is it legal for my supervisor to lay me off and then demote to take my old job?

I have a letter I sent the CEO and a negative response from the company that they deny everything I wrote and layoffs are final, but essentially I believe that my layoff occurred because my position with this energy company was eliminated, and now I discovered that instead the company wanted to keep my supervisor employed, even if it meant eliminating the supervisor's redundant supervisory position in order to give my supervisor my company-essential position, and I believe my old supervisor was moved to my position while I was still effectively employed with said company (even though officially laid off).

Being I am unemployed, if represented I need attorney payments to be taken from the lawsuit amount. I.E., no pay for either of us if we don't win. Thanks for understanding.