A federal appeals panel has rejected a class action claiming Illinois’ unemployment benefits agency violated due process rights by failing to respond to aid applications during a spike in claims related to Covid-19, at the onset of the state's response to the pandemic, which included shutdowns and closures ordered by Gov. JB Pritzker.
Jeremiah Sherwood and Megan Doyle filed a federal lawsuit against Kristin Richards, acting director of the Illinois Department of Employment Security. Each said they lost a job in March 2020 — Sherwood at a hotel and Doyle in real estate — and, though they submitted unemployment assistance applications to IDES, they received neither benefits nor notice of a claim denial. Sherwood went back to work on May 1, 2020, and Doyle returned that July.
Gov. JB Pritzker named Richards’ the agency’s acting director in August 2020. In January 2023 he named her director of the Department of Commerce and Economic Opportunity and tapped Raymond Marchiori to head IDES. The court then substituted Marchiori as defendant in the matter.
U.S. District Judge Jorge Alonso granted a motion to dismiss the claim based on a lack of jurisdiction, saying the case doesn't belong in federal court. The plaintiffs challenged that ruling before the U.S. Seventh Circuit Court of Appeals, arguing that not only do they have standing to sue, but their claims are not barred by sovereign immunity that can be granted to state officials in federal litigation.
Seventh Circuit Judge Joel Flaum wrote the panel’s opinion, issued Aug. 7; Judges Michael Brennan and Amy J. St. Eve concurred.
“The complaint alleges that IDES violated plaintiffs’ rights to equal protection by arbitrarily selecting their particular claims to deny without any process while providing process for other denied claims,” Flaum wrote. “IDES, according to plaintiffs, was unequipped to handle the influx of claims during the pandemic. As such, plaintiffs allege that IDES utilized an arbitrary selection methodology to make its ‘processing statistics appear better than they actually were.’ ”
But those allegations cover past conduct, the panel continued, noting IDES discontinued a debit card system that used the allegedly arbitration selection criteria in late 2021. Because the plaintiffs don’t allege ongoing violations, Flaum wrote, the state's sovereign immunity bars the equal protection claims.
Regarding due process, Flaum wrote, the plaintiffs said the failure to issue a denial notice or be offered a hearing to contest their status is something a federal court should address. The panel agreed the continued denials from IDES prevents the plaintiffs from challenging what they allege is an improper deprivation of their protected interest in unemployment benefits.
The panel further agreed the plaintiffs’ complaint qualifies for an exception to qualified immunity protections because they allege the state continues to violate their due process rights. But in order to bring a federal lawsuit, Flaum wrote, plaintiffs must show “Illinois provides no adequate post-deprivation remedies that they could have pursued instead of coming to federal court.”
Although the panel agreed IDES was obligated to both consider the workers’ unemployment claims and provide a determination notice, it said a state court could’ve issued an order requiring the agency to issue such a notice.
The workers argued a class action represented the only way to deal with their claims that the state violated their rights, because most people facing the need for unemployment benefits can't afford to press their own individual claims in court, if the state simply ignores their applications. Further, they said state courts have declined to make such orders on behalf of a class. But the appeals panel noted the the plaintiffs can choose the form and venue for their lawsuits, and downplayed the argument that only class action was suitable.
"Plaintiffs cannot circumvent the adequacy of mandamus as a state remedy just because they chose to bring their claims on a class-wide basis in federal court," Flaum wrote.
The panel added that no judge has yet granted class certification and said the plaintiffs made no allegation they, personally, would be unable to pursue individual relief. The panel also took note of an argument a judicial order would provide only a determination notice, not the sought benefits, but Flaum explained “IDES’ failure to provide plaintiffs with a determination is the precise injury plaintiffs allege here." Flaum said the only action the plaintiffs appear to ant is a federal court order similar to what a state court could mandate.
Plaintiffs have been represented in the action by attorneys Daniel A. Edelman, Tara L. Goodwin and Matthew J. Goldstein, of the firm of Edelman, Combs, Latturner & Goodwin, of Chicago, and Anthony J. Peraica and Jennifer Marie Hill, of Anthony J. Peraica & Associates, of Chicago.