Opinion
NO. 2022 CA 0477
11-04-2022
Autumn YOUNG, Wendi Lee, Megan Ventress, Courtney Rae Cook, Adrian Roberts, and Felicia Walters v. STATE of Louisiana, Louisiana Workforce Commission, Governor John Bel Edwards, in his Official Capacity, Ava Dejoie Cates, in her Official Capacity
Ellyn J. Clevenger, Wendy Manard, New Orleans, Louisiana, Attorneys for Plaintiffs-Appellants, Jeffrey Young, Wendi Lee, Megan Ventress, Courtney Rae Cook, and Felicia Walters Leigh Ann Schell, William B. Gaudet, Kellen J. Mathews, New Orleans, Louisiana, Attorneys for Defendants-Appellees, Louisiana Workforce Commission and Ava Dejoie Cates, in her Official Capacity as Sec. of Louisiana Workforce Commission Matthew F. Block, John C. Walsh, Baton Rouge, Louisiana, Attorneys for Defendant-Appellee, John Bel Edwards, in his Official Capacity as Governor of the State of Louisiana Jeff Landry, Attorney General, Carey T. Jones, David Jeddie Smith, Jr., Chimene St. Amant, Lauryn A. Sudduth, Assistant Attorneys General, Baton Rouge, Louisiana, Attorneys for Defendant-Appellee, State of Louisiana
Ellyn J. Clevenger, Wendy Manard, New Orleans, Louisiana, Attorneys for Plaintiffs-Appellants, Jeffrey Young, Wendi Lee, Megan Ventress, Courtney Rae Cook, and Felicia Walters
Leigh Ann Schell, William B. Gaudet, Kellen J. Mathews, New Orleans, Louisiana, Attorneys for Defendants-Appellees, Louisiana Workforce Commission and Ava Dejoie Cates, in her Official Capacity as Sec. of Louisiana Workforce Commission
Matthew F. Block, John C. Walsh, Baton Rouge, Louisiana, Attorneys for Defendant-Appellee, John Bel Edwards, in his Official Capacity as Governor of the State of Louisiana
Jeff Landry, Attorney General, Carey T. Jones, David Jeddie Smith, Jr., Chimene St. Amant, Lauryn A. Sudduth, Assistant Attorneys General, Baton Rouge, Louisiana, Attorneys for Defendant-Appellee, State of Louisiana
BEFORE: WELCH, LANIER, AND WOLFE, JJ.
WOLFE, J. Plaintiffs filed this lawsuit challenging the Governor's decision to instruct the Louisiana Workforce Commission ("LWC") to terminate Louisiana's participation in federal COVID-19 pandemic-related unemployment benefits programs. The trial court dismissed the lawsuit after sustaining defendants’ peremptory exception raising the objection of no cause of action. For the following reasons, we affirm.
BACKGROUND
In March 2020, the COVID-19 virus began rapidly spreading across the United States, prompting the federal government to declare a national emergency. Over the following months, the federal unemployment rate rose drastically as businesses were forced to furlough their workers in response to the economic consequences of COVID-19 illnesses and quarantines. In response, the United States Congress enacted 15 U.S.C. § 9001, et seq ., the Coronavirus Economic Stabilization Act ("CARES Act"), which created several temporary federally funded programs that states could opt into to supplement their state unemployment benefits and to mitigate the effects of the pandemic. Section 9021 of the CARES Act established a temporary pandemic unemployment assistance ("PUA") program that provided benefits to individuals who lost work or were unable to work because of the pandemic. The PUA also expanded eligibility for unemployment benefits to workers who would not otherwise qualify. See 15 U.S.C. § 9021(A)(i) and 15 U.S.C. § 9025. The CARES Act was extended by the Continued Assistance Act ("CAA") and the American Rescue Plan Act ("ARPA"), with all extensions expiring on September 6, 2021. 15 U.S.C. § 1923(e).
The federal unemployment benefits programs were optional with each state, pursuant to 15 U.S.C. § 9025(a)(1). Louisiana chose to participate in the distribution of the federal funds through the administration of the LWC. Any state that chose to administer the program entered into a contract between the Administrator of the state's unemployment program and the U.S. Department of Labor. 15 U.S.C. § 9021(f). The Administrator could end a state's participation by letter to the Secretary of the U.S. Department of Labor, thirty days after which the state's administration of the funds would end. 15 U.S.C. § 9023(a). At the direction of Louisiana's governor, the LWC entered into the contract on March 28, 2020, and opted out of the program by letter dated June 30, 2021, which ended Louisiana's participation in the federal unemployment programs as of July 31, 2021, approximately six weeks prior to the termination date by operation of law on September 6, 2021.
Plaintiffs are all former recipients of COVID-19 pandemic-related unemployment benefits. Plaintiffs’ lawsuit sought declaratory and injunctive relief based upon the State of Louisiana's early termination of the federal benefits. Defendants named in the suit are the State of Louisiana, the LWC, Ava Dejoie Cates, in her official capacity as the Secretary of the LWC, and Governor John Bel Edwards, in his official capacity as Governor of Louisiana (hereafter collectively referred to as "the State"). Plaintiffs generally allege that Louisiana officials exercised poor judgment by prematurely opting out of the program in violation of their due process and equal protection rights under state and federal constitutions. Plaintiffs claim their due process rights were violated because they were deprived of "meaningful notice and an opportunity to be heard prior to deprivation of their right to seek federally funded benefits." Plaintiffs allege their rights to equal protection of the laws were violated because they were treated differently than recipients of other federally funded programs, such as those who receive rental assistance, without any "rational basis for targeting recipients of [pandemic-related unemployment benefits] for termination." Additionally, plaintiffs argue that defendants violated the State's statutory duties pursuant to the Social Security Act, codified at 42 U.S.C. § 501, et seq ., by "failing to secure all advantages under the provisions of the Social Security Act."
The original plaintiffs were Autumn Young, Wendi Lee, Megan Ventress, Courtney Rae Cook, Adrian Roberts, and Felicia Walters. During the pendency of the suit, lead plaintiff, Autumn Young, died and her father, Jeffrey Young, was substituted as a party plaintiff on her behalf. Additionally, another plaintiff, Adrian Roberts, was dismissed with prejudice for failure to respond to discovery.
The trial court denied plaintiffs’ request for injunctive relief, which is the subject of a separate appeal that was ultimately dismissed as moot on February 25, 2022.
Defendants all filed and/or joined in exceptions of no cause of action, contending that plaintiffs had no viable relief available under the law. Defendants contended that no legal grounds exist for declaring the State's discretionary actions unlawful. In 2021, the Louisiana Legislature enacted Act No. 276 to amend certain statutes related to unemployment benefits in Louisiana. The amendments essentially permanently increased the maximum weekly unemployment benefits allowed, but the increase was conditioned upon the State's cessation of participating in the optional federal unemployment benefits programs by July 31, 2021, Defendants maintained that plaintiffs had no vested property interest in the discretionary pandemic-related federal benefits, and plaintiffs are not in a protected class. Further, defendants argued that, even if plaintiffs were in a protected class, the State had a legitimate interest in terminating the temporary federal unemployment benefits in favor of a permanent long-term gain in state unemployment benefits. See 2021 La. Acts No. 276, §§ 2 and 3, amending La. R.S. 23:1474(1) and La. R.S. 23:1592.
The exception of no cause of action was argued before the trial court on January 19, 2022. The trial court found no merit to the argument that the funding provisions in the Social Security Act mandated state action regarding pandemic-related unemployment benefits. The trial court also found that the State's participation in the federal unemployment benefits programs was optional, with the State having authority to determine whether to participate or not. Additionally, the trial court concluded that the State's decision to terminate the federal benefits was a policy decision that the State had sole discretion to make. The trial court rejected plaintiffs’ constitutional claims because Act No. 276 did not grant plaintiffs any property rights nor vested rights to which plaintiffs were entitled. On February 3, 2022, the trial court signed a judgment sustaining defendants’ exception of no cause of action and dismissing plaintiffs’ claims against defendants, with prejudice and at plaintiffs’ costs. Plaintiffs appeal, only challenging the dismissal of their case on due process and equal protection grounds.
DISCUSSION
The objection that a petition fails to state a cause of action is properly raised by the peremptory exception. La. Code Civ. P. art. 927(A)(5). In ruling on an exception of no cause of action, the trial court must determine whether the law affords any relief to plaintiffs if they were to prove the factual allegations in the petition and annexed documents at a trial. Christian Schools, Inc. v. Louisiana High School Athletic Association, 2020-0762 (La. App. 1st Cir. 5/18/22), 342 So.3d 1068, 1074, writ denied, 2022-01015 (La. 10/12/22), 348 So.3d 78. For purposes of determining the issues raised by the exception, the well-pleaded facts in the petition, as well as any annexed documents, must be accepted as true. Id. No evidence may be introduced to support or controvert the objection that the petition fails to state a cause of action. La. Code Civ. P. art. 931. Any doubts are resolved in favor of the sufficiency of the petition. Christian Schools, 342 So.3d at 1074. The petition must set forth material facts upon which the cause of action is based, and the correctness of any conclusions of law is not conceded for the purposes of a ruling on an exception of no cause of action. Id. at 1074-1075.
Appellate review of the trial court's ruling sustaining an exception of no cause of action is de novo , since the exception raises a question of law. Christian Schools, 342 So.3d at 1075. Appellate review regarding questions of law is "simply a review of whether the trial court was legally correct or legally incorrect." CamSoft Data Systems, Inc. v. Southern Electronics Supply, Inc., 2015-1260 (La. App. 1st Cir. 9/23/15), 182 So.3d 1009, 1016 (quoting Thinkstream, Inc. v. Rubin, 2006-1595 (La. App. 1st Cir. 9/26/07), 971 So.2d 1092, 1100, writ denied, 2007-2113 (La. 1/7/08), 973 So.2d 730 ). Furthermore, when the grounds of the objection pleaded by the peremptory exception may be removed by amendment of the petition, the judgment sustaining the exception shall order such amendment within the delay allowed by the court. If the grounds of the objection cannot be so removed, or if the plaintiff fails to comply with the order to amend, the action shall be dismissed. See La. Code Civ. P. art. 934 ; Christian Schools, 342 So.3d at 1075.
Our de novo review leads us to conclude that plaintiffs’ allegations regarding the alleged violation of their constitutional rights are merely conclusory. Plaintiffs alleged that the State's actions in enacting Act No. 276 and deciding to prematurely terminate the federal unemployment benefits affected their fundamental rights to due process of law, because they were not "provided with meaningful notice or opportunity to be heard." However, in order to prevail on a due process claim, plaintiffs must show the existence of some property or liberty interest that has been adversely affected by state action. See Christian Schools, 342 at 1075.
Our review of the jurisprudence indicates the issue presented herein is res nova in Louisiana state courts; thus, we shall look to federal case law for guidance. See Pareti v. Sentry Indemnity Company, 536 So.2d 417, 421-422 (La. 1988) ; Pickard v. State, Dept. of Public Safety, License Control and Driver Imp. Div., 572 So.2d 1098, 1099 (La. App. 1st Cir. 1990), writ not considered, 576 So.2d 22 (La. 1991) ; Motton v. Lockheed Martin Corp., 97-0204 (La. App. 4th Cir. 3/19/97), 692 So.2d 6, 8. We find the rationale in several CARES Act decisions from other states support a finding that no property or liberty interest has been interfered with by the State's discretionary decision to end the federal unemployment programs that allowed for additional benefits.
Directly on point, a federal district court decision from Texas, Dickerson v. Texas, No. H-21-2729 (S.D. Tex. Sept. 15, 2021), 2021 WL 4192740, *3, found that the Texas Governor's discretionary decision to end the federal programs allowing additional benefits applied to all people in the programs, leaving them with the benefits with which they started. In other words, the state's baseline unemployment benefits remained intact, and those were the benefits that were the protected entitlements. The court further found that because the additional benefits could be discretionarily removed, those benefits are not protected nor are they entitlements. The court also noted that it was "practically unfeasible to require individual notice and hearing to all who may be eligible." Therefore, the court dismissed the plaintiffs’ procedural due process claims. See also Jackson v. Daniel, No. 1:21-1107-LY-SH (W.D. Tex. Apr. 18, 2022), 2022 WL 1157656, *4, where the same result was reached.
In another federal district court decision from New Mexico, Winter v. New Mexico Department of Workforce Solutions, No. 21-475 JFR/SCY, (D.N.M. Sept. 12, 2022), 2022 WL 4132740, *7, the court rejected the contention that the plaintiffs had a property interest in the federal unemployment benefits. The court relied on a federal district court opinion, Moss v. Lee, No. 3:21-CV-00561 (D. Term. Jan. 6, 2022), 2022 WL 68388, *6, to conclude that defendants were entitled to judgment as a matter of law on plaintiffs’ due process claims, because a private right of action, express or implied, for supplemental federal benefits is absent from the CARES Act. The Moss court found that the CARES Act created temporary federal benefits to supplement state benefit programs and the CARES Act specifically allowed states to exercise discretion in ending their distribution of the federal supplemental benefits. We are persuaded by this analysis that further found such discretion is enough to place the benefit outside the scope of a protected property interest. The existence of significant and sole discretionary authority over the bestowal or continuation of a government benefit suggests that the recipients of such benefits have no entitlement to them. Moss, 2022 WL 68388 at *6.
The only Louisiana case covering the issue at hand is a very recent federal district court case, Plaisance v. State of Louisiana, No. 3:21-v-121 (M.D. La. Sept. 30, 2022), ––– WL ––––, wherein the court found that plaintiffs did not have a property right to CARES Act unemployment benefits. "Without a property interest in CARES Act benefits, those Plaintiffs ... cannot state a procedural due process claim related to the denial of benefits." Id. at *11. Likewise, several other federal district courts have held that there is no private right of action under the CARES Act. See, e.g. , McClendon v. Bernard, No. 4:21-CV-00823 (E.D. Ark. Nov. 29 2021), 2021 WL 5567369, *2 ; Paskiewicz v. Brower, No. 2:20-cv-02238-TLN-AC-PS (E.D. Cal. Dec. 3, 2020), 2020 WL 7074605, *2 ; American Video Duplicating, Inc. v. City Nat'l Bank, No. 2:20-cv-04036-JFW-JPR (C.D. Cal. Nov. 20, 2020), 2020 WL 6882735, *5. See also Town of Castle Rock, Colo. v. Gonzales, 545 U.S. 748, 756, 125 S.Ct. 2796, 2803, 162 L.Ed.2d 658 (2005), where the United States Supreme Court held that the procedural component of the Due Process Clause does not protect everything that might be described as a "benefit." To have a property interest in a benefit, a person clearly must have more than an abstract need or desire and more than a unilateral expectation of it. The person must instead have a legitimate claim of entitlement to it. Town of Castle Rock, Colo., 545 U.S. at 756, 125 S.Ct. 2796.
The underlying rationale of these cases from other states carries over to the instant case. Plaintiffs were not stripped of a protected entitlement without process. See Town of Castle Rock, Colo., 545 U.S. at 756, 125 S.Ct. 2796 (noting that "a benefit is not a protected entitlement if government officials may grant or deny it in their discretion"). For all these reasons, we conclude that plaintiffs have not stated a cause of action for violation of their due process rights. The exception of no cause of action was properly sustained as to these claims. Further, because no property or liberty interest is at stake, no amendment of the factual allegations of plaintiffs’ petition could cure this fundamental flaw in the purported cause of action. Christian Schools, 342 So.3d at 1075.
As for plaintiffs’ allegations concerning equal protection violations, we note that generally, the guarantee of equal protection requires that state laws affect alike all persons and interests similarly situated. State v. Petrovich, 396 So.2d 1318, 1322 (La. 1981). The law creating the classification is presumed to be constitutional and the party challenging the constitutionality of the law has the burden of proving it unconstitutional by showing the classification does not suitably further any appropriate state interest. State v. Fleury, 2001-0871 (La. 10/16/01), 799 So.2d 468, 473. If the classification has some reasonable basis, it does not offend the Constitution simply because the classification is not made with "mathematical nicety, or because in practice it results in some inequality." Dandridge v. Williams, 397 U.S. 471, 485, 90 S.Ct. 1153, 1161, 25 L.Ed.2d 491 (1970), quoting Lindsley v. Natural Carbonic Gas Co., 220 U.S. 61, 78, 31 S.Ct. 337, 340, 55 L.Ed. 369 (1911).
The constitutionality of Act No. 276 has never been challenged regarding equal protection violations since its passage in 2021. Looking to other jurisdictions is again instructive and useful. In Winter , 2022 WL 4132740 at *8, the court found that plaintiffs’ position on the alleged violation of their equal protection rights were conclusory - they claimed they were intentionally discriminated against by defendants. However, the court pointed out that plaintiffs had failed to provide a single example of an individual similarly situated but treated differently by defendants. Likewise, in the instant case, plaintiffs provide no material facts upon which they base their conclusory allegation that their rights to equal protection of the law were violated. Unemployment benefits and rental assistance are not comparable. Plaintiffs have made no allegations of any fundamental or express constitutional right or "suspect" class or other enumerated class as the basis for discrimination. See Menard v. Louisiana High School Athletic Ass'n, 2009-0800 (La. App. 1st Cir. 12/23/09), 30 So.3d 790, 795, writ denied, 2010-0169 (La. 4/5/10), 31 So.3d 370.
In the instant case, all persons are equally affected by the State's termination of the federal unemployment benefits programs. The State made a decision to terminate participation in the temporary pandemic-related federal program so as to increase the weekly unemployment benefits available under state law. There is no disparate treatment, and even if there was, the State has a legitimate interest in making a policy determination and looking to enhance permanent, long-term state unemployment benefits. Therefore, we find that plaintiffs’ petition fails to set forth any factual basis for a finding of a violation of plaintiffs’ equal protection rights. The defendants’ exception of no cause of action was properly sustained on this basis. Furthermore, we conclude that the grounds for the objection of no cause of action for violation of equal protection rights cannot conceivably be removed by amendment of the petition under La. Code Civ. P. art. 934.
CONCLUSION
For the reasons set forth, we affirm the trial court's February 3, 2022 judgment sustaining defendants’ peremptory exception of no cause of action and dismissing plaintiffs’ suit with prejudice. Costs of this appeal are assessed to plaintiffs, Jeffrey Young, Wendi Lee, Megan Ventress, Courtney Rae Cook, and Felicia Walters.