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Cite as: Saylor v C L Rieckhoff Co, unpublished opinion of the Michigan Compensation Appellate Commission, issued August 2, 2017 (Docket No. 16-029832-252337W).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

 

Bauserman v Unemployment Insurance Agency – 20.09

Bauserman v Unemployment Insurance Agency
Digest No. 20.09

MCL 600.6431

Cite as: Bauserman v Unemployment Insurance Agency, unpublished decision of the Court of Claims, entered May 10, 2016 (Case No. 15-000202-MM).

Bauserman v Unemployment Insurance Agency, unpublished opinion per curiam of the Court of Appeals, issued July 18, 2017 (Docket No. 333181).

Court: Court of Claims and Court of Appeals
Appeal pending: Yes
Claimant: Bauserman
Employer: N/A
Date of decision: May 10, 2016; July 18, 2017

View/download the full Court of Claims decision

View/download the full Court of Appeals decision

View/download the full complaint

HOLDING: The Court of Claims held that the Agency’s motion to dismiss was denied because plaintiffs complied with the notice provisions of MCL 600.6431, the Court has subject matter jurisdiction, and the plaintiffs’ claims are not barred by governmental immunity.

The Court of Appeals reversed the Court of Claims holding. The case was remanded for entry of an order granting summary judgment for the Agency

The matter is currently under review by the Michigan Supreme Court.

FACTS: Named plaintiff was terminated from his employment and applied for unemployment benefits. He received benefits for a over a year. While he was receiving benefits, he received from his former employer a lump sum deferred payment of his pro rated bonus from the previous year, which he earned prior to his termination. MIDAS detected a discrepancy and concluded that plaintiff received benefits while he was earning income.

The UIA sent a request for information relative to ineligibility or disqualification to plaintiff’s online MiWAM account, however he was not checking the account as he was no longer receiving benefits at the time. When he finally saw the message months later, he began writing to the Agency to explain the lump sum. The Agency never responded.

Eventually, they notified plaintiff that he had been overpaid benefits and would be assessed a penalty. Plaintiff again contacted the Agency explaining the bonus. Then the United States Department of Treasury notified plaintiff that his federal income tax refund had been seized by the State of Michigan to collect on his unemployment debt. Similar action was taken by the State of Michigan Treasury.

Finally, Plaintiff received a redetermination that its earlier fraud determination was null and void. Plaintiff had filed a complaint in the Court of Claims alleging that the Agency’s fraud detection program, and its collection and seizure of assets, violated the due process clause of the Michigan Const 1963, Art 1, § 17.

DECISION: The Court of Claims decided that plaintiffs’ causes of action did not accrue when Agency first notified them of their liability for unemployment but rather when the Agency issued a redetermination which concluded that the plaintiff had not received UIA benefits fraudulently. The administrative process fails to afford sufficient relief to plaintiff’s challenging an entire statute and policy, therefore a constitutional court claim is viable and there is no governmental immunity.  The Agency’s motion to dismiss on lack of standing is denied.

The Court of Appeals decided that the plaintiffs’ cause of action accrued when “the wrong on which they base their claim was done.” The Court decided the garnishment of wages and interception of tax returns was not the initial event given rise to their claim. Rather, when the Agency issued notices of its determinations and the plaintiffs were not given requisite notice or opportunity to be heard was the initial wrong.

RATIONALE: The Court of Claims found that the plaintiffs’ causes of action did not accrue when the Agency first notified them of their liability for unemployment benefits and penalties, but much later. The causes of action accrued when the Agency issued a redetermination that concluded that plaintiffs had not received UIA benefits fraudulently. At the time the Agency issued the redetermination, then plaintiffs could fully allege the elements of the claim. The amended complaint was filed within six months of the redetermination dates, therefore the plaintiffs complied with statutory requirements.

Furthermore, the Court found that the administrative process by which the plaintiffs could appeal within the Agency failed to afford sufficient relief to plaintiffs wishing to challenge the entire statutory and policy scheme. Therefore the Court found no governmental immunity existed in this case.

The Court of Appeals found that the forfeiture of monetary assets was the damage resulting from the wrongful conduct of the Agency and therefore did not rise to the event given cause for a claim. The Court said this is consistent with the Michigan Supreme Court’s recent decision in Frank v Linkner, 894 NW2d 574 (2017) where the court held that the plaintiffs’ argument “conflates monetary damages with harm.” Frank involved a shareholder oppression action not an unemployment benefits action.

Since the parties did not dispute the date of named plaintiff’s notices of redetermination were December 3, 2014, the action filed on September 9, 2015 is well beyond the six months following the event that gave rise to the cause of action.

Digest author: Sara Posner, Michigan Law, Class of 2017
Digest updated: December 5, 2017

 

Hicks v Colvin – 19.17

Hicks v Colvin
Digest No. 19.17

Due Process/Fraud

Cite as: Hicks v Colvin, 214 F Supp 3d 627 (ED KY 2016).

Court: District Court, Eastern District of Kentucky
Appeal pending: Yes
Claimant: Amy Jo Hicks
Agency: Social Security Administration
Date of decision: October 12, 2016

View/download the full decision

HOLDING: Due process requires individuals to be able to challenge factual assertions made by the government as part of the government redetermining their eligibility for benefits.

FACTS: Claimant, who suffered several psychological and physical ailments, applied for Social Security disability benefits in 2007 with the help of Attorney Eric Conn. Claimant received benefits until 2014, when the SSA’s Office of Inspector General (OIG) discovered a fraudulent scheme orchestrated by Conn with the help of ALJ Daugherty and several doctors. The OIG ordered the SSA to redetermine 1,787 of Conn’s clients’ cases, hold new ALJ hearings, and disregard any evidence if there was reason to believe fraud was involved. At Claimant’s hearing the ALJ refused to review or admit her medical records because they were based on a template medical form that Conn used in his fraudulent scheme. Because so much time had passed, Claimant was unable to testify regarding her exact medical condition and diagnosis at the time she applied for benefits, so her benefits were cancelled.

DECISION: The OIG policy of ordering the SSA to automatically disregard evidence during the redetermination process if the OIG had reason to believe fraud was involved violated due process because it denied individuals a meaningful opportunity for a hearing at which they could challenge the OIG’s factual assertions of fraud.

RATIONALE: Due process requires the government to give individuals a “meaningful hearing” that will provide them with “a fair opportunity to rebut the Government’s factual assertions before a neutral decisionmaker.” Hamdi v Rumsfeld, 542 US 507, 533; 124 S Ct 2633 (2004). That includes giving the individual the right to present facts and have their case be decided according to those facts. Interstate Commerce Comm’n v Nashville RR Co, 227 US 88, 91; 33 S Ct 185 (1913). The OIG’s policy violated due process because it allowed the SSA to make a factual determination about an individual–that they committed fraud–without explaining its reasons or allowing the individual to challenge the determination. Although the SSA did give Claimant a hearing, because it excluded all her medical evidence and didn’t give her the opportunity to challenge the OIG’s determination that the evidence was fraudulent, her hearing was not “meaningful.”

The Court declined to give the OIG fraud policy Chevron deference because it was a policy, not a rule that had undergone notice-and-comment, and thus lacked the force of law. The Court also explained, citing Loudermill v Cleveland Board of Ed, 470 US 532, 541; 105 S Ct 1487 (1985), that although social security disability is an entitlement, so long as the government operates the program, it cannot take away benefits without due process. The Court held the portion of the OIG fraud policy unconstitutional that required ALJs to disregard the evidence it labelled fraudulent without giving those ALJs deference as the fact-finder to determine whether or not it was fraudulent. The Court suggested that, on rehearing, Claimant should be able to offer whatever evidence she wanted, and allow the ALJ discretion to determine whether it was fraudulent or should be admitted.

Digest author: Sarah Harper, Michigan Law, Class of 2017
Digest updated: December 23, 2017

Wickham v. Adecco CS, Inc. – 18.23

Wickham v. Adecco CS, Inc.
Digest No. 18.23

Section 421.32(a)

Cite as: Wickham v Adecco CS, Inc, unpublished opinion of the Michigan Administrative Hearing System, issued September 28, 2016 (Docket No. 16-021211).

Appeal pending: No
Claimant: Margaret M. Wickham
Employer: Adecco CS Inc.
Date of decision: September 28, 2016

View/download the full decision

HOLDING: Under Michigan law, when pleading a cause of action involving fraud, the circumstances alleged to must be stated with particularity. In addition, in a fraud case, due process of law is violated when a claimant is not apprised of when, why, or how her actions constitute intentional misrepresentation of material fact.

FACTS: Claimant received a November 21, 2014 adjudication that concludes that Claimant’s “actions” indicate that she intentionally misled and/or concealed information to obtain benefits to which she was not otherwise entitled.

DECISION: The November 21, 2014 adjudication is facially defective as a matter of law, so it is void, set aside, vacated, and dismissed. Therefore the Agency’s denial of reconsideration concerns an invalid underlying adjudication, so it must also be set aside, vacated, and dismissed as a matter of law.

RATIONALE: The November 21, 2014 adjudication includes no factual assertions in support of the vague generalized legal conclusion that Claimant’s “actions” indicate that she intentionally misled and/or concealed information to obtain benefits to which she was not otherwise entitled. The Agency’s omission of particularized factual assertions in support of its legal conclusions violates Michigan law concerning the pleading of causes of action including fraud. Kassab v Michigan Basic Property Insurance Association, 441 Mich 433 (1992) requires that, when pleading a cause of action involving fraud, the circumstances alleged to must be stated with particularity. Section 421.32(a) requires the Agency to examine claims and render determinations on the facts; the Unemployment Insurance Agency lacks jurisdiction to render adjudications containing summary legal conclusions unsupported by factual assertions. In addition, the November 21, 2014 adjudication violates the demands of due process of law by failing to apprise Claimant of when, why, and how her “actions” constitute intentional misrepresentation of material fact.

Digest author: Winne Chen, Michigan Law, Class of 2017
Digest updated: November 26, 2017

 

Article: Legally Insufficient Notice and UIA Determinations

Legally Insufficient Notice and Unemployment Insurance Agency Determinations
By: Leila McClure, Marina Hunt, and Steve Gray
University of Michigan Law School Unemployment Insurance Clinic
April 2016

Sections: 421.32a, 421.33

Download a PDF version of this article

Frequently, unemployment insurance claimants and employers must rely only on short letter determinations and redeterminations (notices) they receive from the Agency that provide little or no information about why the Agency has taken the action of which it is notifying the party. This confuses most parties and can often prevent them from adequately responding to a negative action taken against them by the Agency. The sparse or confusing notices prevent them from either making, effective protest and appeal decisions, or unable to prepare for hearings. The following article discusses the circumstances in which Agency  notices are legally insufficient and what effect that should have on administrative proceedings.

Agency Required to Comply with US Department of Labor Standards
In the administration of its duties enumerated in the Michigan Employment Security Act, the State of Michigan must “cooperate with the appropriate agency of the United States under the Social Security Act.” M.C.L. 421.11(a). Per this requirement, the Unemployment Insurance agency is statutorily required to comply with relevant regulations promulgated by the Department of Labor.

Relevant Department of Labor Notice Standard
Section 6013 of Appendix A to Part 602 of the Employment Security Manual requires the State of Michigan to include “in written notices of determination furnished to claimants sufficient information to enable them to understand the determinations, the reasons therefor, and their rights to protest, request reconsideration, or appeal.” 20 CFR § 602 App. A, 6013(C)(2)

With regards to disqualification from benefits, the Department of Labor provides that: “If a disqualification is imposed, or if the claimant is declared ineligible for one or more weeks, he must be given not only a statement of the period of disqualification or ineligibility and the amount of wage-credit reductions, if any, but also an explanation of the reason for the ineligibility or disqualification. This explanation must be sufficiently detailed so that he will understand why he is ineligible or why he has been disqualified, and what he must do in order to requalify for benefits or purge the disqualification. The statement must be individualized to indicate the facts upon which the determination was based, e.g., state, “It is found that you left your work with Blank Company because you were tired of working; the separation was voluntary, and the reason does not constitute good cause,” rather than merely the phrase “voluntary quit.” Checking a box as to the reason for the disqualification is not a sufficiently detailed explanation. However, this statement of the reason for the disqualification need not be a restatement of all facts considered in arriving at the determination.” 20 CFR § 602 App. A, 6013(C)(2)(h) (2012) (Emphasis Added).

In the Department of Labor Advisory, Unemployment Insurance Program Letter, No. 01-16 concerning “Federal Requirements to Protect Individual Rights in State Unemployment Compensation Overpayment Prevention and Recovery Procedures, the Department of Labor specifically instructed on what qualifies as sufficient notice for fraud determinations. To satisfy federal law, the individual accused of fraud must “be provided with a written determination which provides sufficient information to understand the basis for the determination and how/when an appeal must be filed and must also include the facts on which the determination is based, the reason for allowing or denying benefits, the legal basis for the determination, and potential penalties or consequences.” USDOL Unemployment Insurance Program Letter No. 1-16, page 2 (emphasis added). The Letter also provides a description of the information that must be included in a written determination:

  1. A summary statement of the material facts on which the determination is based;
  2. The reason for allowing or denying benefits; and
  3. The conclusion of the decision based on the state’s law

Relevant Michigan Law
In Snyder v. RAM Broadcasting, No. 82 23718 AE, Washtenaw Circuit Court (April 26, 1983) (Digest No. 16.39), the Circuit Court held that a “Notice of Hearing which [does] not give a plain statement that claimant’s eligibility pursuant to Section 28(1)(a)… might be raised was not an adequate notice of the issue when it merely used the words ‘Ability/Availability/Seeking Work/Eligibility.’” The reasoning the court used in deciding this notice was inadequate was that it was “not a plain statement of the matters asserted,” meaning that “words and phrases divided by slashes and followed by a string citation to given sections of the Act do not provide a reasonably understandable notification that an issue will be considered, especially where the notification is intended for a lay person.”

Recently in Proulx v. Horiba Subsidiary Inc., 14-006880-241108 (Oct. 2, 2014) (Digest No. 18.21), an unpublished decision by the Michigan Compensation Appellate Commission (MCAC), the body held in part that the agency’s fraud redetermination was insufficient because “it merely provide[d] a conclusory statement with no fact-finding to support it.”

Agency Practice
The Unemployment Agency’s practice of sending conclusory statements of disqualification or findings of misrepresentation violates both the mandatory Department of Labor standards and existing Michigan law. Examples of insufficient notice under the Department of Labor standard include:

  • “Your actions indicate you intentionally misled and/or concealed information to obtain benefits you were not entitled to receive”
  • “You quit your job with COMPANY on DATE due to other personal reasons”
  • Redeterminations including only the underlying issue and relevant statute number, such as: “Ability 28(1)(c)”

Good Cause to Re-Open
Pursuant to UIA Rule 270(1)(e), ““fail[ure] to receive a reasonable and timely notice” is good cause for reconsideration and reopening. Section 32(a) of the MESA provides that “the claimant and other interested parties shall be promptly notified of the determination and the reasons for the determination.” Based on the failure to comply with Department of Labor standards and existing Michigan law, any agency determination or redetermination is void if it does not include:

  • An explanation of the reason for the ineligibility or disqualification that is sufficiently detailed so that the claimant knows why he or she is ineligible
  • Information about what the claimant must do to appeal or requalify for benefits
  • Individualized facts to indicate how the decision was reached

Effect of Insufficient Notice

Void ab initio
Insufficient notice of an agency decision makes that decision null and can be treated as void ab initio. The Michigan Court of Appeals has held that a failure to give proper notice as required by the applicable statute “is a jurisdictional defect that renders the subsequent proceedings void.” Kanouse v Montcalm County Drain Comm’r, unpublished opinion per curium of the Court of Appeals, issued March 19, 2002 (Docket No. 236285), p 2. Likewise, the Court of Appeals held in a workers’ compensation case that improper notice renders a subsequent judgment potentially voidable. Abbott v Howard, 182 Mich App 243 (1990).

Procedural Due Process
The notion that insufficient notice renders a subsequent decision void also comes from a two-step analysis:

(1) Inadequate notice is a violation of procedural due process rights, and

(2) Decisions that relied on a lack of due process cannot be sustained.

Under step (1), it is clear from U.S. Supreme Court jurisprudence that proper notice is fundamental to due process. See, e.g., Mullane v Central Hanover Bank & Trust Co., 339 US 306 (1950). In a case specifically about the rights of welfare recipients, the U.S. Supreme Court said that due process requires “timely and adequate notice detailing the reasons for” an agency decision, and“[t]hese rights are important in cases such as those before us, where recipients have challenged proposed terminations.” Goldberg v Kelly, 397 US 254 (1970). See also Cosby v Ward, 843 F2d 967 (CA 7, 1988) (failure to provide adequate written notice of issues to be raised at unemployment compensation hearing violated fair hearing requirement).

Under step (2), courts have voided judgments that were founded on violations of procedural due process. Often these cases fall under procedural rules such as FRCP 60(b)(4) and MRCP 2.612(c)(1)(d), which allow courts to provide relief from judgments that are void. Courts have interpreted those rules as applying to judgments that arose from inadequate process. See, e.g., In re Ruehle, 307 BR 28 (Bankr CA 6, 2004) (upholding a lower court’s decision to vacate an order where one party was denied due process of law).

Lack of Jurisdiction

An ALJ’s Authority
Where there is an occurrence of insufficient notice or a void determination, an Administrative Law Judge has the authority to dismiss or adjourn a hearing based on lack of jurisdiction over the matter. An ALJ’s authority to return jurisdiction can be inferred from both the Michigan Employment Security Act and the MAHS hearing rules issued by LARA. Section 33 of the Act authorizes MAHS to accept cases on appeal and then give them to Administrative Law Judges so long as they deal with redeterminations issued by the agency in accordance with Section 32a. MESA 421.33(1). Section 32a(1) details the agency’s decision-making process, by which a determination or redetermination is issued at each step, followed by “a hearing on the redetermination before an administrative law judge.” MESA 421.32a(1). According to these rules, the ability to have a hearing with an ALJ is contingent upon the existence of an agency decision. Without a valid determination or redetermination, the judge does not have jurisdiction over the case under MESA.

Also, it is standard practice for an ALJ to return a matter to the Agency when they can’t find an Agency determination to support it. ALJs commonly return matters to the Agency when no determination can be found in their system or in the hearing file.  Legally insufficient notice is akin to that situation.

The administrative hearing rules, issued by LARA for MAHS, support the principle that the ALJ has broad discretion in deciding how to handle a case, including issues that arise before or after hearings and questions of jurisdiction. For example, Rule 106 contains a lengthy list of powers that the ALJ has, including the power to, “on an administrative law judge’s own initiative, adjourn hearings.” Department of Licensing and Regulatory Affairs Michigan Administrative Hearing System Administrative Hearing Rules (eff. January 15, 2015), R 792.10106(1)(o). In addition, Rule 110 allows the ALJ to decline to consider a document that was not properly served on all parties, which is another form of inadequate notice. Id. R 792.10110(8).

Application to Good Cause
The fact that a claimant or employer received insufficient notice in the determinations provides her with good cause for filing a late appeal. The Agency’s administrative code provides that ‘good cause’ for reconsideration under MCL 421.32a includes among other things failure “to receive a reasonable and timely notice, order, or decision.” Mich Admin Code R 421.270(1)(e). Where a determination is legally insufficient on its face, it does not provide reasonable notice as required by 270(1)(e). On that basis, there is good cause for reopening, rehearing, or late appeals.

Appropriate Remedies
There are two possible appropriate remedies when the UIA has provided notice that does not meet the Department of Labor standards. First, a notice could be deemed unreasonable on its face. With a finding of unreasonable notice, the notice can be voided and jurisdiction should return to the Agency to issue a notice that complies with the above-mentioned standards. Alternatively, the unreasonable notice could form the basis for good cause for reopening or late appeal. Under a finding for good cause for reopening or late appeal, a case would then proceed on the underlying merits of the unemployment claim.

————————————-
About the Authors

– Leila McClure, University of Michigan Law School, Class of 2016

– Marina Hunt, University of Michigan Law School Class of 2017

– Steve Gray, Clinical Assistant Professor and Director of the University of Michigan Law School Unemployment Insurance Clinic

Rosewarne, d/b/a Crossroads Imports v Dyktor – 10.42

Rosewarne, d/b/a Crossroads Imports v Dyktor
Digest no. 10.42

Section 29(1)(a)

Cite as: Rosewarne v Dyktor, unpublished opinion of the Ingham County Circuit Court, issued February 26, 1985 (Docket No. 82-28690 AE).

Appeal pending: No
Claimant: Denise R. Dyktor
Employer: Mary Anne Rosewarne, d/b/a Crossroads Imports
Docket no.: B81 01118 76258
Date of decision: February 26, 1985

View/download the full decision

CIRCUIT COURT HOLDING: (1) An employee who gives notice of an intent to quit should not be penalized with a loss of wages by termination prior to the intended date of separation. (2) Since Claimant was the party seeking review and the one unemployed, it was not an abuse of discretion to deny the employer’s request for an adjournment.

FACTS: The employer discharged Claimant in anticipation of Claimant’s projected departure.

DECISION: Claimant is not disqualified for voluntary leaving.

RATIONALE: The court, agreeing with Miller v Visiting Nurses Association, unpublished opinion of the Michigan Employment Security Board of Review, issued July 27, 1978 (Docket No. 1978 BR 54326), stated that notice of an employee’s intention to quit is a benefit to the employer. Thus, it makes no sense to discourage this practice by allowing the employer the prerogative of deciding the employee’s last date. “This court is merely acknowledging notions of fundamental fairness … The giving of notice … is appropriate behavior by an employee. Such behavior should not be penalized with a loss of expected wages.”

Digest Author: Board of Review (view original digest here)
Digest Updated: 11/90

Snyder v RAM Broadcasting – 16.34

Snyder v RAM Broadcasting
Digest No. 16.34

Section 29

Cite as: Snyder v RAM Broadcasting, unpublished opinion of the Washtenaw County Circuit Court, issued April 26, 1983 (Docket No. 8223718AE).

Court: Washtenaw Circuit Court
Appeal pending: No
Claimant: Ann Snyder
Employer: RAM Broadcasting
Date of decision: April 26, 1983

View/download the full decision

HOLDING: The court held that a hearing notice was deficient under the Administrative Procedures Act and the due process clause of the Michigan and United States Constitutions where (1)  it was not a plain statement  of the matters asserted and (2) even if understandable, was not listed in the notice of hearing as an issue which would be presented before the referee.

FACTS:  Claimant filed a timely appeal after the Agency disqualified her from benefits under the Voluntary Quit provision of Section 29(1)(a).  During her hearing, testimony was taken regarding her availability to work and efforts to obtain a job during the period in which she claimed benefits. As a result, she was found disqualified for benefits under Section 29(1)(a) and the seeking work provision of Section 28.  On appeal, the claimant sought reversal of the of the judge’s finding on the “seeking work” issue.  She alleged that she did actively seek employment and was denied a fair hearing on this issue in violation of the Michigan Employment Security Act and the due process clause of the state and federal constitutions.

DECISION: The court held that the hearing notice was deficient under the Administrative Procedures Act and the due process clauses of the Michigan and United States Constitutions. In addition, the referee’s failure to inform the claimant of all issues he planned to decide during the hearing, along with the consequences of failing to meet her burden of proof violated the fairness requirement of Section 33 of the Michigan Employment Security Act.

RATIONALE: The court found that the hearing notice violated the Administrative Procedures Act (APA) provision requiring “a short and plain statement of the matters asserted.”  Here, the court found that “words and phrases divided by slashes and followed by a string citation . . . do not provide a reasonably understandable notification that an issue will be considered, especially when the notification is intended for a lay person.”  

In discussing the due process requirements under the state and federal constitutions, the court cited Hanson v State Board of Registration, 253 Mich 601, 607 (1931), holding that unless the right is waived, a party before a state agency is “at least entitled to a reasonably definite statement of the charge or charges preferred against the accused.”  Here, the court found that the notice of hearing was not reasonably calculated to inform the claimant of the pendency of the seeking work issue: “Whatever the purpose of this convoluted array of words and slashes, it was not to intelligibly notify the plaintiff that her entire benefits package prior to the hearing date was in jeopardy if she did not affirmatively prove her efforts in search of employment.” Thus, the hearing notice was deficient under the APA and the Michigan and United States constitutions.

The court further held that Ms. Snyder was denied a fair hearing where she was not apprised of all the issues the referee intended to decide, along with the consequences of the plaintiff’s failure to carry her burden of proof.  As a result, Ms. Snyder’s hearing violated the fairness requirement of Section 33 of the Act.

Digest author: Laura Page, Michigan Law, Class of 2018
Digest updated: December 1, 2017