Batterton v. Marshall

Batterton v. Marshall

Opinion

 [*696]  This case poses the difficult but familiar problem of whether a particular agency action requires notice by publication and opportunity for comment by interested parties. The State of Maryland (Maryland) ² alleges that the Department of Labor (DOL) violated procedural requirements in changing its methods for determining unemployment rates while implementing the Comprehensive Employment and Training Act (CETA). ³ CETA, as enacted and as amended, created training and job programs with fund disbursements pegged to unemployment levels determined by DOL's [**3]  Bureau of Labor Statistics (BLS). We reverse the district court's grant of summary judgment for appellee DOL.

I. BACKGROUND

Appellant Maryland administers the training and job programs funded by CETA and collects its state unemployment statistics for DOL. The amicus, representing the  [*697]  city of Baltimore, Maryland, is part of a combination of [**4]  local government units established to administer CETA programs. ⁴ Appellees, officials of DOL, are responsible for administering CETA programs and for supervising the collection and computation of unemployment statistics used in allocating CETA monies.

CETA monies are distributed by the federal government to state and local sponsors of manpower training and services, public employment, and emergency job programs. The emergency job program established by Title VI of CETA disburses funds geographically by a formula in relation to the number of unemployed persons in particular locales. ⁵ [**6]  "Unemployed persons" as defined by CETA are to be identified by "criteria used by the Bureau of Labor Statistics [**5]  of the Department of Labor." ⁶

Prior to the enactment of CETA in 1973, DOL generated unemployment statistics [**7]  by applying a method that had evolved over time since the New Deal. Known as the "Handbook" method, ⁷ this approach draws on data collected by the nationwide network of state employment security agencies created under the Wagner-Peyser Act of 1933, 29 U.S.C. §§ 49 et seq. (1976). These state agencies maintain unemployment insurance data from which DOL developed  [*698]  unemployment estimates. ⁸ DOL adopted a new methodology for collecting and computing unemployment statistics. ⁹ [**9]  This method, devised by the DOL Bureau of Labor Statistics (BLS) relies on the state unemployment insurance data, collected under the Handbook Method, only where data from a preferred, second source are not available. This second source is the Current Population Survey (CPS) which is based on a monthly Census Bureau survey of a sample of households, drawn according to social science techniques. As survey data, however, CPS is not reliable for small numbers. So for areas with small populations, DOL continues to rely upon state unemployment insurance data, using the Handbook Method. To develop a composite figure for each state, DOL then combines the two sources of data, developed through the two different [**8]  methods. This new method was never formally announced or published; DOL simply sent descriptive memoranda announcing the change to regional commissions and state unemployment security agencies. ¹⁰

In 1974, Congress added Title VI to CETA which created a nationwide emergency jobs program as a direct response to the nation's "deteriorating economic condition." ¹¹ As these Title VI disbursements were being computed in 1975, DOL, again without formal notice, notified the regional office supervising Maryland that another new procedure in the unemployment statistics methodology would apply to Maryland. ¹² Called the "Balance of State" procedure, it adjusts the Handbook Method estimate where its addition to the state's CPS data fails to match a total benchmark figure for the state, set solely by national CPS data. ¹³ [**11]  DOL then applied the Balance of State procedure to adjust the unemployment statistics submitted [**10]  by Maryland and the Fiscal 1976 CETA allotments based on the statistics. ¹⁴

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