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Michigan News

Judge grants preliminary injunction in lawsuit challenging Michigan unemployment overpayments

Launched during the Great Depression, the unemployment insurance system has seen unprecedented strain during the coronavirus crisis.
Olivier Douliery AFP via Getty Images
Launched during the Great Depression, the unemployment insurance system has seen unprecedented strain during the coronavirus crisis.

Michigan’s Unemployment Insurance Agency (UIA) will have to stop seizing money from some people the agency claims received too much in unemployment benefits, after a Michigan Court of Claims judge’s ruling.

The UIA says it accidentally overpaid unemployment benefits during the pandemic. As a result, it says that hundreds of thousands of people in Michigan owe money back due to errors it blames on the federal government.

The state has garnished wages, seized tax returns, and otherwise forcibly collected much of that money. That led to a class-action lawsuit from plaintiffs who say the state violated their due process rights.

Now, Michigan Court of Claims judge Brock Swartzle has ordered the state to stop collecting from people who haven’t yet exhausted the appeals process, granting in part a preliminary injunction requested by the plaintiffs.

“Plaintiffs are likely to succeed on the merits” of at least one claim in their case, Swartzle wrote in an order issuing the preliminary injunction. “The Agency is likely depriving plaintiffs of their right to due process by seeking repayment of unemployment benefits before completing the administrative-review process,” he wrote.

“In summary, plaintiffs are entitled to preliminary injunctive relief to prevent the Agency from engaging in collection efforts until after the administrative process has run its course.”

UIA spokesman Nick Assendelft said the agency is “still reviewing today’s ruling by Judge Swartzle and its impact on claimants.” He noted that UIA Director Julia Dale has “already authorized 55,000 overpayment waivers with more to come,” and “has instructed staff to identify other claimants who may be eligible for overpayment waivers.” Assendelft said claimants who believe they were not overpaid “have the option and are encouraged to file a protest” with the agency.

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