In an interlocutory appeal, the panel reversed the district court’s determination that plaintiff had no constitutionally protected property interest in federal Pandemic Emergency Unemployment Compensation (PEUC) benefits, and remanded.

Damario Sterling filed a putative class action under 42 U.S.C. § 1983 against the current and former commissioner of the Washington State Employment Security Department (ESD), alleging that he was deprived of unemployment benefits without adequate notice or an opportunity to be heard.

The panel first held that Sterling’s claims are justiciable. He has standing to seek damages because he was injured when ESD offset his benefits to account for alleged overpayments, and that injury was caused by ESD’s challenged conduct. He has standing to seek prospective injunctive relief because he has a procedural right to due process under the Fourteenth Amendment and the Social Security Act, and he could reasonably be expected to seek unemployment benefits again in the future. His claims for prospective relief were not mooted by the end of the PEUC program because he challenges the procedures ESD generally uses to administer unemployment benefits, not any procedures specific to PEUC benefits.

The panel held that Sterling has a property interest in the PEUC benefits that ESD withheld as offsets. The CARES Act, which established a supplemental program to extend unemployment benefits during the COVID-19 pandemic, gives rise to a constitutionally-protected property interest. The Act uses mandatory language and establishes definite eligibility criteria that greatly narrow the discretion of participating states and create legitimate expectations of aid receipt.

The panel declined to reach defendants’ due process argument, which was not certified for interlocutory review.

https://cdn.ca9.uscourts.gov/datastore/opinions/2025/09/04/24-1296.pdf