedures used will result in an erroneous
  deprivation of liberty or property, and the probable value, if any, that
  additional or substitute procedures would add).  Vernon has not alleged
  that the rules and procedures in the administrative process deprived it of
  the ability to submit evidence and legal arguments necessary to refute
  Holton's claims.  Nor has it claimed that the administrative officers who
  handled the case lacked necessary qualifications to understand the central
  issue involved.  In fact, we have often noted that the Board has "special
  expertise" in determining whether an employee's resignation is for good
  cause attributable to the employer, and we afford its decision on this
  issue great weight on appeal.  Garcia v. Dep't of Employment & Training,
  145 Vt. 331, 334-35, 488 A.2d 762, 764 (1985).
   
       ¶  27.   Vernon also claims that the effect of the statutory scheme in
  depriving it of an appeal to this Court in this case violates Chapter I,
  Article 4 of the Vermont Constitution.  The Vermont Constitution mandates
  that "[e]very person within this state ought to find a certain remedy, by
  having recourse to the laws, for all injuries or wrongs which one may
  receive in person, property or character."  Vt. Const. ch. I, art. 4.  We
  have treated Article 4 as the Vermont equivalent of the federal
  constitution's Due Process Clause, Quesnel v. Town of Middlebury, 167 Vt.
  252, 258, 706 A.2d 436, 439 (1997), and we have interpreted Article 4 as
  requiring adequate access to judicial process.  E.g., Shields v. Gerhart,
  163 Vt. 219, 223, 658 A.2d 924, 928 (1995).  As discussed, the effect of
  the statutory scheme on this case has not resulted in a violation of the
  federal constitution's Due Process Clause even though Vernon will not have
  access  to an appellate law court in this case.  Thus, a similar result
  should obtain under Article 4.  

       ¶  28.     We have, however, stated in dicta that, in light of Article
  4, we would hesitate to interpret an "arguably ambiguous" statute as
  foreclosing judicial review of administrative agency action.  Vincent v.
  Vt. State Ret. Bd., 148 Vt. 531, 534 n.2, 536 A.2d 925, 927 n.2 (1987).  We
  are not presented with such a problem here because this statute is
  unambiguous.  It does not foreclose  judicial review in all cases involving
  noncontributing employers.  To the contrary, it expressly provides all
  interested parties the right to appeal the Board's decision to this Court. 
  21 V.S.A. §  1349.  The reimbursement provision of § 1321(f), in
  conjunction with the relatively short disbursement period for this  
  claim,(FN4) rendered this particular noncontributing employer's appeal moot.
  While appeals by other similarly situated noncontributing employers may
  suffer the same fate, the statute does not by its terms foreclose
  noncontributing employer appeals from judicial review of agency action.

                                     C.
   
       ¶  29.     Vernon next argues that § 1321(f)'s requirement that
  noncontributing employers reimburse the Department for any benefits "paid
  but denied on appeal" violates the Equal Protection Clause of the
  Fourteenth Amendment to the U.S. Constitution.  "Absent a suspect
  classification or a violation of a fundamental right, a legislative
  classification does not deny equal protection of the laws if it is
  rationally related to a legitimate public purpose."  In re Letourneau, 168
  Vt. 539, 553, 726 A.2d 31, 41 (1998).  Vernon concedes that its
  self-selected status under the unemployment statutes is not a suspect
  classification, and that no fundamental rights are involved here.  Thus,
  applying the rational basis standard, we have no problem in discerning a
  legitimate governmental interest that supports the disparate treatment
  between contributing and noncontributing employers. 

       ¶  30.     As we noted above, noncontributing employers do not pay the
  unemployment taxes from which the fund receives the money that covers all
  benefits paid to claimants regardless of whether the claimants were
  employed by a contributing or noncontributing employer.  By requiring a
  noncontributing employer to reimburse the fund for all benefits paid out to
  its former employees, the State ensures the financial integrity and
  liquidity of the fund.  In a sense, there is little disparity between
  contributing and noncontributing employers because all the unemployment
  taxes that contributing employers pay into the fund are forever lost to
  those employers, although their future rate of contribution will be
  affected by only those claims that are upheld on appeal.  Nothing in this
  system offends the Equal Protection Clause.(FN5)

       Dismissed.



  FOR THE COURT:

  _______________________________________
  Associate Justice


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                                  Footnotes

FN1.  The California program that the U.S. Supreme Court struck down
  in Java suspended payments for a median period of seven weeks pending an
  employer's appeal after an initial determination.  402 U.S.  at 133.  Here,
  the appeal took substantially longer than seven weeks.  The Board issued
  its decision granting benefits on October 21, 2003.  The appeal from this
  decision was not heard until October 2004, almost one year later.

FN2.  From the record, this matter appears to have personal undertones for
  both claimant and Vernon officials.  At oral argument, Vernon's counsel
  stated that, notwithstanding its lack of any financial stake, the Town
  still seeks vindication for its specific personnel decisions and the
  conduct of its officials in this matter.  Though its desire is
  understandable, it is not a legally cognizable stake in the outcome of this
  case.  If, however, the Board's decision turned on the validity of a Vernon
  personnel policy of general application to all of Vernon's employees, it is
  possible that Vernon's appeal could proceed because a precedent-setting
  decision from this Court on the policy's viability could affect its
  financial stake in future cases likely to arise under the policy.  This is
  not such a case.

FN3.  Vernon argues that through an amendment to § 1321(f), the Legislature
  could solve the mootness problem that will arise in some cases involving
  appeals by noncontributing employers.  It argues that the Legislature could
  omit the language that creates noncontributing employer liability for
  benefits paid but denied on appeal, thus preserving the noncontributing
  employer's financial stake in the outcome of the appeal.  In the absence of
  any constitutional infirmity in the statute, see infra, Parts II.B, II.C,
  we must leave the policy considerations that such an amendment would entail
  for the Legislature to resolve.

FN4.  The benefit claim here was for six weeks.  By contrast, the
  Department's counsel stated at oral argument that the median benefits
  period lasts twenty-six weeks. 

FN5.  Without citation to authority, Vernon further contends that we should
  still strike down § 1321(f) on equal protection grounds in spite of our
  conclusion that it is rationally related to a legitimate governmental
  interest.  To the extent we understand it, Vernon's argument is that the
  Legislature failed to consider the effect that the reimbursement provision
  would have on the appeal rights of noncontributing employers, and thus it
  should be invalidated as arbitrary and capricious.  This argument is
  without merit.