A Washoe County judge has determined that Nevada is in contempt of a court order issued this summer that mandated the state promptly pay thousands of people who had been receiving benefits but saw them stopped without an allowable reason or a hearing.

Judge Barry Breslow issued his ruling on Thursday after an all-day hearing that included testimony from claimants and staff at the Department of Employment, Training and Rehabilitation. He is also fining the state $1,000 for the violation — a penalty that could escalate  if an estimated 9,000 claimants affected are not paid by Christmas Eve.

“This court takes no pleasure whatsoever in admonishing the state, particularly when I have time and again commented on the extraordinary effort that people of the state are taking to help those in need,” Breslow said. “But it's been four to five months. These people need to be paid.”

Breslow acknowledged that his initial order on July 22 that the state pay thousands of claimants by July 28 was too little time to execute the order. He also said he was not finding DETR in contempt for their assessment on fraud, or for having too little evidence that certain unpaid claims were fraudulent. 

But he did find the state was improperly withholding payment from what is estimated to be thousands of claimants who are thought to have eligibility in a different program than what they are applying to (for example, applicants to the Pandemic Unemployment Assistance program for gig workers who have also worked more traditional jobs that make them eligible for payment out of the traditional unemployment program). 

“The court order did not then, nor is the court today, directing the state to pay people who have UI benefits available,” Breslow said. “What the court did in the summer was, if you started to pay them, you cannot stop without them getting a hearing without them having an opportunity to protest.”

The parties also agreed that if the state can demonstrate that a person is being paid by another program or state, DETR does not need to pay twice.

Breslow acknowledged that the state could face serious consequences from the federal government if it pays people in violation of government regulations for the unemployment program, but still said that DETR officials are not moving at the right tempo and said that another DETR employee who took the stand had a different worldview on the state’s role in the matter than the court did.

The hearing stems from an ongoing lawsuit brought by Reno attorney Mark Thierman, who has argued payments to PUA claimants are far overdue and has sought penalties as severe as jail time for state officials who have not complied with court instructions to pay up.

Another hearing is scheduled for 9 a.m. on Dec. 31, when Breslow is expected to check whether DETR complied with the order.