                                                 I attest to the accuracy and
                                                  integrity of this document
                                                    New Mexico Compilation
                                                  Commission, Santa Fe, NM
                                                 '00'04- 15:47:02 2014.05.15
Certiorari Granted, March 14, 2014, No. 34,546

       IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

Opinion Number: 2014-NMCA-050

Filing Date: January 15, 2014

Docket No. 32,026

NEW MEXICO DEPARTMENT
OF WORKFORCE SOLUTIONS,

       Petitioner-Appellant,

and

ALBERTSONS,

       Employer,

v.

NANCY GARDUÑO,

       Respondent-Appellee,

APPEAL FROM THE DISTRICT COURT OF SANTA FE COUNTY
Raymond Z. Ortiz, District Judge

New Mexico Department of Workforce Solutions
Marshall J. Ray, General Counsel
Elizabeth A. Garcia, Staff Attorney
Tami L. Keating, Staff Attorney
Albuquerque, NM
Attorneys for Appellants

New Mexico Legal Aid, Inc.
Timothy R. Hasson
Santa Fe, NM

Attorney for Appellee

                                   OPINION

                                        1
ZAMORA, Judge.

{1}     The New Mexico Department of Workforce Solutions (DWS) appeals from a district
court order reversing a decision of the DWS’s Appeals Tribunal (the Tribunal). The Tribunal
determined that claimant Nancy Garduño (Garduño) was required to repay an overpayment
of unemployment compensation benefits in the amount of $11,256. The district court held:
(1) the Tribunal’s hearing, conducted six months after Garduño started receiving benefits,
violated the timeliness requirements for processing appeal claims under state and federal
law; (2) the doctrine of equitable estoppel barred DWS from claiming and collecting an
overpayment from Garduño; and (3) the overpayment claims process violated Garduño’s due
process rights by failing to provide Garduño with timely notice and a hearing. With respect
to the first two issues, they have been resolved by virtue of our decision in Millar v. New
Mexico Department of Workforce Solutions, 2013-NMCA-055, 304 P.3d 427, cert. denied,
2013-NMCERT-004, 301 P.3d 858, and accordingly, we reverse that portion of the district
court’s order. We affirm the district court on the issue of procedural due process.

I.     BACKGROUND

{2}     Garduño was discharged from her employment with Albertsons (Employer) on
February 5, 2010. She filed for unemployment compensation benefits on February 14, 2010.
After preliminary fact finding, the DWS claims examiner issued a notice of claim
determination (NCD) in favor of Garduño granting her benefits of $402 per week. The NCD
stated that the benefit determination was final unless Employer appealed within fifteen
calendar days from March 12, 2010. Fourteen days later, on March 26, 2010, Employer
appealed. Garduño did not receive a copy of Employer’s appeal, and DWS continued
sending her benefits.

{3}     DWS did not inform Garduño of Employer’s appeal until the Tribunal sent out a
notice of hearing on August 3, 2010, setting the hearing for August 19, 2010. The appeal
before the Tribunal began August 19, 2010, and concluded on September 9, 2010. On
September 14, 2010, the Tribunal determined that Garduño was disqualified from benefits
because she was terminated for misconduct connected with her employment. Garduño
contested Employer’s claim of misconduct. Garduño subsequently received an overpayment
notice for the unemployment payments that she had received from February 27, 2010, until
her benefits were terminated in September 2010, totaling $11,256.

{4}     Garduño appealed the overpayment determination through DWS’s administrative
process. The Tribunal affirmed the claims examiner’s decision that Garduño had been
overpaid benefits in the amount of $11,256 and that the benefits must be repaid to DWS. In
turn, DWS’s cabinet secretary (secretary) upheld the December 30, 2010, determination of
the Tribunal. The secretary’s affirmation was the final administrative decision in the matter.
Having exhausted her administrative remedies, Garduño appealed to the district court under
Rule 1-077 NMRA and Section 51-1-8(M), (N) of the Unemployment Compensation Law,

                                              2
NMSA 1978, §§ 51-1-1 to -59 (1936, as amended through 2010). The district court granted
Garduño a writ of certiorari and, after a hearing, reversed the decision of the secretary.
Specifically, the district court found that DWS was out of compliance with federal and state
timeliness standards for processing appeals, that DWS was equitably estopped from pursuing
overpayments against Garduño, and that DWS had violated Garduño’s procedural due
process right to timely notice and a hearing. This appeal timely followed.

II.    DISCUSSION

{5}     This Court is again called to address the question of whether DWS can recover
unemployment compensation benefits from claimants after the claimants have first been
deemed eligible, then subsequently been deemed ineligible for benefits. In Millar, we
recently concluded that the timeliness requirements of 20 C.F.R. §§ 650.1 to 650.4 (2006,
as amended through 2013) and Section 51-1-8(D), and the doctrine of equitable estoppel do
not preclude DWS from recovering overpayments after the claimant has been disqualified
for benefits. Millar, 2013-NMCA-055, ¶¶ 17, 23. However, we conclude in this case that
DWS violated Garduño’s procedural due process rights in a manner that precludes it from
collecting the repayment. We begin with the standard of review and a brief discussion of
Millar, which is directly on point as to the federal and state timeliness standards and
estoppel. We then turn to the constitutional procedural due process issue raised by Garduño.

A.     Standard of Review

{6}     This Court applies the same standard of review as the district court when reviewing
“an administrative order to determine whether DWS acted fraudulently, arbitrarily, or
capriciously, or whether, based on the whole record, the decision is not supported by
substantial evidence.” Millar, 2013-NMCA-055, ¶ 6. Under the whole record standard of
review, we look at all evidence, whether it is favorable or unfavorable to the agency’s
determination. Id. “Questions of substantial compliance with a statute depend on statutory
construction, and we review those questions de novo.” Id.

{7}    The constitutionality of DWS’s rulings presents this Court with a question of law,
which we also review de novo. See Albuquerque Bernalillo Cnty. Water Util. Auth. v. N.M.
Pub. Regulation Comm’n, 2010-NMSC-013, ¶ 19, 148 N.M. 21, 229 P.3d 494 (applying de
novo standard of review to due process violations); see also U S West Commc’ns, Inc. v. N.
M. State Corp. Comm’n, 1999-NMSC-016, ¶ 15, 127 N.M. 254, 980 P.2d 37 (holding that
an agency’s ruling with respect to whether a party “was afforded the process it [was] due
under the Fourteenth Amendment to the United States Constitution [is] subject to de novo
review”).

B.     Millar v. New Mexico Department of Workforce Solutions

{8}     Both parties agree that the first two issues of this appeal have been resolved by
Millar. For purposes of review, we will briefly discuss the application of Millar to the case

                                             3
at hand. The facts of Millar are strikingly similar to the case currently before this Court. The
claimant was released from his employment on November 20, 2009, and filed for
unemployment compensation benefits. Millar, 2013-NMCA-055, ¶ 2. DWS initially
determined the claimant was eligible for benefits. Id. The claimant received an NCD, which
stated that the benefit determination was final unless his employer appealed within fifteen
calendar days and that if, on appeal, a decision was made against him, he would be required
to repay all benefits he had received. Id. The claimant’s employer did file a timely appeal,
however, DWS did not inform the claimant of the appeal for nearly five months. Id. ¶¶ 2-3.
Meanwhile he continued to receive benefits. Id. ¶ 3. At the appeal hearing, the claimant was
“disqualified from benefits due to misconduct connected with his employment” and was
required to repay DWS $4,931. Id. ¶¶ 3-4. The claimant appealed, exhausting his
administrative remedies, and then appealed to the district court under Rule 1-077 and Section
51-1-8(M), (N). Millar, 2013-NMCA-055, ¶ 4. The district court found in the claimant’s
favor ruling that “DWS was out of compliance with federal and state timeliness standards
for processing appeals” and that “DWS was equitably estopped from pursuing overpayments
against [the claimant].” Id.

{9}     DWS appealed to this Court. Id. We reversed the district court, holding that it had
“misapplied the federal and state time-lapse standards” and that equitable estoppel could not
be applied contrary to DWS’s statutory obligation to recoup overpayments of benefits. Id.
¶¶ 17, 24.

1.     Federal Timeliness Regulations

{10} In Millar, this Court recognized that the “Codes of Federal Regulation are federal law
and, if relevant, may properly be considered by the district court.” Id. ¶ 12. We found
nothing in the broad language of the regulation setting “absolute deadlines for processing
an individual first level appeal.” Id. ¶ 14. We concluded that “the plain language of 20
C.F.R. § 650.4(b) does not establish any mandatory statutory time limit that would require
[the claimant] to be notified of the pending appeal or within which the hearing had to be
held[,]” but instead offers only “guidelines in processing unemployment appeals.” Millar,
2013-NMCA-055, ¶ 14.

{11} Additionally, this Court held that Section 51-1-38(F) “unequivocally imposes a
statutory duty upon DWS to recover funds issued to claimants who are later found to be
ineligible or disqualified from receiving benefits.” Millar, 2013-NMCA-055, ¶ 15. The
Standard for Appeals Promptness Rule, 20 C.F.R. § 650.4(b) does not allow “a claimant who
is subsequently disqualified from receiving benefits to challenge DWS’s mandatory
obligation to recover overpayments.” Millar, 2013-NMCA-055, ¶ 15. We were unable to
reconcile the district court’s interpretation of 20 C.F.R. § 650.4(b) with “DWS’s statutory
obligation to recover overpayments from an initial favorable eligibility ruling that is
subsequently overturned on appeal.” Millar, 2013-NMCA-055, ¶ 17. Therefore, we
concluded that “the district court misapplied the federal and state time-lapse standards” and
reversed. Id.

                                               4
2.     The Application of Equitable Estoppel

{12} In Millar, we noted that estoppel “can only be applied against the state in exceptional
circumstances where there is a shocking degree of aggravated and overreaching conduct or
where right and justice demand it.” Id. ¶ 19. More importantly, it “cannot be applied contrary
to statutory requirements.” Id. “With respect to New Mexico state agencies in particular, the
doctrine only is available to bar those rights or actions over which an agency has
discretionary authority.” Id. (internal quotation marks and citation omitted). “Thus, equitable
relief is not available when the grant thereof would violate the express provision of a
statute.” Id. (alteration, internal quotation marks, and citation omitted). Having recognized
DWS’s mandatory “statutory duty to recover benefits paid to claimants later found to be
ineligible or disqualified” under Section 51-1-38(F), we held that DWS has no discretionary
authority in pursuing collection of any overpayment. Millar, 2013- NMCA-055, ¶ 20. “The
affirmative obligation imposed on DWS to recover full repayment of benefits from [the
claimant] forecloses the application of equitable estoppel against it.” Id. ¶ 24.

{13} Because Millar is directly on point as to the applicability of the federal timeliness
standards and the doctrine of estoppel to DWS’s overpayment collection procedures, we
determine that it definitively resolves those issues as they are raised in this appeal.
Accordingly, we conclude the district court exceeded its authority in holding that the
Tribunal violated the timeliness requirements of 20 C.F.R. §§ 650.1 to 650.4 and Section 51-
1-8(D). The district court also erred in ruling that the doctrine of equitable estoppel barred
DWS from recovering the overpayments to Garduño. However, Millar does not consider or
decide the constitutionality of DWS’s overpayment claims process. 2013-NMCA-055, ¶ 16
(declaring this case does not involve a claim of constitutional deprivation). We now address
whether the overpayment claims process violated Garduño’s procedural due process rights.

C.     Procedural Due Process

{14} DWS claims that by providing notice of the appeal hearing and an opportunity to be
heard, its overpayment claims process afforded Garduño procedural due process. We
disagree.

{15} After an initial determination awarding unemployment benefits is made in favor of
the claimant and payment of benefits has begun, due process requires the recipient be
afforded notice and an opportunity to be heard prior to stopping payment of benefits.
11.3.300.308(E) NMAC (07-15-1998, amended 01-01-2003).

{16} Due process is implicated only when a person has a constitutionally protected interest
in life, liberty, or property. Bd. of Regents v. Roth, 408 U.S. 564, 576-77 (1972). The types
of interests that contribute to liberty and property for Fourteenth Amendment purposes are
both broad and limited. Id. A property interest may arise from an expectation or interest
created by state laws or policies. Id. Property interests “are created and their dimensions are
defined by existing rules or understandings that stem from an independent source such as

                                              5
state law-rules or understandings that secure certain benefits and that support claims of
entitlement to those benefits.” Id. A property interest requires a legitimate claim of
entitlement to some benefit. Id.

{17} A “[s]tate statute[ ] providing for the payment of unemployment compensation
benefits create[s] in the claimants for those benefits property interests protected by due
process.” Wilkinson v. Abrams, 627 F.2d 650, 664 (3d Cir. 1980); see Royer v. State Dep’t
of Emp’t Sec., 394 A.2d 828, 830 (N.H. 1978) (stating that claimants have “statutorily
grounded claim[s] of entitlement to, or property interest in, unemployment compensation
benefits” (internal quotation marks and citation omitted)); accord Berg v. Shearer, 755 F.2d
1343, 1345 (8th Cir. 1985); Basciano v. Herkimer, 605 F.2d 605, 609 (2d Cir. 1978); Rivera
v. Bd. of Review, 606 A.2d 1087, 1090 (N.J. 1992). Our United States Supreme Court has
recognized benefits such as welfare and unemployment compensation as matters of statutory
entitlement. See Goldberg v. Kelly, 397 U.S. 254, 262 (1970). Garduño has a property right
in receiving unemployment benefits by virtue of the Unemployment Compensation Law.
Ross v. Horn, 598 F.2d 1312, 1317-18 (3d Cir. 1979) (noting that claimants “certainly have
a property right in receiving unemployment benefits to which they are entitled by statute”);
see §§ 51-1-1 to -59.

{18} “In general, the right to due process in administrative proceedings contemplates only
notice of the opposing party’s claims and a reasonable opportunity to meet them.” Archuleta
v. Santa Fe Police Dep’t ex rel. City of Santa Fe, 2005-NMSC-006, ¶ 32, 137 N.M. 161, 108
P.3d 1019 (emphasis, internal quotation marks, and citation omitted). Due process also
requires that the notice “be more than a mere gesture; it should be reasonably calculated,
depending upon the practicalities and peculiarities of the case[.]” Albuquerque Bernalillo
Cnty. Water Util. Auth., 2010-NMSC-013, ¶ 21 (internal quotation marks and citation
omitted). This “apprise[s an] interested part[y] of the pending action and afford[s] them an
opportunity to present their case.” U S West Commc’ns, Inc., 1999-NMSC-016, ¶ 29
(internal quotation marks and citation omitted). “[D]ue process . . . is not a technical
conception with a fixed content unrelated to time, place[,] and circumstances.” Mathews v.
Eldridge, 424 U.S. 319, 334 (1976) (internal quotation marks and citation omitted). It is
“flexible and calls for such procedural protections as the particular situation demands.” Id.
(internal quotation marks and citation omitted); accord U S West Commc’ns, Inc., 1999-
NMSC-016, ¶ 25. Procedural due process analysis requires consideration of three distinct
factors:

       (1) the private interest that will be affected by the official action; (2) the risk
       of an erroneous deprivation of such interest through the procedures used, and
       the probable value, if any, of additional . . . procedural safeguards; and . . .
       (3) the Government’s interest, including the . . . fiscal and administrative
       burdens that the additional . . . procedural requirement would entail.

Mathews, 424 U.S. at 321. In balancing these interests, we must consider the proceedings
as a whole.

                                               6
{19} “[T]he formality and procedural requisites for [a due process] hearing can vary,
depending upon the importance of the interests involved and the nature of the subsequent
proceedings.” Fusari v. Steinberg, 419 U.S. 379, 389 (1975) (alterations in original) (internal
quotation marks and citation omitted). “[T]he rapidity of administrative review is a
significant factor in assessing the sufficiency of the entire process.” Id. Notice should be
prompt “with the opportunity to be heard at a meaningful time and in a meaningful manner.”
Sandia v. Rivera, 2002-NMCA-057, ¶ 17, 132 N.M. 201, 46 P.3d 108 (internal quotation
marks and citation omitted). In this context, prompt and adequate notice of appeal and
administrative review “provides an opportunity for consideration and correction of errors
made in initial eligibility determinations.” Fusari, 419 U.S. at 389. The lengthy delay
between an employer’s appeal and the issuance of the notice of appeal hearing is an
important factor in assessing the impact of official action on the private interests.

{20} The private interest here is Garduño’s right to timely notice of Employer’s appeal.
Had Garduño been notified promptly of Employer’s appeal, she could have taken steps to
minimize the overpayment of unemployment benefits for which she was ultimately deemed
ineligible. Instead, Garduño continued to receive benefits of $402 weekly. One day after
Employer’s appeal, Garduño had received $2,010 in unemployment benefits. By the time
DWS mailed the notice of appeal, Garduño had accrued benefits of $9,246. On the date of
the first hearing, Garduño’s potential overpayment debt was $10,050, and upon her
ineligibility determination, it was $11,256.

{21} The risk of erroneously depriving claimants of a prompt notice and a hearing at a
meaningful time is significantly high when DWS fails to send notice of the employer’s
appeal for several months. In this case, by failing to timely inform Garduño that Employer
had appealed, DWS essentially saddled her with a substantial potential debt without
meaningful notice. Moreover, the Tribunal sent out the notice of hearing on August 3, 2010,
for the August 19, 2010, hearing. By the time Garduño received the notice, she had about
two weeks to prepare for the hearing based on this new information, whereas the Tribunal
and Employer had the opportunity to prepare for the hearing at least since March 26, 2010.
DWS’s overpayment claim procedures fall short of the constitutional standard of prompt
notice and an expeditious hearing conducted at a meaningful time. “[T]he citizen facing a
loss at the hands of the [s]tate must be given a real chance to present [their] side of the case
before a government decision becomes final.” Rivera, 606 A.2d at 1090.

{22} We recognize DWS’s interest in avoiding onerous fiscal and administrative burdens,
and the additional procedural requirements associated therewith. We also recognize that
DWS processes a high volume of applications for unemployment compensation benefits and
appeals. However, providing prompt notice of an employer’s appeal, in compliance with due
process, does not require additionally burdensome procedures. Neither does requiring the
Employer to properly serve a copy of its notice of appeal upon the claimant. Even if DWS
is unable to hold appeal hearings immediately following an employer’s appeal, it could
nevertheless notify claimants of employer appeals when the appeals are filed, rather than
sending notice two weeks prior to a hearing that may not be held for several months, or in

                                               7
this case, nearly four months.

{23} In Millar, we cautioned that “prompt payment [was] not the only consideration of
procedural fairness to a claimant, prompt notice of benefits being in jeopardy must be as
well.” 2013-NMCA-055, ¶ 17. We also expressed our concern that the claimant had not been
provided notice of employer’s appeal and DWS continued to pay claimant’s benefits for
several months after the appeal had been filed. Id. ¶ 15. “There is nothing humane about a
delay of some months in not informing an unemployed person that his employer is contesting
the award of benefits and that he may lose them.” Id. This is compounded by the fact that
neither the statute nor the department regulations expressly require that any party, other than
DWS, be notified of another party’s appeal. Compare § 51-1-8(B) (providing for appeal of
initial determination by claimant or interested party, within fifteen calendar days after the
date of notification of mailing of the determination), with 11.3.500.8(A) NMAC (01-01-
2003) (allowing any interested party aggrieved by a determination to file an appeal and
providing for the method, mode, and substance of an appeal to the department). We
acknowledge that the NCD stated the benefit determination was final subject to Employer
appealing the determination within fifteen calendar days. In light of the disagreement
between Garduño and Employer as to the facts surrounding her separation of employment
from Employer, and Garduño not receiving notice that Employer filed an appeal on or before
March 27, 2010, there was no reason for her to believe she would be required to repay any
of her benefits until her receipt of the August notice of hearing, five months later. The
requirement of meeting the constitutional standard of prompt notice and a hearing at a
meaningful time presents a negligible burden for DWS. Such a notice requirement is
imperative for the protection of all parties to an action for unemployment compensation
benefits.

{24} It is completely within the power of DWS to minimize the increasing payment of
benefits that may have to be repaid by an unemployed claimant who is without financial
resources. The dissent concedes that even a busy agency like DWS can readily provide
prompt notice though the statute does not require such. These claimants must be afforded
some degree of protection from DWS’s otherwise avertible failure to timely notify them of
an employer’s appeal.

{25} To the extent that DWS argues that its statutory obligation under Section 51-1-38(F)
to recoup overpayments may not be challenged, we disagree. While it is the “domain of the
[state] legislature, as the voice of the people, to make public policy,” under Article VI of the
United States Constitution, the federal Constitution is the “supreme Law of the Land.”
Cockrell v. Bd. of Regents of N.M. State Univ., 2002-NMSC-009, ¶¶ 13-14, 132 N.M. 156,
45 P.3d 876 (internal quotation marks and citation omitted). As such, constitutional due
process rights may not be overrun by the mandates of state statutes. We conclude that federal
supremacy precludes DWS from collecting overpaid unemployment benefits from Garduño
under Section 51-1-38(F), where its overpayment claims process violated her due process
right to timely notice and a meaningful opportunity to be heard.


                                               8
III.   CONCLUSION

{26} For the reasons set forth above we reverse the district court’s order finding that DWS
was out of compliance with the federal and state timeliness standards for processing appeals
and that DWS was equitably estopped from pursuing overpayments against Garduño. We
affirm the district court’s determination that DWS violated Garduño’s procedural due
process rights to timely notice of her employer’s appeal.

{27}   IT IS SO ORDERED.

                                               ____________________________________
                                               M. MONICA ZAMORA, Judge

I CONCUR:

____________________________________
MICHAEL E. VIGIL, Judge

J. MILES HANISEE, Judge (concurring in part and dissenting in part).

HANISEE, Judge (concurring in part and dissenting in part).

{28} I concur in the Majority Opinion’s application of our recent opinion in Millar to
reverse the district court and hold that the appeal hearing conducted by the DWS Tribunal
was timely under state and federal law and that DWS was not equitably estopped from
recouping unemployment compensation benefits overpaid to Garduño.1 I do not agree,
however, that the same legally compliant hearing simultaneously offends the constitutional
safeguard of procedural due process. As well, it is unlikely that New Mexico law creates a
“property interest”—the threshold requirement of due process claims—in erroneously paid
benefits to which a claimant was legally determined to be unentitled and no longer asserts
were paid to her as a matter of substantive right. I respectfully dissent from Part C of today’s
ruling holding that Garduño’s due process rights were violated and prohibiting DWS from
complying with its statutory obligation to recoup the overpaid funds.

{29} In dissenting, I take no issue with the Majority Opinion’s reiteration of the general
concern we expressed in Millar that the appeal process employed by DWS is poorly
administered and occasions unnecessary human hardship. See Majority Opinion ¶ 23; see
also Millar, 2013-NMCA-055 ¶ 17 (recognizing the importance of “procedural fairness to


       1
        It is also my view that due to the nearly identical facts and overlapping legal issues
shared by the instant case and Millar, DWS’s request for consolidation of the two cases
should have been granted. See Order of August 6, 2012 (holding in abeyance DWS’s request
for consolidated consideration).

                                               9
a claimant” including “prompt notice of benefits being in jeopardy”). The facts of this case
and Millar demonstrate that, although DWS cautions new benefit recipients by NCD that an
employer’s successful appeal would require repayment of overpaid benefits, it belatedly
notifies those same recipients when their initially favorable determinations of eligibility in
fact have been appealed. Despite the absence of “any mandatory statutory time limit that
would require [the claimant] to be notified of the pending appeal,” Majority Opinion ¶ 10
(quoting Millar, 2013-NMCA-055 ¶ 14), prompt notification of the procedural event that
both jeopardizes ongoing receipt of benefits and seeks a retroactive determination of
ineligibility seems readily achievable by even so busy an agency as DWS. This is
particularly so given that, like most funds that administer unemployment benefits, New
Mexico law couples a final determination that benefits were overpaid with mandatory
recoupment. See Section 51-1-38(H) (requiring that claimants whose benefit eligibility is
“modified or reversed by a final decision . . . shall . . . be liable to repay” unduly received
benefits (emphasis added)).

{30} Despite what we consider to be the imperfect nature of the DWS Tribunal’s appeal
process, the question of constitutionality turns on whether Garduño was deprived of a
legitimate property interest without being afforded an opportunity to be heard “at a
meaningful time and in a meaningful manner.” Mathews, 424 U.S. at 333 (establishing the
factors applicable to procedural due process analysis (internal quotation marks and citation
omitted)). Considering the Mathews factors, the Majority Opinion concludes that the private
interest with which DWS impermissibly interfered is Garduño’s “right to timely notice of
Employer’s appeal,” the absence of which it concludes caused a “significantly high” risk of
erroneous deprivation due to her disproportionately brief opportunity to prepare for the
appeal hearing. Majority Opinion ¶¶ 20-22. The majority further holds that these failures
were not overcome by DWS’s interest in “avoiding onerous fiscal and administrative
burdens[.]” Majority Opinion ¶ 22. For many reasons, this analysis is mistaken.

{31} First, I question the majority’s determination that Garduño has pleaded the threshold
requirement needed to trigger procedural due process review. It is particularly entrenched
within constitutional jurisprudence that a claim such as Garduño’s gains cognizability only
upon a showing that she was deprived of “a legitimate liberty or property interest” rightfully
possessed by her. Titus v. City of Albuquerque, 2011-NMCA-038, ¶ 40, 149 N.M. 556, 252
P.3d 780 (internal quotation marks and citation omitted), cert. quashed, 2013-NMCERT-
003, 300 P.3d 1182. That showing has been widely accepted as the switch that initiates the
safeguards of due process. See Roth, 408 U.S. at 577; Hyde Park Co. v. Santa Fe City
Council, 226 F.3d 1207, 1210 (10th Cir. 2000) (“We established nearly twenty-five years
ago that to prevail on either a procedural or substantive due process claim, a plaintiff must
first establish that a defendant’s actions deprived plaintiff of a protectible property
interest.”); Lucas v. Monroe Cnty., 203 F.3d 964, 978 (6th Cir. 2000) (“The Fourteenth
Amendment’s procedural protection of property is a safeguard of the security of interest that
a person has already acquired in specific benefits.” (internal quotation marks and citations
omitted)). While the majority is correct that statutorily derived unemployment benefits have
been held by many courts to constitute a property interest, see Berg, 755 F.2d at 1345; some

                                              10
even at the initiatory stage of a claimant’s application, see Wilkinson, 627 F.2d at 664-65
n.18, in appealing to the district court Garduño elected to abandon any challenge to the
Tribunal’s determination that she was substantively ineligible for unemployment benefits.
Absent a pleaded or preserved assertion of property right, Garduño’s desire to keep—and
not repay to DWS—the overpaid benefits does not give rise to a “legitimate claim of
entitlement.” Roth, 408 U.S. at 577. Rather, her interest is of the type disallowed by Roth:
that for which a claimant has an “abstract need or desire” or a “unilateral expectation.” Id.;
see Cassidy v. Adams, 872 F.2d 729, 732 (6th Cir. 1989) (finding no vested right to prevent
recoupment of overpaid unemployment benefits under then-existing Kentucky state law or
the Social Security Act). Nowhere does New Mexico law bestow ownership of benefits that
are improperly awarded. Absent such a cognizable property interest, Garduño’s claim fails
under Millar.2

{32} Even assuming the existence of a property interest under New Mexico law that
persists despite abandonment in district court, the majority’s Mathews analysis is flawed. At
the outset, the interests to be considered under the Mathews factors are incorrectly identified.
Garduño’s interest is not to “timely notice of Employer’s appeal,” Majority Opinion ¶ 20,
but rather her private interest in unemployment compensation and the fair process of
determining her eligibility to it. Similarly, DWS’s interest is not in “avoiding onerous fiscal
and administrative burdens,” Majority Opinion ¶ 22, but in efficiently processing the volume
of unemployment claims in New Mexico and preserving funds, and when necessary,
recouping overpaid funds so that they may be used to properly compensate eligible
claimants. As well, this interest serves the ancillary purpose of protecting employers from
being wrongly compelled to pay benefits to ineligible claimants. Lastly, the majority
evaluates the risk of erroneous deprivation speculatively and without proper consideration
of “the probable value, if any, of . . . procedural safeguards[.]” Mathews, 424 U.S. at 335.

{33} It is exactly those procedural safeguards, considered within our neutral evaluation
of the time and manner in which the appeal hearing was conducted, that compel substantive
rejection of Garduño’s due process challenge under Mathews. Without discussing the
hearing itself, the majority speculates on what could have been done by Garduño to
minimize her potential debt or to prepare for the hearing for a longer period of time. Majority
Opinion ¶¶ 20-21. This discussion has no factual basis in the record and, more importantly,
circumvents the real Mathews standard that considers the circumstances as a whole in light
of the process due. See Sandia, 2002-NMCA-057, ¶ 10 (“Procedural due process is a flexible
right and the amount of process due depends on the particular circumstances of each case.”


       2
        In Millar, a case in which our Supreme Court elected not to grant certiorari, we
recognized that the claimant sought a waiver of money owed for benefits to which a claimant
was disqualified and to which he had “no vested right.” 2013-NMCA-055, ¶ 16. It is
precisely the absence of such a “vested right” that forecloses the propriety of due process
review herein. Because we concluded that no such right existed in Millar, we must do the
same here.

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(internal quotation marks and citation omitted)). Here, the proceeding took place on two
days, August 19, 2010 and September 9, 2010. Both Garduño and her Albertson’s employer
testified before an Administrative Law Judge. The burden of proof was on Employer to
establish Garduño’s misconduct. Documents, including a video, were provided both to and
by Garduño, and were considered by the judge during the proceeding. Notably, the judge
continued the proceeding for a period of three weeks so that Garduño could: (1) submit
additional documents she believed to be important to the proceeding; (2) effectively
subpoena a witness Garduño wished to question that was not available on August 19; and
(3) be provided the actual video in an accessible format that was testified to but unavailable
on the first day of the proceeding.

{34} Although earlier notice of Employer’s appeal would have been preferable, I cannot
agree that the notice of the hearing itself and the manner in which it was conducted by the
Tribunal failed to comport with due process. To the contrary, the proceeding was conducted
“in a reasonable time and manner.” Since that is the constitutional inquiry, and under the
Mathews factors the procedural safeguards of the Tribunal hearing overcame the delayed
provision of notice of Employer’s taking of the appeal, I do not agree that Garduño’s due
process rights were violated, even assuming she has a legitimate property interest. See Berg,
755 F.2d at 1347 (holding that under the Mathews test, the claimant showed “no significant
injury caused by inadequate pre-termination notice” of hearing regarding unemployment
benefits).

{35}   For all these reasons, I respectfully dissent from Part C of the Majority Opinion.

                                              ____________________________________
                                              J. MILES HANISEE, Judge

Topic Index for N.M. Dep’t of Workforce Solutions v. Garduno, No. 32,026

APPEAL AND ERROR
Standard of Review

ADMINISTRATIVE LAW AND PROCEDURE
Administrative Appeal
Due Process
Hearings
Notice
Standard of Review
Timeliness

CIVIL PROCEDURE
Estoppel

CONSTITUTIONAL LAW

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Due Process

EMPLOYMENT LAW
Unemployment Compensation

REMEDIES
Equity




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