The U.S. Supreme Court agreed to hear a case over Alabama’s bungled handling of unemployment benefits during the COVID-19 pandemic, a situation Gov. Kay Ivey’s office called an “outrageous backlog.”

The lawsuit, first filed in February of 2022, claimed Alabamians faced excessive delays in getting unemployment during the pandemic and that many who were denied early on never were able to schedule a hearing for an appeal. Many others were asked to repay large sums years later. They also could not get an appeal.

In June of 2023, the Alabama Supreme Court decided in favor of the state and the case was thrown out. The case was brought by Legal Services Alabama, a non-profit that advocates for people with low incomes, against the Alabama Department of Labor and Labor Secretary Fitzgerald Washington.

The Department of Labor stated in its motion to dismiss the original case that the way Alabamians should handle disputes is to go through the appeal process, “not by bringing this collateral suit to skip the line.”

The state court ruled that Alabamians should go through the appeals process before suing. But the suit itself was focused on problems with that process.

According to an analysis of 2021 federal data on wait times for unemployment by The Century Foundation, Alabama had the longest delays in the nation during the pandemic. In Alabama, at that time, the average appeal was pending 566 days, nearly twice as long as the second slowest state. And some states were hearing unemployment appeals in under 20 days.

On Friday, the U.S. Supreme Court ruled to grant certiorari to the case. According to Legal Services Alabama, the court is likely to consider the matter in October and will likely rule by June.

“(The) United States Supreme Court has said you don’t have to exhaust administrative remedies. That’s the language. You don’t have to exhaust administrative remedies when you’re challenging a procedural issue, especially if there’s due process considerations,” said Larry Gardella, attorney for Legal Services Alabama,

Legal Services alleged in its suit the state penalized some applicants by paying them and then improperly determining them to have been “overpaid” and placing them in a Treasury Offset Program so that any tax returns they might have would be taken to cover the alleged overpayment.

The Alabama Department of Labor said it could not comment on the matter due to pending litigation. The Alabama Attorney General’s Office said it is prepared to argue on behalf of the state.

“The State agrees with the Alabama Supreme Court’s ruling and looks forward to defending it before the U.S. Supreme Court,” said a spokesperson for the Attorney General.

During the pandemic, states received money from the federal government to increase state unemployment payments by $600 a week. The lawsuit, initially filed in Montgomery County, alleged the state was slow in processing claims for assistance during the early phases of the pandemic.

The Department of Labor in its initial response argued that Legal Services was effectively asking the courts to take over and run the department. But the COVID lockdown was unprecedented, and they were overwhelmed. “In the wake of a once-in-a-century pandemic, ADOL faced a tsunami of unemployment claims.”

Then in 2021, Alabama demanded that some residents who had been paid unemployment repay it. The state reported overpaying $164 million in unemployment between 2020 and 2021. For those people who received overpayment notices, many were unable to get an appeal hearing.

After reporting by AL.com on the wide demands for repayment, Gov. Kay Ivey’s office in the summer of 2022 issued this statement: “At the end of the day, the agency approved and paid out the claims. If a mistake is made by the government, people should not have to pay the price for something that was no fault of their own.”

Aaron Johnson, 68, is one of the 26 defendants that sued the state as a part of the case. He was laid off from the U.S. Census Bureau in 2020, according to the complaint. He sought unemployment in October of that year and had received no decision by January of 2022 despite his repeated phone calls to the department.

Christin Burnett became unemployed in 2019 and applied for unemployment. According to the complaint, she was found eligible and paid until 2020. She got no response about her application for pandemic unemployment but learned that she was ineligible online and was later told it was because of an error involving her social security number and because she had become unemployed before COVID.

“Ms. Burnett is unable to find new employment because of COVID. She is waiting for (the department) to acknowledge her hearing request and schedule a hearing,” the lawsuit said.

The department acknowledged in its response to the suit that staffing shortages hindered the processing of the many claims and said it was doing all it could to improve.

“The Department is now entering in appeals received in early December 2020,” said Thomas Daniel, director of Unemployment Compensation in an affidavit in the suit in March of 2022. “Given the current backlog, it is impossible to provide a hearing date for all claimants within 90 days — even if ordered by the court”

The state identified a significant backlog in appeal requests in its report to the U.S. Department of Labor in 2022, saying it had gotten but not addressed at least 82,000 appeals due to technological issues and staffing shortages.

“Just before the pandemic hit, budget constraints dictated reducing an already strained workforce. Within months of the ADOL staff reductions, the state-mandated closures forced unprecedented claim loads,” the state department stated in a report to the federal department in February of 2022.

Legal Services say the hope the case will force the Department of Labor to improve its services.

Montgomery County Judge James Anderson ruled in August of 2022 that the state and its officials could not be sued over the unemployment situation due to their sovereign immunity.

Legal Services of Alabama appealed the decision to the state supreme court, which ruled last year that the plaintiffs could not sue without completing the state’s appeals process.