Michigan Court Approves $20 Million Unemployment Fraud Settlement

by Scott McClallen


The Michigan Court of Claims has entered an order certifying the $20 million class-action settlement against the Unemployment Insurance Agency.

The settlement resolves a class-action lawsuit against the agency claimed in 2013 it falsely accused unemployment recipients of fraud and seized private property without due process.

The settlement will resolve seven years of litigation against the UIA. At issue in Bauserman v. Unemployment Insurance Agency was the UIA’s Michigan Integrated Data Automated System, which inaccurately flagged “thousands of Michiganders” for unemployment fraud. In response to the erroneous system reporting, the state wrongfully seized “paychecks, income tax refunds, and other assets without due process.”

“I am grateful to the court for agreeing that the compensation settlement is fair, reasonable, and adequate and that it satisfies all due process requirements,” Michigan Attorney General Dana Nessel said in a statement. “While this settlement cannot undo the hardships these residents faced, it does secure the long overdue relief that they deserve.”

On Oct. 20, Nessel and the law firm of Pitt, McGehee, Palmer, Bonanni & Rivers announced that Michigan had reached a $20 million settlement in Bauserman v. Unemployment Insurance Agency. The parties submitted settlement documents to the court for approval.

The court conducted a hearing on Jan. 9 hearing arguments supporting the request for preliminary approval of the settlement and certification of a settlement class.

To be eligible for an award of compensation, a claimant must meet the definition of the settlement class, including if the person received an initial determination or redetermination of intentional misrepresentation issued by the UIA between Oct 1, 2013, and Aug, 31, 2015, issued initially through the UIA’s auto-adjudication process, and suffered a first collection on or after March 9, 2015, and did not opt-out from the settlement.

On Feb. 1, the claims administrator will issue a notice of settlement of Bauserman UIA False Fraud Class Action. The notice will be mailed to each known class member and will provide contact information and a table of important dates, along with instructions on what documents the claimants must submit to be eligible under the settlement agreement. The notice also details an appeal process concerning disputes about eligibility for participation in the settlement class and disagreements over the monetary award.

To begin the process, claimants must submit a completed registration form by April 5 and submit a claim form by April 14. The registration form and claim form will be available for completion online.

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Scott McClallen is a staff writer covering Michigan and Minnesota for The Center Square. A graduate of Hillsdale College, his work has appeared on Forbes.com and FEE.org. Previously, he worked as a financial analyst at Pepsi.
Photo “Michigan-Unemployment-Insurance-Agency” by The Center Square.


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