The Court will hear oral arguments tomorrow, Monday, in Williams v. Washington, a case testing whether a plaintiff must exhaust state administrative remedies in order to bring a state-court lawsuit under federal civil-rights law. Here's my preview of the case, from the ABA Preview of United States Supreme Court Cases, with permission:

Case at a Glance

Several plaintiffs sued the Alabama Secretary of Labor to force the state Department of Labor to act promptly on their claims for unemployment compensation. The plaintiffs sued in state court under 42 U.S.C. § 1983, a federal statute that authorizes plaintiffs to sue a person acting under color of state law for violations of the U.S. Constitution or federal law. The Alabama Supreme Court dismissed the case on the ground that the plaintiffs failed to appeal their claim through the Department’s administrative process before they sued in state court, as required by state law. 

INTRODUCTION

Alabama law requires a plaintiff to appeal a denial of unemployment compensation through an administrative appeal process in the Department of Labor before they appeal to state court. At the same time, the Supreme Court has held that plaintiffs need not exhaust state administrative remedies before suing in federal court pursuant to Section 1983. This case tests whether and how that Court ruling applies to the plaintiffs’ state court case.

ISSUE

Does Section 1983 preempt Alabama’s requirement that a person exhaust the administrative appeal process before suing in state court?

FACTS

In the wake of a spike in unemployment compensation claims due to COVID-19, a group of Alabama residents sued the state Secretary of Labor, Fitzgerald Washington, in state court for failing to act timely on their unemployment compensation applications. The plaintiffs alleged that the state Department of Labor took months to make initial determinations on their claims for benefits, and that some plaintiffs never received these determinations. They also claimed that the Department stopped or denied benefits for a period without sufficient notice to the plaintiffs. And they alleged that the Department failed to schedule hearings to appeal adverse determinations.

The plaintiffs sued under the bread-and-butter federal civil rights law, 42 U.S.C. § 1983. Section 1983 authorizes plaintiffs to sue officers acting under color of state law for violations of their federal constitutional or federal statutory rights. In this case, the plaintiffs alleged that the Department violated their due process rights and the federal Social Security Act. The plaintiffs asked the court to direct the Department to make decisions promptly on all applications for unemployment compensation, and to notify claimants who requested a hearing and to schedule those hearings within 90 days of the request.

The Secretary moved to dismiss the case. The Secretary argued, among other things, that the court lacked jurisdiction because the plaintiffs failed to exhaust their unemployment-compensation administrative appeal process required under state law. Under this process, an applicant for unemployment compensation must appeal an initial denial to an administrative tribunal comprised of Department officers. Only then can an applicant appeal to state court. In other words, state law requires an applicant to exhaust this administrative-appeal process before they appeal to state court. The Secretary argued that the plaintiffs in this case bypassed the administrative appeal process, and that the state court therefore lacked jurisdiction over their claims.

The state circuit court granted the Secretary’s motion to dismiss, but did not specify the grounds for dismissal. The Alabama Supreme Court affirmed the dismissal on the sole ground that the plaintiffs failed to exhaust their state administrative remedies before bringing their lawsuit in state court. This appeal followed.

CASE ANALYSIS

The case asks whether the plaintiffs must exhaust state administrative remedies, as required by state law, before they can file their Section 1983 claims in state court. Stated only slightly differently, the case asks whether Section 1983 preempts the state-law exhaustion requirement, so that the plaintiffs need not exhaust state administrative remedies before filing their Section 1983 claims in state court.

The Court touched on the issue over thirty years ago, in Patsy v. Board of Regents of the State of Florida. 457 U.S. 496 (1992). The Court in Patsy ruled that “exhaustion of state administrative remedies should not be required as a prerequisite to bringing an action pursuant to § 1983.” But the plaintiffs in Patsy filed their case in federal court, not state court, and the Court did not specifically address whether plaintiffs must satisfy a state exhaustion requirement that goes to the state court’s jurisdiction.

The parties wrangle over whether and how Patsy applies to this case, and whether Section 1983 preempts Alabama’s exhaustion requirement.

The plaintiffs argue that Patsy resolves this case. They claim that while Patsy involved a federal-court lawsuit, its reasoning applies equally to state-court lawsuits. They say that the Court confirmed this in Felder v. Casey, 487 U.S. 131 (1988), where the Court ruled that Section 1983 claims preempt state-law exhaustion requirements. In particular, the plaintiffs point to language in Felder that says that a state exhaustion requirement would force plaintiffs “to seek redress in the first instance from the very state officials whose hostility to those rights precipitated their injuries,” and that it would “produce different outcomes in federal civil rights litigation based solely on whether that litigation takes place in state or federal court.” The plaintiffs assert that their Section 1983 lawsuit preempted Alabama’s exhaustion for these same reasons.

The plaintiffs go on to argue that the Alabama Supreme Court erred in ruling otherwise. The plaintiffs say that the state high court was wrong to distinguish between state-court lawsuits and federal-court lawsuits, because Patsy and Felder already held that Section 1983 preempts state exhaustion requirements in both forums. They contend that the court was also wrong to characterize the state’s exhaustion requirement as “jurisdictional,” because this label alone cannot overcome the preemptive effect of Section 1983. In addition, the plaintiffs assert that the court wrongly interpreted and invoked other Court precedent.

Finally, the plaintiffs argue that the Court should adopt a categorical rule that plaintiffs need not exhaust state administrative remedies before bringing a Section 1983 case in state court, unless Congress explicitly imposed an exhaustion requirement. But even if the Court declines to adopt a categorical rule, the plaintiffs contend that they should still prevail on the strength of their particular case. According to the plaintiffs, that’s because any administrative exhaustion requirement would undermine the very point of their Section 1983 case—that Alabama’s administrative process itself is broken.

The Secretary counters first that Section 1983 does not expressly preempt the state requirement that plaintiffs exhaust administrative remedies. If anything, he says, Section 1983 contemplates a role for administrative processes in protecting against constitutional and statutory violations, by creating liability “in an action at law, suit in equity, or other proper proceeding for redress.” 42 U.S.C. § 1983 (emphasis added). Relatedly, the Secretary also contends that Section 1983 does “not occup[y] the entire field of rules regarding the structure and jurisdiction of state courts,” and therefore does not preempt state administrative processes under a “field” theory. And he says that the state exhaustion requirement does not conflict with Section 1983, because the state requirement “serves to facilitate a public-benefit program and does not defeat liability or single out civil-rights claims.”

Moreover, the Secretary contends that Court precedent supports his preemption arguments. The Secretary asserts that under Court precedent, states may regulate their courts through neutral rules, and that Alabama’s exhaustion requirement is just such a neutral rule. He also claims that the state’s exhaustion requirement is “jurisdictional,” meaning that it goes to the jurisdiction of the state courts, and is not “an outcome-determinative procedural rule or . . . defense on the merits.” The Secretary asserts that “[t]his Court has never applied § 1983 to preempt this sort of standard jurisdictional rule.” The Secretary contends that forcing Alabama state courts to adjudicate claims that are not within their jurisdiction would intrude on a core aspect of state sovereignty and “raise[] grave constitutional problems.”

Finally, the Secretary argues that Patsy and Felder do not support a categorical rule that Section 1983 preempts all state-law exhaustion requirements. He claims that Patsy was not a preemption case at all, and that it only held that courts cannot impose an exhaustion requirement. And he says that Felder involved “a discriminatory and outcome-determinative rule designed to minimize state liability,” not a neutral exhaustion requirement, like Alabama’s. 

SIGNIFICANCE

A Court ruling for the Secretary would require the plaintiffs in this case to exhaust their administrative appeals before filing their Section 1983 claims in state court. But as the plaintiffs point out in their opening brief, such a ruling would be especially paradoxical, given that the plaintiffs are challenging long delays, and even non-decisions, in that very process. In other words, a ruling for the Secretary could leave some of the plaintiffs in limbo until the Department starts moving claims.

Moreover, a ruling for the Secretary could affect the thousands of other Section 1983 claimants around the country by incentivizing states to impose exhaustion requirements and requiring other Section 1983 claimants similarly to satisfy exhaustion requirements before filing their claims in state courts. As the plaintiffs argue, this would undermine the purpose of Section 1983, to hold state officers to account for statutory and constitutional violations without undue delays or impediments imposed by the states.

On the other hand, the Secretary contends that the issue “has little practical significance.” Moreover, the Secretary says that a Court ruling for the plaintiffs could impermissibly intrude on state sovereignty by eviscerating the state’s exhaustion requirement, which, according to the Secretary, is a neutral jurisdictional requirement for state courts.

Finally, the case will resolve a lopsided split in the state high courts. State courts of final resort in Alaska, California, Colorado, Connecticut, the District of Columbia, Iowa, Kansas, Montana, Nevada, Ohio, Wisconsin, and Wyoming have all held that a plaintiff need not exhaust state administrative appeals before filing a Section 1983 claim in state court. Before the Alabama Supreme Court ruled, only the Supreme Court of South Dakota held that Section 1983 plaintiffs must comply with state exhaustion requirements.