Two incarcerated plaintiffs brought this class-action lawsuit seeking to obtain the benefits provided under the Coronavirus Aid, Relief, and Economics Security (CARES) Act. The plaintiffs sought to represent a class all people incarcerated in the United States between March 27, 2020 until August 1, 2020 (the date the complaint was filed) who was tax-eligible to receive the benefits. The plaintiffs alleged that the defendants (the United States of America, the US Department of Treasury, the IRS, the Secretary of the Department of Treasury Steven Mnuchin and the Commissioner of Internal Revenue) refused to issue Economic Impact Payments (EIP) to incarcerated people as part of the CARES Act. Brought under the Administrative Procedure Act, the complaint contended that Congress did not exclude incarcerated people from receiving benefits through the CARES Act, and that the IRS did not have a reasonable basis to exclude incarcerated people from the EIP benefit program because they still have tax obligations while incarcerated. The plaintiffs sought attorneys' fees, declaratory judgment that the defendants lacked authority to withhold EIP benefits from incarcerated people, and injunctive relief ordering the defendants to automatically issue EIP benefits to entitled individuals in prison, and to reconsider any filed claim that was denied solely based on the claimant's incarcerated status. Three days after filing the complaint, the plaintiffs also moved for a class-certification and a preliminary injunction declaring the defendants' policy unlawful and ordering EIP benefits to be provided to eligible class members. The plaintiffs were represented by Lieff Cabraser Heimann & Bernstein LLP and Equal Justice Society. After being initially assigned to Judge Charles R. Breyer, the case was reassigned to Judge Phyllis J. Hamilton for all future proceedings.

Judge Hamilton permitted plaintiffs from Galvan v. Mnuchin, No. 1:20-cv-04511 (N.D. Ill.), to intervene, as those parties were seeking class certification of an identical class to the one at issue in this case. On September 24, 2020, Judge Hamilton granted the plaintiffs' motion for preliminary injunction and their motion to certify class. 2020 WL 5702129. The plaintiffs moved for summary judgment five days later, but the defendants subsequently appealed to the Ninth Circuit on October 1 and requested that the district court proceedings be stayed during appeal (Docket No. 20-16915).

The case is ongoing as of October 8, 2020.

Justin Hill - 10/08/2020


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