Maryland judge rules Hogan not prevent federal funding for enhanced unemployment benefits to residents.

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A Maryland circuit court judge ruled Tuesday that Republican Gov. Larry Hogan cannot unilaterally end enhanced federal unemployment benefits for workers in the state.

Following a full-day hearing on Monday, Baltimore City Circuit Court Judge Lawrence Fletcher-Hill wrote in an opinion that Hogan and Labor Secretary Tiffany Robinson cannot take any further action to prevent the state from receiving the enhanced benefits, which amount to an additional $300 a week per worker paid for by the federal government.

Hogan announced in June that he intended to end the enhanced benefits earlier this month. But with the ruling the benefits are now expected to continue through the end of the program in early September for some 180,000 Marylanders who claimed unemployment over the past few months.

“This Court is not free to ignore the General Assembly’s mandatory direction that the Maryland Secretary must go as far as possible in cooperation with the United States Secretary of Labor to achieve ‘a common end or objective,'” Fletcher-Hill wrote, granting a preliminary injunction against Hogan.

Mike Ricci, a spokesperson for Hogan, said in a statement to DCist/WAMU that they were disappointed in the judge’s decision.

“This lawsuit is hurting our small businesses, jeopardizing our economic recovery, and will cause significant job loss. Most states have already ended enhanced benefits, and the White House and the US Department of Labor have affirmed that states have every right to do so,” Ricci wrote. “We firmly believe the law is on our side.”

But Maryland House Speaker Adrienne Jones (D-Baltimore County) said the ruling was clear.

“Abandoning federal help at a time when our economy is just beginning to rebound is foolish because it will hurt Maryland families, small businesses and our State’s recovery efforts,” Jones wrote in a statement.

The ruling follows two lawsuits filed against the Hogan administration by a pair of advocacy organizations, the Public Justice Center and the Unemployed Workers Union, which pushed back on Hogan’s plan to end the enhanced benefits early as a means to encourage residents to start looking for jobs again.

Hogan joined 24 other states — with mostly Republican governors — in ending enhanced federal unemployment benefits on July 3. The state simultaneously reinstated a requirement that people seeking unemployment benefits prove they are actively seeking work.

The organizations’ lawyers claimed that the administration violated state law, which requires the Department of Labor to accept the federal unemployment funds. The lawyers also said that the administration caused irreparable harm to those struggling during the pandemic, and created negative ripple effects throughout the economy.

“It’s not hyperbolic to say that this case is life or death for many,” Alex Summerfield, a pro-bono attorney with the Unemployed Workers Union, told the judge in his closing statements on Monday. “The main question here is, does administrative inconvenience weigh heavier than human need?”

But lawyers for the Hogan administration argued that federal law says the state isn’t required to accept federal funding for unemployment insurance or any other program.

“It’s plain language that needs to be evaluated under the principles of cooperative federalism,” Christopher Mellott, one of the state’s lawyers, told the judge in his closing statement. “Nowhere does … [it] suggest that the labor secretary and the state of Maryalnd shall accept, maximize, or secure the CARES Atc program or any other program for that matter.”

Four witnesses testified on behalf of the plaintiffs during a hearing. Michael Siers, an economic analyst with the Regional Economic Studies Institute, was among them. He testified that there had been a shortage of workers since the beginning of the pandemic. But he added that there’s “significant risk in ending enhanced employment benefits” because benefits drive consumer spending among poor residents.

“Ending this subsidy could result in a weaker economy,” Siers said.

State attorneys were quick to point out that as each of the 24 states terminated enhanced unemployment benefits, job searches increased by 5%. But Siers added that job searches don’t amount to closing the labor gap and people being hired. Even with the increase in job searches, the demand for labor has remained strong in Maryland and nationwide, according to the latest May jobs report from Indeed.

Neil Bradley, a vice president at the U.S. Chamber of Commerce, also testified, saying that one of the chamber’s surveys showed that the worker shortage was attributable to multiple factors like the lack of child care, people retiring, and the skills gap. A smaller percentage of people said the level of government benefits removed the urgency to seek work.

The most crucial testimony came from Robinson herself, who explained why the administration sought to end the expanded benefits early.

“We saw 13 consecutive months of job growth in Maryland. We reviewed countless documents and reviewed countless phone calls among internal teams and with the governor’s office to make this very calculated policy decision,” she said. “We determined that the best thing for Maryland job seekers … that this time was to get them access to reemployment activities and connect with the high number of jobs available in our state.”

Robinson added that the program was more expensive during the pandemic to run due to the increased level of fraudulent unemployment claims. “Fraud from identity theft is new during this pandemic,” Robinson explained. “Fraudsters that have collected information had been waiting for an opportunity.”

She said the federal programs available during the pandemic made it very easy for anyone with a Social Security number, date of birth, a full name, and address to access the benefits even if they were fraudulent. Robinson said the fraudulent claims led to a slow down in claimants getting their benefits. In October, the Baltimore Sun reported that roughly 64,000 Marylanders were still waiting for their claims to be processed.

But the judge shot down that argument.

“To the extent defendants argue this fact is a justification for early termination of the programs because doing so might save money, the Court rejects the argument as a consideration in the balance of harms,” Fletcher-Hill wrote in his opinion. “Unemployed Maryland residents should not be penalized by the criminal activities of bad actors.”

Outside of the legal fight over the fate of the expanded federal benefits, Robinson has been facing political challenges from state Democrats. Last week democratic state legislative leaders called for Robinson’s resignation for “ongoing failures of her leadership to rectify the catastrophic unemployment benefit delivery during the COVID-19 pandemic.”

Mike Ricci, called the request “a political stunt” and “a bunch of nonsense.”

This story was updated with comments from the Hogan Administration and Maryland House Speaker Adrienne Jones.