| Opinion: | Owens v. Zumwalt, 2022 OK 14 |
| Subject matter: | Covid-related unemployment benefits. |
| Date Decided: | February 8, 2022 |
| Trial Court: | District Court of Oklahoma County: Judge Bonner |
| Route to this Court: | Appeal from preliminary injunction; retained sua sponte. |
| Facts: | On March 15, 2020, Governor J. Kevin Stitt signed Executive Order No. 2020-07, declaring the COVID-19 pandemic to be a statewide emergency under the provisions of the Oklahoma Emergency Management Act. Congress passed the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) on March 27, 2020. The CARES Act made available to the states several new unemployment benefit programs. These programs included the Pandemic Unemployment Assistance (PUA), the Pandemic Emergency Unemployment Compensation (PEUC), and the Federal Pandemic Unemployment Compensation (FPUC). Soon after passage of the CARES Act, the Executive Director of the Oklahoma Employment Security Commission (OESC) signed agreements with the U.S. Department of Labor (DOL) to administer the new COVID-related unemployment programs. Governor Stitt delegated authority for the execution of the agreements to the Executive Director of OESC. On May 3, 2021, the Governor withdrew the COVID-19 emergency declaration. On May 17, 2021, Governor Stitt signed Executive Order No. 2021-15, which indicated, as of June 27, 2021, Oklahoma would no longer provide COVID-related unemployment benefits and, instead, would provide a one-time $1,200 incentive to assist those returning to the workforce. The same day, Zumwalt provided written notice to the DOL that OESC was terminating the agreements. On July 7, 2021, Plaintiff/Appellee Ronda K. Owens filed a Petition for Declaratory Judgment and Injunctive Relief against Zumwalt. The Petition was amended on July 20, 2021 to add Plaintiff/Appellee Darryl Hubbard and additional Plaintiffs/Appellees who lost benefits when the COVID-related unemployment programs ended (collectively, “Citizens”). Citizens alleged that Governor Stitt and Zumwalt acted without authority and violated 40 O.S. § 4-313 of the Oklahoma Employment Security Act (OESA) by terminating the agreements with the DOL to administer COVID-related unemployment programs. Citizens sought a preliminary injunction requiring Zumwalt to administer the COVID-related unemployment programs. The trial court heard the matter on August 5, 2021. The trial court granted the preliminary injunction on August 6, 2021 and ordered Zumwalt to immediately notify the DOL that Oklahoma would be reinstating the COVID-related unemployment programs. The state appealed and the Court retained the case. |
| Standard of Review: | The granting of a preliminary injunction is reviewed for an abuse of discretion. An abuse of discretion occurs when a decision is clearly against the weight of the evidence, contrary to law, or contrary to established principles of equity. Whether a statute creates a private right of action presents a question of law, which the appellate court reviews de novo. |
| Analysis: | Citizens seek a declaratory judgment that Zumwalt’s early withdrawal from the COVID-related unemployment programs violated 40 O.S. § 4-313, which provides :In the administration of this act the Oklahoma Employment Security Commission shall cooperate to the fullest extent consistent with the provisions of this act, with the Social Security Act, as amended, and is authorized and directed to take such action, through the adoption of appropriate rules, administrative methods and standards, as may be necessary to secure to this state and its citizens all advantages available under the provisions of such act, under the provisions of Sections 1602 and 1603 of the Federal Unemployment Tax Act and under the provisions of the Act of Congress entitled “An Act to provide for the establishment of a national employment system and for cooperation with States in the promotion of such system, and for other purposes”, approved June 6, 1933, as amended. The Commission shall comply with the regulations of the Secretary of Labor relating to the receipt or expenditure by this state of monies granted under any of such acts and shall make such reports, in such form and containing such information as the Secretary of Labor may from time to time require, and shall comply with such provisions as the Secretary of Labor may from time to time find necessary to assure the correctness and verification of such reports. The Court concluded that this is a regulatory statute and that the Court has adopted a three-pronged test to determine if a private cause of action can be inferred from a regulatory or public-law statute: (1) the plaintiff is one of the class for whose especial benefit the statute was enacted; (2) some indication of legislative intent, explicit or implicit, suggests that the Legislature wanted to create a private remedy and not to deny one; and (3) implying a remedy for the plaintiff would be consistent with the underlying purposes of the legislative scheme. See Holbert v. Echeverria, 1987 OK 99, ¶¶ 7-8, 744 P.2d 960, 963. Nothing in 40 O.S. § 4-313 indicates the Legislature intended, either explicitly or implicitly, to create a private remedy to enforce the OESA. The Court also finds that a preliminary injunction preserves the status quo until there can be a final determination of the controversy. When the petition was filed in this case, the status quo was that COVID-related unemployment programs were not being administered in Oklahoma. Plaintiffs were not seeking the typical preventative or prohibitive preliminary injunction to preserve the status quo. Rather, Plaintiffs sought to change the status quo. A mandatory injunction is an extraordinary remedial process that commands the performance of some positive act. The trial court entered a mandatory preliminary injunction requiring Zumwalt to immediately reinstate and administer the programs. |
| Outcome: | Stay lifted; Preliminary injunction vacated; Cause remanded with instructions to dismiss with prejudice. |
| Vote: | CONCUR: Darby, C.J., Kane, V.C.J., Winchester, Gurich, Rowe, and Kuehn, JJ.CONCUR IN RESULT: Kauger, Edmondson, and Combs (by separate writing), JJ. |
| Other: | Justice Combs concurs in the result of the majority opinion because he believes that the trial court abused its discretion by entering a mandatory preliminary injunction. |