The State of Michigan has reached a $20 million settlement resolving a class action lawsuit alleging that the Unemployment Insurance Agency used an auto-adjudication system to falsely accuse recipients of fraud, resulting in the seizure of their property without due process.
The settlement was announced by Attorney General Dana Nessel and by Pitt, McGehee, Palmer, Bonanni & Rivers, the Royal Oak-based law firm representing the plaintiffs in the class action lawsuit.
In 2015, the Plaintiffs in the case, titled Bauserman v. Unemployment Insurance Agency, sued the State of Michigan Unemployment Insurance Agency for using an automated system known as MIDAS to falsely accuse thousands of Michiganders of unemployment fraud, resulting in the wrongful seizure of their paychecks, income tax refunds, and other assets without due process.
Over the next seven years, the case resulted in two significant decisions from the Michigan Supreme Court. In April 2019, the Court held that the class action was timely filed in accordance with the Michigan Court of Claims Act but only those claimants that had money collected from them for the first time on or after March 9, 2015 could be included in the potential class.
In July 2022, the Court held that the Plaintiffs in the case could seek monetary damages from the State based on the alleged violation of the State Constitution. Earlier this year, the parties worked with a neutral mediator to negotiate a resolution of the class action....
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