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156389 - Bauserman v Unemployment Agency

Grant Bauserman, Karl Williams, and Teddy Broe, on Behalf of Themselves and All Others Similarly Situated,

 

Jennifer L. Lord

Kevin M. Carlson

 

Plaintiffs-Appellants,

 

v

(Appeal from Ct of Appeals)

 

 

(Ct of Claims – Stevens, C.)

 

Unemployment Insurance Agency,

 

Jason Hawkins

 

Defendant-Appellee.

Debbie K. Taylor

 

 

 

Summary

The state’s Unemployment Insurance Agency (UIA) used the Michigan Integrated Data Automated System (MiDAS) to detect suspected cases of fraudulent benefit claims, ultimately resulting in thousands of individuals being falsely accused of fraud and ordered to repay benefits. In this case, the UIA issued a redetermination that each of the three named plaintiffs was ineligible for benefits and had to repay them, plus penalties. In two of the three cases, the UIA issued a second redetermination voiding the initial finding of ineligibility. Plaintiffs sued the UIA, alleging that the determination of guilt without notice and an opportunity to be heard before the imposition of penalties violated their right to due process. The Court of Claims denied the UIA’s motion for summary disposition, holding that plaintiffs had complied with the 6-month notice provision of the Court of Claims Act, MCL 600.6431(3), because the cause of action did not accrue until issuance of the second redetermination (i.e., the decision showing that the benefit claims were not fraudulent). In an unpublished opinion, the Court of Appeals reversed, holding that plaintiffs’ claims accrued at the time of the first redetermination (i.e., the decision notifying them of their alleged fraudulent conduct), and that their suit was therefore time-barred. The Supreme Court has directed oral argument on plaintiffs’ application for leave to appeal to address whether “the happening of the event giving rise to plaintiffs’ cause of action” for the deprivation of property without due process occurred when defendant issued its allegedly wrongful notice of redetermination, or when defendant actually seized plaintiffs’ property. MCL 600.6431(3); MCL 600.5827; cf. Frank v Linkner, 500 Mich 133, 149-153 (2017). ​