The Hawaii Supreme Court has rejected a class-action lawsuit that tried to spur faster action from the state’s labor department on thousands of outstanding unemployment claims.

On Thursday, the court denied a petition filed last month on behalf of thousands of workers left jobless amid the ongoing COVID-19 pandemic.

Specifically, the suit aimed to compel the Department of Labor and Industrial Relations to process unemployment insurance claims “promptly” as required under state law, particularly thousands of challenging claims that have languished for months without resolution or payment.

It sought what’s called an “extraordinary writ” from the court to intervene with the DLIR. But the Supreme Court, in rejecting the petition Thursday, wrote that the case wasn’t there “to warrant this court’s intervention in the agency’s process.”

“In addition,” the court’s order continued, “it cannot be said that petitioners lack alternative means to seek relief.”

Unemployment Insurance office located at the Princess Ruth Keelikolani Building . DLIR

A lawsuit sought to compel the state labor department to “promptly” process unemployment claims.

Cory Lum/Civil Beat

It did not specify whether that meant relief in a lower court or by some other means.

“Speaking on behalf of the group, we are shocked and enraged,” said Cynthia Fite.

The Windward Oahu resident served as a point person before the suit’s petitioners and Dentons, the law firm that filed the action on their behalf.

“There is no alternative relief for these people to get within the UI system” in the way it’s currently being run, Fite said. “The frustration, the anger, the fear, the stress — there’s hardly any words to describe what these people are feeling before this news today, let alone when this news was delivered.”

The petitioners are currently exploring their options going forward, Fite added.

Krishna Jayaram, a spokesperson for the state Attorney General’s Office, said the court’s denial would help DLIR process claims faster.

“We believe the Supreme Court’s decision to deny the petition for an extraordinary writ was the right decision for all stakeholders,” he said in an emailed statement.

“This will help ensure that DLIR remains focused on administering claims, protecting taxpayers, and delivering needed support as quickly as possible — not on litigation in the courts. DLIR is making progress in processing claims and reducing its backlog and that important work will continue.”

The DLIR, like many state labor departments across the U.S., was caught ill-equipped to handle the massive spike in unemployment claims starting in late March.

“While initial difficulty may have been understandable immediately following the onset of the pandemic and resulting restrictions, more than six months in, the DLIR’s failings can no longer be excused or ignored,” the suit, filed by attorneys Paul Alston and J. Blaine Rogers, had argued.

On Thursday, Dentons issued a statement on the court’s denial.

“The DLIR remains critically understaffed and under-resourced eight months into the global pandemic,” the statement read, “and its failure to timely process claims for unemployment and federal benefits allocated for pandemic relief is devastating the lives of individuals most in need of the safety net our … government is supposed to provide.”

The firm acknowledged that it was seeking an “extraordinary remedy,” but “the court’s decision turns a blind eye to the fact these are extraordinary times.”

Still Catching Up

DLIR has paid out more than $3 billion in claims since the pandemic hit but continues to struggle with the most complex cases, which have mostly been snagged by “job-separation issues.”

DLIR announced last week the launch of a new 100-person adjudication unit to help deal with the case backlog. However, that unit, along with a new outsourced call center, is poised to end at the end of the year when the state’s federal CARES Act money expires, DLIR Executive Director Anne Eustaquio told the Honolulu Star Advertiser during an interview streamed last week on Facebook.

The DLIR has further hired about 85 staff members since the pandemic hit but a third of them have already left the agency, Eustaquio added.

“It’s just a tough job,” Eustaquio told the Star-Advertiser. “We have a lot of claimants who are at this point really frustrated. Sometimes it’s hard to be able to listen to the stories and the real impact it’s making to families, and some individuals can’t handle that type of work. It’s tough, it’s hard on the heart.”

Fite, meanwhile, said that claimants who haven’t been paid are growing increasingly desperate, and the delays are taking a serious mental toll on many of those she talks to.

“Shame on the government of Hawaii and shame on the Supreme Court for not realizing the severity of this,” she said Thursday.

Read the court’s order of denial here:

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