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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

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.  



                                                           -2-                                                     6937
  


----------------------- Page 3-----------------------

                                                                                                

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
  


----------------------- Page 4-----------------------

                                                   

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...)  



                                                             -4-                                                        6937
  


----------------------- 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)).  



                                                            -17-                                                       6937
  


----------------------- Page 18-----------------------

                                                                                                              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).  



                                                             -18-                                                        6937
  


----------------------- Page 19-----------------------

                              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.  



                                                                 -19-                                                           6937
  


----------------------- Page 20-----------------------

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...)  



                                                             -20-                                                       6937
  


----------------------- Page 21-----------------------

                    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...)
  



                                                               -21-                                                         6937
  


----------------------- Page 22-----------------------

(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...)  



                                                             -22-                                                        6937
  


----------------------- Page 23-----------------------

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.  



                                                            -23-                                                           6937  

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