Supreme Court set to hear arguments in false unemployment fraud case

Beth LeBlanc
The Detroit News
The Michigan Supreme Court.

Lansing — The Michigan Supreme Court will hear oral arguments on a case brought by residents who said they were falsely accused of unemployment fraud.

Judges will hear arguments in Bauserman v Unemployment Insurance Agency Oct. 10 during the court’s afternoon session, according to a notice from the courts.

The case stems from widespread problems with an automated computer system the state used to determine unemployment fraud. The Michigan Unemployment Insurance Agency reversed more than 40,000 determinations made by the system between October 2013 and August 2015.

The class-action suit argues the state, based on those faulty determinations, seized residents’ property without proper notice, violating their constitutional due process rights.

“After more than five years, it’s time for these people to have their day in court,” said Jennifer Lord, one of the lead attorneys for the case.

The case had been tossed by the state Court of Appeals in July 2017 in a ruling that determined residents failed to file their class-action lawsuit within six months of the harm having occurred, a timeline required in suits seeking financial damages against the state.

The state has argued the harm happened when the individuals first received notices of the penalties, while resident said it occurred when their income taxes were seized.

The state has paid roughly $21 million in restitution, penalties and interest to people wrongfully accused between 2013 and 2015.       

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