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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Blas v. State, Dept. of Labor (8/8/2014) sp-6937
Notice: This opinion is subject to correction before publication in the PACIFIC REPORTER .
Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts,
303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email
corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
LEO BLAS, )
) Supreme Court No. S-15154
Appellant, )
) Superior Court No. 3AN-12-08710 CI
v. )
) O P I N I O N
STATE OF ALASKA, )
DEPARTMENT OF LABOR AND ) No. 6937 - August 8, 2014
WORKFORCE DEVELOPMENT, )
DIVISION OF EMPLOYMENT )
SECURITY, )
)
Appellee. )
_______________________________ )
Appeal from the Superior Court of the State of Alaska, Third
Judicial District, Anchorage, Kevin M. Saxby, Judge.
Appearances: Leo Blas, pro se, Chugiak, Appellant. Aesha
Pallesen, Assistant Attorney General, Anchorage, and
Michael C. Geraghty, Attorney General, Juneau, for
Appellee.
Before: Fabe, Chief Justice, Winfree, Stowers, Maassen, and
Bolger, Justices.
STOWERS, Justice.
I. INTRODUCTION
The Department of Labor and Workforce Development, Division of
Employment Security (the Division) determined that Leo Blas committed fraud when he
----------------------- Page 2-----------------------
failed to report that he worked and traveled during weeks he claimed and received
unemployment benefits. Blas presented no contrary evidence disputing these findings
and this conclusion. We affirm the superior court's decision to uphold the Division's
decision to reduce and deny Blas's receipt of unemployment benefits and to disqualify
him from receiving benefits for 52 weeks.
II. FACTS AND PROCEEDINGS
A. Facts
Leo Blas is a highly educated accountant by profession; he also trained and
worked as a life insurance agent. Blas collected unemployment benefits on and off for
several years through the Division under the Alaska Employment Security Act.1 On
March 17, 2010, the Division's Benefit Payment Control Unit issued a determination of
disqualification to Blas based on his failure to report work and travel while he was
unemployed and receiving unemployment benefits. On February 16, 2011, a Division
Appeal Tribunal partially reversed this determination, but held that "the facts
reveal . . . [Blas withheld] material information about . . . one week of travel and two
weeks of employment in November 2009" and "did so with the intent to receive
unentitled benefits during those three weeks."2
This appeal concerns Blas's alleged failure to report work and travel in
2011 and 2012. Blas applied for unemployment benefits in 2011 for the weeks ending
July 16, July 23, August 13, August 20, September 3, September 10, September 17,
November 26, December 3, December 10, December 17, December 24, and
1 AS 23.20.005-.535.
2 This Division decision is not the subject of this appeal, but it is relevant to
the Division's later decision that Blas committed fraud in knowingly applying for
benefits for weeks that he worked and traveled, as well as the Division's later imposition
of its most stringent 52-week penalty.
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December 31. He also applied for benefits in 2012 for the weeks ending January 14 and
January 21. During these weeks, Blas worked for Vision Alaska I, LLC, d/b/a Coastal
Television Broadcasting Company, as a contract and then salaried employee, and then
at Harley's Auto Park as a salaried employee. Although required to report travel to the
Division when filing for benefits, Blas traveled to Moscow, Idaho and back to
Anchorage on November 22-23, 2011, and did not report it.
B. Proceedings
3
The Division commenced two proceedings against Blas.
1. The first proceeding
On April 16, 2012, the Division's Benefit Payment Control Unit issued a
notice of determination to Blas because employer records showed that he had earnings
during 13 weeks he had received unemployment benefits.4 This determination relied on
a recorded, in-person interview with Blas where he admitted that he began working as
an accounting clerk on a contract basis for Coastal Television in July 2011. Blas also
admitted that he became a salaried employee of Coastal Television on July 28, 2011.
Blas also agreed that he became a salaried employee of Harley's Auto Park on
December 1, 2011. The determination stated: "You reviewed the . . . [previous] decision
from the Appeals Tribunal . . . issued [February 16, 2011] in [your] case. You agreed
that you were advised . . . that you must report your work and earnings whether you had
3 The superior court consolidated Blas's May 7, 2012 and June 19, 2012
administrative appeals.
4 The determination listed weeks in 2011 ending July 16, July 23, August 13,
August 20, September 3, September 10, December 3, December 10, December 17,
December 24, and December 31. It also listed weeks in 2012 ending January 14 and
January 21.
-3- 6937
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been paid or not." Blas disputed that the previous February 16, 2011 decision of the
Appeal Tribunal found him to have fraudulently applied for benefits in 2010.
When asked why he answered "no" to the question "Did you work for any
employer?" on his online weekly certifications seeking unemployment benefits, Blas
answered that he had received a letter from the Division that informed him he was owed
Emergency Unemployment Compensation benefits for 2007, and he declined to report
his work and earnings because he was underpaid and "the Division owed him money."
Blas was then asked whether he knew that, by answering "no," he was certifying to false
information. Blas stated that he was "not sure." Blas also stated that after the Division
deducted the amount of the Emergency Unemployment Compensation benefits he was
owed, he would be willing to make payments on the balance of unentitled benefits he
received.
The Division's determination concluded that "[Blas] knew [he was]
required to report [his] work and earnings and [he] failed to do so; misrepresentation has
5
been established." The determination denied Blas benefits under AS 23.20.387 in 2011
5 AS 23.20.387 provides:
(a) An insured worker is disqualified for benefits for the
week with respect to which the false statement or
misrepresentation was made and for an additional period of
not less than six weeks or more than 52 weeks if the
department determines that the insured worker has knowingly
made a false statement or misrepresentation of a material fact
or knowingly failed to report a material fact with intent to
obtain or increase benefits under this chapter. The length of
the additional disqualification and the beginning date of that
disqualification shall be determined by the department
according to the circumstances in each case.
(b) A person may not be disqualified from receiving benefits
(continued...)
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----------------------- Page 5-----------------------
6
and reduced his benefits under AS 23.20.360 in 2011 for the weeks ending August 13,
August 20, September 3, September 10, December 3, December 10, December 17,
December 24, December 31, and in 2012 for the weeks ending January 14 and
January 21. It also denied Blas benefits under AS 23.20.387 in 2011 for the weeks
ending July 16 and July 23. The determination found that, because
[Blas] had [previously been] disqualified for
misrepresentation within the past five (5) years (03/[17]/10),
[he was] automatically DENIED future benefits under the
[7]
provisions of AS 23.20.387 and 8 AAC 85.380(c) for fifty-
two (52) weeks beginning with the week ending 04/14/12
through 04/06/13.
5 (...continued)
under this section unless there is documented evidence that
the person has made a false statement or a misrepresentation
as to a material fact or has failed to disclose a material fact.
Before a determination of fraudulent misrepresentation or
nondisclosure may be made, there must be a preponderance
of evidence of an intention to defraud, and the false statement
or misrepresentation must be shown to be knowing and to
involve a material fact.
6
AS 23.20.360, titled "Earnings deducted from weekly benefit amount,"
provides that "[t]he amount of benefits . . . payable to an insured worker for a week of
unemployment shall be reduced by 75 percent of the wages payable to the insured
worker for that week that are in excess of $50. However, the amount of benefits may not
be reduced to zero."
7
8 Alaska Administrative Code (AAC) 85.380(c) (2014) provides: "The
period of disqualification under AS 23.20.387 is 52 weeks if the claimant has been
previously disqualified, within five years of the date of the determination, for making a
false statement or misrepresentation, or failing to report a material fact."
-5- 6937
----------------------- Page 6-----------------------
Finally, the determination concluded that Blas was subject to any applicable
8
overpayment debt and penalty amount under AS 23.20.390(a). Blas appealed this
determination.
In the Appeal Tribunal hearing, Blas did not dispute that he had worked for
the weeks reported in the determination. In fact, he offered to "start making payments"
and to "make a payment plan" for any excess he might owe. Instead, Blas argued that:
(1) an administrative subpoena issued by the Division investigator in his case to access
his bank records violated his right to privacy; (2) he was entitled to a calculation of
damages he owed if he was being accused of fraud; (3) the previous February 16, 2011
Appeal Tribunal decision did not find that he had committed fraud in his 2010
application for benefits, and the Division erred in its 2012 determination by concluding
that he had previously committed fraud when it automatically denied him 52 weeks of
unemployment benefits; (4) the Division investigator called his last employer and caused
him to lose his job; and (5) the Division did not provide him with discovery that he
requested, including a recording of the phone call that caused his loss of employment,
and a "second investigator's report" that Blas alleged aimed to uncover the
circumstances of his termination.9
The Appeal Tribunal affirmed the Division's April 16, 2012 determination
and denied Blas benefits in 2011 for the weeks ending July 16, July 23, August 13
though September 10, as well as December 3, 2011 through January 21, 2012 "and for
8 AS 23.20.390(a) provides: "An individual who receives a sum as benefits
from the unemployment compensation fund when not entitled to it under this chapter is
liable to the fund for the sum improperly paid to the individual."
9
Blas did not produce evidence to substantiate his allegations that a Division
investigator caused him to lose his job, or that another investigator actually conducted
an investigation of the first investigator in this case.
-6- 6937
----------------------- Page 7-----------------------
10
the future weeks of April 14, 2012 through April 6, 2013." The Tribunal also upheld
the Division's determination of overpayment liability under AS 23.20.390(a), which
included penalties. It remanded to the Division the issue of Blas's eligibility for benefits
during the week ending September 17, 2011, and ordered a recalculation of any penalty
Blas owed.
Blas appealed the Appeal Tribunal's decision to the Commissioner. The
Commissioner issued a decision that affirmed the Appeal Tribunal in all respects,
concluding that Blas "clearly committed fraud for a protracted period by giving false
information on his claim certifications in spite of . . . [being] disqualified for failing to
fill out the claim forms properly in a previous claim year," and that Blas gave "no
explanation as to why he filed the claims" and instead "cavalierly gave testimony in the
hearing to the effect that if he had been paid any weeks that he was not entitled to that
he would pay it back." The Commissioner noted that the Appeal Tribunal decision "did
not rely on any bank records that the [D]ivision may have obtained by subpoena" and
even if it did, "the [D]epartment is not in the position to interpret the constitutionality of
statutes it is mandated to enforce."
2. The second proceeding
On June 5, 2012, the Division's Benefit Payment Control Unit issued a
second notice of determination to Blas, finding that Blas failed to report earnings for the
week ending September 17, 2011, and failed to report travel for time he was in Idaho
11
during the week ending November 26, 2011. The determination concluded that Blas
10 The determination alternatively reduced Blas's benefits pursuant to
AS 23.20.360 for the weeks ending August 13, 2011 through September 10, 2011 and
December 3, 2011 through January 21, 2012.
11 An initial determination was sent to Blas on May 17, 2012, but was
(continued...)
-7- 6937
----------------------- Page 8-----------------------
"made false statements with the intent to obtain benefits [he was] not entitled to receive,"
denied him benefits for the weeks ending September 17, 2011, and November 26, 2011,
and again disqualified him from 52 weeks of future benefits.12
Blas appealed this determination to the Appeal Tribunal, and in the hearing
testified that he did not remember if he worked on September 12 and 13, 2011. Blas
stated that his failure to report may have been an "oversight," that he was uncertain
whether he was actually paid for working those days, and that the whole system was not
entirely clear to him. Blas also stated that he did not check the box "yes" that he traveled
the week ending November 26, 2011 because "if I [said] yes, it looks like I traveled the
13
whole week. I just traveled for one day." He asserted that he had to fly to Idaho for
11 (...continued)
corrected and sent out as a redetermination on June 5, 2012. Blas technically appealed
both "determinations," but the only difference between the two was the amount of wages
the employer actually reported (in May it was $1,279.04, and in June it was $365.44).
12 The determination denied benefits under AS 23.20.360 and AS 23.20.387
for the week ending September 17, 2011. The determination also denied benefits under
AS 23.20.378 (travel) and AS 23.20.387 for the week ending November 26, 2011.
Alaska Statute 23.20.378(a) provides that "[a]n insured worker is entitled to
receive . . . benefits for a week of unemployment if for that week the insured worker
is . . . available for suitable work. An insured worker is not considered available for
work unless registered for work in accordance with regulations adopted by the
department." We have held that, to be available for suitable work, "the individual [must
be] willing to work and . . . available to a substantial field of employment." Lind v.
Emp't Sec. Div., Dep't of Labor , 608 P.2d 6, 8 (Alaska 1980). The Division considered
Blas unavailable for work in Alaska due to his travel outside of the state.
13
Blas actually was in travel status two days. According to the record, Blas
departed Anchorage on November 22, 2011 at 6:10 a.m. to travel to Idaho. He returned
to Anchorage on November 23, 2011, at 10:47 p.m. An applicant for unemployment
benefits is required to certify that he has not traveled because benefits are only owed if
the applicant is available and able to work. See AS 23.20.378. If the applicant is in
(continued...)
-8- 6937
----------------------- Page 9-----------------------
a "personal matter." He claimed that he did not understand why the "one day" was "such
a big deal" and questioned the hearing officer as to why the one day of travel mattered
at all to his benefits determination for the week. Finally, Blas again protested the
administrative subpoena process used by the Division investigator to access his bank
account records.
The Appeal Tribunal affirmed the Division's denial of benefits under
14
AS 23.20.387 and reset the 52 weeks of unemployment ineligibility for the week
ending May 19, 2012. This ineligibility continued through May 11, 2013. Blas appealed
to the Commissioner. The Commissioner affirmed the Appeal Tribunal in all respects,
concluding that Blas
clearly committed fraud for the two weeks in question by
giving false information on his claim certifications in spite of
the fact he was properly informed of the correct way to file
claims via his claimant handbook and had been disqualified
for failing to fill out the claim forms properly in a previous
claim year.
Blas appealed to the superior court.
3. The superior court appeal
The superior court consolidated Blas's appeals. Blas renewed his
arguments concerning the administrative subpoena process, as well as the investigator's
conduct in allegedly calling his former employer and causing his termination.
13 (...continued)
travel status unrelated to efforts seeking employment on a given day, he is not available
and able to work, and therefore not eligible for unemployment benefits for that day.
14 The Appeal Tribunal reduced Blas's benefits for the week ending
September 17, 2011 under AS 23.20.360. That statute delineates how the Division
deducts earnings from the applicant's weekly benefit amount. See AS 23.20.360. The
Appeal Tribunal also denied Blas's benefits for the week ending November 26, 2011
under AS 23.20.378, because Blas traveled and was thus unavailable for suitable work.
-9- 6937
----------------------- Page 10-----------------------
The court upheld the Division's decisions. It concluded that: (1) Blas
presented "no contrary evidence" to dispute the Division's findings that he had worked
and traveled during certain weeks when he reported that he had not worked or traveled;
(2) the Division "had a reasonable basis" to conclude that Blas committed fraud; and (3)
the Division had not violated Blas's constitutional rights during its investigation or the
administrative adjudication process.
Blas timely appeals and proceeds pro se.
III. STANDARD OF REVIEW
"When the superior court acts as an intermediate court of appeal from an
15 We review questions of fact
agency decision we review the agency decision directly."
in administrative decisions using the "substantial evidence" test.16 "The scope of review
for an agency's application of its own regulations to the facts is limited to whether the
17
"We apply
agency's decision was arbitrary, unreasonable, or an abuse of discretion."
the reasonable basis standard of review to questions of law involving agency expertise,
and the substitution of judgment standard to questions outside the agency's expertise."18
Finally, "[t]he interpretation of a statute . . . is a question of law to which we apply our
15 Pyramid Printing Co. v. Alaska State Comm'n for Human Rights , 153 P.3d
994, 997-98 (Alaska 2007) (citations omitted).
16 Handley v. State, Dep't of Revenue , 838 P.2d 1231, 1233 (Alaska 1992).
17
Griffiths v. Andy's Body & Frame, Inc., 165 P.3d 619, 623 (Alaska 2007)
(quoting Hodges v. Alaska Constructors, Inc. , 957 P.2d 957, 960 (Alaska 1998))
(internal quotation marks omitted).
18
Pyramid Printing Co. , 153 P.3d at 998 (citing Leigh v. Seekins Ford , 136
P.3d 214, 216 (Alaska 2006)).
-10- 6937
----------------------- Page 11-----------------------
independent judgment,"19 "taking into account the plain meaning and purpose of the law
as well as the intent of the drafters."20
IV. DISCUSSION
A. The Division's Determination That Blas Failed To Report Work Is
Supported By Substantial Evidence.
A determination of fact by an agency will stand if it is supported by
substantial evidence,21 which is "such relevant evidence as a reasonable mind might
22
accept as adequate to support [the agency's] conclusion" in light of the whole record.
Under the substantial evidence standard "it is 'not the function of the (reviewing) court
to reweigh the evidence or choose between competing inferences, but only to determine
whether such evidence exists.' "23
24
Whether Blas failed to report work is a question of fact. The relevant
19 West v. State, 248 P.3d 689, 694 (Alaska 2010) (citing Parson v. State,
Dep't of Revenue, Alaska Hous. Fin. Corp. , 189 P.3d 1032, 1036 (Alaska 2008)).
20 Native Vill. of Elim v. State , 990 P.2d 1, 5 (Alaska 1999) (citing Alaska
Wildlife Alliance v. Rue, 948 P.2d 976, 979 (Alaska 1997)).
21 Button , 208 P.3d at 200.
22 Alaskan Crude Corp. v. State, Alaska Oil & Gas Conservation Comm'n ,
309 P.3d 1249, 1254 (Alaska 2013) (alteration in original) (quoting Lopez v. Adm'r, Pub.
Emps.' Ret. Sys. , 20 P.3d 568, 570 (Alaska 2001)).
23
State, Dep't of Labor v. Boucher, 581 P.2d 660, 662 (Alaska 1978)
(alteration in original) (quoting Interior Paint Co. v. Rodgers , 522 P.2d 164, 170 (Alaska
1974)).
24 See, e.g., Calvert v. State, Dep't of Labor & Workforce Dev., Emp't Sec.
Div. , 251 P.3d 990, 998 (Alaska 2011) (holding that whether an employee voluntarily
quit suitable work for good cause is a question of fact); Smith v. Sampson, 816 P.2d 902,
904 (Alaska 1991) (holding that whether employee was dismissed from his employment
(continued...)
-11- 6937
----------------------- Page 12-----------------------
evidence to support this factual finding was produced at both Appeal Tribunal hearings
as exhibits in the form of online and telephonic forms that Blas filled out for
unemployment for weeks he was employed. Payment invoices sent by Blas, payment
receipt stubs, and copies of paychecks that corresponded to the weeks Blas applied for
unemployment also appeared in the agency record as exhibits. Also in evidence were
Blas's admissions: he did not dispute that he had worked during the weeks in question;
instead Blas repeatedly demanded an accounting of how much he owed, so that he could
"start making payments" or "make a payment plan" for any excess he might owe. The
Commissioner affirmed both Appeal Tribunal decisions based on this evidence and
Blas's failure to rebut it.
Because there is ample relevant evidence to support the Division's finding
that Blas failed to report work during the weeks in question, we affirm the agency's
factual finding.
24 (...continued)
for misconduct is a question of fact). "Generally, facts are those findings that respond to
inquiries about who, when, what, and where. For example, whether a defendant drove
her car through a red light is considered a question of fact." Timothy P. O'Neill & Susan
L. Brody, Taking Standards of Appellate Review Seriously: A Proposal to Amend Rule
341, 83 ILL . B.J. 512, 514 (1995) (footnotes omitted) (internal quotation marks omitted).
"An 'ultimate' fact is different from an 'historical' fact. The question of whether a traffic
light was red is a question of historical fact. The pertinent historical facts may lead to the
'ultimate' factual conclusion that defendant was 'negligent.' " Id . at 514 n.13 (citation
omitted).
-12- 6937
----------------------- Page 13-----------------------
B. The Division's Determination That Blas Failed To Report Travel
Was Supported By Substantial Evidence, And The Division Did Not
Abuse Its Discretion When It Found Blas Was Not Available For
Suitable Work.
Whether Blas failed to report his travel is a question of fact.25
We review
an agency's application of its own regulations to the facts to determine whether the
agency's decision was "arbitrary, unreasonable, or an abuse of discretion."26
According to the record, Blas departed Anchorage on November 22, 2011
at 6:10 a.m. to travel to Idaho on personal business. He returned to Anchorage on
November 23, 2011, at 10:47 p.m. The Appeal Tribunal found that Blas "traveled away
from his residence during his customary work week for purposes unrelated to obtaining
employment, and he did not seek work in the areas he traveled[, namely, Idaho]," in
violation of AS 23.20.378 and 8 AAC 85.353. The Appeal Tribunal concluded that Blas
"[did] not meet the available criteria of the regulation during the week of his travel." The
Commissioner affirmed these findings and conclusions.
Blas argues that "the partial day [of] travel . . . did not interfere" with his
local job search "in any single 24 hour calendar day period" and that he was "present in
Alaska every single calendar day of that week, and pursued employment locally by
phone, online and other methods."27
Alaska Statute 23.20.378(a) provides that "[a]n insured worker is entitled
to receive . . . benefits for a week of unemployment if for that week the insured worker
25 See O'Neill & Brody, supra note 24, at 514.
26 Griffiths v. Andy's Body & Frame, Inc. , 165 P.3d 619, 623 (Alaska 2007)
(internal quotation marks omitted).
27 As explained in note 13, Blas was in travel status two days, departing
Anchorage at 6:10 a.m. on November 22, 2011, and returning to Anchorage at 10:47
p.m. on November 23, 2011.
-13- 6937
----------------------- Page 14-----------------------
is . . . available for suitable work. An insured worker is not considered available for
work unless registered for work in accordance with regulations adopted by the
department." 8 AAC 85.353 governs a claimant's availability for suitable work as it
relates to travel claims. The requirements of that regulation "apply to any period during
28
subject to
which a claimant travels outside the area in which the claimant resides"
29
exceptions for conditions not applicable here, or if the applicant must travel for
30
approved training. As relevant to Blas, the regulation provides that "[a] claimant is
available for work each week while traveling only if the claimant is traveling
to . . . search for work and is legally eligible to accept work in the area of travel."31
Here, Blas admitted in the June 2012 Tribunal Appeal hearing that he did
28 8 AAC 85.353(a) (emphasis added).
29 Those exceptions are where the insured worker:
(A) is ill or disabled;
(B) is traveling to obtain medical services that are not
available in the area in which the insured worker resides, or,
if a physician determines it is necessary, the insured worker
is accompanying a spouse or dependent who is traveling to
obtain medical services;
(C) resides in the state and is noncommercially hunting or
fishing for personal survival or the survival of dependents;
(D) is serving as a prospective or impaneled juror in a court;
or
(E) is attending the funeral of an immediate family member
for a period of no longer than seven days . . . .
AS 23.20.378(a)(1).
30 8 AAC 85.353(a).
31 8 AAC 85.353(b)(1).
-14- 6937
----------------------- Page 15-----------------------
not search for work during the period he traveled. Blas traveled over November 22 and
23, 2011 - a Tuesday and a Wednesday in the middle of the standard work week.
There is substantial evidence to support the Division's finding that Blas did not report
his travel, and the Division did not abuse its discretion in applying its regulations to this
fact and concluding that Blas was not available for suitable work when Blas was outside
of Alaska for two work days. We thus affirm the Division's denial of benefits to Blas
under AS 23.20.378 for the calendar week ending November 26, 2011, because Blas was
not available for suitable work that week due to travel.
C. The Division Did Not Err When It Concluded That Blas Committed
Fraud.
"The substitution of judgment standard is applied where the questions of
law presented do not involve agency expertise or where the agency's specialized
knowledge and experience would not be particularly probative as to the meaning of the
32
statute." "The standard is appropriate . . . where the case concerns statutory
interpretation or other analysis of legal relationships about which the courts have
33
specialized knowledge and experience." "Application of this standard permits a
reviewing court to substitute its own judgment for that of the agency even if the agency's
34
decision had a reasonable basis in law." Just as the workers' compensation statutes do
32 Tesoro Alaska Petroleum Co. v. Kenai Pipe Line Co. , 746 P.2d 896, 903
(Alaska 1987) (citing Matanuska-Susitna Bor. v. Hammond , 726 P.2d 166, 175 (Alaska
1986); Glacier State Telephone v. Alaska Pub. Utils. Comm'n , 724 P.2d 1187, 1189 n.1
(Alaska 1986))).
33 Id . (quoting Earth Res. Co. of Alaska v. State, Dep't of Revenue , 665 P.2d
960, 965 (Alaska 1983)) (internal quotation marks omitted).
34 Id . (citing Earth Res. Co. of Alaska , 665 P.2d at 965).
-15- 6937
----------------------- Page 16-----------------------
not "give a context-specific definition of 'knowingly,' "35 the Employment Security Act
36
does not provide a definition of this word. It thus falls to us to interpret the terms
"knowing" or "knowingly" in AS 23.20.387.37
The Division concluded that Blas "clearly committed fraud . . . by giving
false information on his claim certifications in spite of the fact [that] he was properly
informed of the correct way to file claims via his claimant handbook and had been
disqualified for failing to fill out the claim forms properly in a previous claim year."
Alaska Statute 23.20.387(a) gives the Division authority to disqualify a claimant from
receiving benefits based on misrepresentation for up to 52 weeks when the claimant
"knowingly [makes] a false statement or misrepresentation of a material fact or
knowingly [fails] to report a material fact with intent to obtain or increase benefits under
this chapter." The statute does not define the term "knowingly"; however, subsection
(b) cautions that the Division must have "documented evidence" demonstrating a
"preponderance of evidence of an intention to defraud, and the false statement or
misrepresentation must be shown to be knowing and to involve a material fact."38
Blas does not directly challenge the Division's finding that he committed
fraud, and nowhere in his briefing does Blas argue that he did not intend to apply for
39
Instead, Blas argues
benefits during weeks the Division claims Blas actually worked.
35 ARCTEC Servs. v. Cummings , 295 P.3d 916, 922 (Alaska 2013) (citing
AS 23.30.395).
36 See AS 23.20.520 (defining the terms found in the Act).
37
See ARCTEC Servs. , 295 P.3d at 920-21.
38 AS 23.20.387(b).
39
Blas characterizes his weekly benefit certification where he reported he did
(continued...)
-16- 6937
----------------------- Page 17-----------------------
that his appeal should automatically stay the Division's enforcement of his
disqualification from receiving 52 weeks of unemployment benefits, because the matter
is still being contested, and because the amount of unemployment benefits the Division
denied him far outweighs the amount of the Division's "overpayment" to him by
"thousands of dollars."
The Division contends that it had a reasonable basis to conclude that Blas's
misrepresentations were "knowing" and intentional because: (1) Blas received and read
the Unemployment Insurance Claimant Handbook, which explained how to properly
report one's work and earnings; (2) the questions to which Blas responded "no" when
certifying his employment status were simple and unambiguous - allowing little room
for misunderstanding; (3) Blas participated in the prior February 2011 appeal before the
Appeal Tribunal, and his obligation to accurately report was "thoroughly explained to
him at that time"; and (4) even after Blas was paid unemployment benefits, he never
informed the Division or tried to correct his earlier "misrepresentation."
In order to determine whether Blas was "knowingly" deceptive in his
reporting, we must interpret the fraud provision found in AS 23.20.387. This requires
40 We aim
that we examine the language of the statute "construed in light of its purpose."
to give effect to the legislature's intent while taking into consideration "the meaning the
39 (...continued)
not travel as a "misstatement . . . related to travel during a week of unemployment." Blas
essentially takes issue with the term "fraud" because he believes his material
misrepresentations are minor compared to the penalties the Division imposed on him.
40
Beck v. State, Dep't. of Transp. & Pub. Facilities , 837 P.2d 105, 116-17
(Alaska 1992) (citing Vail v. Coffman Eng'rs, Inc., 778 P.2d 211, 213 (Alaska 1989)).
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41
statutory language conveys to others" - the plain meaning of the statute. We use a
sliding scale on matters of statutory interpretation: "the plainer the language of the
42
statute, the more convincing contrary legislative history must be." We give weight to
an agency's interpretation when such interpretation has been of a longstanding and
continuous nature.43
The plain language of AS 23.20.387 contains the following mental state
requirements: (1) the claimant must "knowingly" make a false statement or fail to report
(2) with "intent to obtain or increase benefits"; there must be documentary evidence of
(3) an "intention to defraud" by a preponderance of the evidence; and (4) the false
44
In the workers'
statement must be shown to be "knowing" and involve a material fact.
compensation benefits case ARCTEC Services v. Cummings , we concluded "that
'knowingly,' for purposes of fraud claims under AS 23.30.250(b), requires the subjective
41 Alyeska Pipeline Serv. Co. v. DeShong , 77 P.3d 1227, 1234 (Alaska 2003)
(quoting Muller v. BP Exploration (Alaska) Inc. , 923 P.2d 783, 787 (Alaska 1996)).
42 Marathon Oil Co. v. State, Dep't of Natural Res ., 254 P.3d 1078, 1082
(Alaska 2011) (quoting Alaskans For Efficient Gov't, Inc. v. Knowles , 91 P.3d 273, 275
(Alaska 2004)) (alteration and internal quotation marks omitted).
43
See Bartley v. State, Dep't of Admin., Teacher's Ret. Bd. , 110 P.3d 1254,
1261 (Alaska 2005) (finding the agency interpretation guiding when longstanding);
Storrs v. State Med. Bd., 664 P.2d 547, 552 (Alaska 1983) (holding that a "statutory
construction adopted by those responsible for administering a statute should not be
overruled in the absence of 'weighty reasons' " (quoting Kelly v. Zamarello , 486 P.2d
906, 910-11 (Alaska 1971)); Nat'l Bank of Alaska v. State, Dep't of Revenue , 642 P.2d
811, 815-16 (Alaska 1982) (reasoning that courts should give weight under independent
judgment standard to longstanding agency interpretation); 2B N ORMAN J. SINGER ,
S
UTHERLAND ON STATUTES AND STATUTORY CONSTRUCTION § 49:05, at 52-53 (6th ed.
2000) (noting rule that courts should give weight to longstanding statutory construction).
44 AS 23.20.387(a)-(b).
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45
intent to defraud." We reasoned that subsection (a) of that statute imposed criminal
liability; thus we construed "knowingly" in accordance with the criminal law definition
46
of the term found in AS 11.81.900(a)(2). We ultimately determined that "knowingly"
in AS 23.30.250(b) also required subjective intent, despite the fact that subsection (b)
merely imposed civil penalties.47
Alaska Statute 23.20.387(a) disqualifies a claimant from receiving
unemployment benefits for a period from six to 52 weeks, with the length of the
disqualification and its start date "determined by the department according to the
48
circumstances in each case." The statute's earliest iteration in 1955 suggests that
culpability required a subjective intent to defraud: the claimant was automatically
disqualified for 26 weeks if "he . . . made a false statement or representation of a material
49
In 1980 the statute was amended to give the Division
fact knowing it to be false."
45 295 P.3d 916, 920 (Alaska 2013).
46 Id . at 922. Alaska Statute 11.81.900(a)(2) provides that an individual acts
"knowingly" with respect to conduct or to a circumstance . . .
when the person is aware that the conduct is of that nature or
that the circumstance exists; when knowledge of the
existence of a particular fact is an element of an offense, that
knowledge is established if a person is aware of a substantial
probability of its existence, unless the person actually
believes it does not exist; a person who is unaware of conduct
or a circumstance of which the person would have been
aware had that person not been intoxicated acts knowingly
with respect to that conduct or circumstance.
47 ARCTEC Servs. , 295 P.3d at 923.
48 AS 23.20.387(a).
49 Ch. 5, § 741(k), ESLA 1955.
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discretionary latitude to "vary the length of disqualification from 6-52 weeks depending
50 51
on the circumstances" with the goal of "main[taining] . . . a solvent trust fund" and
52
"strengthening [the] qualifications for [receipt of unemployment] benefits." But the
53
term "knowingly" was preserved in AS 23.20.387(a) and the subjective mental state
underscored in subsection (b): "there must be evidence of a[] [person's] intention to
54
defraud, and the act must be knowing ."
50 Sen. Finance Comm., Section by Section Analysis of Proposed H.B. 214,
11th Leg., 2d Sess. at 6 (1980), available at Alaska Leg. Microfiche Collection No.
1057.
51 Letter from Jay S. Hammond, Governor, to Terry Gardiner, Speaker of the
House on H.B. 214, 11th Leg., 1st Sess. (Feb. 13, 1979), available at Alaska Leg.
Microfiche Collection No. 1057.
52 Id .
53
Sen. Finance Comm., Proposed Language of H.B. 214, 11th Leg., 2d Sess.
at 12 (1980), available at Alaska Leg. Microfiche Collection No. 1057. We observe that
while the legislative history of AS 23.20.387 is sparse, the proposed language of this
subsection in 1980 has remained virtually unchanged for over 30 years. In 1980 the
proposed language of AS 23.20.387(a) provided: "An individual is disqualified for
benefits . . . if the department finds that the individual has knowingly made a false
statement or misrepresentation as to a material fact or knowingly failed to report a
material fact with intent to obtain or increase any benefits under this chapter." Presently,
subsection (a) provides: "An insured worker is disqualified for benefits . . . if the
department determines that the insured worker has knowingly made a false statement or
misrepresentation of a material fact or knowingly failed to report a material fact with
intent to obtain or increase benefits under this chapter."
54 Id . (emphasis added). The language of proposed subsection (b) in 1980
provided: "There must be evidence of an intention to defraud, and the act must be
knowing and must involve material facts before a determination of fraudulent
misrepresentation or nondisclosure may be made." The present statutory subsection is
nearly identical and provides: "Before a determination of fraudulent misrepresentation
(continued...)
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We conclude that the statute's legislative history supports our interpretation
of "knowingly" used in AS 23.20.387: the Division must prove that the insured worker
had a subjective intent to defraud before it can exercise its discretionary authority to
disqualify him from receiving benefits for up to a calendar year. Here, circumstantial
55
evidence proved that Blas had the requisite subjective intent. The Division made
findings that: (1) Blas "acknowledged [that] he had received and read a claimant
information handbook[,] which explain[ed] the need to report on weekly certifications
any work and earnings and travel," and he "was properly informed of the correct way to
file claims via his claimant handbook"; (2) the questions to which Blas responded "no"
(e.g., "Did you work for any employers?" and "Were you self-employed?" and "Did you
56
and
travel?") were simple and unambiguous, allowing no room for misunderstanding;
54 (...continued)
or nondisclosure may be made, there must be a preponderance of evidence of an
intention to defraud, and the false statement or misrepresentation must be shown to be
knowing and to involve a material fact."
Again, we observe that while "the plain meaning of a statute does not
always control its interpretation . . . [,] under Alaska's sliding-scale approach to statutory
interpretation, 'the plainer the language of the statute, the more convincing contrary
legislative history must be.' " Bartley v. State, Dep't of Admin., Teacher's Ret. Bd. , 110
P.3d 1254, 1258 (Alaska 2005). Here, we find no legislative history contrary to the plain
meaning of "knowingly" found in AS 23.20.387(a), see id., and our prior interpretation
of a different but analogous self-reporting fraud provision in the workers' compensation
context reinforces the meaning we ascribe to this statutory term, namely, the requirement
that the insured worker possess a subjective intent to defraud. See supra note 45.
55
See, e.g., First Nat. Bank of Fairbanks v. Enzler , 537 P.2d 517, 521-22
(Alaska 1975) (reasoning that an intent to defraud may be proved by circumstantial
evidence).
56
Cf. ARCTEC Servs. v. Cummings, 295 P.3d 916, 923 (Alaska 2013)
(discussing and affirming the Workers Compensation Appeals Board's credibility
(continued...)
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(3) Blas participated in the prior February 2011 appeal before the Appeal Tribunal about
his failure to report work and travel, and his obligation to accurately report was
explained to him at that time.
This evidence constitutes a "preponderance of evidence of an intention to
57
defraud" by way of knowing, false statements involving material facts concerning
Blas's employment and travel status. Blas presented no contrary evidence to show that
he did not work or did not understand that he was required to report his employment, nor
did he dispute that he certified his eligibility for unemployment benefits on days that he
worked and traveled. Quite the contrary, throughout the case Blas justified his conduct
by stating that "the Division owed [him] money," that he was ready to "start making
payments" for any excess he might owe, and that his personal travel was not "such a big
deal." Given this evidence in support of the Division's fraud determination and Blas's
failure to rebut it, we uphold the Division's determination of fraud under AS 23.20.387,
and we affirm its denial of benefits for the benefit weeks in question.58
56 (...continued)
determination where the claimant was confused about having to report her volunteering
as employment); Shehata v. Salvation Army, 225 P.3d 1106, 1111, 1115-17 (Alaska
2010) (holding that the workers' compensation statute does not authorize the Board to
order the reimbursement of paid benefits based on silence, nondisclosure, or omissions,
where the injured worker worked part-time for five weeks, but was unaware that he was
committing fraud).
57 See AS 23.20.387(b).
58 Blas also frames his appeal as a constitutional challenge to: (1) the
Division's use of an administrative subpoena to access his bank records; (2) the Division
investigator's alleged call to his last employer that caused his termination; (3) the
Division's "illegal seizure" of his annual Permanent Fund Dividend check; and (4) the
Division's alleged failure to provide him with the discovery he requested. But Blas
admitted that he worked and traveled on days that he reported he did not, and has at no
(continued...)
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V. CONCLUSION
We AFFIRM the Division's decisions.
58 (...continued)
point in this case submitted evidence to the contrary. Thus, this is essentially an appeal
of two administrative determinations on uncontested facts.
"It is well-settled that it is an appellant's responsibility to present this court
with a record sufficient to allow meaningful review of his or her claims." Walden v.
Dep't of Transp. , 27 P.3d 297, 303 (Alaska 2001) (citing Adrian v. Adrian , 838 P.2d
808, 811 n.5 (Alaska 1992)). In the proceedings before the Division, Blas could have
attested to facts in the form of an affidavit or engaged in other forms of discovery,
despite his claim that the Division denied him the documents that he requested. Blas
understood basic evidentiary requirements, stating in his opening brief with us that he
will bring a "motion to compel [against] the state to produce [documents] when
appropriate." Because Blas has not in any meaningful way substantiated his allegations
concerning his claims of improper use of an agency subpoena and improper investigation
and contact with a prior employer, and because Blas has not contested the operative facts
underlying the administrative determinations, we decline to reach the merits of any
constitutional challenge to the agency's investigative or adjudicatory process in this
administrative appeal.
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