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Judge Dismisses Legal Aid of Arkansas’s Pandemic Unemployment Benefits Early Termination Case based on Legislature’s Amendment to Statute after Previous Favorable Decision

In June 2021, Arkansas stopped participating in federal pandemic-based unemployment programs about two months before the federal programs would have expired, cutting off about 69,000 Arkansans from unemployment benefits. Legal Aid of Arkansas filed a lawsuit on behalf of several Arkansans who lost federally funded unemployment benefits.  The plaintiffs won an initial preliminary injunction hearing soon after which would have required Governor Hutchinson and the Arkansas Department of Workforce Services (DWS) to resume participation in the Federal Pandemic Unemployment Compensation (FPUC), Pandemic Extended Unemployment Compensation (PEUC), and Pandemic Unemployment Assistance (PUA) programs. This was based on an Arkansas statute that required that DWS “shall” participate in federal unemployment programs.  The State appealed that decision to the Arkansas Supreme Court and prevented benefits from restarting in the meantime. 

While the Arkansas Supreme Court was still deciding this issue, the Arkansas legislature called a special session to amend the statute our case was based on.  The Legislature changed the statute to instead say that DWS “may” participate in federal unemployment programs, which would no longer require the State to participate.  The Legislature also said that this statute would apply retroactively, effectively legalizing the Governor’s decision to stop participation in the programs after the decision had already gone into effect.   

Earlier this year, the Arkansas Supreme Court sent the case back to the same Judge who heard the case before, Judge Herbert Wright of the Pulaski County Circuit Court, to consider whether the amendment to the statute and the time that had passed since he made the original decision granting the injunction affected his decision.  Legal Aid of Arkansas represented those plaintiffs in a new hearing, arguing that the Legislature’s amendment to the statute was unconstitutional because it gave DWS too much discretion and because applying it retroactively would deny the affected 69,000 Arkansans’ right to benefits that they were eligible to receive under the law. 

Unfortunately, on September 28, 2022, Judge Wright denied Legal Aid’s Motion for a new preliminary injunction and dismissed the case.  After much consideration, Legal Aid and the plaintiffs on the lawsuit have decided not to appeal this decision due to concerns about the likelihood of success on appeal and the potential impacts of an unfavorable decision.  The bottom line is that the pandemic benefits will not be restored. 

However, DWS is still required to consider applications for pandemic benefits for persons newly eligible.  We believe that there are many claimants out there who were denied traditional unemployment benefits (UI) and either did not know to apply for PUA benefits or did not have their PUA applications processed correctly.  Some of these claimants have UI overpayments now for periods that they may have been eligible for PUA.  Anyone with these issues or other legal problems is welcome to call our Helpline and request assistance at (800) 952-9243.  

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