Labor & Employment Law Daily Wrap Up, PROCEDURE—U.S.: States may not immunize officials from Section 1983 claims on administrative exhaustion grounds, (Feb 21, 2025)

By Jason Albright, J.D.

The Alabama Supreme Court had found that Section1983 did not preempt the state’s administrative-exhaustion requirement.

In cases in which a state court’s application of a state exhaustion require­ment in effect immunizes state officials from Section 1983 claims challenging delays in the administrative process, state courts may not deny those Section 1983 claims on failure-to-exhaust grounds, the U.S. Supreme Court held in a 5-4 opinion by Justice Kavanaugh. Reversing a decision of the Alabama Supreme Court that had held that Section 1983 did not preempt Alabama’s administrative-exhaus­tion requirement applicable to workers’ allegations that the state unlawfully delayed processing their state unemployment benefits claims, the High Court found that, as its cases have held repeatedly, “a state law that immunizes government conduct otherwise subject to suit under §1983 is preempted, even where the federal civil rights litigation takes place in state court.” Justice Thomas filed the dissenting opinion (Williams v. Reed, No. 23–191 (U.S. Feb. 21, 2025)).

Benefits applications. In the case, 21 Alabama claimants who applied for unemployment benefits argued that the state Department of Labor, in various ways, unlawfully delayed the processing of their claims. One plaintiff alleged that he attempted to appeal his claim to an appeals tribunal but the Department never scheduled a hearing or otherwise acted on his appeal, even after he attempted to follow up numerous times by email and phone calls.

Lawsuit. The claimants sued the Alabama Secretary of Labor in his official capacity in a state circuit court. Invoking 42 U.S.C. § 1983, they asserted, among other things, that the state agency’s delays in processing their benefits claims violated the Due Process Clause of the Fourteenth Amendment and the Social Security Act of 1935.

They sought a court order requiring the Department to (1) “issue an initial nonmonetary decision within the next ten days to every plaintiff who has not yet received a decision”; (2) “provide within ten days a hearing date for each of the plaintiffs who [has] requested a hearing”; (3) schedule such hearings for a date not later than 90 days after the request for the hearing; and (4) pay every approved claim within two days of the date of approval.

Failure to exhaust. The state Secretary of Labor moved to dismiss, arguing, among other things, that the state trial court lacked jurisdiction because the claimants had not satisfied the administrative-exhaustion requirement in Alabama Code § 25–4–95. The state circuit court granted the Secretary’s motion and dismissed the complaint.

Alabama Supreme Court’s decision. The claimants then appealed to the Alabama Supreme Court, which affirmed on failure-to-exhaust grounds. The state high court concluded that under the U.S. Supreme Court’s precedents, Section 1983 did not preempt the state’s administrative-exhaustion requirement.

The U.S. Supreme Court granted certiorari.

Longstanding precedent. Writing for the majority, Justice Kavanaugh initially observed that the Supreme Court has long held that “a state law that immunizes government conduct otherwise subject to suit under §1983 is preempted, even where the federal civil rights litigation takes place in state court.” Felder v. Casey, 487 U. S. 131, 139 (1988). As the Court there explained, states possess “no authority to override” Congress’s “decision to subject state” officials “to liability for violations of federal rights.”

Even if “cloaked in jurisdictional garb.” That principle, Justice Kavanaugh emphasized, bars any state rule immunizing state officials from a “particular species” of federal claims, even if the immunity rule is “cloaked in jurisdictional garb.” Haywood v. Drown, 556 U.S. 729 at 739, 742 (2009).

Catch-22. And here, according to the Court, under Alabama’s exhaustion requirement, state courts cannot review claims of unlawful delays under Section 1983 unless and until the claimants first complete the administrative process and receive a final decision on their claims. “In essence, Alabama has said that to challenge delays in the administrative process under §1983, you first have to exhaust the administrative process. Of course, that means that you can never challenge delays in the administrative process.” That “catch-22,” said Kavanaugh, prevents the claimants from obtaining a merits resolution of their Section 1983 claims in state court and in effect immunizes state officials from those kinds of Section 1983 suits for injunctive relief.

Preempted. Under the Supreme Court’s precedents, observed Kavanaugh, Alabama cannot maintain such an immunity rule. “As this Court’s cases have repeatedly held, ‘a state law that immunizes government conduct otherwise subject to suit under §1983 is preempted, even where the federal civil rights litigation takes place in state court.” Felder v. Casey , 487 U. S. 131, 139 (1988).

The judgment of the Alabama Supreme Court was accordingly reversed and the case remanded.

Dissent. In his dissent, joined by Justices Alito, Gorsuch, and Barrett, Justice Thomas argued that states have “unfettered dis­cretion over whether to provide a forum for §1983 claims in their courts,” and that Alabama’s exhaustion rule does not transgress the limitations the High Court’s precedents have recog­nized.

The case is No. 23–191.

Judge: Kavanaugh, B.

Attorneys: Adam G. Unikowsky (Jenner & Block) for Nancy Williams. Edmund Gerard LaCour Jr., Office of the Attorney General of Alabama, for Fitzgerald Washington, Alabama Secretary of Labor.

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