Unemployment Fraud Lawsuit Against State Dismissed by Court of Appeals

Michigan’s automated computer system wrongly flagged tens of thousands of people for unemployment fraud.

Michigan Unemployment Agency 2 michigan.gov 7.19.17-jn

The Michigan Court of Appeals dismissed a lawsuit claiming the state wrongfully accused thousands of people of unemployment fraud.  

In 2013, the state started using an automated system to flag fraud cases. But the system wrongly identified tens of thousands of people – and some of them sued to get their money back, plus fees and interest.

But the Court says they waited too long to file the lawsuit.

Jennifer Lord is an attorney for the plaintiffs. She says the state is abusing a legal technicality to evade responsibility, and the next stop is the Michigan Supreme Court.

“We want everyone to know we’re not giving up,” she said. “We’re in it for the long haul, and we’re going to continue to fight this as long as it takes.”

But, the delay, Lord said, “is going to cause immediate and continuing harm to tens of thousands of people.”

Michigan Talent Investment Agency Director Wanda Stokes said the court made the right decision, and the state is working to fix the problems and get a refund to anyone who was wrongly accused or sanctioned.

Stokes said the agency has refunded or is in the process of refunding more than $16 million. She says the agency is also re-tooling its process for rooting out fraud to ensure there’s no repeat.

“People come to the Unemployment Insurance Agency when they are going through a difficult and stressful time in their lives,” she said. “We are focused on helping them get benefits they are entitled to as they find their next careers. We are working tirelessly to restore the public’s trust in our system, and we are on the road to doing that.”

Authors

  • Rick Pluta
    Rick Pluta has been covering Michigan’s Capitol, government, and politics since 1987.
  • Cheyna Roth is the co-host and creator of WDET's state politics podcast, MichMash. She has been an audio journalist for almost a decade, covering major events like presidential elections, college scandals, the Michigan Legislature and more, appearing on NPR and across Michigan public radio stations. Cheyna is also a senior producer and podcast host for Slate.com, having produced and hosted shows like Political Gabfest, The Waves, and What Next TBD. Also an author, Cheyna has written two true crime books and her written work has appeared in Broadly, Slate, and MLive, among others.