Ohio Supreme Court hears second round of arguments over pandemic-era unemployment benefits

The Ohio Supreme Court began oral arguments in a second case over pandemic unemployment benefits by wondering why the case was back before the justices.

“I went back to Bowling 1, we dismissed it as moot,” Chief Justice Sharon Kennedy said on May 20. “Why are we back here, why didn’t that resolve the case?”

An attorney representing Ohio Gov. Mike DeWine said she’d be satisfied “if the court were to simply put an end to the years of litigation and the waste of judicial resources as well as attorney resources litigating a case that simply has no point.”

An attorney representing Ohioans who were eligible for pandemic-era benefits said DeWine should have to ask the U.S. Department of Labor for benefits that weren’t received, because the governor “lacked the legal authority” to withdraw from a federal program nearly five years ago.

Federal Pandemic Unemployment Compensation program

The story of the case heard as part of May 20 oral arguments stretches back to 2021, when a group of individuals who were eligible for money under a pandemic-era federal program sued the state for ending its participation before the program ended in September 2021.

Before that, in March 2020, Congress passed the CARES Act. The measure did a number of things meant to aid Americans in the midst of the COVID-19 pandemic, including creating extra unemployment benefits through the Federal Pandemic Unemployment Compensation program. That included $600 per week in extra funds, from March to July of 2020, and $300 per week in extra benefits after that time. The program was closed in September 2021.

Without supporting data, Ohio to end federal unemployment supplement

States were not required to participate, but Ohio did, at least at first. Attorney Mathura Sridharan from the Ohio Attorney General’s Office told the court the extra money “disincentivized returning to work, tightening labor markets,” which led to DeWine’s decision to withdraw from the program in June 2021. Ohioans returned to the pre-pandemic unemployment system and benefits.

That same year, individuals entered into a lawsuit in Franklin County Common Pleas Court, arguing that DeWine should not have taken the state out of the program. The Franklin County court said the CARES Act was not named as one of the federal laws in a “cooperation statute,” an Ohio law related to unemployment compensation that requires the state, through the director of the Ohio Department of Job and Family Services to “cooperate with the United States Department of Labor to the fullest extent” consistent with state law. The statute requires the ODJFS director to do so through actions like adoption of rules and regulations “as may be necessary to secure to this state and its citizens all advantages” available under specific federal statutes. Because the CARES Act was not included, the state was not mandated to participate, the court ruled.

The 10th District Court of Appeals, however, reversed this decision, concluding that the governor was compelled to seek benefits through the CARES Act.

Upon review in 2022, after the program had ended, the Ohio Supreme Court dismissed the case as “moot.”

In 2023, the Ohio legislature made changes to the “cooperation statute.” Lawmakers added a section that states nothing “precludes the director from ceasing to participate in any voluntary, optional, special, or emergency program offered by the federal government,” including CARES Act programs. Sridharan said lawmakers also explained that the governor has the authority to withdraw from the programs.

The case returned to a lower court, with attorneys for benefits recipients saying the supreme court’s dismissal didn’t cover all of the issues brought forth in the case, just the request that the court temporarily compel the state to continue being a part of the program while the court case was being decided.

Franklin County’s common pleas court this time ruled that the governor should have taken “all action necessary” to reinstate the program in Ohio. On appeal, the 10th District upheld the decision, leading to the second appeal to the Ohio Supreme Court.

“The lower courts’ decisions trample a trifecta of the other branches’ powers: they defy this court’s first dismissal, the (general) assembly’s statute, and the governor’s discretion,” Sridharan wrote in documents to the supreme court.

The power to end the program

In oral arguments in front of the Ohio Supreme Court this week, the state and attorneys representing individuals who were eligible for the benefits argued over the cooperation statute once again. The state maintained arguments that the case had already been decided by the supreme court and the program was long gone, while attorneys for benefits recipients said the program should have stayed in place and DeWine should ask for the money they may have received.

Attorney Andrew Engel, of the law firm DannLaw, said the case boiled down to a matter of authority, particularly who had the power to allow Ohio to join the benefits program, and who was authorized to end the participation.

Kennedy pointed to federal rules that allowed states to give 30-day written notice to terminate the benefits program.

“That’s what the governor did, because on May 13 (2021), the governor announced he would end the state’s participation in the … program, with an effective date of June 26th, so that was 30 days and then it closed,” Kennedy said.

The federal law states that the the governor can agree to join the program, but under state unemployment benefits law, according to Engel, only the Ohio General Assembly has the power to end participation and stop benefits.

“What we’re saying is under Ohio law, that process did not include the governor making a unilateral decision,” Engel told the supreme court.

The attorney said DeWine must now ask for the money benefits-eligible Ohioans would have received if the state hadn’t left the program. He added that because Congress appropriated the money “without fiscal year limitation,” the money should still be available until it’s appropriated for some other purpose.

Sridharan expressed skepticism that the funds were still available, but nevertheless asked the court to align their ruling in the current appeal to their previous ruling.

“This case expired when the program expired back in 2021,” she said.