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Case Name Scholl v. Mnuchin PB-CA-0058
Docket / Court 4:20-cv-05309-PJH ( N.D. Cal. )
State/Territory California
Case Type(s) Criminal Justice (Other)
Public Benefits / Government Services
Special Collection COVID-19 (novel coronavirus)
Case Summary
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, ... read more >
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). Defendant's motion to stay was denied, and the Ninth Circuit appeal was dismissed on December 12, 2020.

On October 14, 2020, the court granted in part and denied in part plaintiffs’ motion for summary judgment and denied defendants’ motion to stay. As part of that order, the court entered a permanent injunction similar to its preliminary injunction, declared defendants’ policy of withholding benefits solely based on an eligible individuals’ incarcerated status to be void, and certified the class.

On December 11, 2020, two individuals who are incarcerated in the U.S. Virgin Islands and Puerto Rico filed a motion to intervene in this suit individually and on behalf of all others similarly situated. Plaintiff-interveners argued that, like the plaintiffs, they were eligible to receive EIPs, but were being denied on the basis of their incarcerated status. They maintained that their interests were not adequately represented by the plaintiffs, due to the unique laws governing the U.S. territories and possessions, and therefore sought to certify a subclass of incarcerated residents of the U.S. territories and possessions who would otherwise be eligible for an EIP but did not receive a payment. Both plaintiffs and defendants filed oppositions to plaintiff-intervenors’ motion. On January 11, 2021, the court denied the motion to intervene since it would unduly delay adjudication of the original parties’ rights. Plaintiff-intervenors’ claims would require the court to address questions, particularly those involving the CARES Act and the Treasury Department’s plans with the territories and possessions, that shared no commonality with the questions already addressed in this litigation.

Following the October 14, 2020 order, the court received status updates from the parties and held two status conferences to confirm defendants’ compliance with the declaration and permanent injunction. Following this compliance, final judgment was entered on January 21, 2021. The Court retains jurisdiction over this matter for purposes of enforcing its October 14, 2020 permanent injunction and the case remains ongoing.

Justin Hill - 10/08/2020
Tessa McEvoy - 03/26/2021


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Issues and Causes of Action
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Issues
Content of Injunction
Preliminary relief granted
Defendant-type
Jurisdiction-wide
General
Public benefits (includes, e.g., in-state tuition, govt. jobs)
Plaintiff Type
Private Plaintiff
Causes of Action Administrative Procedure Act, 5 U.S.C. §§ 551 et seq.
Defendant(s) Commissioner of Internal Revenue
Secretary of the U.S. Department of Treasury
U.S. Department of Treasury
U.S. Internal Revenue Service
United States of America
Plaintiff Description All United States citizens and legal permanent residents who are or were incarcerated (i.e., confined in a jail, prison, or other penal institution or correctional facility pursuant to their conviction of a criminal offense) in the United States, or have been held to have violated a condition of parole or probation imposed under federal or state law, at any time from March 27, 2020 to the August 1, 2020 and who are otherwise tax-eligible to receive the CARES Act benefits.
Class action status sought Yes
Class action status outcome Granted
Filed Pro Se No
Prevailing Party Plaintiff
Public Int. Lawyer Yes
Nature of Relief Preliminary injunction / Temp. restraining order
Injunction / Injunctive-like Settlement
Source of Relief Litigation
Filed 08/01/2020
Case Ongoing Yes
Additional Resources
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  See this case at CourtListener.com (May provide additional documents and, for active cases, real-time alerts)
Court Docket(s)
N.D. Cal.
01/21/2021
4:20-cv-05309-PJH
PB-CA-0058-9000.pdf | Detail
Source: PACER [Public Access to Court Electronic Records]
General Documents
N.D. Cal.
08/01/2020
Class Action Complaint [ECF# 1]
PB-CA-0058-0001.pdf | Detail
Source: PACER [Public Access to Court Electronic Records]
N.D. Cal.
09/24/2020
Order Granting Motion for Preliminary Injunction and Motion for Class Certification [ECF# 50] (489 F.Supp.3d 1008)
PB-CA-0058-0002.pdf | WESTLAW| LEXIS | Detail
Source: PACER [Public Access to Court Electronic Records]
N.D. Cal.
10/14/2020
Order Granting in Part and Denying in Part Motion for Summary Judgment and Denying Motion for Stay [ECF# 87] (494 F.Supp.3d 661)
PB-CA-0058-0003.pdf | WESTLAW| LEXIS | Detail
Source: PACER [Public Access to Court Electronic Records]
N.D. Cal.
10/16/2020
Order Denying Motion for Stay and Granting Motion for Reconsideration [ECF# 90]
PB-CA-0058-0004.pdf | Detail
Source: PACER [Public Access to Court Electronic Records]
N.D. Cal.
12/11/2020
Notice of Motion, Motion for Leave to Intervene & Declaration of Joseph A. DiRuzzo, III in Support [ECF# 163]
PB-CA-0058-0007.pdf | Detail
Source: PACER [Public Access to Court Electronic Records]
N.D. Cal.
01/12/2021
Order Requesting Proposed Form of Judgment [ECF# 181]
PB-CA-0058-0006.pdf | Detail
Source: PACER [Public Access to Court Electronic Records]
N.D. Cal.
01/21/2021
Final Judgment [ECF# 184]
PB-CA-0058-0005.pdf | Detail
Source: PACER [Public Access to Court Electronic Records]
show all people docs
Judges Hamilton, Phyllis Jean (N.D. Cal.) show/hide docs
PB-CA-0058-0002 | PB-CA-0058-0003 | PB-CA-0058-0004 | PB-CA-0058-0005 | PB-CA-0058-0006 | PB-CA-0058-9000
Plaintiff's Lawyers Alvernaz, Christina A (California) show/hide docs
PB-CA-0058-0001 | PB-CA-0058-9000
Dafa, Jalle H (California) show/hide docs
PB-CA-0058-0001 | PB-CA-0058-9000
Dermody, Kelly M. (California) show/hide docs
PB-CA-0058-0001 | PB-CA-0058-9000
DiRuzzo, Joseph A. III (Florida) show/hide docs
PB-CA-0058-0007 | PB-CA-0058-9000
Holder, Lisa (California) show/hide docs
PB-CA-0058-0001
Paterson, Eva Jefferson (California) show/hide docs
PB-CA-0058-0001 | PB-CA-0058-9000
Pitoun, Christopher Robert (California) show/hide docs
PB-CA-0058-9000
Robbins, Edward Morris Jr (California) show/hide docs
PB-CA-0058-0007 | PB-CA-0058-9000
Salahi, Yaman (California) show/hide docs
PB-CA-0058-0001 | PB-CA-0058-9000
Tawatao, Rau Mona (California) show/hide docs
PB-CA-0058-0001 | PB-CA-0058-9000
Defendant's Lawyers Yost, Landon Monte (District of Columbia) show/hide docs
PB-CA-0058-9000
Other Lawyers Castillo, Cynthia Alicia (California) show/hide docs
PB-CA-0058-9000
Skaff, Stephanie Powers (California) show/hide docs
PB-CA-0058-9000
Spivey, Amy Nicole (California) show/hide docs
PB-CA-0058-9000

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