Sterling v. Feek

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

DAMARIO RASHEED STERLING, No. 24-1296

individually and on behalf of all

D.C. No.

others similarly situated,

3:22-cv-05250-

DGE

Plaintiff - Appellant,

v.

OPINION

CAMI L. FEEK, Commissioner,

Washington State Employment

Security Department, in her individual

and official capacities; SUZAN G.

LEVINE, Former Commissioner,

Washington State Employment

Security Department, in her individual

capacity,

Defendants - Appellees.

Appeal from the United States District Court

for the Western District of Washington

David G. Estudillo, District Judge, Presiding

Argued and Submitted February 6, 2025

Portland, Oregon

Filed September 4, 2025

2 STERLING V. FEEK

Before: Carlos T. Bea, Lucy H. Koh, and Jennifer Sung,

Circuit Judges.

Opinion by Judge Sung

SUMMARY*

Pandemic Emergency Unemployment Compensation

Benefits

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

*

This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

STERLING V. FEEK 3

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.

4 STERLING V. FEEK

COUNSEL

Jillian M. Cutler (argued), Jack N. Miller, and Marc C. Cote,

Frank Freed Subit & Thomas LLP, Seattle, Washington;

Walter M. Smith and Steve E. Dietrich, Smith & Dietrich

Law Offices PLLC, Olympia, Washington; for Plaintiff-

Appellant.

Marsha J. Chien (argued), Deputy Solicitor General; Robert

W. Ferguson, Attorney General; Office of the Washington

Attorney General, Olympia, Washington; Timothy G. Leyh,

Randall T. Thomsen, Ariel A. Martinez, and Erica R.

Iverson, Special Assistant Attorneys General; Bryan Cave

Leighton Paisner LLP, Seattle, Washington; for Defendants-

Appellees.

Daniel F. Johnson, Breskin Johnson & Townsend PLLC,

Seattle, Washington; Rory B. O’Sullivan, Washington

Employment Benefits Advocates PLLC, Seattle,

Washington; for Amicus Curiae Washington Employment

Lawyers Association.

Anne L. Paxton, Unemployment Law Project, Seattle,

Washington, for Amici Curiae Unemployment Law Project,

Oregon Law Center, and National Employment Law Project.

STERLING V. FEEK 5

OPINION

SUNG, Circuit Judge:

This interlocutory appeal arises from a putative class

action against Defendants Cami Feek and Suzan LeVine, the

current and former commissioner, respectively, of the

Washington State Employment Security Department (ESD).

Plaintiff Damario Sterling filed suit under 42 U.S.C. § 1983,

alleging that Defendants unlawfully deprived him and other

unemployed workers of their property interests in

unemployment benefits, including (1) benefits the State

provided under the Washington Employment Security Act,

WASH. REV. CODE § 50.01, et seq., and (2) supplemental

benefits funded by the federal Pandemic Emergency

Unemployment Compensation (PEUC) program. Sterling

alleges that those deprivations occurred without adequate

notice or opportunity to be heard in violation of the

Fourteenth Amendment’s Due Process Clause and the Social

Security Act’s fair hearing requirement, 42 U.S.C.

§ 503(a)(3).

Below, Defendants moved for summary judgment. The

parties agreed that, for Sterling to prevail on his

constitutional and statutory claims, he must have a property

interest in the unemployment benefits. Further, the State

conceded that Sterling has a property interest in benefits

provided under Washington’s Employment Security Act.

The State, however, contended that Sterling had no property

interest in PEUC-funded benefits. The district court agreed

with Defendants on that issue. Although the district court

denied Defendants’ motion on other grounds, it granted

Sterling’s motion requesting that the district court certify an

interlocutory appeal on the question of whether there is a

6 STERLING V. FEEK

constitutionally-protected property interest in PEUC

benefits. A motions panel granted Sterling’s petition for

permission to appeal. For the reasons below, we conclude

that Sterling had a protected property interest in the

supplemental PEUC-funded unemployment benefits, and we

reverse and remand.

I. BACKGROUND

A. Statutory Background

Washington’s regular unemployment benefits program

is part of a federal-state cooperative program. WASH. REV.

CODE Ch. 50.16, § 50.12.180; 42 U.S.C. §§ 501–03. In

operating and administering the program, ESD must comply

with certain federal requirements. See 42 U.S.C. §§ 501–03.

The Social Security Act requires, for example, that

participating states employ administrative methods

“reasonably calculated to insure full payment of

unemployment compensation when due” and provide the

“[o]pportunity for a fair hearing, before an impartial tribunal,

for all individuals whose claims for unemployment

compensation are denied.” Id. § 503(a)(1), (a)(3).

Washington’s Employment Security Act and its

implementing regulations codify under state law the State’s

obligation to provide unemployment benefits to individuals

consistent with the requirements of the Social Security Act.

WASH. REV. CODE § 50.01, et seq.; see also WASH. ADMIN.

CODE § 192-10, et seq.

Washington law entitles eligible individuals to receive

up to 26 weeks of unemployment benefits per year. WASH.

REV. CODE § 50.20.120. If an individual receives more

benefits than they were entitled to receive, ESD may assess

an overpayment. See WASH. ADMIN. CODE § 192-220-015.

Once the agency does so, it may deduct offsets from future

STERLING V. FEEK 7

unemployment benefits to recoup the assessed overpayment.

See WASH. REV. CODE § 50.20.190(1). Before offsetting any

benefits, however, ESD must notify the individual of the

overpayment assessment and explain its reasons for the

assessment. Id. The individual may then appeal any element

of the assessment. Id. § 50.20.190(3); WASH. ADMIN. CODE

§ 192-220-060.

In response to widespread unemployment during the

COVID-19 pandemic, Congress enacted the CARES Act,

which established a supplemental federal-state cooperative

program to extend unemployment benefits. See CARES Act,

Pub. L. No. 116-136, 134 Stat. 281 (2020) (codified at 15

U.S.C. §§ 9001–132). Relevant to this appeal, the Act

created the PEUC program, which provided additional

weeks of unemployment benefits for individuals who had

exhausted their regular unemployment benefits under state

and federal law. 15 U.S.C. §§ 9021, 9025. The program

expired in September 2021. Id. § 9025(g)(2).

Under the CARES Act, State participation in the

supplemental PEUC program was optional. And, if a state

opted in, it retained discretion to end its participation. 15

U.S.C. § 9025(a)(1). If a state chose to participate in the

PEUC program, however, the CARES Act required the state

to agree to “make payments of pandemic emergency

unemployment compensation to individuals who”: (1) “have

exhausted all rights to regular compensation under the State

law or under Federal law with respect to a benefit year”;

(2) “have no rights to regular compensation with respect to

a week under such law or any other State unemployment

compensation law or to compensation under any other

Federal law”; (3) “are not receiving [Canadian

unemployment] compensation”; and (4) “are able to work,

8 STERLING V. FEEK

available to work, and actively seeking work.” Id.

§ 9025(a)(2)(A)–(D).

The Act also required participating states to pay benefits

according to a specific formula. See id. § 9025(a)(4)(A). The

Act specified that the amount “payable to any individual for

any week” was: (1) the amount of his regular unemployment

benefits payable “under the State law for a week of total

unemployment”; (2) the amount of his federal pandemic

unemployment compensation benefits; and (3) the amount,

if any, of his mixed earner unemployment compensation. Id.

§ 9025(a)(4)(A)(i)–(iii). The Act further mandated that the

“conditions of the State law which apply” to regular

unemployment benefits also apply to PEUC benefits,

“including terms and conditions relating to availability for

work, active search for work, and refusal to accept work.”

Id. § 9025(a)(4)(B).

Finally, the Act required participating states to

accomplish any recovery for overpayment of PEUC benefits

through deductions from either PEUC or regular

unemployment benefits “in accordance with the same

procedures as apply to the recovery of overpayments of

regular unemployment benefits paid by the State.” Id.

§ 9025(e)(3)(A). And the Act made any overpayment

determination by a state agency “subject to review in the

same manner and to the same extent as determinations under

the State unemployment compensation law.” Id.

§ 9025(e)(4).

B. Administrative Background

In early 2020, Sterling lost his job as a professional

restorer due to the COVID-19 pandemic, and he applied for

unemployment benefits. ESD approved Sterling’s

application in March 2020 and awarded him $551 in weekly

STERLING V. FEEK 9

benefits. In September 2020, ESD informed Sterling that he

had exhausted all regular unemployment benefits but could

apply for additional benefits funded by the PEUC program.

Sterling applied, and ESD approved his application. The

agency again awarded him $551 per week.

In January 2021, ESD audited the payroll records of

Sterling’s former employer. The agency determined that his

employer had misreported sick pay as wages and failed to

report certain other wages. As a result of this audit, ESD

redetermined Sterling’s weekly benefits and reduced his

award from $551 to $538 per week.

Between January 29 and February 11, 2021, ESD sent

Sterling six different notices about the redetermination,

which asserted two different overpayment amounts and

provided four different deadlines for Sterling to appeal or

respond.

ESD sent four of those notices on January 29. The first

stated that ESD had overpaid Sterling by $52 in March and

April 2020 and informed him that he could appeal that

determination by March 1. The second said that Sterling

“may receive up to $538 each week” and gave Sterling until

March 29 to appeal. The third told Sterling that ESD

“previously denied your benefits based on the information

we had at that time,” and that “[t]his decision replaces the

earlier one.” It asserted that Sterling “might owe [ESD]

$7332[] as a result of this decision,” indicated ESD had

overpaid Sterling between September and December of

2020, and gave a deadline of March 1 to appeal. The final

notice that ESD sent on January 29 was a web notice

informing Sterling that he must provide ESD certain

information by February 8.

10 STERLING V. FEEK

The next day, January 30, ESD sent Sterling an

overpayment waiver and instructed him that he must respond

by February 8. On February 11, ESD informed Sterling that

“[w]e denied your unemployment benefits starting Mar[ch]

15 2020 until the reason for our decision no longer exists,”

that he “must pay back $7332,” and that he had until March

15 to appeal.

In February 2021, Sterling filed an appeal with ESD.

While that appeal was pending, ESD began reducing

Sterling’s ongoing benefits to offset the disputed

overpayment assessments.

In August 2021, an administrative law judge (ALJ)

decided Sterling’s appeal. The ALJ found that ESD’s letters:

(1) failed to “provide adequate notice to the claimant the

reasons why benefits were denied or the claim reevaluated”;

(2) failed to “inform the parties about the facts that led up to

the Department’s determination” or “the statute or regulation

on which it based its decision”; and (3) failed to provide

“adequate notice of the basis for the Department’s decision

to deny, reduce, or reevaluate benefits.” Accordingly, the

ALJ concluded that Sterling was neither “subject to a denial

of benefits” nor “liable for an overpayment of benefits.” The

ALJ remanded the matter to ESD to issue a new

redetermination letter.

By the time of the ALJ’s order, ESD had offset at least

$6,994 of Sterling’s ongoing PEUC benefits. 1 After the

ALJ’s order, the agency reimbursed Sterling the amounts it

had offset. ESD’s online system, the Unemployment Tax

and Benefits Program (UTAB), continues to indicate that

1

As the district court noted, Defendants describe the precise amount

offset as both $6,994 and $6,995.

STERLING V. FEEK 11

Sterling owes ESD $339. That $339 is the remaining amount

that ESD determined Sterling owed for the alleged

overpayments but had not yet offset at the time of the ALJ’s

order. 2

Sterling stopped receiving unemployment benefits in

September 2021.

C. Procedural History

In April 2022, Sterling and other claimants filed this

putative class action against Commissioner Feek, later

adding former Commissioner LeVine to the suit. Following

the dismissal of the other named plaintiffs, Sterling remains

the only named plaintiff.

The operative Second Amended Complaint (SAC)

alleges that Defendants deprived Sterling and other

unemployed workers of their property interests in regular

and PEUC-funded unemployment benefits in violation of the

Due Process Clause of the Fourteenth Amendment and the

fair hearing requirement of the Social Security Act. The SAC

states that ESD sent Plaintiffs “confusing, untimely, and

threatening overpayment notices stating that they owed

thousands of dollars to the government.” It further alleges

that ESD routinely failed to provide “adequate prior notice

or opportunity to be heard” before redetermining benefits

and assessing overpayments.

The SAC seeks damages, injunctive relief, and

declaratory relief. It alleges that Plaintiffs “suffered damages

when they were subject to offset of their continuing claims

for unemployment benefit and/or . . . required to repay

2

ESD represents that it would have credited Sterling’s account for the

balance owed but instead placed a “hold” on his account because of this

litigation.

12 STERLING V. FEEK

amounts to ESD that arose from untimely or deficient

overpayment determinations like that issued to . . . Sterling.”

The SAC further states that “ESD will likely continue to

provide Plaintiffs . . . with untimely overpayment

assessments and/or overpayment assessments lacking

factual and legal explanations for the liability, and will cause

claimants to suffer losses through offsets or other collections

of their property regardless of whether they file a timely

appeal.” As a result, the SAC alleges, “Plaintiffs will

continue to suffer irreparable injury until Defendants’

unlawful and/or unconstitutional actions are enjoined and

declared to be unlawful and/or unconstitutional.”

After the district court determined that the Social

Security Act claim was governed by the “same standards

applicable to constitutional due process,” Defendants moved

for summary judgment on the claims of Sterling, the only

remaining plaintiff. They conceded that Sterling had a

constitutionally-protected property interest in his regular

unemployment benefits. But they asserted Sterling’s claims

still fail as a matter of law based on two arguments: (1) there

is no constitutionally-protected property interest in PEUC

benefits; and (2) even if otherwise, Sterling received

adequate due process. Sterling opposed the motion on both

grounds.

The district court agreed with Defendants’ first

argument: it concluded that although regular unemployment

benefits give rise to a protected property interest, PEUC

benefits do not because “the PEUC program may be

terminated at the discretion of the States receiving them.”

The court therefore held that Sterling’s claims failed to the

extent they were “based on funds distributed under the

PEUC program.”

STERLING V. FEEK 13

However, the district court still denied Defendants’

motion for summary judgment because it found a genuine

factual dispute regarding whether the offsets at issue related

to Sterling’s PEUC-funded or regular unemployment

benefits, and viewing the record in the light most favorable

to Plaintiff, the offsets included some regular state benefits.

Because “even a temporary deprivation of Sterling’s regular

unemployment benefits constituted a deprivation of a

constitutionally-protected property interest,” and there was

also a genuine factual dispute regarding whether Sterling

received adequate due process before the State offset his

benefits, the district court concluded that Defendants were

not entitled to summary judgment on Sterling’s claims as a

matter of law.

Sterling moved for reconsideration of the district court’s

ruling that he did not have a property interest in PEUC

benefits and, in the alternative, requested certification for

interlocutory appeal. Defendants sought reconsideration of

the district court’s finding that ESD may have offset

Sterling’s regular employment benefits. The district court

denied both motions for reconsideration, but it certified for

interlocutory appeal the question of whether there is a

constitutionally-protected property interest in PEUC

benefits. A motions panel then granted Sterling’s petition for

permission to appeal.

II. JURISDICTION

A. Article III Jurisdiction

Article III of the United States Constitution confers

limited authority on federal courts to hear only active cases

or controversies brought by plaintiffs who demonstrate

standing. Spokeo, Inc. v. Robins, 578 U.S. 330, 337–38

(2016). We have an “independent obligation” to ensure that

14 STERLING V. FEEK

a case falls within our Article III jurisdiction by confirming

that standing exists and that the issues presented are not

moot. Summers v. Earth Island Inst., 555 U.S. 488, 499

(2009); In re Burrell, 415 F.3d 994, 997 (9th Cir. 2005).

Accordingly, we exercise our discretion to address

Defendants’ uncertified argument that Sterling’s claims are

nonjusticiable either because he lacks standing or because

his claims are mooted by the end of the PEUC program.

i. Standing

“The irreducible constitutional minimum of [Article III]

standing contains three elements.” Lujan v. Defenders of

Wildlife, 504 U.S. 555, 560 (1992). “The plaintiff must have

(1) suffered an injury in fact, (2) that is fairly traceable to the

challenged conduct of the defendant, and (3) that is likely to

be redressed by a favorable judicial decision.” Spokeo, 578

U.S. at 338. The plaintiff, as the party invoking federal

jurisdiction, bears the burden of establishing standing as to

each form of relief sought. Friends of the Earth, Inc. v.

Laidlaw Env’t Servs. (TOC), Inc., 528 U.S. 167, 185 (2000).

Here, Sterling seeks both damages and prospective relief.

Sterling has standing to seek damages. Defendants do

not seriously contend otherwise. It is undisputed that

Sterling was injured when ESD offset his benefits to account

for alleged overpayments, and that injury was caused by

ESD’s challenged conduct. Sterling seeks actual, exemplary,

and nominal damages.

We next consider Sterling’s standing to bring claims for

injunctive and declaratory relief. We analyze standing as to

those claims together because “a plaintiff [who] has standing

to seek injunctive relief . . . also has standing to seek a

declaratory judgment.” Seattle Pac. Univ. v. Ferguson, 104

F.4th 50, 62 (9th Cir. 2024) (quoting Clark v. City of

STERLING V. FEEK 15

Lakewood, 259 F.3d 996, 1007 (9th Cir. 2001), as amended

(Aug. 15, 2001)).

Defendants contest Sterling’s standing to seek

prospective relief on two grounds. We begin with the more

technical argument. Defendants assert that ESD only ever

applied offsets to Sterling’s PEUC benefits and Sterling

therefore lacks standing to seek prospective relief related to

ESD’s procedures for administering regular unemployment

benefits. In their view, even if the alleged overpayments

stemmed from ESD’s payments of regular employment

benefits to Sterling, Defendants couldn’t have possibly

deprived Sterling of his interest in his regular employment

benefits because they only ever made deductions to his

PEUC benefits. We are unconvinced that this distinction

matters. If ESD deprived Sterling of money that he would

have otherwise received to recover alleged overpayments of

regular unemployment benefits, the effect was to deprive

Sterling of his regular unemployment benefits.

In any case, Sterling challenges ESD’s procedures for

redetermining and offsetting unemployment benefits—

procedures that ESD used for both regular and PEUC

benefits. Moreover, Defendants do not dispute that ESD

continues to use these same procedures for regular

unemployment benefits, even after the PEUC program

ended. The injury is the same whether ESD redetermines,

reduces, or applies offsets against PEUC or regular

unemployment benefits. See Armstrong v. Davis, 275 F.3d

849, 867 (9th Cir. 2001) abrogated on other grounds by

Johnson v. California, 543 U.S. 499, 504–05 (2005)

(holding that plaintiffs who were injured by parole board

policy of failing to accommodate disabilities “all established

the same injury,” even though plaintiffs suffered from

different disabilities and required different

16 STERLING V. FEEK

accommodations). Accordingly, we are not persuaded that

the disputed factual issue of whether ESD offset Sterling’s

PEUC benefits or regular unemployment benefits affects

Sterling’s standing to seek prospective relief from ESD’s

procedures for redetermining and offsetting unemployment

benefits.

We turn to Defendants’ argument that Sterling lacks

standing to seek prospective relief because he is no longer

receiving unemployment benefits. To establish standing for

prospective relief, Sterling must show there is a “sufficient

likelihood that he will again be wronged in a similar way.”

City of Los Angeles v. Lyons, 461 U.S. 95, 111 (1983). To

meet this requirement, a plaintiff generally must show that

the threat of injury is “actual and imminent, not conjectural

or hypothetical.” Earth Island Inst., 555 U.S. at 493. Where,

as here, the plaintiff was injured by an alleged violation that

occurred in the past, he must demonstrate that he is

realistically threatened by a repetition of the violation. Still,

he need not show that the likelihood of repetition is “high.”

Melendres v. Arpaio, 695 F.3d 990, 998 (9th Cir. 2012). He

can meet this requirement, for example, by “demonstrat[ing]

that the harm is part of a pattern of officially sanctioned

behavior, violative of the plaintiff[’s] federal rights.”

Armstrong, 275 F.3d at 861 (cleaned up).

Further, a plaintiff seeking injunctive relief for a

procedural injury is held to a “less demanding standard.”

Ochoa v. Pub. Consulting Grp., 48 F.4th 1102, 1107 (9th

Cir. 2022). “The person who has been accorded a procedural

right to protect his concrete interests can assert that right

without meeting all the normal standards for redressability

and immediacy.” Lujan, 504 U.S. at 572 n.7. A plaintiff

establishes “procedural standing” by showing that he was

accorded a procedural right to protect his interests, and that

STERLING V. FEEK 17

he has concrete interests that are threatened. Ochoa, 48 F.4th

at 1107.

Sterling has a “procedural right to due process” under the

Fourteenth Amendment and 42 U.S.C. § 503. See id. That

right protects a concrete interest—Sterling’s interest in

receiving unemployment benefits for which he qualifies

under state and federal law. And the record supports the

conclusion that his concrete interest is “threatened.” Id.

(quoting City of Las Vegas v. F.A.A., 570 F.3d 1109, 1114

(9th Cir. 2009)). Defendants’ own records show that Sterling

has filed claims for state unemployment benefits at least

three times. Consequently, Sterling can reasonably be

expected to seek unemployment benefits again in the future.

Additionally, Defendants do not dispute that Sterling’s

injury stems from Defendants’ ongoing practices. Under

these circumstances, the risk is “‘sufficiently real’ to meet

the low threshold required to establish procedural standing.”

Id. (quoting Yesler Terrace Cmty. Council v. Cisneros, 37

F.3d 442, 446 (9th Cir. 1994)) (holding plaintiff had standing

to seek prospective relief from alleged procedural due

process violations even though her claimed “future harms

[we]re speculative”).

ii. Mootness

“A case becomes moot—and therefore no longer a Case

or Controversy for purposes of Article III—when the issues

presented are no longer ‘live’ or the parties lack a legally

cognizable interest in the outcome.” Already, LLC v. Nike,

Inc., 568 U.S. 85, 91 (2013) (quotation marks omitted). “The

requisite personal interest that must exist at the

commencement of the litigation (standing) must continue

throughout its existence (mootness).” U.S. Parole Comm’n

v. Geraghty, 445 U.S. 388, 397 (1980) (quoting Henry P.

18 STERLING V. FEEK

Monaghan, Constitutional Adjudication: The Who and

When, 82 YALE L.J. 1363, 1384 (1973)). But mootness is

more complex than simply “standing set in a time frame,”

because it is more flexible and has exceptions that do not

apply to standing. Laidlaw, 528 U.S. at 189–92; Karuk Tribe

of Cal. v. U.S. Forest Serv., 681 F.3d 1006, 1017 (9th Cir.

2012).

Defendants assert that Sterling’s claims for prospective

relief are rendered moot by the expiration of the PEUC

program. But Sterling seeks prospective relief addressing

ESD’s procedures for denying, assessing overpayments on,

and reducing awards of unemployment benefits—

procedures that ESD continues to use even though the PEUC

program has ended. Because he challenges the procedures

ESD generally uses to administer unemployment benefits—

not any procedures specific to PEUC benefits—his

prospective relief claims are not mooted by the end of the

PEUC program.

In sum, we have Article III jurisdiction over Sterling’s

claims.

B. § 1292(b) Jurisdiction

A non-final order may be certified for interlocutory

appeal where there is “a controlling question of law as to

which there is substantial ground for difference of opinion”

and “an immediate appeal from the order may materially

advance the ultimate termination of the litigation.” 28 U.S.C.

§ 1292(b). Although we give deference to the ruling of the

motions panel, we have an independent duty to confirm that

jurisdiction is proper. See Kuehner v. Dickinson & Co., 84

F.3d 316, 318–19 (9th Cir. 1996). Further, “even when this

court has interlocutory jurisdiction, it is free to decline to

hear some or all the issues the parties raise on appeal.” ICTSI

STERLING V. FEEK 19

Oregon, Inc. v. Int’l Longshore & Warehouse Union, 22

F.4th 1125, 1131 (9th Cir. 2022).

Whether there is a constitutionally-protected property

interest in PEUC benefits presents a question of law that

materially affects the outcome of this litigation. As the

district court recognized, we have not previously considered

the issue presented: when a state opts into a federal-state

benefit program but retains discretion to withdraw, whether

that discretion negates eligible recipients’ property interest

in the benefits. We also agree with the district court that

“fair-minded jurists might reach contradictory conclusions”

on this “novel legal issue[].” Reese v. BP Exploration

(Alaska) Inc., 643 F.3d 681, 688 (9th Cir. 2011). Reviewing

the question at this juncture would also resolve an issue

fundamental to Sterling’s individual claims and clarify

which putative class members are eligible for relief. Because

“resolution of the question may appreciably shorten the time,

effort, or expense of conducting the district court

proceedings,” interlocutory review materially advances the

litigation. ICTSI Oregon, 22 F.4th at 1131 (quotation marks

and citation omitted). Accordingly, we have jurisdiction

under § 1292(b) to review the certified question, and

interlocutory review is appropriate.

III. PROPERTY INTEREST IN PEUC BENEFITS

The certified question is whether Sterling has a property

interest in the PEUC benefits that ESD withheld as offsets.

Although the parties agree that Washington’s participation

in the PEUC program was optional, they dispute whether the

State’s choice to participate in the program, under the terms

imposed on their participation by federal law and contract,

created a property interest for Sterling in receiving PEUC

20 STERLING V. FEEK

benefits. That is a question of law, which we review de novo.

See Krug v. Lutz, 329 F.3d 692, 695 (9th Cir. 2003).

As noted, the district court concluded that Sterling had

no property interest in PEUC benefits because the CARES

Act allowed the State to end its participation, and thus

Sterling’s PEUC benefits, at its discretion. Sterling argues

that the CARES Act nonetheless gave rise to a property

interest because it required every state that opted to

participate in the PEUC program, including Washington, to

abide by various conditions that created benefit entitlements

for the duration of the state’s participation in the program.

For the reasons below, we agree with Sterling that he had a

protected property interest in PEUC benefits.

A. Statutes mandating the award of government

benefits based on objective eligibility criteria create

property interests.

“The Fourteenth Amendment’s procedural protection of

property is a safeguard of the security of interests that a

person has already acquired in specific benefits. These

interests—property interests—may take many forms.” Bd. of

Regents of State Colleges v. Roth, 408 U.S. 564, 576 (1972).

Property interests “are not created by the Constitution.

Rather they are created and their dimensions are defined by

existing rules or understandings that stem from an

independent source such as state law—rules or

understandings that secure certain benefits and that support

claims of entitlement to those benefits.” Id. at 577. A person

has a protected property interest in a government benefit

when the individual seeking the benefit has “a legitimate

claim of entitlement to it.” Id. A legitimate claim of

entitlement exists when there are conditions under which a

benefit must be granted or there are limited conditions under

STERLING V. FEEK 21

which the benefit can be denied. See, e.g., Armstrong v.

Reynolds, 22 F.4th 1058, 1068 (9th Cir. 2022) (“[A] law

establishes a property interest in employment if it restricts

the grounds on which an employee may be discharged.”);

Doyle v. City of Medford, 606 F.3d 667, 673 (9th Cir. 2010)

(“[A] statute must contain particularized standards or criteria

to create a property interest.” (quotation marks omitted)). In

contrast, “a benefit is not a protected entitlement if

government officials may grant or deny it in their

discretion.” Town of Castle Rock v. Gonzales, 545 U.S. 748,

756 (2005).

Property interests can be conferred in many ways,

including by “statute, regulation, contract, or established

practice.” Reynolds, 22 F.4th at 1067; accord. Perry v.

Sindermann, 408 U.S. 593, 601 (1972) (“‘[P]roperty’

interests subject to procedural due process protection are not

limited by a few rigid, technical forms.”). If a statute,

regulation, or contract uses “mandatory language” that

requires the government to provide benefits based on

“specific objective eligibility criteria,” the resulting

entitlement is constitutionally protected. Griffeth v. Detrich,

603 F.2d 118, 121 (9th Cir. 1979); see also, e.g., Foss v.

Nat’l Marine Fisheries Serv., 161 F.3d 584, 588 (9th Cir.

1998) (“The Ninth Circuit has long held that applicants have

a property interest protectible under the Due Process Clause

where the regulations establishing entitlement to the benefit

are, as here, mandatory in nature.”); Wedges/Ledges of Cal.,

Inc. v. City of Phoenix, 24 F.3d 56, 63 (9th Cir. 1994) (A

statute that “significantly constrain[s] the discretion” of the

awarding official creates an “‘articulable standard’ sufficient

to give rise to a legitimate claim of entitlement.” (citation

omitted)); Jacobson v. Hannifin, 627 F.2d 177, 180 (9th Cir.

1980) (“A property interest may be created if ‘procedural’

22 STERLING V. FEEK

requirements are intended to operate as a significant

substantive restriction on the basis for an agency’s

actions.”).

Although we have not previously considered whether

unemployment benefits are constitutionally protected, other

circuits have consistently held that eligible unemployed

workers have a property interest in unemployment benefits

funded by the federal government and administered by the

states. See, e.g., Cahoo v. SAS Analytics, Inc., 912 F.3d 887,

900 (6th Cir. 2019) (“Recipients of unemployment

compensation have constitutionally-protected property

interests in unemployment benefits.”); Berg v. Shearer, 755

F.2d 1343, 1345 (8th Cir. 1985) (“Unemployment benefits

are a property interest protected by the due process

requirements of the fourteenth amendment.”); Ross v. Horn,

598 F.2d 1312, 1317 (3d Cir. 1979) (“[A]ppellants certainly

have a property right in receiving unemployment benefits to

which they are entitled by statute.”). We see no basis for

disagreeing with our sister circuits, and Defendants offer

none. To the contrary, Defendants concede that the State’s

longstanding unemployment benefits program creates a

property interest in “regular” unemployment benefits.

Defendants contend only that there is no protected property

interest in the supplemental PEUC unemployment benefits.

We disagree.

B. The CARES Act mandates the award of PEUC

benefits based on objective eligibility criteria.

The CARES Act “significantly constrain[s] the

discretion” of state agencies in administering PEUC

benefits. Wedges/Ledges, 24 F.3d at 63. By participating in

the PEUC program, Washington State contractually bound

itself to the provisions of the CARES Act. See 15 U.S.C.

STERLING V. FEEK 23

§ 9025(a)(1)–(2). The Act uses “mandatory language” that

requires participating states to award PEUC benefits to

individuals who meet “specific objective eligibility criteria.”

Griffeth, 603 F.2d at 121.

For example, the Act mandates that any state’s

agreement to participate in the PEUC program “shall

provide that the State agency of the State will make

payments of pandemic emergency unemployment

compensation to individuals who” satisfy certain

requirements. 15 U.S.C. § 9025(a)(2) (emphasis added).

Those requirements, in turn, are “objective” and “carefully

circumscribed.” Foss, 161 F.3d 587–88. The Act requires a

state to pay benefits to individuals who: (1) “have exhausted

all rights to regular compensation under the State law or

under Federal law with respect to a benefit year”; (2) “have

no rights to regular compensation with respect to a week

under such law or any other State unemployment

compensation law or to compensation under any other

Federal law”; (3) “are not receiving [Canadian

unemployment] compensation”; and (4) “are able to work,

available to work, and actively seeking work.” Id.

§ 9025(a)(2)(A)–(D).

The Act specifies a mandatory formula to calculate those

payments. The amount of PEUC benefits “payable to any

individual for any week of total unemployment shall be

equal to”: (1) the amount of his regular unemployment

benefits payable “under the State law for a week of total

unemployment”; (2) the amount of his federal pandemic

unemployment compensation benefits; and (3) the amount,

if any, of his mixed earner unemployment compensation. Id.

§ 9025(a)(4)(A)(i)–(iii) (emphasis added).

24 STERLING V. FEEK

The Act also constrains the ability of states to recover

overpayments. It provides: “No repayment shall be required,

and no deduction shall be made, until a determination has

been made, notice thereof and an opportunity for a fair

hearing has been given to the individual, and the

determination has become final.” Id. § 9025(e)(3)(B). The

Act further provides: “Any determination by a State agency

under this section shall be subject to review in the same

manner and to the same extent as determinations under the

State unemployment compensation law, and only in that

manner and to that extent.” Id. § 9025(e)(4) (emphasis

added).

Finally, although states may terminate their participation

in the PEUC program, they may only do so “upon providing

30 days’ written notice to the Secretary.” Id. § 9025(a)(1). In

other words, even if ESD had terminated its participation in

the program (which it did not), it still would have been

obligated to pay PEUC benefits for 30 days after sending its

termination notice.

Because the CARES Act uses “mandatory language” and

establishes “definite eligibility criteria” that “greatly narrow

the discretion of [participating states]” and “create legitimate

expectancies of aid receipt,” we conclude that

unemployment benefits funded by the PEUC program give

rise to a constitutionally-protected property interest.

Griffeth, 603 F.2d at 122.

C. Defendants wrongly focus on the discretion to

participate in the PEUC program rather than the

discretion to award benefits.

Benefits provided by federal-state cooperative programs

can create property interests even where state participation

in the program is voluntary. For example, the Supreme Court

STERLING V. FEEK 25

has recognized that qualified individuals have a property

interest in receiving food stamps, even though state

participation in the food stamp program was (and continues

to be) voluntary. Atkins v. Parker, 472 U.S. 115, 128 (1985);

7 U.S.C. § 2013 (1977). Likewise, we have held that

individuals who were the primary intended beneficiaries of

the Section 8 housing program had a protected property

interest in Section 8 benefits, even though housing owners’

participation in the program was voluntary. Ressler v.

Pierce, 692 F.2d 1212, 1215–16, 1222 (9th Cir. 1982). And

the Eighth Circuit recognized that the Medicaid Act creates

a constitutionally protected property interest for qualifying

individuals, even though state “participation in Medicaid is

voluntary, [because] states that choose to participate must

comply with the requirements for state plans.” Pediatric

Specialty Care, Inc. v. Ark. Dep’t of Hum. Servs., 364 F.3d

925, 928 n.2, 930 (8th Cir. 2004).

Accordingly, the relevant inquiry is not whether states

have discretion to participate in the PEUC program, but

rather whether states have “open-ended discretion[]” to

award PEUC benefits. Wedges/Ledges, 24 F.3d at 63; see

also Groten v. California, 251 F.3d 844, 850 (9th Cir. 2001)

(real estate appraiser had protected property interest in

reciprocal license despite state’s ability to terminate

underlying reciprocal agreement because state statute

“significantly restrict[ed] the discretion” of the awarding

agency).

As explained above, Washington did not have open-

ended discretion to award and recoup PEUC benefits.

Notwithstanding the Act’s mandatory provisions and

objective criteria, Defendants argue that beneficiaries have

no property interest because the Act “granted Washington

unlimited discretion to decide whether to participate in the

26 STERLING V. FEEK

PEUC program and expressly granted Washington unilateral

authority to withdraw.” Defendants offer no controlling

authority for the proposition that a state’s discretion to

decide whether to participate in a benefit program precludes

the creation of any property interest in the benefits

administered under the program. Instead, like the district

court, Defendants rely solely on unpublished, out-of-circuit

district court decisions. Those cases, and Defendants’

position, cannot be reconciled with the longstanding

precedents regarding comparable benefit programs

discussed above. Intended beneficiaries, including Sterling,

have a constitutionally-protected property interest in PEUC

benefits, and we reverse the district court’s contrary ruling.

Finally, we address Defendants’ argument that the

PEUC program did not create a constitutionally-protected

property interest because it provided “a temporary benefit on

an emergency basis.” The “temporary” and “emergency”

nature of the PEUC program does not negate the fact that

beneficiaries had a legitimate claim of entitlement to the

PEUC benefits for the duration of the state’s participation in

that program. Because the CARES Act required the state to

administer the PEUC-funded benefits under the same “terms

and conditions” as “apply to claims for regular

[unemployment] compensation” throughout the state’s

participation in the PEUC program, 15 U.S.C.

§ 9025(a)(4)(B), Defendants’ discretion in administering the

PEUC benefits, like their discretion in administering regular

unemployment benefits, was “significantly constrain[ed],”

Wedges/Ledges, 24 F.3d at 63. The State’s participation in

the PEUC program therefore gave rise to a protected

property interest for eligible individuals like Sterling.

STERLING V. FEEK 27

IV. DUE PROCESS

Defendants ask that we reach beyond the discrete,

certified question of law and “direct the district court to enter

summary judgment in [their] favor” because, in their view,

ESD provided Sterling with adequate due process. We

decline to do so.

“[I]n seeking interlocutory review of issues not

certified,” an appellee is “well-advised” to file a cross-

petition under Federal Rule of Appellate Procedure 5(b)(2).

Reese, 643 F.3d at 689. Defendants did not do so here. Their

“failure to do so and election to raise an issue only in [their]

answering brief disadvantages [Sterling], who [was] unable

to anticipate presciently and to address adequately the issue

in [his] opening brief.” Id. The absence of a Rule 5(b)(2)

cross-petition in such circumstances also “risks offending

the party presentation principle.” Id. at 689–90; see also

Swint v. Chambers Cnty. Comm’n, 514 U.S. 35, 49–50

(1995) (“[L]oosely allowing pendent appellate jurisdiction

would encourage parties to parlay” interlocutory orders into

“multi-issue interlocutory appeal tickets.”).

Further, Defendants do not argue that the question of

whether Sterling received due process “would independently

merit interlocutory review.” Reese, 643 F.3d at 689. Indeed,

Defendants’ actions below indicate that it would not: When

Defendants moved for reconsideration of the district court’s

order denying their summary judgment motion, they did not

ask the district court to revisit its conclusion that, “[i]n

weighing the Matthews factors, and when viewing the facts

in the light most favorable to Sterling, . . . Defendants have

failed to establish they are entitled to dismissal of [Sterling’s

due process claim] as a matter of law.” “That [Defendants]

did not find the district court’s alleged error on th[is] ruling[]

28 STERLING V. FEEK

so plain as to seek reconsideration counsels against our

reviewing [it] on interlocutory appeal.” Reese, 643 F.3d at

689. We therefore decline to reach this uncertified issue.

CONCLUSION

For these reasons, we conclude that Sterling’s claims are

justiciable. We review and reverse the district court’s ruling

that Sterling had no constitutionally-protected property

interest in the PEUC benefits. We decline to reach

Defendants’ uncertified due process argument.

REVERSED AND REMANDED.