Court of Appeals says Indiana can withdraw from federal pandemic unemployment program


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INDIANAPOLIS — The Court of Appeals of Indiana ruled that the state can withdraw from the federal pandemic unemployment program.

In a decision handed down Tuesday, the appeals court said the state did not violate any rules when it stopped paying enhanced unemployment benefits from the CARES Act. The court also ruled that the plaintiffs in the case “have not shown a reasonable likelihood of success at trial.”

From the conclusion:

Because we find that Indiana Code section 22-4-37-1 does not require participation in the CARES Act programs, the State’s decision to terminate the benefits did not violate the statute. We, therefore, conclude that Plaintiffs have not shown a reasonable likelihood of success at trial, and because the movant must prove each of the requirements to obtain a preliminary injunction, we hold that the trial court abused its discretion when it granted the Plaintiffs’ motion for preliminary injunction and enjoined Defendants from withdrawing Indiana from the CARES Act benefits.

The appeals court had previously denied a motion from the state seeking to delay the reinstatement of federal pandemic unemployment benefits. The state had been forced to restart the payments based on a ruling from a Marion County Superior Court judge.

Tuesday’s ruling said the trial court “abused its discretion” when it prevented the state from withdrawing from the program.

Gov. Holcomb released the following statement about the decision.

“I want to thank the Court of Appeals on its ruling to reverse the trial court’s decision on unemployment benefits. The state took the appropriate steps to terminate its participation in these optional federal pandemic unemployment programs and this ruling confirms that we had the legal authority to do so.

These programs assisted Hoosiers in a time when some businesses were closed due to the COVID-19 pandemic. Since that time, businesses are adapting so that they can remain open while maintaining a safe environment. Currently Indiana has more than 143,000 job openings and I know there are even more out there. The Department of Workforce Development continues to work with the unemployed to connect them with resources they need to gain skills and be matched with employment.”

Gov. Eric Holcomb decided to end the program on June 19, making Indiana one of more than two dozen states terminating at least one of three pandemic unemployment programs. Holcomb had said the programs were hurting Indiana’s economic recovery from the pandemic and contributing to a worker shortage.

Two groups filed suit against the state, saying ending the benefits would cause “irreparable harm” to Hoosiers. The federal program is set to expire nationally in September.

We reached out to the Department of Workforce Department, which said it was reviewing the ruling.

Drew Anderson, spokesman for the Indiana Democratic Party, issued a statement on the ruling:

“The back-and-forth court litigation about unemployment benefits continues to expose one glaring problem: Indiana Republicans created a ‘work more for less’ economy where Hoosiers are being forced to take low-paying jobs and work sometimes 80 hours just to make rent, not including other utilities. This falls on Indiana Republicans like Governor Eric Holcomb who refuse to address the state’s ‘F’ workforce grade and a track record of losing ‘good jobs’ in the state. It’s why Democrats are eager to pass the American Jobs Plan, because the transformative infrastructure investments would begin to solve the problems created by the Indiana Republican Party.”

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