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Monday, April 6, 2020

Attorney general appeals unemployment fraud case to state Supreme Court

Local Government

By John Sammon | Jan 23, 2020


Michigan's Attorney General Dana Nessel is asking the State Supreme Court to reject an earlier opinion of the Michigan Court of Appeals that thousands of workers falsely accused of unemployment insurance fraud could be awarded damages.

“This appeal was necessary because Michigan has no case law on how or when a court can award money damages in a case where the plaintiff alleges a violation of their due process rights,” Kelly Rossman-McKinney, a spokeswoman for Nessel, told the news website Bridge. “We want to pay an appropriate amount to those individuals who have truly been harmed.”

The Bauserman v. Unemployment Insurance Agency case stems from what critics contended was the state’s misguided attempt to over-automate the system of issuing unemployment checks, while at the time laying off workers who formerly had processed the checks.

According to the Bridge report, plaintiffs’ lawyers alleged that 40,000 residents were damaged under the administration of then-Gov. Rick Snyder, a Republican, after the installation of a new computer system in 2013 to automate the issuance of unemployment checks. The year before the Unemployment Insurance Agency (UIA) laid off 400 full and part-time employees, a third of its force.   

An internal review conducted last year found that 21,000 workers had been falsely accused of unemployment fraud over a two-year period.

A Court of Appeals in December found the state had violated due process rights of the workers and that they were entitled to damages.

Attorneys for the state countered that damages were unwarranted in the case in that a due process violation does not justify damage awards.

The state’s appeal said it should be up to the Michigan Legislature to determine if damages should be awarded according to the state Constitution and not the court.

“This court should grant leave to consider this issue and should ultimately conclude that separation-of-powers principles require our Legislature to determine whether it is appropriate to impose damage remedies for an alleged violation of our Constitution – and if so under what circumstances,” the appeal read.

Jennifer Lord with the Royal Oak-based law firm of Pitt, McGehee, Palmer and Rivers, the attorney for the plaintiffs, called the state appeal disappointing.

“This has been their tactic all along, to delay and delay,” Lord told Bridge. “It’s really disappointing because in most cases when a party appeals, they have a good-faith argument they didn’t do anything wrong. The state admitted it was wrong. To keep defending this is pretty shocking.”

State attorneys said in their appeal contend that if left to stand, the Court of Appeals decision would result in violating a separation-of-powers doctrine and improperly permit courts to OK large monetary awards without legislative authorization.

However, Lord maintained there is no need for the Legislature to determine if clients of the unemployment insurance system are entitled to money awards.

The Michigan Constitution says no person can be "deprived of life, liberty or property, without due process of law,” she said. “That is explicitly stated.”

The state argues that federal case law placed the awarding of damages with legislative bodies, the report said.   

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Michigan Supreme CourtMichigan Office of Attorney General

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