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Supreme Court Agrees To Hear Class-Action Suit Against UIA

April 18, 2018

The Michigan Supreme Court has ordered oral arguments on a lawsuit filed by unemployment insurance claimants who were falsely accused of fraud through the state’s controversial Michigan Integrated Data Automated System (MiDAS).

In its Saturday, April 7 order, the court wants the claimants to address whether the event leading to their cause of action occurred when the Unemployment Insurance Agency (UIA) issued its allegedly wrongful notice of redetermination or when the UIA actually seized the claimants’ property. 

The class-action suit was filed in September 2015 and Court of Claims Judge Cynthia Stephens ruled in May 2016 that the case could proceed. 

But, a three-judge panel of the Michigan Court of Appeals unanimously dismissed the suit in July saying it wasn’t filed within the six-month statute of limitations. 

The state launched MiDAS — without human supervision — in October 2013. The $47 million system, designed to detect fraud in unemployment insurance claims, incorrectly identified upwards of 40,000 Michigan residents as fraudsters. 

A subsequent review by the feds in cooperation with the UIA found MiDAS was wrong 93 percent of the time. 

Those wrongly identified as fraudsters were subjected to aggressive collection techniques, including wage garnishment and seizure of income tax refunds. The UIA has refunded some of the money. 

The court has invited the Michigan League for Public Policy to submit an amicus curiae brief.

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