Hupp v. Employment Security Commission of Wyoming , 1986 Wyo. LEXIS 500 ( 1986 )

CARDINE, Justice.

The single dispositive issue in this case is whether the Wyoming Employment Security Commission (ESC) has the authority to reconsider its own ruling in a contested case when that ruling was made by the full commission at the final stage of intra-agency review. We reverse and hold that decisions of the full commission sitting as an appellate tribunal are final unless a judicial appeal is taken to the district court by an unsuccessful party.¹

FACTS

This case arose when Raylene Davis, a barber formerly employed at a barbershop owned by appellant Timothy Hupp, filed a claim for unemployment benefits. Ms. Davis listed appellant as her last employer. When the claim was processed, the ESC staff discovered that appellant had not registered his business with the commission. The ESC then began an investigation to find out whether appellant was liable for employer contributions to the unemployment compensation fund.

The ESC’s investigation resulted in an “Official Notice of Unemployment Insurance Coverage” which the agency sent to appellant. The notice informed appellant that he was an employer rather than an independent contractor and was, therefore, required to contribute to the fund. Appellant perfected a timely intra-agency appeal which was heard by an agency appeals examiner in Cheyenne on November 14, 1984. The examiner affirmed the initial agency determination, and appellant again appealed, this time to the Employment Security Commission itself. After entertaining oral argument on December 17, 1984, the three-member commission reversed the prior agency determinations and held that the barbers working at appellant’s place of business “were not engaged in employment for Timothy L. Hupp, d/b/a Your Appearance. Timothy L. Hupp is not liable for taxes paid on their wages.”

The agency staff was apparently unhappy with the commission’s decision and, on January 14, 1985, requested that the commission reconsider. Appellant was notified of the staff’s request by mail. A nonevi-dentiary reconsideration hearing was held in Casper on January 24th, and the commission reversed itself by an order dated January 28th. The order stated;

“Upon reconsideration, we conclude that those who performed barber and cosmetology services for Hupp prior to August 2, 1988, were engaged in employment, under the Wyoming Employment Security Law, which subjected Hupp to contributions to the unemployment compensation fund based upon compensation paid to those individuals.”

Appellant perfected a timely appeal to the district court, and the case was then certified directly to this court as permitted by Rule 12.09, W.R.A.P. (Cum.Supp.1985).

THE PARTIES’ CONTENTIONS

The parties agree that the procedures followed by appellant and the ESC were entirely proper until the commission decided to reconsider its ruling of December 17, 1984. Appellant claims that the commission had no authority to reconsider and that even if it had such authority, its decision upon reconsideration was unsupported by substantial evidence.² Appellee, the Employment Security Commission counters that the power to reconsider is inherent in an agency’s power to decide and that the agency’s decision upon reconsideration was supported by substantial evidence. We believe that the parties’ first issue, whether the agency had authority to reconsider, is dispositive so we do not address the parties’ second issue involving substantial evidence.

THE POWER TO RECONSIDER

Any attempt to ascertain the powers of an administrative agency must begin with the proposition that only those powers expressly conferred by the legislature are granted to an agency. Brasel & Sims Construction Company, Inc. v. State Highway Commission of Wyominq, Wyo., 655 P.2d 265, 267 (1982).

“Stated in another manner, an administrative body has only the power and authority granted by the constitution or statutes creating the same * * *. Such statutes must be strictly construed or ‘any reasonable doubt of existence of any power must be resolved against the exercise thereof’ * * *.” (Citations omitted.) Tri-County Electric Association, Inc. v. City of Gillette, Wyo., 525 P.2d 3, 8-9 (1974).

In the context of an agency’s power to reconsider a final decision, the Supreme Court of Hawaii has stated:

“The weight of authority requires that an administrative agency’s power to reconsider final decisions be statutorily grounded, either stated expressly or inferred from a reading of the entire statute.” Yamada v. Natural Disaster Claims Commission, 54 Hawaii 621, 513 P.2d 1001, 1004 (1973). Accord Olson v. Borough of Homestead, 66 Pa.Cmwlth. 120, 443 A.2d 875, 878 (1982); Klaren v. Board of Fire and Police Commissioners of Village of Westmont, 99 Ill.App.2d 356, 240 N.E.2d 535, 537 (1968); Koehn v. State Board of Equalization, Department of Alcoholic Beverage Control, 166 Cal.App.2d 109, 333 P.2d 125, 128 (1958).³

Consistent with the principle of enumerated agency authority, § 27-3-602(a)(ii), W.S.1977 limits the ESC’s power to create its own procedures. It states:

“(a) The commission shall:

* * * * * *

“(ii) Determine its organization and methods of procedure in accordance with this act.” (Emphasis added.)

In essence, the ESC may create and employ a reconsideration procedure only if that authority can be found somewhere in the Wyoming Employment Security Law, §§ 27-3-101 through 27-3-704, W.S.1977.

Our search for statutory authority covers a limited portion of the Employment Security Law because only a few of the act’s provisions relate to employer contribution cases. These cases commence either when the employer requests a contribution determination by the commission or when the ESC staff begins an investigation on its own motion. Section 27-3-502, W.S. 1977 (Cum.Supp.1985). The staff makes the initial determination of employer liability, and it becomes final unless the employer appeals within 15 days after the determination is mailed. Section 27-3-502(a), W.S. 1977 (Cum.Supp.1985). If the employer appeals under § 27-3-502(a), then § 27-3-506(d), W.S.1977, supra, comes into play. That section, in turn, incorporates the procedures found in §§ 27-3-401 through 27-3-409:

“An employer may apply to the commission for review of a decision or determination involving contribution liability. * * If the commission grants review, the employer shall be given opportunity for hearing in accordance with W.S. 27-3-401 through 27-3-409.”

Section 27-3-403, W.S.1977 governs the employer’s initial appeal. It is conducted by an appeal tribunal which is composed of either a hearing examiner or a three-member body consisting of a salaried examiner and representatives of the employer and employee. When, as in this case, an employee is not a party, a single hearing examiner makes up the appeal tribunal. The initial appeal takes the form of a contested case governed by the Wyoming Administrative Procedure Act (APA). See §§ •27-3-403 and 27-3-405, W.S.1977, supra.

If the appeal tribunal’s decision is adverse to the employer, he can attempt an additional appeal under § 27-3-404, W.S. 1977. This second appeal within the agency is taken to the entire employment security commission. The commission can base its decision on the evidence taken by the hearing examiner, and it can also take new evidence. Section 27-3-404(b), W.S.1977.

Finally, if the full commission affirms a decision adverse to the employer, he has 30 days in which to bring an appeal to the district court. Section 27-3-506(d); Rule 12.04, W.R.A.P.

Section 27-3-404, W.S.1977 governs appeal procedure before the full commission. It is the statute which must be searched for language authorizing the full commission to reconsider its ruling in the employer’s second appeal. Subsection (c) states in relevant part:

“The commission shall promptly notify parties to a proceeding of its decision including findings and conclusions. The decision is final unless judicial review is initiated pursuant to this article.” (Emphasis added.)

We think that the finality language of subsection (c) is clear. The commission cannot reconsider its appellate decision unless there is some other statute expressly permitting reconsideration. At first glance, it appears that subsection (d) of § 27-3-404 is just such a statutory exception. It states:

“Subject to limitations prescribed under W.S. 27-3-402(c), the commission may reconsider a determination provided by a final decision of an appeal tribunal and may apply to the tribunal for a revised decision.”

But closer inspection reveals that the commission’s power to reconsider the final decisions of appeal tribunals under § 27-3-404(d) is “subject to limitations prescribed under W.S. 27-3-402(c).” Section 27-3-402(c) permits reconsiderations only when there is “an error in computation or identity [of the unemployment claimant],” when wages of the claimant relevant to the determination were omitted, or when benefits were denied or determined based on a misrepresentation of facts. In this case, none of these grounds for reconsideration were present. The commission reconsidered its decision because the staff thought the commission had misread its own precedent, not because there had been an error in computation, an omission of claimant’s wages, or misrepresentation of facts. Its reconsideration exceeded the limitations created in § 27-3~402(c).

THE SPECIAL CONCURRENCE

In his special concurrence, Justice Urbig-kit contends that the APA authorizes the ESC to reconsider its decisions as long as the agency adopts rules of reconsideration procedure. Sage Club, Inc. v. Employment Security Commission of Wyoming, Wyo., 601 P.2d 1306 (1979), is cited for the proposition that the APA prevails over the procedural sections of the Wyoming employment security statutes.

Our holding in Sage Club, Inc. v. Employment Security Commission of Wyoming was actually much narrower than suggested. We held that the APA procedures supersede conflicting statutes pertaining to employment security procedures that were passed before the APA was enacted. The key statute in this case, § 27-3-404(c), W.S.1977, is not superseded by APA § 16-3-102 because the legislature recodified § 27-3-404 after the most recent revision of § 16-3-102. 1983 Wyoming Session Laws, ch. 114, § 1 (§ 27-3-404); 1982 Wyoming Session Laws, ch. 62, § 3 (§ 16-3-102). It appears that the legislature intended that § 27-3-404(c), W.S.1977 as amended, rather than the provisions of the APA, govern ESC rehearings.

If the legislature intended that the APA supersede all conflicting employment security statutes, it probably would have said so in the 1983 amendments to the Employment Security Law. In 1985, the legislature amended the statute at issue in Sage Club, Inc. v. Employment Security Commission of Wyoming, supra, § 27-3-407, so that it no longer conflicted with the APA judicial review provision. But the legislature did not change the procedural statute which governs ESC rehearings — § 27-3-404(c).

The specially concurring opinion states that the legislature did not consciously withhold from the ESC power to rehear. But the plain language of § 27-3-404(c) suggests a conscious legislative decision to do just that. Section 27-3-404(c) states:

“The decision [of the full Employment Security Commission] is final unless judicial review is initiated pursuant to this article.”

If the legislature intended to empower the ESC to rehear, it surely knew how to grant that power in plain terms. When the legislature gave the Public Service Commission the power to rehear, the legislature used the following unmistakable language:

“At any time after an order has been made by the commission any person interested therein may apply for a rehearing in respect to any matter determined therein and the commission shall grant and hold such rehearing if in its judgment sufficient reason therefor be made to appear, which rehearing shall be subject to such rules as the commission may prescribe.” Section 37-2-214, W.S.1977.

We cannot find ESC rehearing authority in Rule 12.04, W.R.A.P., which gives aggrieved parties 30 days to appeal final agency decisions to the district court. The rule applies to decisions on rehearing as well as all other final decisions. But this does not mean that all agencies must have the power to rehear. The rule is simply a procedural provision that applies to those ageneies that have been given the power to rehear.

Nor do subsections (a)(ii) and (b) of § 27-3-602, W.S.1977 authorize rehearings by the ESC. A careful reading of these sections reveals that the ESC can adopt rules of procedure only when they are in accordance with the specific procedural statutes in the Employment Security Law.

While we sympathize with Justice Urbig-kit’s suggestion that the ESC be able to revise its own decisions within a reasonable time after they are made, we believe that authority to rehear must come from the legislature. Section 27-3-404(c) can be amended, or a rehearing provision similar to the Public Service Commission’s rehearing statute, § 37-2-214, W.S.1977, can be enacted.

Reversed.

1 . The agency itself cannot bring an appeal to the district court because it is not a "person aggrieved or adversely affected in fact by a final decision of an agency in a contested case.” Section 16-3-114(a), W.S.1977; Pritchard v. State, Division of Vocational Rehabilitation, Department of Health and Social Services, Wyo., 540 P.2d 523, 526 (1975).

2 . Appellant also argued in his brief that even if permitted, the ESC’s reconsideration was untimely. Appellant abandoned this contention at oral argument apparently recognizing that § 27-3-506(d), W.S.1977 (Cum.Supp.1985) governs the finality of the ESC’s decision. If reconsideration were authorized, then § 27-3-506(d) would permit reconsideration within 30 days after the ESC's decision. In this case, the ESC did reconsider within 30 days of the December 17th decision. We must decide whether the agency could reconsider, not whether its reconsideration was timely.

3 . Some state courts and several United States circuit courts of appeal have held that the power to reconsider is inherent in an administrative agency’s power to decide. E.g., Trujillo v. General Electric Company, 621 F.2d 1084, 1086 (10th Cir.1980). This is clearly contrary to the Wyoming principle of limited agency authority.