Interstate Brands v. Unemployment Ins. Appeals Bd

In Interstate Brands v. Unemployment Ins. Appeals Bd. (1980) 26 Cal.3d 770, the board had granted unemployment insurance benefits to plaintiff's employees who had been locked out following a selective strike. The trial court exercised independent judgment on the evidence and issued a peremptory writ setting aside the order. The Supreme Court affirmed, holding that an employer's right to be free from erroneous charges to its unemployment insurance reserve account is a fundamental vested right. In reaching that conclusion, the court addressed a contention that Bixby v. Pierno (1971) had eliminated a right to independent review which had previously existed. Prior to Bixby , independent review was authorized in all cases in which a vested property right was affected by an administrative decision. It was argued in Interstate Brands that, by adding a separate new requirement that the right be fundamental, the fact that the affected right was vested and deprived an appellant of property was no longer sufficient to warrant independent review. (Interstate Brands v. Unemployment Ins. Appeals Bd., supra , 26 Cal.3d at pp. 774-775.) The court rejected this argument, pointing out that in the Bixby opinion they concluded that the substantial evidence test was appropriate, since petitioners did not allege "'any deprivation of their right to a livelihood or a deprivation of their property .'" ( Interstate Brands, supra , at p. 778.) The Interstate Brands court then made the following observation, which is the basis for appellant's allegation that a new standard of review was enunciated in Interstate Brands : "As the foregoing summary demonstrates, we believe, our concern in the Bixby case was not directed toward restricting or withdrawing the availability of independent review in 'decisions or classes of decisions' as to which such availability had been previously established. Rather our concern was directed toward providing a doctrinal basis through which such review could be extended to 'decisions or classes of decisions' which, although not involving vested property rights in the traditional sense, nevertheless had an impact on the individual 'sufficiently vital . . . to compel a full and independent review' by the court. n5 Bixby v. Pierno, supra , 4 Cal.3d at p. 144. It was in this spirit, then, that we said: 'In determining whether the right is fundamental the courts do not alone weigh the economic aspect of it, but the effect of it in human terms and the importance of it to the individual in the life situation.' (Id. , italics added.)" ( Interstate Brands, supra , 26 Cal.3d at p. 779.) The court held that the independent judgment rule was to be applied when the California Unemployment Insurance Appeals Board made a decision impacting upon employees' unemployment insurance reserve accounts. ( Id., at pp. 775, 780.) Nothing in the opinion, however, abrogates application of the substantial evidence test to agencies vested with judicial power. In a footnote quoting Bixby, the Interstate Brands court carefully noted that: "The ultimate question in each case is whether the affected right for purposes of the independent judgment rule is deemed to be of sufficient significance to preclude its extinction or abridgement by a body lacking judicial power." (Interstate Brands v. Unemployment Ins. Appeals Bd., supra, 26 Cal.3d at p. 779, fn. 5.) Thus, the court implicitly recognized that the substantial evidence test governed administrative bodies vested with judicial power by the state Constitution. (See also id., at p. 782 (conc. opn. of Clark, J.).)