Motion For Contempt - DETR

FILED
Electronically
CV20-00755
2020-11-19 06:45:48 PM
Jacqueline Bryant
3795 Clerk of the Court
1 Mark R. Thierman, Nev. Bar No. 8285 Transaction # 8170948 : yviloria
mark@thiermanbuck.com
2 Joshua D. Buck, Nev. Bar No. 12187
josh@thiermabuck.com
3 Leah L. Jones, Nev. Bar No. 13161
leah@thiermanbuck.com
4 Joshua R. Hendrickson, Nev. Bar. No. 12225
Joshh@thiermanbuck.com
5 THIERMAN BUCK LLP
7287 Lakeside Drive
6 Reno, Nevada 89511
Tel. (775) 284-1500
7 Fax. (775) 703-5027
8 Attorneys for Plaintiffs
9 IN THE SECOND JUDICIAL DISTRICT COURT OF
10 THE STATE OF NEVADA IN AND FOR THE
Email info@thiermanbuck.com www.thiermanbuck.com
COUNTY OF WASHOE
11
(775) 284-1500 Fax (775) 703-5027
12 Case No.: CV20-00755

THIERMAN BUCK LLP
AMETHYST PAYNE, IRIS PODESTA-

7287 Lakeside Drive
Reno, NV 89511
13 MIRELES, ANTHONY NAPOLITANO,

ISAIAH PAVIA-CRUZ, VICTORIA PLAINTIFFS’-PETITIONERS’ REPLY
14 IN SUPPORT OF MOTION
WAKED, CHARLES PLOSKI, FOR CONTEMPT
15 DARIUSH NAIMI, TABITHA ASARE,
SCOTT HOWARD, RALPH NRS 34.290
16 WYNCOOP, ELAINA ABING, and
WILLIAM TURNLEY behalf of
17
themselves and all others similarly
18 situated,
Plaintiffs-Petitioners,
19
v.
20
STATE OF NEVADA ex rel NEVADA
21 DEPARTMENT OF EMPLOYMENT,
TRAINING AND REHABILITATION
22 (DETR) HEATHER KORBULIC in her
23 official capacity only as Nevada Director of
Employment, Training and Rehabilitation,
24 DENNIS PEREA in his official capacity as
Deputy Director of DETR, and KIMBERLY
25 GAA in her official capacity only as the
26 Administrator for the Employment Security
Division (ESD); and DOES 1-100, inclusive,
27
Defendants-Respondents
28
0
Plaintiffs’-Petitioners’ Reply In Support Of Motion For Contempt
1 I. INTRODUCTION
2 Defendants (“Defendants” or “DETR1”) have admitted that “[a]s of August 24, 2020,
3 125,409 PUA claimants had received payment at some point.”2 DETR also admits that 13,068
4 were not paid during the week of 8/15/20 for reasons other than failure to file a weekly claim
5 and/or excess earnings. Id. DETR asserts that as of that date some 12,044 have clear and
6 convincing evidence of fraud. Id. Yet when DETR actually did an audit of 3,500 persons, not a
7 single one of the 3,500 claimants DETR reviewed for “rampant” fraud were deemed fraudulent,
8 and DETR asked its vendor to “process them for payment.”3 Thus, nearly 9,500 claimants had a
9 legal right for payments to continue until they were given an opportunity to be heard but had
10 payments stopped, have yet to receive an opportunity to be heard, and there is no indication that
11 payments resumed in direct contempt of Court. The United Sates Department of Labor (“DOL”)
(775) 284-1500 Fax (775) 703-5027
12 UIPL 01-16 dated October 1, 2015 at p. 6, § (i) “Requirements for making a Determination of
THIERMAN BUCK LLP
7287 Lakeside Drive
Fraud” demands that a state agency make “contact with the individual, inform him or her of the
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13
14 conflict, and allow an opportunity for rebuttal.” 4 The DOL further forbids the state to use an
15 “automated system” to make determinations. Id.
16 DETR has not even attempted to provide this Court with an explanation, let alone an
17 update through a supplemental response of how many people are captured under the Court’s
18
19 1
When Plaintiffs first filed their lawsuit on 5/12/20, the named Defendants were State of
20 Nevada/DETR, Heather Korbulic in her official capacity only as Director of DETR, Kimberly
Gaa in her official capacity only as Administrator for the Employment Security Division and
21
DOES 1-100. Ms. Korbulic took over for previous interim Director Tiffany Tyler-Garner, who
22 was appointed by Governor Sisolak 1/17/20 but resigned in April 2020. Ms. Korbulic resigned
6/19/20. Ms. Gaa was placed on extended leave with no reason given on 9/4/20. Previous Deputy
23 Administrator of the Employment Security Division, Jeffrey Frischmann, joined Elisa Cafferata
on 9/4/20 to take over the leadership of DETR. See https://www.ktnv.com/13-investigates/detr-
24
to-announce-leadership-changes-in-the-coming-days-insiders-say-a-top-administrator-is-out.
25 2
See Exhibit 1 to Defendants’ 8/31/20 Opposition, Declaration of David Schmidt, ¶ 3.
26 3
See Exhibit 2 to Defendants’ 8/31/20 Opposition, Declaration of Brian Bracken, ¶¶ 9-10.
27 4
Exhibit 1 attached to the Declaration of Leah Jones, ¶ 2, “UIPL 01-16” dated October
28 1, 2015 at p. 6, § (i) and discussed further infra at § D. The DOL affirmed UIPL 01-16 in UIPL
16-20 Change 2, dated July 21, 2020 at p. I-10. UIPL 16-20 Change 2 is attached as Exhibit 8.
1
1 Order, how many of the 9,500 still remain unpaid, why they remain so, and when or if the original
2 3,500 were ever actually paid.
3 Plaintiffs’ Counsel continues to receive hundreds of weekly communications from
4 claimants who had payments start then stop even though they have: (a) continued to file a weekly
5 claim; or (b) had no excess earnings or any earnings whatsoever; or (c) have no clear and
6 convincing evidence of fraud; or (d) have not had an opportunity to be heard by an adjudicator
7 of any sort prior to payments being stopped; or (e) had a diminution in work and were denied
8 solely due to the date of work stoppage being prior to March 2020.
9 In addition, DETR is now unlawfully denying benefits to claimants who have received at
10 least one payment, those payments were stopped without any opportunity for claimants to be
11 heard, and now the claimants are being disqualified and/or are deemed to have “overpayments.”5
(775) 284-1500 Fax (775) 703-5027
12 It is business as usual for DETR because these claimants have similarly been denied the
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7287 Lakeside Drive
opportunity to be heard prior to benefits being stopped once started. The only appeal mechanism
Reno, NV 89511
13
14 claimants are provided is through DETR’s Web portal—claimants cannot appeal telephonically
15 or through the U.S. mail. Adding insult to injury, when these claimants attempt to appeal, they
16 are brazenly and heartlessly informed they “do not have the privilege to perform this action.”6
17 These claimants must be covered under the Court’s Order as well.
18 Clearly, DETR continues to follow its inhumane and unlawful edict of denying benefits
19 to eligible Nevada citizens for any and all reasons, whether legal or not, as opposed to providing
20 struggling eligible Nevada claimants a means in which they can promptly receive lifesaving
21 benefits mandated by Congress under the CARES Act. As set forth in both Plaintiffs’ motions
22 for contempt and further updated herein, DETR has been and remains in contempt of Court.
23
5
The CARES Act at 15 U.S.C. §§ 9023(f)(1)(B), 15 U.S.C. § 9024(f) and 15 U.S.C. §
24 9025(e)(1)(B) specifically prohibits this kind of debt collection scare tactics, as do cases on pre-
judgement takings of entitlement benefits. See, e.g. Goldberg v. Kelly, 397 U.S. 254 (1970),
25
Fuentes v. Shevin, 407 U.S. 67 (1972) and California Department of Human Resources v. Java.
26 6
See e.g., Exhibit 2, attached to the Jones Dec., ¶ 3. As late as 11/12/20 Claimants receive
27 an “Overpayment” letter but when they try to appeal through the DETR web portal - - the only
way PUA claimants can appeal they are told they “do not have the privilege.”; see also
28 https://www.youtube.com/watch?v=PoiAC92iZ_Y&feature=youtu.be
2
1 II. TIMELINE OF EVENTS AND CURRENT FACTUAL DEVELOPMENTS7
2  July 22, 2020: This Court issued an Order of Mandate clearly and unequivocally
3 requiring DETR, no later than July 28, 2020, to resume payments to all those class members who
4 have had their payments stopped without prior hearing UNLESS: (a) the applicant did not file a
5 weekly claim; or (b) the applicant has earnings in excess of that which would otherwise qualify
6 the applicant for benefits; or (c) there is clear and convincing evidence of fraud by the applicant;
7 or (d) until such time as the applicant is afforded an opportunity to be heard. In addition the
8 Order clarified that a covered individual for the purposes of the Pandemic Unemployment
9 Assistance (“PUA”) includes an individual with reportable income, and is either unemployed,
10 partially employed, or unable or unavailable to work because of the COVID-19 public health
11 emergency has severely limited his or her ability to continue performing work activities and has
(775) 284-1500 Fax (775) 703-5027
12 therefore cause substantial interference with his or her work activities, payments are required.
THIERMAN BUCK LLP
7287 Lakeside Drive
 July 29, 2020: Plaintiffs filed their first motion for contempt.
Reno, NV 89511
13
14  August 19, 2020: Plaintiffs filed their second motion for contempt.
15  August 31, 2020: Defendants filed their opposition to Plaintiffs’ second motion
16 for contempt.
17  October 15, 2020: DETR issues press release indicating it will deny 217,500 PUA
18 claims. See Exhibit 3, attached to the Jones Dec., ¶ 4.
19  October 16, 2020: The article in the Nevada Independent titled, “DETR: Lost
20 Wages Assistance Unemployment Benefit Payouts Have Begun; Hundreds of Thousands Of
21 PUA Claims Denied For ID Issues” by Michelle Rindels reports these denials will effect “about
22 half of all PUA claims filed.” See Exhibit 4, attached to the Jones Dec., ¶ 5. The graph provided
23 indicates 492,071 individual PUA claims were filed between May 16 and October 10, 2020. Id.
24  October 20, 2020: The Court held a hearing on the Special Master’s fees and
25 costs and set a briefing schedule and hearing for December 3, 2020, on Plaintiffs’ motion for
26 contempt allowing Defendants to file a supplemental opposition within twenty (20) days (11/9).
27 7
This Court may take judicial notice of facts that are “[g]enerally known within the
28 territorial jurisdiction of the trial court,” as well as those that are “[c]apable of accurate and ready
determination . . . [and] not subject to reasonable dispute.” NRS 47.130(2).
3
1 Defendants did not file a supplemental. Plaintiffs were allowed to file a response and submit the
2 matter to the Court ten (10) days thereafter (11/19).8
3  November 7, 2020: The article in the Nevada Independent titled, “As
4 Unemployment Rolls Remain Swollen, Some Fear Plight of Jobless Has Fallen To Wayside”
5 Michelle Rindels reported, “There have now been more than 1.3 million claims for
6 unemployment in Nevada since the pandemic began, while there are about 1.5 million people in
7 the labor force.” See Exhibit 5, attached to the Jones Dec., ¶ 6.
8  November 11, 2020: Article by Michelle Rindels of the Nevada Independent
9 reports DETR has only been able to schedule 100 appeals with adjudicator/referees, which is a
10 full 106 days (over three and one-half months) after the July 28, 2020 deadline set by the Court’s
11 Order. See Exhibit 6, attached to the Jones Dec., ¶ 7.

(775) 284-1500 Fax (775) 703-5027
12 III. ANALYSIS
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7287 Lakeside Drive
A. DETR has been properly served through electronic means.

Reno, NV 89511
13
14 DETR’s argument that Plaintiffs have somehow failed to meet the NRS 34.290 standard
15 for personal service has been previously addressed in Plaintiffs’ motions for contempt, pointing
16 to the modern electronic service records, as well as Defendants’ own participation in crafting the
17 Order signed by the Court.
18
B. Plaintiffs Albring and Wyncoop have ripe claims and the issues present are
19 capable of repetition but can evade review.
20 This Court has continually stated the issues presented in this case, and the claims of
21 Plaintiffs and the putative class “are not moot because some claims are capable of repetition, but
22 yet can evade review.” See e.g., July 22, 2020, Order “Conclusions of Law.” Accordingly,
23 DETR’s arguments that the evidence Plaintiffs continue to provide to the Court is inadmissible
24 hearsay that only affects non-parties and therefore must be denied are untenable. As Plaintiffs
25 stated in their motion for contempt, Plaintiffs Albring and arguably Plaintiff Wyncoop continue
26 to be covered by the Court’s Order. Moreover, per the Court’s October 22, 2020 Order setting
27 the December 3, 2020 hearing for Plaintiffs’ motion for Contempt, the Parties were instructed to
28
8
The Parties are scheduled to meet and confer on November 24, 2020.
4
1 meet and confer “well in advance of the December 3, 2020 hearing regarding exhibits to be
2 presented and witnesses expected to testify…” which is scheduled for November 24, 2020.
3 Plaintiffs intend to provide three to five persons who meet the criteria set forth in each of
4 the categories carved out in the Court’s July 22, 2020 Order for live testimony. Specifically,
5 testimony from persons who have received at least one payment but whose payments have
6 stopped even though they: (a) continued to file a weekly claim; or (b) had no excess earnings that
7 which would otherwise qualify the applicant for benefits; or (c) have no clear and convincing
8 evidence of fraud; or (d) have had not had an opportunity to be heard; and (e) had a diminution
9 in work prior to March 2020 but were denied based on no COVID related reason and as described
10 in Plaintiffs’ second motion for contempt, at § II, pp. 3-5.
11 C. There is no clear and convincing evidence of fraud.

(775) 284-1500 Fax (775) 703-5027
12 DETR asserted in the August Bracken declaration that as of that date some 12,044 have
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some amorphous clear and convincing evidence of fraud. In a October 15, 2020 DETR Press
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13
14 Release DETR confirmed it was denying 217,500 claims due to identification issues. See Exhibit
15 3 Because DETR has failed to provide the Court with an update on the status of claimants who
16 fall under the Court’s Order, it is unknown how many claimants had payments start but then stop,
17 and if any of the 217,500 should be included.
18 What is clear is that as of August, 12,044 claimants’ payments should not have been
19 stopped, and payments should have restarted until the claimant had an opportunity to be heard.
20 “ID issues” are not clear and convincing evidence of fraud. DOL UIPL 16-20, clearly states that
21 “[t]he requirements of 20 C.F.R. 625.14 shall apply with respect to overpayments and fraud to
22 the same extent and in the same manner as DUA.”9 While Section 2102 of the CARES Act relies
23 on self-certification to verify that an individual is covered under the PUA program, the state has
24 authority to request supporting documentation when investigating the potential for fraud and
25 improper payments. However, requests for supporting documentation and a state’s investigative
26
27
9
28 See Exhibit 7 attached to the Jones Dec., ¶ 8, DOL UIPL, 16-20 dated April 5, 2020 at
Attachment I, p. I-12 § (h).
5
1 and adjudicative practices should be done in alignment with the processes described in UIPL No.
2 01-16 to ensure due process is afforded to the individual. DOL UIPL 01-16 requires that:
3
The ”when due” requirement means that all determinations require
4 a complete investigation of the issue(s) involved, including the
opportunity to rebut, before the issuance of a determination.
5 Where there is factual conflict between the information received
from an individual and other information received by the agency,
6
from any source, it is incumbent upon the state to make further
7 contact with the individual, inform him or her of the conflict, and
allow an opportunity for rebuttal. Because such factual conflicts
8 require the state agency to make determination of credibility and
intent, determinations of fraud must be made by agency staff. The
9
determination may not be made by an automated system.
10 See Exhibit 1, UIPL 01-16 dated October 1, 2015 at p. 6, § (i) (emphasis applied). The DOL has
11 not abandoned its position that a state agency must continue to make payments until an impartial
(775) 284-1500 Fax (775) 703-5027
12 hearing officer has rendered a decision after a fair hearing as required by Java and 42 U.S.C.
THIERMAN BUCK LLP
7287 Lakeside Drive
Reno, NV 89511
13 §503(A)(3). If DETR suspects fraud before a determination is made, then DETR is required to
14 make personal contact with the claimant (not automated IDme, text, or email) to at least find out
15 if there is an innocent explanation for the facts upon which DETR believes there is fraud.
16 DETR’s current system is not legal and all claimants who have had payments start but stop
17 without personal contact cannot be denied benefits because DETR cannot assert clear and
18 convincing evidence of fraud. Thus, the 9,500 payments that were stopped in August must be
19 restarted, and any additional claims where payments have been stopped must be restarted until
20 such time that the claimants has an opportunity to be heard.
21
D. Progress is not compliance and there is no “just excuse” for failure to follow
22 the law and this Court’s Order.
23 There is no “just excuse” defense for failure to pay benefits to claimants who have
24 received a determination of eligibility, verified through the fact of receiving at least one payment,
25 then had those payments stop by DETR’s tortured reading of the law. DETR’s main argument
26 against contempt is that “they have continued to make progress” while also asserting that it is
27 “not possible” to commence payment per the Court’s Order. See Bracken Dec. at ¶¶ 6, 11. DETR
28 also argues that they have made “significant efforts toward compliance.” See Opp. at p. 8, sec.
6
1 G. These are not legally valid reasons to disobey a court order. This Court’s Order did not state
2 “progress” was required, the Order clearly and unequivocally required continued payment on or
3 before July 28, 2020, to a defined subset of PUA claimants.
4 DETR must be required to restart payment to all 9,500 previously identified claimants,
5 continuing paying until such time the claimants has an opportunity to be heard. In addition,
6 DETR must alert all claimants who had start/stops of the ability to appeal and provide for appeals
7 other than through DETR’s intermittently functional Web portal.
8 IV. CONCLUSION
9 For the reasons stated above, Plaintiffs request that this Court impose a fine on each
10 Defendant in an amount not exceeding $1,000. Furthermore, Plaintiffs request that the Court
11 publicly admonish Defendants, and each of them, that if they fail for a third time to obey this
(775) 284-1500 Fax (775) 703-5027
12 Court’s July 22, 2020 Order, the Court may order the party to be imprisoned for a period not
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exceeding 3 months and may make any orders necessary and proper for the complete enforcement
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13
14 of the Order.
15 AFFIRMATION
16 The undersigned does hereby affirm that the proceeding document to be filed in the
17 Second Judicial District Court in the State of Nevada, County of Washoe, does not contain the
18 social security number of any person.
19
20 DATED: November 19, 2020 Respectfully Submitted,
21 THIERMAN BUCK LLP
/s/ Leah L. Jones
22
Mark R. Thierman
23 Joshua D. Buck
Leah L. Jones
24 Joshua R. Hendrickson
Attorneys for Plaintiffs-Petitioners
25
26
27
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7
1
INDEX OF EXHIBITS
2
Exhibit No. Description Pages
3 United States Department of Labor
1 7
4 Unemployment Insurance Program Letter No. 01-16
2 “TK’s” Disqualification and Overpayment Letters from DETR 9
5 3 DETR October 15, 2020 Press Release 3
October 16, 2020 Nevada Independent Article
6 "DETR: Lost Wages Assistance Unemployment Benefit
4 6
7 Payouts Have Begin; Hundreds of Thousands of PUA Claims
Denied for ID Issues
8 November 7, 2020 Nevada Independent Article
5 "As Unemployment Rolls Remain Swollen, Some 7
9
Fear Plight of Jobless Has Fallen to the Wayside"
10 November 11, 2020 Nevada Independent Article
6 "Indy Q&A: What Has Unemployment Strike Force 7

11 Accomplished As Its 3-Month Timeframe Ends?"
United States Department of Labor
(775) 284-1500 Fax (775) 703-5027
12 7 44
THIERMAN BUCK LLP
Unemployment Insurance Program Letter No. 16-20

7287 Lakeside Drive
Reno, NV 89511
13 United States Department of Labor

8 14
Unemployment Insurance Program Letter No. 16-20 Change 2
14
15
16
17
18
19
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25
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28
8
1
PROOF OF SERVICE
2
3
CASE NAME: Amethyst Payne et al. v. State of Nevada ex rel Nevada Department of
4 Employment Training and Rehabilitation et al.
5 COURT: In the Second Judicial District Court of the State of Nevada in and for the
County of Washoe
6 CASE NO.: CV20-00755
7 On the date last written below, the follow document(s) were served as follows:
8
PLAINTIFFS’-PETITIONERS’ REPLY IN SUPPORT OF MOTION FOR CONTEMPT
9
10 by placing an original or true copy thereof in a sealed envelope, with sufficient

postage affixed thereto, in the United States Mail address to:
11
(775) 284-1500 Fax (775) 703-5027
X by using the Court’s eflex Electronic Notification System addressed to:

THIERMAN BUCK LLP
12
7287 Lakeside Drive
by electronic email addressed to:

Reno, NV 89511
13
by personal or hand delivery addressed to:
14 by facsimile (fax) addressed to:
15 by Federal Express/UPS or other overnight delivery addressed to:
16
17
Greg Ott
18 Attorney General’s Office
100 N. Carson St.
19 Carson City, NV 89701
20 Attorney for the Defendants
21 Robert Whitney
Attorney General’s Office
22
100 N. Carson St.
23 Carson City, NV 89701
Attorney for the Defendants
24
I declare under penalty of perjury under the laws of the State of Nevada that the foregoing
25
is true and correct. Executed on November 19, 2020 at Reno, Nevada.
26
/s/ Jennifer Edison-Strekal
27 Jennifer Edison-Strekal
28
-1-
PROOF OF SERVICE

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FILED

12 Case No.: CV20-00755

AMETHYST PAYNE, IRIS PODESTA-

13 MIRELES, ANTHONY NAPOLITANO,

11 Order. See Exhibit 6, attached to the Jones Dec., ¶ 7.

A. DETR has been properly served through electronic means.

11 C. There is no clear and convincing evidence of fraud.

6 "Indy Q&A: What Has Unemployment Strike Force 7

Unemployment Insurance Program Letter No. 16-20

13 United States Department of Labor

10 by placing an original or true copy thereof in a sealed envelope, with sufficient

X by using the Court’s eflex Electronic Notification System addressed to:

by electronic email addressed to:

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