By Ed White
Associated Press
DETROIT (AP) — The Michigan Supreme Court heard arguments Wednesday in a case that could open the door to financial penalties against the state for computer-driven decisions that wrongly accused thousands of people of fraud when they collected unemployment benefits.
No one disputes that a computer system automatically spitting out fraud verdicts was a disaster during Gov. Rick Snyder's administration. Tax refunds were seized and other steps were taken before more than $20 million finally was returned by the state.
The issue now is whether people claiming due process violations under the Michigan Constitution can try to wring money from the state for the misery. A decision could break new legal ground.
"This court should say that a constitutional tort exists. ... This court does not need legislative approval to step in," attorney Mark Granzotto argued.
An attorney for the Unemployment Insurance Agency said the department "does not seek to minimize" what happened to people wrongly accused of fraud. But he noted that any cure beyond returning the seized money should be up to the Legislature.
"This court should continue its precedent of staying out of the policy-making business that comes with creating remedies," Assistant Attorney General Jason Hawkins said.
Advocates for the unemployed have repeatedly highlighted what happened over a roughly two-year period: A computer system was allowed to make jobless benefit determinations without a person stepping in. Tens of thousands of fraud decisions were eventually reversed.
There were reports of bankruptcies and people desperate for legal help.
"The false fraud scandal warped the public's perception" of unemployment benefits, attorney Rachael Kohl said in a court filing for the Michigan League for Public Policy, which follows issues affecting low-income families.
Justice Richard Bernstein suggested he was struggling with the state's opposition to compensation for alleged constitutional violations.
"This went on for quite a long period of time. It impacted a tremendous number of people," Bernstein said. "If this wasn't a policy or custom ... what exactly would be?"
- Posted October 08, 2021
- Tweet This | Share on Facebook
Court hears case about wrong fraud decisions by state agency
headlines Oakland County
- Annual Dinner & Meeting
- FORCE Team arrests six in prolific auto theft ring
- Michigan allocates $12 million to support community-based organizations in advancing environmental and climate justice
- Oakland County and SMART launch pilot program providing free transit for veterans and dependents
- Supreme Court sides with the Consumer Financial Protection Bureau
headlines National
- More lawyers—and clients—want to learn about sustainable development practices
- Top artificial intelligence insurance tips for lawyers
- Lawyer charged with illegally transmitting Michigan data after 2020 election
- Viral video shows former Rikers Island inmate as she learns she passed bar exam on first try
- How Sullivan & Cromwell is scrutinizing potential new hires after campus protests
- No separate hearing required when police seize cars loaned to drivers accused of drug crimes, SCOTUS rules