Opinions / Panel Activity

Last week the Federal Circuit issued its opinion in Ireland v. United States, a Little Tucker Act case that attracted an amicus brief. In this case, the Federal Circuit reviewed a decision by the Western District of Texas to grant a motion to dismiss for failure to state a claim. In an opinion authored by Judge Stoll that was joined by Judges Lourie and Linn, the Federal Circuit affirmed the judgment of the district court. The Federal Circuit held that the district court properly dismissed the case for failure to state a claim because “[t]he plain language of § 9021(b) does not create a mandatory payment obligation between the Secretary and ‘any covered individual.’” This is our opinion summary.

Judge Stoll began by highlighting the procedural and factual background of the case:

In March 2020, at the beginning of the COVID-19 pandemic, Congress enacted the Coronavirus Aid, Relief, and Economic Security (CARES) Act . . . . The CARES Act created several temporary unemployment benefit programs, including Pandemic Unemployment Assistance (PUA) . . . . PUA provided up to 79 weeks of benefits to individuals who were unemployed or otherwise unable to work for various reasons relating to the COVID-19 pandemic and who were not otherwise eligible for state unemployment insurance benefits. . . . To receive benefits, a ‘covered individual’ must self-certify an inability to otherwise work due to COVID-19, and provide documentation to substantiate employment or self-employment . . . . For covered individuals that provide the requisite documentation, ‘[a]ssistance for unemployment as a result of COVID-19’ is available . . . . Following enactment of the CARES Act, Texas entered into an agreement with the Department of Labor to pay PUA benefits to Texas residents. . . . Plaintiffs are each Texas residents. And each alleges that after Texas withdrew from the PUA program, Texas ceased paying the PUA benefits for which he or she had previously been eligible. . . . In June 2022, the magistrate judge recommended that the case be dismissed. . . . He explained that ‘Congress’s failure to identify an alternative payment method supports a plain reading of the statute that participation by the states is required for receipt of benefits under the CARES Act.’ . . . The district court entered an order adopting the report and recommendation ‘for substantially the reasons stated therein’ and dismissed Plaintiffs’ case.

Judge Stoll began her analysis for the court by explaining how the panel reviews a district court’s dismissal “according to the law of the regional circuit.” In the present case, “that is the Fifth Circuit, which ‘review[s] de novo the district court’s dismissal of Plaintiffs’ complaint.’” Judge Stoll then explained how the focus of her statutory interpretation would be on “whether 15 U.S.C. § 9021 requires the Secretary to provide unemployment benefit assistance” in the absence of a state agreement.

Judge Stoll then addressed each of Ireland’s arguments in turn, beginning with the argument that the Act “creates a payment obligation between the ‘Secretary’ and ‘any covered individual’ because ‘shall’ is a mandatory term.” Judge Stoll rejected the argument, noting that, “when each subsection of the PUA statute is read together . . . it creates no obligation to provide PUA benefits directly to individuals living in states that lack active agreements to administer PUA benefits.” Judge Stoll emphasized that “[t]he assistance mandated by subsection (b) ‘shall’ be provided ‘through agreements with States.’” She further explained how “the DUA regulations that permit the payment of DUA benefits only where the applicable state has signed an agreement with the Secretary also apply to the PUA program.”

Judge Stoll then turned to Ireland’s argument that “the DUA ‘regulation conflicts with the PUA statute and does not apply.’” Judge Stoll indicated “there is no such conflict;” when the whole Act is read together, its “language is consistent with the DUA regulation.”

Lastly Judge Stoll addressed Ireland’s argument “that Congress differentiated PUA from four related CARES Act programs in that PUA, unlike the other CARES Act programs, generally does not require agreements with states.” Rejecting a series of Ireland’s related arguments, Judge Stoll noted that “the PUA statute does not direct the Secretary to make payments directly to individuals; it provides payments ‘shall’ be made ‘to each State which has entered into an agreement.’” Judge Stoll then turned to Ireland’s assertion that “PUA is the only program that sets forth its own Congressionally-determined eligibility criteria through its definition of ‘covered individual.’” According to Judge Stoll, this distinction does not address the question before the court, “whether the Secretary had an obligation to pay PUA benefits to individuals without state participation,” and anyway “eligibility criteria bear no relation to the Secretary’s purported obligation to provide PUA benefits.”

As a result of this analysis, the Federal Circuit affirmed the district court’s judgment.