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Wednesday, March 27, 2024 | Back issues
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State appeals court rules Indiana can stop pandemic unemployment payments

The Indiana Court of Appeals overturned a lower court order preventing the state from ending its participation in the enhanced federal unemployment insurance program offered during the pandemic.

INDIANAPOLIS (CN) — Indiana may withdraw from a federal unemployment benefits program that was enacted by Congress last year to help mitigate the damage caused by the Covid-19 pandemic, the state appeals court ruled.

In a unanimous decision Tuesday, the Indiana Court of Appeals held that the governing state law does not require the state to participate in the federal program and that it was well within its power to withdraw from the program in May.

“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,” Judge James Kirsch wrote for a three-judge panel.

The specific unemployment benefits in question came from legislation passed by the Congress in March 2020 known as the CARES Act, which among its many provisions expanded unemployment insurance benefits for people out of work, allowing more people to claim them and increasing weekly payments by $300.

These benefits have been extended by Congress several times. After the passage of President Joe Biden's American Rescue Plan in March of this year, the enhanced unemployment benefits are currently set to expire on Sept. 6.

However, despite the extensions, Indiana’s Republican Governor Eric Holcomb announced in May that the Hoosier State would be ending its participation in the federal pandemic unemployment benefit program on June 19.

“There are help-wanted signs posted all over Indiana, and while our economy took a hit last year, it is roaring like an Indy 500 race car engine now. I am hearing from multiple sector employers that they want and need to hire more Hoosiers to grow,” Holcomb said in a statement at the time.

The governor's announcement drew criticism from many, and spawned a lawsuit filed in June by a group of Indiana residents and a group of pastors who claimed that the state’s decision to end the benefits was unlawful.

A judge in Marion County Superior Court agreed and ruled that the plaintiffs were entitled to an injunction against the state until a ruling on the merits of their claims could be issued. This injunction kept in place the enhanced unemployment benefits and halted the state’s withdrawal.

However, the state appeals court reversed the injunction Tuesday, finding the plaintiffs had not shown that they were likely to succeed on the actual merits of their case.

“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,” Kirsch wrote.

Holcomb celebrated the ruling in a statement Tuesday, saying the state had followed the rules on ending the benefits.

“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,” the governor said.

According to the U.S. Bureau of Labor Statistics, Indiana has held a fairly steady unemployment rate this year. In 2021, the state has fluctuated between 4.2% and 3.9% unemployment rate, with preliminary June numbers showing the state sitting at a relatively low 4% jobless rate, compared to 5.4% nationwide.

Kirsch was joined on the panel by Judges Melissa May and Nancy Vaidik.

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Categories / Appeals, Government, Health, Regional

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