Unemployed Workers v. Ducey

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

UNEMPLOYED WORKERS UNITED, et al.,
Plaintiffs/Appellants,

v.

DOUGLAS DUCEY, et al.,
Defendants/Appellees.

No. 1 CA-CV 22-0054
FILED 9-27-2022

Appeal from the Superior Court in Maricopa County
No. CV2021-014027
The Honorable Katherine Cooper, Judge

AFFIRMED

COUNSEL

Osborn Maledon, PA, Phoenix
By Joshua David Rothenberg Bendor, Joshua J. Messer
Co-Counsel for Plaintiffs/Appellants

Barton Mendoza Soto, PLLC, Tempe
By James E. Barton, II
Co-Counsel for Plaintiffs/Appellants

Law Office of Paul Gattone, Tucson
By Paul J. Gattone
Co-Counsel for Plaintiffs/Appellants

National Legal Advocacy Network, Chicago, IL
By Christopher J. Williams, Sheila Maddali
Co-Counsel for Plaintiffs/Appellants
Fennemore Craig, PC, Phoenix
By Timothy J. Berg, Brett Gilmore, Lyndsey Maasch
Counsel for Defendants/Appellees

Community Legal Services, Phoenix
By Pamela M. Bridge
Counsel for Amicus Curiae Community Legal Services

William E. Morris Institute for Justice, Phoenix
By Andrew P. Schaffer, Brenda Munoz Furnish
Counsel for Amicus Curiae William E. Morris Institute for Justice

OPINION

Presiding Judge David D. Weinzweig delivered the opinion of the Court, in
which Judge Brian Y. Furuya and Judge Jennifer M. Perkins joined.

W E I N Z W E I G, Judge:

¶1 Arizona law requires the Arizona Department of Economic
Security (“ADES”) to “[t]ake such action as may be necessary to secure to
this state and its citizens all advantages available under the provisions of
[four federal unemployment acts].” See A.R.S. § 23-645(2). We must decide
whether that law required ADES to secure unemployment benefits under
the CARES Act, enacted by Congress in response to the COVID-19
pandemic. Because it did not, we affirm.

FACTS AND PROCEDURAL BACKGROUND

¶2 COVID-19 arrived in America and Arizona in the last ten days
of January 2020, generating twin medical and economic emergencies. The
economic emergency was abrupt. In April 2020 alone, the nation’s
unemployment rate jumped by more than ten percent. See U.S. Department
of Labor, Bureau of Labor Statistics.1

¶3 And so, on March 25, 2020, Congress passed the Coronavirus
Aid, Relief, and Economic Security Act, better known as the CARES Act.
Among its programmatic reach, the CARES Act created and funded the

1 See United States Bureau of Labor Statistics, Unemployment rate rises to record high
14.7 percent in April 2020, (May 13, 2020), www.bls.gov/opub/ted/2020/unemployment-
rate-rises-to-record-high-14-point-7-percent-in-april-2020.htm.

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Opinion of the Court

Federal Pandemic Unemployment Compensation program (“FPUC”), a
supplemental payment of unemployment benefits for qualified
unemployed workers during the pandemic. All 50 states were invited to
join the FPUC program, which was voluntary, and the states were assured
they could leave the program on 30 days’ written notice. See 15 U.S.C. §
9023(b)(3)(A)(i).

¶4 Two days later, Governor Ducey signed into law a directive
for ADES to join the FPUC program, and ADES entered a written
agreement with the federal government, which confirmed that ADES could
leave the program on 30 days’ written notice.

¶5 Nearly 64 weeks after entering the agreement, on July 10,
2021, Governor Ducey directed ADES to exit the agreement. The federal
government continued funding the FPUC program for 58 more days, and it
expired nationally on September 6, 2021. See 15 U.S.C. § 9023(b)(3)(A)(ii),
(e)(2).

¶6 This lawsuit followed in October 2021, seeking a writ of
mandamus and request for declaratory and injunctive relief against ADES
and Governor Ducey (collectively, “the State”). The plaintiffs are three
Arizona residents who lost their job because of the pandemic, and a New
York non-profit organization named Unemployed Workers United
(collectively, the “Workers”). The Workers alleged that the State violated
Arizona law, specifically A.R.S. § 23-645(2), by exiting the pandemic
unemployment program 58 days before its natural end. They sought a
court order directing the State to retroactively secure 58 more days of
benefits for eligible Arizonans.

¶7 The superior court denied relief, finding that “Arizona law
[did] not compel [the State] to obtain FPUC benefits,” which the court
characterized as “an optional CARES Act benefit that states could start and
stop at their discretion.” Workers timely appealed. We have jurisdiction.
See A.R.S. § 12-2101(A)(1).

DISCUSSION

¶8 This appeal presents an issue of statutory interpretation that
we review de novo. Schwarz v. City of Glendale, 190 Ariz. 508, 510 (App.
1997). “Our task in statutory construction is to effectuate the text if it is clear
and unambiguous.” BSI Holdings, LLC v. Ariz. Dep’t of Transp., 244 Ariz. 17,
19 ¶ 9 (2018) (internal citation omitted). “If the statute is subject to only one
reasonable interpretation, we apply it without further analysis.” Stambaugh

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Opinion of the Court

v. Killian, 242 Ariz. 508, 509 ¶ 7 (2017) (quoting Wade v. Ariz. State Ret. Sys.,
241 Ariz. 559, 561 ¶ 10 (2017)).

¶9 At the heart of Workers’ argument is A.R.S. § 23-645, which
was adopted by the legislature in 1977. Section 23-645 requires the Arizona
Department of Employment Security to:

Take such action as may be necessary to secure to this state
and its citizens all advantages available under the provisions
of the social security act that relate to unemployment
compensation, the federal unemployment tax act, the
Wagner-Peyser act and the federal-state extended
unemployment compensation act of 1970.

¶10 Workers contend this statute required ADES to secure FPUC
benefits because FPUC benefits were an “advantage[] available under” the
social security act and the federal-state extended unemployment
compensation act of 1970 (“1970 Act”). They first argue that FPUC benefits
were an “advantage[] available under” the social security act because
Congress directed the Department of Labor to distribute FPUC benefits
through preexisting “Social Security infrastructure” and “methods of
administration.”

¶11 We are not persuaded. First, the FPUC program and FPUC
benefits were created and funded by Congress under the CARES Act—not
the social security act or the 1970 Act. Compare 15 U.S.C. §§ 9021, 9023, 9025
(pandemic unemployment benefits), with 42 U.S.C. §§ 301–1397 (social
security) and Federal-State Extended Unemployment Compensation Act of
1970, Pub. L. No. 91-373, 84 Stat. 708 (codified in a note to 26 U.S.C. 3304).
Unlike the social security and 1970 acts, Congress enacted the CARES Act
to triage the economic catastrophe sparked by the COVID-19 pandemic. See
Holcomb v. T.L., 175 N.E.3d 1177, 1183 (Ind. Ct. App. 2021) (explaining FPUC
benefits represented a “temporary” measure to “provide[] different benefits
to more types of people and for different amounts of time,” and its
unemployment benefits represented “a supplement to traditional
[unemployment] benefits during an unprecedented pandemic”).

¶12 Second, Congress did not amend the social security act to
fund FPUC benefits; nor did the Arizona legislature amend Section 23-
645(2) to reach FPUC benefits under the CARES Act. See Canon Sch. Dist.
No. 50 v. W.E.S. Const. Co. Inc., 177 Ariz. 526, 529 (App. 1994) (“[W]e are
reluctant to construe the words of a statute to mean something other than
what they plainly state.”). By contrast, Congress did amend the social

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Opinion of the Court

security act in the Families First Coronavirus Response Act. See Pub. L. 116-
127 § 4102, 134 Stat. 178, 192–93 (amending Section 903 of the Social Security
Act, 42 U.S.C. § 1103).

¶13 Third, FPUC benefits did not morph into an “advantage[]
available under” the social security act simply because the federal
government used “Social Security infrastructure” and “methods of
administration” to distribute FPUC benefits. The pandemic represented a
hard stop on our state’s economy. It caused an unprecedented spike in the
unemployment rate, and sparked an immediate need to distribute billions
of dollars to millions of unemployed persons. Because it had no time to
blaze a new administrative path, Congress turned to the time-tested, well-
worn “Social Security infrastructure” and “methods of administration.” See
15 U.S.C. § 9021(g)(1)(A).

¶14 Fourth, FPUC benefits did not morph into an “advantage[]
available under” the 1970 Act merely because Congress borrowed seven
definitions from the 1970 Act when crafting the CARES Act. See 15 U.S.C.
§ 9023(i)(1), (2) (defining “compensation,” “regular compensation,”
“benefit year,” “State,” “State agency,” “State law” and “week”). Workers
offer no legal authority for the point that two distinct, self-reliant statutes
become one when they share some definitions.

¶15 All but one court presented with this issue has reached the
same decision. See Brannon v. McMaster, 864 S.E.2d 548, 550 (S.C. 2021)
(“The only connection the Programs have to the [social security act] is that
the funds to be distributed to recipients pass through bank accounts of the
Social Security Administration. This is not sufficient to render benefits paid
under the Program to be ‘advantages available under the provisions of the
[social security act].’”); Holcomb, 175 N.E.3d at 1183 (“Utilizing this
established accounting system and specifying how funds should be moved
around and made available for distribution is entirely different from
creating a new federal benefit program, which the CARES Act is.”); Caron
v. New Hampshire et al., 2021-CV-00423, slip op. at 7 (Sup. Ct. N.H. Sept. 27,
2021) (“[S]imply because PUA ‘benefits are distributed by utilizing the
same accounting systems used to fund the administrative costs of the state
[unemployment insurance] programs’ under the [social security act,] it does
not follow that the PUA benefits themselves are ‘advantages available
under the [social security act].’”). And the outlier has been accepted for
review. See State ex rel. Bowling v. DeWine, 2021 WL 3733205, at *11, ¶¶ 45–
47 (Ohio).

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CONCLUSION

¶16 We affirm.

AMY M. WOOD • Clerk of the Court
FILED: JT

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