Paschal v. Didrickson

Background

This dispute involves people seeking past-due unemployment benefits and whether they can sue a State for money that would be paid from funds kept separate from general state revenues. The opinion explains two kinds of unemployment benefits at issue: both paid from segregated state funds, and one type is entirely paid by the Federal Government. Multiple federal appeals courts disagree. The Seventh and Tenth Circuits held such suits are blocked by the Eleventh Amendment even if the money is in a separate fund or federally financed. By contrast, the Fourth, Third, and First Circuits have allowed relief when funds are segregated or when the federal government would reimburse the State.

Reasoning

The main question is whether the Eleventh Amendment prevents lawsuits that seek retroactive money from states when payment would come from segregated or federally funded accounts. Lower courts reached different answers: some treat any money judgment as a judgment against the State and bar suits, while others focus on the source of payments and allow suits in certain circumstances. The Court today denied review, so it did not resolve this split among the appeals courts. Justice White dissented, saying the issue is important and he would grant review to settle the disagreement.

Real world impact

Because the Supreme Court refused to take the case, there is no single national rule. People seeking retroactive unemployment payments may win in some parts of the country and lose in others. Whether recoveries are allowed may hinge on where the money is kept and whether the Federal Government would pay.

Dissents or concurrances

Justice White wrote a dissent arguing the conflict among appeals courts is important and should be resolved by the Court.