Judge says Michigan's UIA must halt collection efforts for claimants with pending appeals

Adrienne Roberts, Detroit Free Press
·2 min read

Michigan's Unemployment Insurance Agency must halt collection activities for claimants who were told they were overpaid benefits in the pandemic and then appealed that decision, according to a Thursday order from a state judge.

This order clarifies that it's not just the plaintiffs in a lawsuit that the agency needs to stop collection efforts, such as garnishing wages or seizing tax refunds, for. Instead, it applies to any claimant with an overpayment letter who appealed or protested the decision and who has yet to exhaust all their options.

"Putative class members will likely suffer irreparable harm to their constitutional right to due process if defendants seek repayment of unemployment benefits from them before completing the administrative review process," Court of Claims Judge Brock Swartzle said in the order.

Court of Claims Judge Brock Swartzle said in an order that Michigan's Unemployment Insurance Agency must halt collection activities, such as seizing federal tax returns, for claimants who received benefits in the pandemic but were then later told they were overpaid.
Court of Claims Judge Brock Swartzle said in an order that Michigan's Unemployment Insurance Agency must halt collection activities, such as seizing federal tax returns, for claimants who received benefits in the pandemic but were then later told they were overpaid.

The need for clarification came after the agency asked Swartzle a month ago who the preliminary injunction granted in a proposed class-action lawsuit applied to. The agency said it believed the injunction should be limited to the named parties in the lawsuit, and not extended to a class of claimants.

In the order, Swartzle said the injunction applies to claimants with timely protests and appeals — with a caveat. It also applies to claimants who file an untimely appeal or protest and subsequently establish "good cause" through a redetermination or an administrative law judge's decision.

It's unclear how many claimants this order will affect. Some clues as to how many claimants have received overpayment letters were provided in a recent announcement from the agency that said it received authorization from the U.S. Department of Labor to pause collections activities for nearly 400,000 unemployment insurance claimants for at least the next few months. That "pause" expires on Oct. 31, while the court's injunction halts collection activities until the administrative-review process is completed.

Nick Assendelft, a spokesperson for Michigan's UIA, said the agency and the state's attorney general's office are reviewing the judge’s ruling to determine next steps regarding the UIA's suspension of collections announced in July.

More: Michigan unemployment agency has questions after judge orders pause on collections

More: Michigan's UIA pauses collections against 400,000 claimants with overpayment letters

Swartzle said the case remains open, and he said although the court will consider the question of class certification in the near future, it's likely that certification will be granted.

Contact Adrienne Roberts: amroberts@freepress.com.

This article originally appeared on Detroit Free Press: Judge: UIA must stop collection efforts for claimants with appeals