High court considers whether to let jobless false fraud case proceed

A lawyer representing individuals who were falsely accused of unemployment fraud years ago argued Wednesday before the Michigan Supreme Court that Michigan’s violation of his clients’ due process rights merits monetary damages beyond the reimbursement of unemployment benefits that were taken from them. 

But a lawyer for the state said the jobless benefits case doesn’t meet the standard of a due process rights violation. 

Attorney Mark Granzotto argued to the high court that it should let his clients proceed with what could amount to a multimillion dollar lawsuit against the state. The state usually is exempt from monetary damages because of Michigan’s governmental immunity law, but suits filed under constitutional claims are expected to bypass state law. 

The false fraud unemployment scandal dates back to a state-run computer program that falsely accused thousands of people between 2013 and 2015 of unemployment fraud, which was then, in many cases, collected on by the state. For some individuals who had to return the jobless aid they received, the burden led to bankruptcies and foreclosures.

The Michigan Supreme Court heard arguments about whether lawsuits against the state for false unemployment fraud claims should be allowed to go forward despite a law giving the government immunity.

The court needs no “imprimatur” from the Legislature to uphold the state Constitution and determine damages based on a constitutional violation of claimants’ right to due process, Granzotto said.

“We have a situation where the administrative process cannot address the constitutional claims the plaintiff is making and it can’t award the damages the plaintiff is asking for,” he said. 

“…This court has a role, a special role it seems to me, in the enforcement of constitutional rights.” 

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