House Bill 5172

Topic: Re-opening period for fraud cases
Sponsor: Representative Martin Howrylak (R)
Introduced: October 24, 2017
Status: Signed into law December 20, 2017
Effective Date: July 1, 2018

Link to Legislation (read legislative history and the final Act here)

ISSUES WITH CURRENT LAW: Currently, the Agency only sends notices to the claimant’s last known address, which may or may not be the claimant’s current address. The Agency cannot reopen a case after 1 year even if new information becomes available from the claimant or employer.

WHAT THE NEW BILL DOES:

  • The new bill establishes a two-part reform:
    • The Agency will send fraud notices to all known addresses on file with the Agency, Treasury, and Secretary of State. Claimants must keep their address current with the Agency for the entirety of their benefit year.
    • Good cause to reopen will now include incidents where determinations/redeterminations are sent to the wrong address, so long as it can be shown that the address was wrong.

HOW THE NEW BILL HELPS CLAIMANTS:

  • This bill helps claimants by requiring the Agency to send notices of determinations/redeterminations to all of a claimant’s known addresses.
  • Now, claimants will have a higher likelihood of knowing that they are being accused by the Agency.
  • Claimants will be able to participate in the administrative hearing process by showing “good cause” for reopening their cases beyond 1 year, because they never received the Agency’s notices in the first place.

House Bill 5168

Topic: ID Theft Protections
Sponsor: Representative Diana Farrington (R)
Introduced: October 24, 2017
Status: Signed into law December 20, 2017
Effective Date: March 21, 2018

Link to Legislation (read legislative history and the final Act here)

ISSUES WITH CURRENT LAW: The current law does not require the Agency to use all information provided by individuals applying for benefits to verify identification before making payments on claims.

WHAT THE NEW BILL DOES:

  • Claimants must provide the Agency with their social security number and one of the following: driver’s license number, state ID number, or verification of identity using I-9 documents.
  • The Agency shall request, but not require, individuals applying for benefits to submit their base period employer’s unemployment agency account number and federal employer ID number.
  • The Agency will verify a claimant’s identity before making an initial payment.

 

HOW THE NEW BILL HELPS CLAIMANTS:

  • This bill helps claimants by preventing others from using their information to collect benefits under their name.

House Bill 5167

Topic: Advocacy Program
Sponsor: Representative Wendell Byrd (D)
Introduced: October 24, 2017
Status: Signed into law December 20, 2017
Effective Date: July 1, 2018

Link to Legislation (legislative history and final version of Act)

ISSUES WITH CURRENT LAW: The commission provides an advocacy program to provide claimants and employers advocacy assistance. However, this is not extended to people accused of fraud.

WHAT THE NEW BILL DOES:

  • The new bill allows claimants accused of fraud to participate in the advocacy program.
  • If a final determination is made that a claimant or employer committed fraud, then the Agency will recover the cost of the representation from the claimant or employer.

HOW THE NEW BILL HELPS CLAIMANTS:

  • Gives claimants accused of fraud access to legal representation, just like any other claimant or employer.

Saylor v. C.L. Rieckhoff Co. – 16.95

Saylor v. C.L. Rieckhoff Co.
Digest No. 16.95

Section 421.62

Cite as: Saylor v C L Rieckhoff Co, unpublished opinion of the Michigan Compensation Appellate Commission, issued August 2, 2017 (Docket No. 16-029832-252337W).

Court: Michigan Compensation Appellate Commission
Appeal pending: No
Claimant: Brian Saylor
Employer: C.L. Rieckhoff Co.
Date of decision: August 2, 2017

View/download the full decision

HOLDING: The Michigan Compensation Appellate Commission held that the Agency must have an employer protest and a determination of eligibility before it can initiate a fraud investigation. Further, the Commission held that a benefit check determination of eligibility under 32(f) is not a sufficient predicate determination to issue a 62(a) fraud determination.

FACTS: Claimant had received benefits and the Agency issued him redeterminations accusing him of committing fraud. He was required to repay the amount received in benefits plus penalty. The Agency did not receive an employer protest, but rather issued the redetermination on its own motion.

The Agency argued that the benefit check determinations under 32(f) of the Act were sufficient to allow it to issue redeterminations. The Commission disagreed.

DECISION: The Commission’s decision rested on procedural due process. It decided that the method employed by the Agency in issuing the redetermination violated Claimant’s due process rights.

RATIONALE: The Commission’s decision stemmed from both a statutory construction of the MESA, due process, and the Michigan Administrative Procedures Act. The Commission found that 32(f) did not provide the basis for redeterminations finding fraud; rather, a separate determination of ineligibility needed to occur before a 62(a) redetermination of fraud could be found. Further, because there was no initial determination to serve as the foundation for the redetermination, the issuance of the redeterminations were procedurally deficient. The Commission reasoned that the MAPA required it to set aside the redeterminations regardless of whether Claimant timely appealed, as they were issued erroneously.

The Commission further noted that the Agency did not have the ability to issue redeterminations without an employer protest outside of the time frame prescribed by section 32a of the Act.

Digest author: Travis R. Miller, Michigan Law, Class of 2018
Digest updated: January 2, 2018

 

Lawrence v Michigan Unemployment Insurance Agency – 16.96

Lawrence v Michigan Unemployment Insurance Agency
Digest No. 16.96

Section 421.33

Cite as: Lawrence v Mich Unemployment Ins Agency, 320 Mich App 422 (2017).

Court: Court of Appeals
Appeal pending: No
Claimant: Suzanne Lawrence
Employer: Bloomfield Hills Country Club
Docket No.: 332398
Date of decision: July 11, 2017

View/download the full decision

COURT OF APPEALS HOLDING: The claimant does not have the burden to prove that she did not receive benefit checks.

FACTS: Claimant worked for a country club and was laid off for the winter season. Claimant  was paid vacation time for the first weeks of the lay off. The Agency alleged that Claimant received benefits during those weeks and is required to pay restitution ($158). Claimant denied receiving benefits during those weeks. Claimant appealed the lower decisions as misconstruing the case: the lower decisions referred to eligibility, but Claimant argued that the case is about whether she received any payment during the ineligible weeks.

DECISION: Reversed. The courts focused on the wrong issue: it was not whether Claimant was eligible but rather whether she received payment on the ineligible weeks; and there was error in affirming MCAC and in its factual determinations, misapplying the substantial evidence test.

RATIONALE: The ALJ “bewilderingly” focused consideration on eligibility during the weeks Claimant “conceded she was ineligible.” (Emphasis in original.) The ALJ decision lacks legal grounds because eligibility was not at issue. MCAC “completely missed the mark” by not overturning because the issue on appeal was whether the ALJ addressed the appropriate issue.

The circuit court erred when when it determined that MCAC’s decision was supported by competent, material, and substantial evidence. The notices of restitution and the determination were “not proof that the MUIA issued an overpayment, in any amount, to [Claimant], and to accept them as such would defy common sense.” Without a scintilla of evidence to support the payments, the circuit court erred by affirming MCAC’s decision as supported by competent, material, and substantial evidence. Claimant did not have the burden to establish that she did not receive benefits as alleged. Claimant would need to rebut evidence by the Agency, but it is not her burden in the first instance. This avoids Hodge because the circuit court did not need to substitute its judgment on credibility for the ALJ’s; the ALJ simply did not make a contrary factual finding.

Digest author: Benjamin Tigay, Michigan Law, Class of 2018
Digest updated: January 2, 2018

 

Cotton v. Express Employment Professionals – 16.93

Cotton v. Express Employment Professionals
Digest No. 16.93

Section 421.62

Cite as: Cotton v Express Employment Professionals, unpublished opinion of the Maycomb County Circuit Court, issued June 5, 2017 (Docket No. 2016 -4047-AE).

Court: Macomb County Circuit Court
Appeal pending: Yes
Claimant: Yvette Cotton
Employer: Express Employment Professionals
Date of decision: June 5, 2017

View/download the full decision

HOLDING: The court found that the Agency lacked jurisdiction to issue a redetermination of the claimant’s “benefit check determinations” under 32a(2), which holds that the Agency must have good cause to reconsider a prior determination or redetermination after the 30-day period has expired and must re-open within a year of the previous determination. The court therefore found it unnecessary to address the timeliness of the claimant’s subsequent protests.

FACTS: Claimant had received benefits and the Agency issued her redeterminations accusing her of committing fraud. She was required to repay the amount received in benefits plus penalty. The Agency did not receive a timely employer protest, and the employer did not show good cause for issuing a late protest.

The Agency argued that the benefit check determinations under 32(f) of the Act were sufficient to allow it to issue redeterminations. The Court disagreed.

DECISION: The Court’s decision rested on procedural due process. It decided that the method employed by the Agency in issuing the redetermination violated claimant’s due process rights. The court remanded for further proceedings to determine the basis for the determinations, but noted it did not need to reach Claimant’s good cause for late appeal, as the redeterminations were issued erroneously.

RATIONALE: The court’s decision stemmed from both a statutory construction of the MESA and due process. The court demurred the Agency’s contention that section 62 of the Act gave it authority to issue determinations and redeterminations. Rather, the court reasoned, MESA gives the Agency authority under 32a. This means that the Agency does not have broad, sweeping authority, over the course of three years, to make determinations and redeterminations. They must do so within the parameters of 32a and 32.

The court made clear that the deficiencies in the Agency’s process meant the court did not need to address Claimant’s good cause for reopening.

Digest author: Travis R. Miller, Michigan Law, Class of 2018
Digest updated: January 2, 2018

 

Sanderson v. UIA – 16.94

Sanderson v. UIA
Digest No. 16.94

Section 421.32a & Section 421.62

Cite as: Sanderson v Michigan Unemployment Insurance Agency, unpublished decision of the Court of Claims, issued June 5, 2017 (Case No. 16-000083-MM).

Court: Court of Claims
Appeal pending: Yes
Plaintiff: Judy Sanderson, Albert Morris, Antonyal Louis, and Madeline Browne
Defendant: Unemployment Insurance Agency
Date of decision: June 5, 2017

View/download the full decision

HOLDING: The Court granted the defendant’s motion for summary disposition because plaintiffs failed to satisfy the requirements of MCL 600.6431.

FACTS: Claimant Sanderson began receiving unemployment benefits in June 2009. The UIA issued redeterminations on September 26, 27, and 28, 2011 determining that Claimant was not entitled to benefits because she made intentional misrepresentations. The UIA gives three years from the date of the last redetermination to initiate administrative action or court action to recover improperly paid benefits. The UIA began collection efforts against Claimant in May 2014. Interception of her tax refund occurred on or about April 9, 2015.

DECISION: Plaintiffs failed to comply with the notice requirements found in MCL 600.6431. Claimant Sanderson’s complaint was filed on April 11, 2016, far more than six months after the first instance of wrongful garnishment.

The Court denied the plaintiffs’ request to amend the complaint and rejects the claim that summary disposition is premature because discovery has not yet begun.

RATIONALE: Plaintiffs’ claims do no meet the timing requirements of MCL 600.6431. This applies a six month notice deadline to file a complaint. The Court assumed without deciding that Plaintiffs’ interpretation of Section 421.62 is correct, which sets a three year period for collecting a debt. However, plaintiffs’ complaints were filed on April 11, 2016 and in order for them to satisfy the requirements under MCL 600.6431, the wrongs need to occur within six months of the filing date. None of the claims asserted fit the timeframe.

The Court denied leave to amend because there is no manner in which they could amend the complaint so that it complies with the requirements under MCL 600.6431.

The Court also determined that plaintiffs’ assertions were not enough to demonstrate that discovery is warranted in this matter.

Digest author: Sara Posner, Michigan Law, Class of 2017
Digest updated: December 26, 2017