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decided: December 27, 1985.
WALTER LESNESKI, PETITIONERv.WORKMEN'S COMPENSATION APPEAL BOARD (PITTSBURGH PRESS COMPANY AND VIGILANT INSURANCE COMPANY), RESPONDENTS
Appeal from the Order of the Workmen's Compensation Appeal Board in the case of Walter Lesneski v. Pittsburgh Press Company, No. A-84100, dated November 25, 1983.
Amiel B. Caramanna, Jr., with him, Alexander J. Pentecost, for petitioner.
Raymond F. Keisling, for respondents.
Judges Craig and Doyle, and Senior Judge Kalish, sitting as a panel of three. Opinion by Judge Craig.
[ 94 Pa. Commw. Page 19]
Walter Lesneski questions a Workmen's Compensation Appeal Board order which reversed a referee's decision restoring his eligibility for disability payments.
Lesneski, a driver for the Pittsburgh Press, was injured in the course of his employment in August, 1976, and received compensation benefits through October, 1977. At that time, he signed a final receipt*fn1 and returned to work. In July, 1980, Lesneski, complaining of pain and no longer employed by the Press, filed a petition to set aside the final receipt that he had signed in 1977.
A referee, considering deposition testimony, found that Lesneski "was still disabled when he signed the final receipt on October 31, 1977." The employer appealed, alleging that the medical depositions did not prove that Lesneski remained disabled at the time he signed the final receipt, and therefore that the referee was incorrect in his ruling. The board reversed the referee and dismissed Lesneski's petition. This appeal followed.
In his brief, Lesneski contends that there is substantial evidence on record to support the referee's finding that Lesneski's disability had not terminated at the time he signed the final receipt. Significantly, Lesneski relies upon his own deposition testimony as well as the supporting depositions provided by two physicians. However, although the referee apparently considered Lesneski's deposition, it was not in the original record compiled by the board and certified to us. Because of questions regarding the status of Lesneski's deposition this court, in a separate opinion and order, remanded this case to the board in order to determine
[ 94 Pa. Commw. Page 20]
whether or not Lesneski's deposition was, in fact, a part of the official record before us and to reconsider its decision in the case. Accordingly, the board conducted an additional hearing and although it received no new evidence, it concluded that Lesneski's deposition had in fact been admitted into the record and reissued its original November 25, 1983 decision reversing the referee and denying benefits. We reverse.
In workmen's compensation cases, the referee, not the board, is the ultimate factfinder. Garcia v. Workmen's Compensation Appeal Board (Bethlehem Steel Corporation), 503 Pa. 342, 469 A.2d 585 (1983). In his findings of fact, the referee stated:
4. Claimant did return to work at his job as a truck driver for the defendant and continued to work but missed several periods of work because he was still experiencing pain and discomfort in his lower back and left leg.
5. Claimant had to stop work May 16, 1980, due to the pain and discomfort which made it difficult for him to continue. He has not worked since.
7. Claimant presented the testimony of Dr. Erle M. Heath, M.D. Dr. Heath examined the claimant in June of 1981 and continued treating him with the diagnosis of a chronic lumbar strain and degenerative arthritis, which was aggravated by the claimant's compensable injury. It was Dr. Heath's opinion that as a result of the chronic lumbar strain and aggravated degenerative osteoarthritis claimant was totally disabled and continues to be totally disabled for his job as a truck driver, which required not only driving but lifting heavy bundles of newspapers.
[ 94 Pa. Commw. Page 218]
. Claimant also presented the testimony of Louis H. Brandstetter, M.D. Dr. Brandstetter diagnosed that claimant had a chronic prostatitis condition which was directly related to his compensable injury and that claimant could not perform his former job as a result.
9. Robert F. Botkin, M.D., testified on behalf of the defendant. It was the doctor's opinion that claimant was not disabled for his job as a truck driver, even though he exhibited muscle spasm in the lumbo sacral area.
10. Your Referee finds the testimony of Doctors Heath and Brandstetter more credible in this instance than that of Dr. Botkin, and finds accordingly that claimant was still disabled when he signed the Final Receipt on October 31, 1977. (Emphasis added.)
In its review, the board is limited, as is this court, to determining whether substantial evidence supports the referee's findings of fact or whether an error of law was committed. Dudley v. Workmen's Compensation Appeal Board (Township of Marple), 80 Pa. Commonwealth Ct. 233, 471 A.2d 169 (1984). Because we now have Lesneski's testimony included in the record before us, we have a situation by which the claimant's own testimony (Findings of Fact Nos. 4, 5), in conjunction with the medical evidence (Findings of Fact Nos. 7, 8, 9), constitutes substantial evidence to support the referee's findings. American Chain and Cable Co. v. Workmen's Compensation Appeal Board, 37 Pa. Commonwealth Ct. 574, 391 A.2d 50 (1978).
Lesneski testified that his back continually bothered him from the time of his accident up until the last time that he worked:
Q. From the time you worked from August 14, 1976, the date of the accident, up until the last time you worked --
[ 94 Pa. Commw. Page 22]
A. Yes, sir.
Q. How was your back doing as you would perform your job?
A. Well, my back always bothered me. I went to work anyway, because the compensation was giving me a hard time. The back was always bothering me. I couldn't straighten it.
Q. Would you have any difficulty doing the job?
A. Yes, sir, I did. (Emphasis added.)
Although the board, at the time that it filed its decision, correctly cited the "clear and convincing proof" standard, this court has since redefined the burden of proof faced by a claimant seeking to set aside a final receipt of benefits. In Sheibley v. Workmen's Compensation Appeal Board (ARA Food Services Co.), 86 Pa. Commonwealth Ct. 28, 483 A.2d 593 (1984) this court held that, because the 1972 amendments to section 434 of the Act, 77 P.S. § 1001, eliminated the conclusive proof requirement, a claimant need only provide "sufficient credible competent evidence."
Unlike Sheibley, the record here also contains medical testimony pertinent to the point at issue. Dr. Erle Heath, testifying on deposition for Lesneski, stated:
A: I reviewed the X-rays that were taken at St. Clair Hospital in August of 1976 and it did show some hypertrophic changes in the lumbar spine at that time which would confirm that the arthritis existed prior to the accident. However, this was asymptomatic, he was really not aware of this and continued to work regularly. However, since that time this was aggravated by the injury, and the changes in the X-rays which I took in 1981 are certainly advanced in relation to those of 1976.
Q: Doctor, let me ask you this then: Based on the history of the patient gave you and what
[ 94 Pa. Commw. Page 23]
do you feel within a reasonable degree of medical certainty was the cause of your diagnosis with the exception of the degenerative arthritis?
A: In my opinion the chronic lumbar strain and the resulting symptoms and disability is undoubtedly the direct result of the accident of August of 1976, and part of his disability is the result of aggravation by trauma of the accident of 1976 of the pre-existing degenerative or osteoarthritis.
Q: So then to sum up, your diagnosis would be the chronic lumbar strain and the residual muscle damages, and you feel was caused by the accident and the degenerative arthritic condition was aggravated based on history?
A: Yes, based on history and the change in X-rays.
Q: Change in X-rays, which is documented.
A: Yes. (Emphasis added.)
Although there is no medical testimony explicitly stating that at the time he signed the final receipt Lesneski still suffered disability attributable to the accident, the clear implication here is that the disability never ceased. That Dr. Heath did not examine Lesneski until 1981 does not lessen the competency of his testimony because, in formulating his opinion, he reviewed the 1976 medical data.
So viewed, Dr. Heath's medical testimony confirms that disability continued to exist through October, 1977, when the final receipt was signed.
Thus, Lesneski's testimony, in conjunction with his physicians' testimony, provides competent evidence which the referee found sufficiently credible to rule that Lesneski still suffered compensable disability at the time he signed the final receipt.
The board may disregard a referee's findings only where there is an absence of competent evidence to
[ 94 Pa. Commw. Page 24]
support the findings. Arena v. Workmen's Compensation Appeal Board (Packaging Systems Corp.), 85 Pa. Commonwealth Ct. 553, 483 A.2d 577 (1984). Unless the board hears additional evidence, it, like this court, is "necessarily confined to a limited reviewing function." 85 Pa. Commonwealth Ct. at 556, 483 A.2d at 579.
Accordingly, we reverse the board's order.
Now, December 27, 1985, the order of the Workmen's Compensation Appeal Board, dated November 25, 1983, and republished on September 17, 1985, is reversed, and the order of the referee dated June 23, 1982, granting benefits and providing for attorney's fees, costs and interest, is affirmed.
Reversed. Order of referee affirmed.
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EU Doesn't Plan to Go Easy on Google (Like the FTC)
Tiffany Kaiser
January 11, 2013 9:36 AM
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Europe's antitrust chief accused Google of diverting traffic
Google may have
gotten off pretty easy
with the U.S. Federal Trade Commission (FTC) earlier this month, but it doesn't look like the European antitrust authorities will let Google go with a warning and a slap on the wrist.
Joaquin Almunia, Europe's antitrust chief, recently said that Google is providing search results that promote its own services instead of fairly showing those of competitors.
"We are still investigating, but my conviction is [Google] are diverting traffic," said Almunia. "They are monetising this kind of business, the strong position they have in the general search market and this is not only a dominant position, I think -- I fear -- there is an abuse of this dominant position."
Almunia added that he agreed with the FTC's recent decision to force Google to change its business practices, but the EU's punishment at the investigation's conclusion will "not be weaker."
Google could have to pay the EU a fine as high as 10 percent of its global annual turnover, which would be about $3.79 billion.
Earlier this month,
Google managed to escape a nearly two-year U.S. Federal Trade Commission (FTC) investigation
without paying any fines
Instead of paying fines, the FTC made Google promise that it would stop scraping reviews and information from other websites, stop requesting sales bans when suing companies for patent infringement and allow advertisers to export data in order to evaluate advertising campaigns.
The decision to not fine Google after such a long investigation surprised many rival companies like Microsoft and Nextag, who believe Google won't learn its lesson unless there are severe consequences.
"Game reviewers fought each other to write the most glowing coverage possible for the powerhouse Sony, MS systems. Reviewers flipped coins to see who would review the Nintendo Wii. The losers got stuck with the job." -- Andy Marken
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Tragedy of the art commons
Posted by Daniel Hall on October 13, 2007
I recently read Tyler Cowen's new book Discover Your Inner Economist. (Short review: Thought provoking, life affirming, and funny. Read it.) In a chapter on appreciating culture, he notes the dangers that overexposure poses to our appreciation for great art:
…honestly I don't know how good the Mona Lisa is, and I don't even know how I could know.
I am not invoking postmodern skepticism about the arbitrariness of objective value standards. … When it comes to the Mona Lisa, it is hard for any American or European today to look at the picture with fresh eyes. …
Economists call this phenomenon "the tragedy of the commons." A tragedy of the commons occurs when individual actions, taken together, destroy the value of an asset or resource.
Tragedy of the commons problems arise among common pool resources, whose defining characteristics are that they are non-excludable (everyone has access to them) and rivalrous (my use of the resource diminishes everyone else's ability to use it). Fisheries are a classic example: they are an open-access resource which anyone can take from, but the more fish I take, the less there are left for you to take (and, what's worse, the less there are left for everyone (both you and me) next year when the now-reduced population can't produce as many offspring).
It struck me that historically art had exactly the opposite characteristics from a common pool resource: art was excludable (only wealthy patrons had art, and smelly peasants weren't getting in to see it) and non-rivalrous (which is traditionally how we would think of a piece of artwork — it's like a sunset which can continue to provide enjoyment no matter how many people see it). This made it what economists call a club good. (I suppose the name implies that you have to be in the club — art patrons and their friends in this case — in order to get the good.)
The rise of public museums as repositories for art changed this somewhat, by making art far less excludable — you still might have to travel to go see it, but at least you could get in for a look. This effectively made art a public good, both non-rival and non-excludable.
So, what changed? My interpretation of Tyler's view is that technology made art so easy to reproduce and made its distribution so effortless that art became radically non-excludable. This is a good thing on a certain level; it implies, after all, that it's far easier to learn about, view, and appreciate (at least in a manner) much of history's greatest art. But technology also made it possible for a few "great" pieces to capture enormous audiences, as their popularity reinforced their dissemination, generating a positive feedback loop that made certain art pieces overexposed. This overexposure gave art some amount of rivalness. Everyone else's use of that art — their constant flashing it in my face — impinged on my ability to fully appreciate it.
Now, clearly, Tyler is using a slightly different sense of a good being "rival" in this case than in the case with the fishes. It's not like constant dissemination is actually destroying the artwork itself. I think intrinsic in Tyler's view is the sense that much of the power of art comes from its ability to produce a reaction or change in us, and that power is much impaired by constant exposure to shadowy copies.
I experienced this earlier this year when I saw the painting American Gothic in Chicago. It was a cool experience getting to see it. But at the same time, I didn't know what to feel when I saw it, and thinking back on the day later it wasn't even among the top 5 most impactful or memorable things I saw at the Art Institute that day — rather, they were mostly things that snuck up on me, that I hadn't seen before and impressed or moved me.
So, in the spirit of not destroying the surprise and power of personal experience, this is all I'm going to say about Tyler's book on this blog. I trust that you'll go out and read it. You'll be glad you did.


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Is this restaurant good for business meetings?
Is this a cafe?
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Had dinner here in October. My husband had the beef brisket - which he loved. I had tilapia and it was delicious. 2nd time eating here and have yet to be disappointed! Nice quaint atmosphere, service was excellent.
The charm of this restaurant was the first thing we noticed when we walked in. The food was amazing! We both had a breakfast wrap, scones, and a fruit cup! Will definitely go back when we return. We both highly recommend this place!
This is a pretty cozy little cafe nuzzled in Eagle Harbor. Its a quant little place(cottage). The food was delicious - Basic breakfasts. Very friendly staff.
We had heard about this restaurant and we were disappointed when we found out that they changed to weekends only after November 1, our arrival date. But, we were able to enjoy a wonderful breakfast on Friday the 4th; and we enjoyed it so much we came back for dinner that evening. Rocky is the server and very knowledgeable, courteous...
A few of us stopped here to have a drink so we could decide what to do with the rest of our day. Wish we didn't already have dinner plans . After looking over their menu, it was very tempting to eat there.
But nice menu, friendly staff, and good hours. We were here in the off season and most of the places were closed; but this place was open.
I love love love breakfast! Eggs, bacon and all the lovelyness of fresh ingredients. So I was excited to try this place. The staff are great, very friendly. The decor is pretty basic, unimpressive (one star gone) but functional/clean. I ordered scrambled eggs, breakfast potatoes, with a side of bacon. Now I like my scrambled eggs light and fluffy and...
We were blown away by the sandwiches we had. All of the meet is grown locally, and is organic. The service was great also. My wife, daughter and I purchased 2 smoothies for the 3 of us. They split them 3 ways and gave us extra. The soup was also great.
We had breakfast on our first stay in Door County, nearby. The service was very friendly and attentive, and the food was very good. Restaurant is right in the middle of town and across from the water. Scrambles were very flavorful and so were the belgian waffles. We would go back.
We had an awesome breakfast - small, but quaint - good service - reasonable price. Many menu options. Would go back!!
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Can we bring our own wine and are dogs allowed in the outside seating area?
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Discussion in 'Front page news archive' started by News Bot, Aug 11, 2009.
This is a discussion thread for the "App Store News" story posted on the front page.
There is and a "e" and a "." missing, and a "-" too much in the "our own MR Team member Radish's apperance in the game"-link. Link should be;
Other than that, nice update! I really can't wait for the minigore updates Please Register or Log in to view images
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I can not wait till the next episodes come out!! This game will hit the top #5 in the App Store for sure.
Thanks for the heads up. Rushed it out late last night... I'll be more careful next time...
Quest for Knight's Onrush looks so amazing. I am definitely going to do a review on that.
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Hundreds of soldiers in Fort Carson's 10th Special Forces Group train for war and rescue at Monarch Mountain near Salida. Many have never been on skis. Shanna Lewis reports for KCFR.
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LOVED THIS DRESS this was my first Lindy Bop dress and I got it as a Christmas present from my husband and boys as a well done on reaching my Slimming World target. I wore it Christmas day and felt amazing. Amazing quality at an amazing price. My only issue would be my stupid body size, I stopped between sizes so it gapped a little at the top of the zip but this has now been sorted by my amazing mother and I am now dieting again to be one actual size, which will make future purchases easier
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This scheme is applicable only on devices purchased on or after October 1, 2016 and comes with certain terms and conditions.
Zopo has announced a new scheme of 1 year replacement warranty from the date of purchase for all its devices. This scheme is applicable only on devices purchased on or after October 1, 2016 and comes with certain terms and conditions.
With this latest scheme, customers using a Zopo device will be able to replace their faulty devices with a new one within 4-5 days. Compared to this, other handset manufacturers offers 1 year onsite warranty through which only in extreme cases a replacement is offered.
Zopo recently launched the new Color F1 last month with 5.5 inch 720p display, a quad-core 1.2 Ghz MediaTek MT6580 processor, 1GB RAM. It also features a 16GB internal storage which is expandable up to 64GB via microSD card. In the camera department, there is an 8 megapixel rear facing camera and a 2 megapixel front shooter. The device runs on Android 6.0 marshmallow and houses a 2300 mAh battery. With these specifications, the phone sells at Rs 8,890.
With increasing competition, this is probably Zopo's attempt to make its mark in highly competitive budget smartphone segment.
The phone comes equipped with Bar-code & QR code scanner and has multi-Account Application feature feature as well.
With multi-account app feature, you can create two accounts of an apps such as WhatsApp.
The Hero 2 comes in black, white and golden color options.
The listings have revealed the design and specifications of the Samsung Galaxy On7 (2016) and On5 (2016).
Curiously, the phone was made available long back in India and is currently available on Amazon.in for Rs 31,500.
The smartphone comes in five different colors- Rose Gold, Champagne Gold, Black, Blue and Silver.
The Color F5 will be available for purchase from mid-July.
The smartphone comes in White, Gold and Black colors.
The Zopo Speed 8 was earlier expected to be launched in the country in July.
The Zopo has shared a teaser image of its upcoming smartphone on its official twitter handle.


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Man charged for hitting tree, blocking trafficFebruary 24,2014Police: Driver hits
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Nortwestern will probably not prevail in the suit. It will be tied up for 5 or more years in appeals before going to the WI State Supreme Court. The loss, if it is Northwestern will probably bankrupt the company and make all the plantiffs lawyers rich. It is too bad if greed was the business model for this company.
Class-action suit could have big impact on Northwestern Mutual
Complaint over change in annuity dividends


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What is a Moral Epigenetic Responsibility?
23 Aug, 16 | by miriamwood
Guest Post by Charles Dupras & Vardit Ravitsky
Re: The ambiguous nature of epigenetic responsibility
Epigenetics is a recent yet promising field of scientific research. It explores the influence of the biochemical environment (food, toxic pollutants) and the social environment (stress, child abuse, socio-economic status) on the expression of genes, i.e. on whether and how they will switch 'on' or 'off'. Epigenetic modifications can have a significant impact on health and disease later in life. Most surprisingly, it was suggested that some epigenetic variants (or 'epi-mutations') acquired during one's life could be transmitted to offspring, thus having long-term effects on the health of future generations.
Epigenetics is increasingly capturing the attention of social scientists and ethicists, because it brings attention to the importance of environmental exposure for the developing foetus and child as a risk factor for common diseases such as cardiovascular, diabetes, obesity, allergies and cancers. Scholars such as Hannah Landecker, Mark Rothstein and Maurizio Meloni have argued that epigenetics may be used to promote various arguments in ongoing debates on environmental and social justice, as well as intergenerational equity. Some even suggested that epigenetics could lead to novel ways of thinking about moral responsibilities for health.
Is it fair that disadvantaged populations are exposed to an inequitable share of harmful environments – such as polluted areas – that are epigenetically-detrimental to their health? Who should be held responsible for protecting children and future generations from epigenetic harm induced by their environments? Should we hold the parents accountable for detrimental epigenetic impact of their behavior on their children? And how should we manage the possible risks of stigmatization and discrimination of people that we consider blameworthy of inflicting epigenetic harm on others? These sensitive questions call for a nuanced investigation of the impact epigenetics can have on our understanding of moral responsibility.


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October 17, 2006
HANSEL DEBARTOLO AND THE H.M. DEBARTOLO, JR. M.D., S.C. PENSION PLAN AND TRUST, PLAINTIFFS,v.HEALTH SOUTH CORPORATION, SURGICARE OF JOLIET, INCORPORATED, AND JOLIET SURGICAL CENTER LIMITED PARTNERSHIP, DEFENDANTS.
Plaintiffs Hansel Debartolo and the H.M. Debartolo, Jr. M.D., S.C. Pension Plan and Trust (collectively, "Debartolo"), have filed a claim for declaratory judgment and injunctive relief against Defendants HealthSouth Corporation, Surgicare of Joliet, Inc. and Joliet Surgery Center Limited Partnership (collectively, "HealthSouth"), alleging a violation of the Medicare anti-kickback statute and seeking to void an amendment in the limited partnership agreement. HealthSouth has now filed a motion to dismiss, arguing that the anti-kickback statute does not provide a private right of action that would allow Debartolo to obtain the requested relief. For the following reasons, HealthSouth's motion is granted.
For the purposes of this motion the facts are as follows. HealthSouth Corporation, through its subsidiary, is the majority owner of the Joliet Surgical Center (the "JSC"), a licensed ambulatory surgical center. Debartolo has been a limited partner in the Joliet Surgery Center Limited Partnership ("JSCLP") for 25 years, and had privileges to perform surgical procedures at the JSC from 1981 to 2001. In 2000, the JSC did not grant Debartolo time to perform procedures and, as a result, his privileges lapsed in 2001. Debartolo did not seek to renew his privileges.
Although the partnership agreement did not originally contain a provision permitting the forced redemption of a limited partner's units, an amendment which added this provision came into effect on July 28, 2004. Through the amendment, the JSCLP sought to ensure compliance with the safe harbor provision of the Medicare anti-kickback statute, 42 U.S.C. § 1320(a)-7b. The statute provides, in part, that a person is guilty of a felony if he or she: knowingly and willfully solicits or receives any remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind-
(A) in return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program . . . .
Id. The safe harbor provision Defendants sought to comply with provides an exception.
If all of the investors are physicians who are in a position to refer patients directly to the entity and perform procedures on such referred patients; group practices, as defined in this paragraph, composed exclusively of such physicians; or investors who are not employed by the entity or by any investor, are not in a position to provide items or services to the entity or any of its investors, and are not in a position to make or influence referrals directly or indirectly to the entity or any of its investors, all of the following seven standards must be met--
(i) The terms on which an investment interest is offered to an investor must not be related to the previous or expected volume of referrals, services furnished, or business otherwise generated from that investor to the entity;
(ii) At least one-third of each physician investor's medical practice income from all sources for the previous fiscal year or previous 12-months period must be derived from the physician's performance of procedures (as defined in this paragraph);
(iii) At least one-third of each physician investor's medical practice income from all sources for the previous fiscal year or previous 12-month period must be performed at the investment entity. . . . 42 C.F.R. § 1001.952(r)(3).
The partnership amendment in dispute includes a section which requires that all limited partners certify annually that one-third of his or her medical practice income is derived from performing outpatient surgical procedures, and that these procedures are conducted at the JSC. Another section provides for the forced redemption of a limited partner's units in the event that the limited partner no longer uses the JSC as an extension of his or her medical practice. Debartolo received a letter requesting that he complete his certification in the spring of 2005. He did not return the certification, as he no longer had privileges to perform procedures at the JSC. In January of 2006, Debartolo received a check and a letter informing him that the JSCLP had purchased his units. Debartolo rejected the offer and returned the check. Shortly thereafter, he requested to be placed on the surgical schedule and was told to submit a credentialing application. After submitting the application, Debartolo requested nullification of the buyback of his units. Debartolo received a letter from HealthSouth stating that he had not met the requirements for limited partners and denying his request to nullify the buyback.
On May 3, 2006, after HealthSouth denied Debartolo's request, Debartolo filed suit against HealthSouth seeking declaratory and injunctive relief. Plaintiffs allege two counts, (1) that the amendment be declared void because it violates the anti-kickback statute, and (2) that Defendants be enjoined from performing the forced buyback of Debartolo's units of the JSCLP. On June 29, 2006, Defendants filed this motion to dismiss.
A motion to dismiss tests the sufficiency of a complaint, not the merits of a case. Autry v. Northwest Premium Servs., Inc., 144 F.3d 1037, 1039 (7th Cir. 1998). I should grant HealthSouth's motion to dismiss only if Debartolo cannot prove any set of facts in support of his claim that would entitle him to relief. Conley v. Gibson, 355 U.S. 41, 45-46 (1957). Furthermore, I must accept all well-pleaded factual allegations in the Complaint as true, drawing all reasonable inferences from those facts in Debartolo's favor. Cleveland v. Rotman, 297 F.3d 569, 571 (7th Cir. 2002). I may grant HealthSouth's motion only if "no relief could be granted under any set of facts that could be proved consistent with the allegations." Hishon v. King & Spalding, 467 U.S. 69, 73 (1984).
Defendants argue that the statute does not provide a private right of action for Debartolo to void the amendment. As a result, he does not have standing to sue. In West Allis Mem'l Hosp., Inc. v. Bowen, the Seventh Circuit held that there was no private right of action under a prior version of the statute because Congress intended for the government to handle enforcement, not private parties. 852 F.2d 251, 255 (7th Cir. 1988). See also, United States ex rel. Barrett v. Columbia/HCA Healthcare Corp., 251 F. Supp. 2d 28, 37 (D.D.C. 2003).
Debartolo argues that he does have standing because HealthSouth is attempting to enforce the amendment against him. So, even if the statute lacks a private right of action, that omission is irrelevant because the case involves an amendment that violates a federal statute and any contract for the performance of an illegal act is void and unenforceable. According to him, by forcing redemption HealthSouth punishes partners who no longer refer patients to the center.
In support of his argument, Debartolo cites Zimmer, Inc. v. Nu Tech Med., Inc., 54 F. Supp. 2d 850 (N.D. Ind. 1999), in which the court considered a contractual claim between private parties under the Anti-Kickback statute and held that an agreement between a manufacturer and a supplier was illegal and thus unenforceable. Further, he cites Modern Med. Labs., Inc. v. Smith-Kline Beecham Clinical Labs., Inc., in which the plaintiff sued the defendant drug manufacturer for breach of contract after the manufacturer informed the plaintiff that it would not perform the agreement because the agreement violated the anti-kickback provision. No. 92 C 5302, 1994 U.S. Dist. LEXIS 11525 (N.D. Ill. 1994).
In the motion and the response, both parties have conflated the issues of standing and implied causes of action. Whether or not a plaintiff has standing to pursue an action is distinct from whether or not that plaintiff has a cause of action. "The concept of a 'cause of action' is employed specifically to determine who may judicially enforce the statutory rights or obligations." Davis v. Passman, 442 U.S. 228, 239 (1979). "[It] is a question of whether a particular plaintiff is a member of the class of litigants that may . . . appropriately invoke the power of the court." Id. at 239 n.18.*fn1 On the other hand, when considering standing the court is determining whether the plaintiff has "alleged such a personal stake in the outcome of the controversy as to assure . . . concrete adverseness . . . ." Id. (citing Baker v. Carr, 369 U.S. 186, 204 (1962)). I will address the two issues separately.
Standing is a threshold question in all federal cases. "The plaintiff, as the party invoking federal jurisdiction, bears the burden of establishing the required elements of standing." Lee v. City of Chicago, 330 F.3d 456, 468 (7th Cir. 2003). Every plaintiff must have a sufficient personal stake in the outcome to "warrant his invocation of federal-court jurisdiction and to justify exercise of the court's remedial powers . . . ." Warth v. Seldin, 422 U.S. 490, 498 (1975). This means that a plaintiff must personally suffer "some threatened or actual injury resulting from the putatively illegal action . . . ." Linda R. S. v. Richard D., 410 U.S. 614, 617 (1973).
Standing has three elements. First, the plaintiff must have suffered an "injury in fact." Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992). This means that the invasion of the plaintiff's legally protected interest must be concrete and particularized, as well as actual or imminent. Id. An injury that is only "'conjectural' or 'hypothetical'" is not enough. Id. Next, "there must be a causal connection between the injury and the conduct complained of." Id. In other words, the plaintiff must be able to fairly trace the injury back to the defendant's actions, rather than the "independent action of some third party not before the court." Id. (citation ommitted). Lastly, "it must be 'likely,' as opposed to merely 'speculative,' that the injury will be 'redressed by a favorable decision'" Id. at 561 (citation omitted).
Under the standard the Court articulated in Lujan, Debartolo certainly has standing to pursue this case. Debartolo is suing Defendants because he personally owned shares in the JSCLP. Those shares have already been liquidated and he is suing to stop or reverse that process because he believes that HealthSouth's actions were improper. HealthSouth's actions would be an actual invasion of his concrete, particularized interest in the JSCLP. His injury is directly traceable to Defendant's actions and could be redressed if I render a favorable decision.
Although Debartolo would have standing to pursue the case, he does not have a private right of action to enforce the statute. The factors I must take into account when deciding whether or not a statute establishes a private right of action include: 1) whether Debartolo is a member of the class meant to be protected; 2) whether there is any legislative intent to either create or deny such a remedy; 3) whether it would be consistent with the legislative intent to imply a remedy for the plaintiff; and 4) whether the cause of action in question is one that is traditionally relegated to state law. West Allis, 852 F.2d at 255 (citing Cort v. Ash, 422 U.S. 66, 78 (1975)). Although West Allis dealt with an effort by a third party to enforce the statute, the Seventh Circuit's reasoning and final conclusion also apply in this case.
The statute's purpose is to protect the federal health care system from abuse. Debartolo is a physician investor, thus he is not a member of the class meant to be protected by the statute. As for the legislative intent, unless "congressional intent can be inferred from the language of the statute, the statutory structure, or some other source, the essential predicate for implication of a private remedy simply does not exist." Northwest Airlines, Inc. v. Transport Workers Union, 451 U.S. 77, 94 (1981). Debartolo has not suggested that I can make any such inference.
It is "an 'elemental canon' of statutory construction that where a statute expressly provides a remedy, courts must be especially reluctant to provide additional remedies. In such cases, '[i]n the absence of strong indicia of contrary congressional intent, we are compelled to conclude that Congress provided precisely the remedies it considered appropriate.'" Karahalios v. National Federation of Federal Employees, Local 1263, 489 U.S. 527, 533 (1989) (alteration in original) (citations omitted). Nothing in the language of the statute implies a private cause of action; the title of the statute even states its purpose as, "Criminal penalties for acts involving Federal health care programs." 42 U.S.C. § 1320a-7b. Congress could have given private parties a right to enforce, but instead limited the statutory remedies to criminal penalties, thus a cause of action cannot be implied. As a result, there is no private cause of action for Debartolo to pursue.
Private Cause of Action
The next question that must be answered is whether Debartolo is correct that the lack of a private cause of action is irrelevant in this matter. This case's unique posture under the Declaratory Judgment Act, 28 U.S.C. § 2201, (the "Act") is the source of the confusion. The purpose of the Act is "to avoid accrual of avoidable damages to one not certain of his rights and to afford him an early adjudication, without waiting until his adversary should see fit to begin suit." Nucor Corp. v. Aceros Y Maquilas de Occidente, S.A. de C.V., 28 F.3d 572, 577-78 (7th Cir. 1994) (citations omitted). According to Debartolo, a plaintiff seeking a declaratory judgment on the legality of an agreement does not need a private cause of action. He is incorrect.
In Williams v. Nat'l Sch. of Health Tech., Inc., the plaintiff argued that the Declaratory Judgment Act allowed her claim to proceed despite the fact that there was no private cause of action under the Higher Education Act. 836 F. Supp. 273 (E.D. Pa. 1993). The court rejected this argument, stating that since there was no private cause of action under the statute, permitting plaintiffs to continue with the declaratory judgment action using the HEA statute would be "tantamount to allowing a private cause of action." Id. at 281. "The Declaratory Judgment Act cannot be used to circumvent the enforcement mechanism which Congress established." Id.
Similarly, in Catholic Charities of Me., Inc. v. City of Portland, the court rejected the idea that the declaratory judgment act could overcome the lack of private cause of action under the Housing and Community Development Act. 304 F. Supp. 2d 77, 93 (D. Me. 2004). The court stated that "a declaratory judgment action using the HCDA as the source of the underlying substantive law is tantamount to a private cause of action . . . forbidden by the First Circuit." Id.
Much like in Williams and Catholic Charities, permitting Debartolo to continue with the claim in this case under the Anti-Kickback statute by using the Declaratory Judgment Act would be equivalent to allowing a private cause of action where one does not exist. Debartolo cannot use the Declaratory Judgment Act to circumvent the provisions of the statute.
Both of the cases Debartolo cites to support his argument are distinguishable. In Modern Med. Labs it was the defendant that raised the Anti-Kickback statute as a defense to the claim. 1994 U.S. Dist. LEXIS 11525, at *2. Those facts are inapplicable here because the positions of the parties are different. A defendant is allowed to use a statute as a defense. When a statute makes an act illegal, contracts for the performance of that act are deemed void and unenforceable as a matter of public policy. U.S. Nursing Corp. v. Saint Joseph Med. Ctr., 39 F.3d 790, 792 (7th Cir. 1994). There is no issue of whether the plaintiff in Modern Med. Labs has a private cause of action because it was pursuing a breach of contract claim.
The relative positions of the parties in Zimmer are more similar to those in this case. However, the Zimmer court did not address the issue of whether a private cause of action existed. Zimmer, 54 F. Supp. 2d 850. Therefore it does not justify allowing this case to continue.
Federal Jurisdiction
In addition to the lack of a private cause of action, there are also possible jurisdictional issues in this case. "[J]urisdiction is a question of whether a federal court has the power, under the Constitution or laws of the United States, to hear a case." Davis, 442 U.S. at 239 n.18. By asserting a violation of the Anti-Kickback statute, Debartolo seeks to invoke federal question jurisdiction under 28 U.S.C. § 1331. However, this is a declaratory judgment action and in determining jurisdiction in such actions the "court must proceed with the knowledge that 'in many actions for declaratory judgment, the realistic position of the parties is reversed.'" Crown Cork & Seal Co. v. Pennsylvania Human Relations Comm'n, 463 F. Supp. 120, 124 (E.D. Pa.. 1979) (quoting Public Service Comm'n of Utah v. Wycoff Co., 344 U.S. 237, 248 (1952)).
Whenever a plaintiff in a declaratory judgment action seeks to prevent an expected suit by the defendant, "the jurisdiction of the district court depends on whether the court would have jurisdiction over that [expected] suit." Primax Recoveries, Inc. v. Sevilla, 324 F.3d 544, 548 (7th Cir. 2003) (citations omitted). In such cases the character of the nominal defendant's expected action -- not the nominal plaintiff's defense -- is what determines whether federal-question jurisdiction exists in the district court. Crown Cork, 463 F. Supp. at 124. If the threatened action does not involve a federal law claim "it is doubtful if a federal court may entertain an action for a declaratory judgment establishing a defense to that claim." Id. The Declaratory Judgment Act does not expand the jurisdiction of the federal courts. Id.
If HealthSouth had brought an action against Debartolo to enforce the partnership agreement, there is no question that Debartolo would be allowed to defend the suit by claiming that the amendment is void and unenforceable under the very same statute he uses in this case.
As I already noted, when a statute makes an act illegal, contracts for the performance of that act are deemed void and unenforceable as a matter of public policy. U.S. Nursing, 39 F.3d at 792 (7th Cir. 1994). However, based on the information in this complaint, it is questionable that a complaint by HealthSouth could be brought in federal court.
Federal question jurisdiction in this action is supposedly based on the Anti-Kickback statute, but if HealthSouth were the protagonist, Debartolo would only be using the statute as a defense. A claim by HealthSouth would likely be a contract claim to enforce the terms of the JSCLP partnership agreement. The Supreme Court has refused to find federal question jurisdiction in cases where the federal issue arises as a defense to what would otherwise be a state law claim. Louisville & Nashville R. Co. v. Mottley, 211 U.S. 149, 152 (1908). In addition, it seems that diversity jurisdiction would not exist because (according to Debartolo's Complaint) Debartolo is a citizen of Illinois, HealthSouth is a Delaware Corporation with a registered agent in Illinois, Surgicare is an Illinois corporation and the JSCLP is an Illinois partnership. Thus, the present claim may lack the requisite complete diversity that it needs in order for jurisdiction to be based on diversity of the parties. See Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996). CONCLUSION
I find that the Medicare anti-kickback statute does not provide a requisite private cause of action upon which Debartolo may base his claim. HealthSouth's motion to dismiss is granted.
James B. Zagel United States District Judge
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October 14, 1993
DURWOOD C. JAMES, PETITIONERv.DISTRICT OF COLUMBIA DEPARTMENT OF EMPLOYMENT SERVICES, RESPONDENT
Petition for Review of a Decision of the District of Columbia Department of Employment Services
Before Rogers, Chief Judge, and Schwelb and Farrell, Associate Judges. Opinion for the court by Associate Judge Farrell. Dissenting opinion by Chief Judge Rogers.
FARRELL, Associate Judge: In discussing the admission of a particular form of hearsay, the Supreme Court has observed:
Individual pieces of evidence, insufficient in themselves to prove a point, may in cumulation prove it. The sum of an evidentiary presentation may well be greater than its constituent parts. . . . piece of evidence, unreliable in isolation, may become quite probative when corroborated by other evidence.
Bourjaily v. United States, 483 U.S. 171, 179-80, 107 S. Ct. 2775, 97 L. Ed. 2d 144 (1987). This observation is relevant to the case before us in which we decide whether evidence chiefly -- though not exclusively -- hearsay in nature constituted "substantial evidence" of misconduct sufficient for us to sustain a hearing examiner's denial of petitioner's application for unemployment compensation. We hold that the evidence satisfied that standard, and therefore affirm.
Petitioner was employed as a security guard by Diamond Security, Inc., from April 21, 1988 through November 27, 1989, when he was fired as a result of a series of job-related acts of misconduct. After a Department of Employment Services (DOES) claims examiner denied petitioner's request for unemployment compensation, petitioner appealed, and an appeals examiner convened a hearing on February 22, 1990, at which petitioner and his former job supervisor testified. The examiner concluded that petitioner did not qualify for unemployment benefits because he had been discharged for misconduct. D.C. Code § 46-111 (b) (1990). The examiner based this finding chiefly on disciplinary action reports (DARs) contained in petitioner's employment record, as well as the supervisor's testimony and the examiner's negative assessment of petitioner's credibility. The Office of Appeals and Review affirmed the examiner's decision.
The supervisor, John Steele, testified at the hearing that petitioner was fired because "over a period of time, consistently and constantly continued to break the rules and regulations after being counseled by my supervisors as well as by myself. . . ." The most recent incident, which was the "last straw" for the employer and resulted in the termination, took place on November 23, 1989, *fn1 when petitioner failed to report to work. Steele testified that after being informed of this fact, he called petitioner's home. *fn2 Petitioner's wife said that he was sick in bed and could not come to the phone. The following day petitioner called Steele to explain that he had been absent from work because he was sick. According to Steele, this violated the employer's established procedure "in respect to calling off duty that he was not coming to work" (emphasis added).
The record contains twenty-two disciplinary reports concerning petitioner prepared by various Diamond Security sergeants and generally signed by Steele, who also personally prepared and signed three of them. Among the offenses listed are: failing to report for duty, tardiness, falsely claiming he was at work, drinking or sleeping on duty, being out of uniform, taking home the company radio, having a television on the work site, and failing to obey orders. Petitioner signed seven of the nineteen reports without comment, indicating he had received and read them, and signed one other report under protest. Most of the reports were prepared the same day the misconduct occurred; others were prepared within three days (in one instance six days) of the incident. The appeals examiner relied specifically on seven of the reports, *fn3 but took account of the others ("The misconduct in this case included the following. . ." (emphasis added)).
Although Steele did not prepare most of the DARs, he testified that he wrote the November 6, 17, and 23, 1989 reports since he was "the manager of the building that was working at," and he therefore had personal knowledge of these incidents. Otherwise, Steele would review such reports and discuss them with the employee involved and "counsel" him. Steele listed a number of reports for which he had personally counseled petitioner contemporaneously with the infractions, testifying that petitioner was "personally present to review and to voice any objections" to the reports.
Petitioner did not deny speaking with Steele "about the problems that we had with the schedule and working at Diamond Security," but denied the basis for the reports. He contended that there were inconsistencies in the DARs, that he did not have knowledge of some of them, that they were false, and that they were written up in order to avoid paying him unemployment and as retribution for his having won a wage and hour award. He also objected to the fact that the persons who had written the individual reports were not present for him to cross-examine.
A decision by DOES must be supported by substantial evidence, Jadallah v. District of Columbia Dep't of Employment Servs., 476 A.2d 671, 675 (D.C. 1984), defined as "such relevant evidence as a reasonable mind might accept as adequate to support a Conclusion." Nova Univ. v. Educational Inst. Licensure Comm'n, 483 A.2d 1172, 1190 (D.C. 1984), cert. denied, 470 U.S. 1054, 105 S. Ct. 1759, 84 L. Ed. 2d 822 (1985) (citations omitted). Since the appeals examiner based her decision primarily on the evidence in the disciplinary reports, whose authors -- except in the case of Steele -- were not present to testify, we must decide whether the hearsay evidence presented was substantial as thus defined.
"Hearsay evidence is admissible in administrative proceedings unless it is irrelevant, immaterial, or unduly repetitious." Lim v. District of Columbia Taxicab Comm'n, 564 A.2d 720, 724 (D.C. 1989) (citation and quotation marks omitted); D.C. Code § 1-1509 (b). "If hearsay evidence is found to be reliable and credible, it may constitute substantial evidence." Simmons v. Police & Firefighters' Retirement Bd., 478 A.2d 1093, 1095 (D.C. 1984) (citing Johnson v. United States, 202 U.S. App. D.C. 187, 190-91, 628 F.2d 187, 190-91 (1980)). At the same time, "administrative findings and Conclusions based exclusively on hearsay [are subject] to exacting scrutiny." Lim, supra. More than once we have declined to uphold a DOES finding of misconduct where an employer's hearsay evidence was refuted by the claimant's sworn testimony. E.g., Jadallah, supra; McLean v. District of Columbia Dep't of Employment Servs., 506 A.2d 1135, 1137-38 (D.C. 1986).
We have not, however, mechanically rejected agency findings for lack of substantial evidence whenever the finding was based mainly, or even entirely, on hearsay evidence contradicted by sworn testimony. Rather, the test remains as we described it in Simmons and Lee: hearsay found to be reliable and credible may constitute substantial evidence, "especially . . . where the evidence is uncontradicted," Simmons, 478 A.2d at 1095; but without extrinsic corroboration (proof aliunde) such evidence will be "scrutinized" carefully. Lim, 564 A.2d at 724. See also Jadallah, 476 A.2d at 677 (Ferren, J., Concurring) ("Absent some indicia of reliability, hearsay evidence alone should not be permitted to offset the sworn testimony of a witness and to constitute substantial evidence in support of an agency position"); Martin v. District of Columbia Police & Firefighters' Retirement & Relief Bd., 532 A.2d 102, 109-10 n.2 & accompanying text (D.C. 1987); Johnson, supra, 202 U.S. App. D.C. at 190-91, 628 F.2d at 190-91 (cited in Martin and Simmons) ("rejecting a per se approach that brands evidence as insubstantial solely because it bears the hearsay label"; "instead . . . evaluating the weight each item of hearsay should receive according to the item's truthfulness, reasonableness, and credibility"). *fn4
In this case, a variety of factors confer reliability on the DAR reports, and these in turn, viewed together with Steele's testimony, provide substantial support for the examiner's finding that petitioner was terminated for conduct manifesting "a disregard of standards of behavior which the employer a right to expect of his employees." D.C. Code § 46-111 (b)(2). See, e.g., Shepherd v. District of Columbia Dep't of Employment Servs., 514 A.2d 1184 (D.C. 1986) (pattern of absenteeism and tardiness). Whether or not they fit within the hearsay exception for business records (a question we need not decide), the DARs were completed as part of Diamond Security's regular procedure for disciplining employees. They were prepared by a succession of sergeants contemporaneously with the events, and were routinely followed up by personal counseling, in some cases by Steele himself -- who had personal knowledge of three of the incidents. This aggregation of prompt reports by different supervisors tends to disprove either that the DARs stemmed from faulty perception or memory or that the writers lacked objectivity or "disinterestedness." Simmons, 478 A.2d at 1095. Moreover, in large part they were "consistent with each other in that they described the same pattern of behavior" by appellant, id. -- absence from or tardiness in reporting to work, falsely representing that he was at work, and sleeping or drinking on the job. The fact that Steele (who testified and could be cross-examined) had personally counseled petitioner following many of the incidents is important. Were the reports all or mostly baseless, as petitioner asserted at the hearing, one would expect him to have voiced some objection to them to Steele at the time; yet Steele testified to no such denials or to any reason he had acquired to doubt the reliability of the reports based on petitioner's reaction during the counseling.
Petitioner had access to the reports before the agency hearing, Simmons, 478 A.2d at 1095; Johnson, 202 U.S. App. D.C. at 191, 628 F.2d at 191, *fn5 but his denial of misconduct was blanket and largely non-specific. *fn6 Other than to say that the DARs were "just written up to evade paying me unemployment," petitioner did not explain why or how the employer would have fabricated an extensive file of disciplinary reports prepared by several different sergeants. Moreover, the examiner discounted petitioner's credibility because of shifting answers he gave her about when, in relation to a new job he had begun, he had also applied for unemployment benefits.
All of these circumstances persuade us that the disciplinary reports were reliable proof which "a reasonable mind might accept as adequate to support Conclusion" that petitioner had engaged in misconduct justifying termination. Nova Univ., 483 A.2d at 1190. Even if a small number of the DARs together might not have persuaded us of the reliability of the examiner's Conclusion, the sheer cumulation of reports made the body of proof self-corroborating and the "sum of evidentiary presentation" more trustworthy than "its constituent parts" would have been if viewed in isolation. Bourjaily, 483 U.S. at 179-80. This was no "attenuated evidentiary chain" as in Jadallah, 476 A.2d at 677 (criticizing reliance on "hearsay within hearsay"), nor a case where an appreciable gain in reliability would have been achieved by requiring the authors of the individual reports to testify. Steele described both the process by which the disciplinary reports were prepared and the important follow-up in the form of counseling which regularly attended them and which he specifically performed in petitioner's case. *fn7 When added to this is the personal knowledge Steele had of three of the infractions on which the examiner expressly relied, there was no infirmity in the proof sufficient to permit us to reject the judgment of the hearing examiner.
ROGERS, Chief Judge: The majority concludes that based on hearsay statements in the form of disciplinary reports, there is substantial evidence to support the agency's finding that petitioner was discharged for misconduct under D.C. Code § 46-111 (b) (Repl. 1990). The difficulty with this Conclusion is twofold: (1) the petitioner's sworn testimony challenged the accuracy of the hearsay disciplinary action reports on which the employer relied, and (2) the employer's witness did not have personal knowledge of the events at issue.
Unlike the key decision on which the majority relies, Bourjaily v. United States, 483 U.S. 171, 107 S. Ct. 2775, 97 L. Ed. 2d 144 (1987), in the instant case there were no surrounding circumstances to constitute independent evidence of the violations. In Bourjaily, there was subsequent evidence showing that the person engaged in the telephone conversation had appeared at the arranged place and done what he said during the telephone conversation he was going to do. Id. at 180-81. On that basis the Court was satisfied that even if each of the hearsay statements was unreliable, the subsequent events provided corroboration by independent evidence. Id. The Court stated that it was not deciding whether the hearsay statements standing alone would have been sufficient evidence of the conspiracy. Id. at 181. Furthermore, in Bourjaily, the issue was confined to the use of hearsay in making preliminary factual determinations on the admissibility of hearsay under an exception to the rule against hearsay, see FED. R. EVID. 104 (a) & 801 (d)(2)(E). Id. at 181. By contrast, in the instant case, the majority would broaden Bourjaily to allow use of hearsay to make the substantive finding, namely, whether there is substantial evidence of misconduct, without regard to the admissibility of such evidence under an exception to the hearsay rule. See majority opinion at 1, 8. Hence, its reliance on Bourjaily is misplaced.
In the instant case, the Department of Employment Services (DOES) had before it only the challenged hearsay disciplinary action reports and the testimony of a supervisory employee who provided no evidence contrary to the petitioner's sworn testimony that the particular disciplinary reports were prepared for the purposes of the unemployment compensation review and were false or otherwise inaccurate. There was no evidence of subsequent events to demonstrate the reliability of the disciplinary action reports (DARs) at issue. Contrary to the warnings of Jadallah v. District of Columbia Dep't of Employment Servs., 476 A.2d 671, 676 (D.C. 1984), and Washington Times v. District of Columbia Dep't of Employment Servs., 530 A.2d 1186, 1190 (D.C. 1987), the majority, relying, in part, on a Concurring opinion in Jadallah, see majority opinion at 5 (citing Jadallah, supra, 476 A.2d at 677 (Ferren, J., Concurring)), upholds the agency's decision. Because the hearsay evidence on which the agency relied in finding misconduct was refuted by petitioner's sworn testimony, the agency's decision was not based on substantial evidence under Jadallah, supra, and, therefore, the case should be remanded to the agency for further proceedings. *fn1
A review of the facts and agency proceedings is required to appreciate the limited nature of the employer's non-hearsay evidence. The only witness presented by the employer, John Steele, testified that he is generally responsible for reviewing field supervisors' DARs and discussing the DARs with the individual security guard.
Petitioner was employed as a security guard by Diamond Security, Inc. from December 30, 1986 until November 24, 1989, when he was terminated for a pattern of consistent and constant misconduct. *fn2 Following an intra-agency appeal and a hearing at which petitioner appeared pro se, the agency denied his request for unemployment benefits. *fn3 Petitioner contends that disciplinary action reports (DARs), which were the sole method of proof for all of the allegations of misconduct on which the agency relied, except the most recent one, are hearsay evidence that he disputed at the bearing. *fn4 In his words, the DARs "could have been written and stamped by any one."
An examination of the DARs on which the agency relied reveals, as the employer's witness, Mr. Steele, testified at the hearing, that field supervisors actually prepare the DARs. *fn5 The most recent DAR, which ostensibly was the immediate cause for the dismissal, was dated November 23, 1989, when petitioner did not show up for work. A supervisor called petitioner's home and was told that he was sick. The writer of the DAR then called petitioner's home and asked to speak with him. A person whom the writer stated was petitioner's wife told the writer that petitioner was sick and could not come to the telephone. In response the writer informed petitioner's wife that petitioner was no longer employed by Diamond Security. Mr. Steele testified that he was the person who had made this call. In fact, however, the actual DAR, which is in the record, is signed "action taken by" Sgt. Howe on November 23, 1989. *fn6 Mr. Steele's name appears in signature form in his reviewing capacity on November 24, 1989, and the description of the occurrence appears to be in the handwriting of Sgt. Howe. Thus, although Mr. Steele testified that he had first-hand knowledge of this incident, the record before the agency indicates that this DAR, like the others, was prepared by someone else and signed by Mr. Steele in his supervisory capacity. *fn7
The appeals examiner relied on six incidents, aside from the November 23rd incident, in finding that petitioner had been discharged for consistent and constant misconduct. At the hearing, petitioner's testimony effectively refuted each DAR. First, the November 6, 1989, DAR stated that petitioner had been sleeping on the job. Petitioner testified that he was not at work on that day, explaining that a wage and hour dispute was occurring and he was on call. *fn8 Second, the November 2, 1989, DAR stated that petitioner was out of uniform. Petitioner testified that there was no basis for that report. Third, the DAR report of April 21, 1989, stated that petitioner had falsely represented that he was on the job site. In his testimony, petitioner denied a similar DAR that he said concerned June 24, 1989, claiming that he had not been on the job site because the supervisor had failed to pick him up. In addition, petitioner testified that it was not a fair write-up and that "a whole lot of these are the same way." In response to the hearing examiner's question whether he denied the dates that he failed to either call or report to work, petitioner testified that he always called: "I was there or I called . . . and let them know that I wasn't going to be at work. I'm not that kind of employee." *fn9 Fourth, the November 17, 1989, DAR stated that petitioner was late reporting for work. Petitioner testified that all the reports for May 19 through November 24 were false and had no basis. Fifth and sixth, the DARs of April 13 and 14, 1989, cited petitioner for having a television on site. While petitioner was not afforded an opportunity to respond to these reports, petitioner stated in his April 9, 1990, appeal from the hearing examiner's decision that there were no rules forbidding television. *fn10
Mr. Steele, for the employer, testified that petitioner was dismissed because he "consistently and constantly continued to break the rules and regulations after being counseled by my supervisors as well as myself." Mr. Steele explained that he had allowed petitioner "to continue to work, because he was a good worker until he started to mess up, and then he just continued, refused to conform to things that we talked about on each DAR until . . . finally I didn't have any choice but to terminate him." Mr. Steele also testified that he had personally counseled petitioner on numerous occasions. He did not testify, however, that petitioner had ever admitted that he had violated any of the employer's rules or reasonable expectations after prior warnings. Nor did petitioner deny talking to Mr. Steele "about the problems that we had with the schedule and working at Diamond Security." Rather, he testified that there were inconsistencies in the DARs, that he did not have knowledge of many of them, that some were false and that they were written up in order to avoid paying him unemployment. At the hearing, petitioner objected to the fact that the people who had purportedly written up the reports were not present for him to cross-examine, specifically citing 7 DCMR § 312.7 (1986). *fn11
The majority concludes that in the face of sworn testimony contesting hearsay evidence, hearsay evidence standing alone can constitute substantial evidence to support a finding of misconduct warranting the denial of unemployment benefits. See supra, majority opinion, at 5-7. This controverts binding authority that hearsay evidence is not sufficient evidence where it is refuted by sworn testimony. Jadallah, supra, 476 A.2d at 676 (declining to hold that the direct sworn testimony of a witness on a crucial fact can be refuted by hearsay from a declarant available for trial); see also Curtis v. District of Columbia Dep't of Employment Servs., 490 A.2d 178, 179-80 & n.3 (D.C. 1985) (failure to swear witnesses, simply reading documents into the record did not constitute sufficient evidence of misconduct). In Jadallah, supra, the court made clear that, notwithstanding the hearsay testimony on behalf of the employer:
It is one thing to hold that hearsay evidence is admissible at agency hearings, but quite another thing to say that the direct sworn testimony of a witness on a crucial fact can be effectively refuted by hearsay, i.e., the statements of persons not produced as witnesses -- and hence not subject to cross-examination -- when the party relying on such statements is in a position to call the declarants to the stand.
Jadallah, supra, 476 A.2d at 676. In reversing and remanding the case to the agency in Jadallah, supra, because the double hearsay was "too thin" to constitute substantial evidence, the court noted that the employer had failed to explain why security officials with direct knowledge of the misconduct were not called to testify at the agency hearing. *fn12 Id. at 677. Since Jadallah, supra, the court has continued to emphasize its concern about reliance by agencies on hearsay evidence when the declarant is available. See McLean v. District of Columbia Dep't of Employment Servs., 506 A.2d 1135, 1137-38 (D.C. 1986) (hearsay testimony contradicted by sworn testimony of witness does not constitute substantial evidence). See also Lim v. District of Columbia Taxicab Comm'n, 564 A.2d 720, 725 & n.11 (D.C. 1989) (reemphasizing that "an administrative agency should not rely on hearsay to refute sworn testimony, when the party relying on the hearsay is able to call the declarant to the stand").
The record does not provide a basis on which to conclude that the DARs were reliable hearsay. First, the DARs were not business records falling within the exception to the hearsay rule. *fn13 Petitioner challenged not only the accuracy of the DARs, but testified that most of the DARs were "just written up to evade paying me unemployment," claiming that he thought he was being fired because he had won a wage and hour award. Mr. Steele's testimony did not address these allegations in petitioner's testimony and cannot, therefore, provide an evidentiary basis on which the appeals examiner could conclude that the DARs were within the business-records exception. See Palmer v. Hoffman, 318 U.S. 109, 114, 63 S. Ct. 477, 87 L.Ed. 645 (1943) (business reports whose primary purpose is for litigation are not admissible under business-records exception to the hearsay rule). He never responded to petitioner's assertion by testifying that the DARs at issue were prepared as part of the employer's regular business operations and not primarily for use in unemployment compensation proceedings, and the hearing examiner made no pertinent finding. See Coates v. Johnson & Johnson, 756 F.2d 524, 550 (7th Cir. 1985) (disciplinary memorandum admissible because used as part of "the systematic conduct of running a business" and "not prepared primarily with a view toward their use in a subsequent adversarial proceeding"). While personnel records may properly be accorded some weight, they cannot constitute sufficient evidence when rebutted by sworn testimony. See Washington Times, supra, 530 A.2d at 1190. The hearsay records on which the agency relied, therefore, did not constitute sufficient evidence on which to base a finding of misconduct under D.C. Code § 46-111 (b) (Repl. 1990). See Id.; Jadallah, supra, 476 A.2d at 675-76, 677 (Ferren J., Concurring); see also 3 KENNETH C. DAVIS, ADMINISTRATIVE LAW TREATISE § 16.6, at 243 (2d ed. 1980) (listing circumstances to be considered in determining whether or not particular evidence should be relied upon); cf. Curtis, supra, 490 A.2d at 179-80 & n.3.
Second, the credibility determination made by the appeals examiner misses the mark. The majority points out that the appeals examiner found that Mr. Steele was truthful and petitioner was not. See supra, majority opinion, at 8. However, this credibility finding cannot overcome the requirement that the agency's findings must be supported by substantial evidence. Gunty v. District of Columbia Dep't of Employment Servs., 524 A.2d 1192, 1197 (D.C. 1987) (citation omitted). The burden to show misconduct was on the employer, see supra note 3, and, in view of the employer's reasons for discharging petitioner -- for "consistently and constantly continuing to break the rules and regulations after being counseled" -- the appeals examiner's reliance on the seven DARs challenged by petitioner's sworn testimony could not constitute substantial evidence of "misconduct" under the statute. See Jones, supra, 395 A.2d at 395. The employer's only witness, Mr. Steele, had no personal knowledge of the incidents, other than through hearsay reports from the field examiners. *fn14 Nor did he otherwise provide a basis, as did independent evidence in Bourjaily, supra, 483 U.S. at 180-81, on which the appeals examiner could determine that the DARs were reliable or admissible as business records. Thus, the appeals examiner's credibility determination could not overcome the deficiency of proof occasioned by the disputed DARs. *fn15
Finally, the factors on which the majority relies in concluding that the DARs were reliable are peripheral to the issue of whether there was substantial evidence to support the finding of misconduct. The thrust of the majority's Conclusion is that the DARs were inherently reliable because of their cumulativeness, the fact that they were created by different sergeants following company procedure, and their consistency. *fn16 See majority opinion at 6. Upon examination, these factors do not provide an adequate response when hearsay is challenged in sworn testimony in the absence of a showing that the declarants are unavailable to testify and there is no substantiating independent evidence of reliability.
The factors on which the majority relies confront neither petitioner's testimony that the DARs were false nor his testimony that they had been manufactured for the purpose of depriving him of his unemployment benefits. The truthfulness of petitioner's testimony was not inconsistent with the factors on which the majority relies. If the DARs are false, the fact that there are a number of reports makes them no less false; the employer's witness had no personal knowledge of the incidents set forth in the DARs. The fact that the DARs were prepared pursuant to company procedure does not necessarily mean that the particular DARs challenged by petitioner were not prepared for reasons other than his unemployment disqualification; an assertion that the employer's witness did not address. Neither did the fact that the DARs were prepared according to general company procedure mean that the DARs were accurate. See also supra note 2. The fact that the DARs were consistent can cut both ways: either they can be read as the majority suggests or, read as too consistent, indicating that they were manipulated, especially in view of the fact that many of the DARs were prepared by two sergeants. See supra note 12. The appeals examiner made no findings on the relevant points relating to these factors, relying instead on a credibility determination that missed the mark since Mr. Steele was not in a position to address the accuracy of the reported incidents and did not testify that the DARs at issue were not written for unemployment compensation purposes. In other words, the existence of the majority's factors are peripheral to the issue of whether there was substantial evidence of misconduct based on the employer's hearsay evidence which was challenged in sworn testimony.
Accordingly, because Jadallah is controlling, the case should be remanded to the agency for further proceedings, and I respectfully Dissent.
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YOUNG arsonists are often serial offenders who have lit at least 10 fires, a Queensland study has found.
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