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Gallarzo v. Ariz. Dep’t of Econ. Sec. - 7/31/2018

Arizona Court of Appeals Division One holds that Department of Economic Security violated claimants’ due process rights by delaying transmission of applications for appeal to court.

A.R.S.§ 41-1883(B) requires the Arizona Department of Economic Security (“DES”) to transmit applications for appeal of disputed benefits claims to the Court of Appeals.  Due to employee misconduct, however, DES failed to do so in hundreds of cases between 2013 and 2016.  Six claimants whose applications for appeal were delayed subsequently alleged that DES had violated their procedural due process rights.

The Court of Appeals agreed.  First, the Court found that all applicants have a property interest in the statutorily-provided adjudicated procedures, and an “often-acute” monetary interest in the determination of their benefit eligibility.  Emphasizing that DES presented no justification for its failures, the Court further found that DES’s failures violated claimants’ due process rights. 

The Court elected to exercise its inherent authority to remedy DES’s constitutional violations.  Among other things, the Court ordered DES to:

  • waive any overpayment interest owed by claimants as a result of DES’s delay;
  • within 30 days, file an updated status report regarding the status of all investigations into the negligence that led to the failures in question, as well as updated copies of all training plans implemented by DES to address the same; and
  • on an ongoing basis, notify the Court of any changes in its training plans or investigations. 

The Court simultaneously issued Administrative Order 2018-05 to effectuate the remedial measures ordered in its opinion.

Judge Swann wrote the opinion; Judges Johnsen and Winthrop joined.

Posted by: Hayleigh S. Crawford

Posted On: 8/20/2018