A 263-day wait for jobless benefits: Alabama shrimp farmer takes case to Supreme Court

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WASHINGTON − Derek Bateman, an independent shrimper in Alabama, couldn't sell shrimp during the COVID-19 pandemic and filed for unemployment benefits.

When his application was denied, Bateman spent months trying to appeal, he said in a court filing. Bateman finally received some of what he was owed nearly two years later, after having “lost everything” and struggling to keep from going hungry.

The Supreme Court heard arguments Monday on whether Bateman and other Alabama residents with similar stories have to complete the unemployment system’s appeals process before they're allowed to go to court to get the state to be more responsive.

The Alabama residents argue they wouldn't have tried to sue if the appeals process was working in the first place.

"We're not saying in this court that we necessarily deserve to win," said Adam Unikowsky, who represented the residents. "We just want a chance to be heard."

But the state says the system was overwhelmed during the pandemic and that’s not a reason for bypassing the normal administrative process. They argue that would be like allowing a plaintiff to go straight to an appeals court before the trial court weighs in.

"I think this court's rulings show that merely deferring consideration of a claim is very different than defeating it," said Alabama Solicitor General Edmund G. LaCour, Jr.

Justice Neil Gorsuch asked how Alabama has been addressing the delays.

LaCourt said the state has tripled the number of employees handling appeals, from eight to 25.

The number of Alabamans waiting at least 21 days for a hearing has been reduced from more than 131,000 in January of 2022 to about 7,410.

"And we anticipate clearing that backlog by the end of the year," he said.

In March of 2021, the month Bateman was first able to get through to someone in the unemployment office, the average wait time for an appeal was 263 days, according to federal data analyzed by The Century Foundation, a progressive think tank.

That was the second-longest wait time in the nation, behind only West Virginia’s 317-days.

But all states were hard hit by the deluge of applications during the pandemic and unemployment systems are still recovering, according to the foundation’s Michele Evermore, who’s written that it’s hard to overstate the enormous damage the pandemic wrought.

Funding for state unemployment programs was at a 50-year low when they got hit with the pandemic, bringing a deluge of claims and new benefit requriements directed by Congress to better address the crisis.  

Alabama, for example, struggled to process more than five times the normal amount of claims, according to the state.

States are still clearing out their pandemic workload while addressing the ongoing challenge of fraud and the need for updated technology, Evermore said.

Labor departments are supposed to issue 87% of first payments within two-to-three weeks. Alabama’s best monthly performance this year was about 50%. It also has one of the worst rates for processing appeals in a timely fashion.

If a state is underperforming, the federal government can revoke grants it sends to help states run their programs.

“But since that’s never going to lead to better performance, they will never revoke states’ administrative funding,” said Evermore, who previously worked in the U.S. Labor Department on ways to improve the system. “The government really has no meaningful penalty.”

Legal Services Alabama, a legal aid group, sued Alabama on behalf of Bateman and other residents under a federal civil rights law, Section 1983. They want the state to be forced to “promptly” make decisions on unemployment benefits and to schedule requested hearings within 90 days.

The Alabama Supreme Court said state law requires that the challengers go through the state labor department’s administrative appeals process before they can sue.

"Since these claims existed for the first time in 1935, they've always been adjudicated in the first instance by these hearing officers," LaCour told the Supreme Court. "They have expertise when it comes to hearing these types of claims because they hear thousands, or hundreds of thousands, a year."

But Legal Services Alabama says their lawsuit is allowed under previous U.S. Supreme Court decisions, even though those decisions involved lawsuits in federal – not state – courts.

Justice Amy Coney Barrett asked Monday why the residents hadn't filed their suit in federal court.

Unikowsky said state courts hear most unemployment benefit cases and are best positioned to direct the state labor department to be more responsive.

"What we're trying to do is get the state agency to give us hearings and give us adequate notice," he told the court. "And what the state court said is that because you didn't exhaust those remedies, precisely because we didn't get the hearing and the notice, you can't bring your claim."

Chief Justice John Roberts asked Unikowsky if residents could still sue before exhausting the appeals process even if Alabama had the most efficient imaginable labor department.

Residents would have the same ability to sue, Unikowsky said, but they would lose that suit because their rights hadn't been violated.

The case is Williams v. Washington.