When states cut off COVID benefits early, U.S. must pay – lawsuit

FILE PHOTO: The United States Department of Labor is seen in Washington, D.C., U.S., August 30, 2020. REUTERS/Andrew Kelly

(Reuters) – The U.S. government has been hit with two proposed class actions seeking to hold it responsible for paying unemployment benefits under last year’s COVID-19 relief law to residents of states that ended the benefits early.

The lawsuits, filed Monday in the U.S. District Court for the Western District of Texas and the Court of Federal Claims, both say the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was enacted in March 2020, made payments to people who lost their jobs as a result of the pandemic mandatory under the law, even if state governments decided to stop administering them.

The U.S. Department of Labor, which oversaw the so-called Pandemic Unemployment Assistance (PUA) at the federal level, did not immediately respond to a request for comment.

Twenty-five Republican-controlled states, including Texas, Georgia and Iowa, cut off some form of COVID relief benefits before they were set to end under the CARES Act in September. Twenty of the states cut off PUA, according to the lawsuits.

While workers have sued some of those states, Danny Rosenthal of James & Hoffman, a lawyer for the plaintiffs, said he believed Monday’s lawsuit was the first seeking recovery from the federal government.

The plaintiffs brought their cases under the federal Tucker Act, which waives the government’s usual sovereign immunity from being sued in cases where plaintiffs claim that they are owed mandatory payment under a federal statute.

They say that, under the CARES Act, the federal government “shall provide” the unemployment funds. While the law stated that the program was to be managed through agreements with states that have an “adequate system” for administering payments, it did not remove the federal government’s obligation to beneficiaries in states without such a system.

“In describing the Secretary of Labor’s obligation to provide PUA payments, the language of the CARES Act is clear and mandatory,” both lawsuits said. “It does not grant discretion to the Secretary or states to deny PUA payments guaranteed by the Act to qualified individuals.”

The plaintiffs are seeking judgments against the government for the amount all class members would have received if their benefits had not been cut off early. The proposed classes likely includes hundreds of thousands of people, according to the complaints.

The plaintiffs did not say how much money they were seeking for the class. All of the individual plaintiffs are seeking under $10,000.

The cases are Creager Ireland v. United States, U.S. District Court, Western District of Texas, No. 21-cv-01049, and Beaty v. United States, U.S. Court of Federal Claims, No. 21-cv-02195.

For plaintiffs: Anna Bocchini of Equal Justice Center; Chris Williams and Sheila Maddali of National Legal Advocacy Network; Danny Rosenthal and Ryan Griffin of James & Hoffman; and Michael Persoon of Despres, Schwartz and Geoghegan

For the government: not immediately available

Read more:

Half of U.S. states to end Biden-backed pandemic unemployment early

White House: U.S. states to decide whether to extend lapsed jobless benefits