Earlier this month, in a ruling that ought to be required reading for public servants everywhere, the Michigan Court of Appeals revealed how state bureaucrats and judges ran roughshod over a worker erroneously accused of filing a fraudulent unemployment claim.

A three-judge appellate panel's unanimous decision in West Bloomfield resident Suzanne Lawrence's lawsuit against the Michigan Unemployment Insurance Agency means Lawrence won't have to return the $158 the state has been trying to claw back from her since 2015, when it  claimed — "without a scintilla of evidence," in the court's words — that Lawrence collected jobless benefits she wasn't entitled to.

But Tuesday, a second Court of Appeals panel decided that tens of thousands of other similarly situated workers have no recourse against the same conspiracy of dunces who persecuted Lawrence.

In a separate ruling dismissing a class-action filed on behalf of claimants falsely accused of defrauding the state, appellate judges Michael Gadola, Karen Fort Hood  and Patrick Meter embraced Attorney General Bill Schuette's argument that the victims of the unemployment agency's massive screw-up waited too long to sue. 

The Court of Appeals'  one-two punch leaves Gov. Rick Snyder with a stark choice: Will he congratulate Schuette for protecting the millions of dollars the state siphoned from falsely accused workers after trampling their rights, garnishing their wages and seizing their tax refunds. Or will he demand legislative action to correct the flagrant miscarriage of justice his administration engineered?

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Grand theft, automated

This month's appellate rulings are the latest turn in a scandal that exploded in 2016 after auditors determined that the state had erroneously accused as many as 40,000 workers of seeking jobless benefits they didn't deserve.  

The Michigan Unemployment Insurance Agency (MUIA) blames an error-prone computer system for accusing claimants on the basis of inaccurate or incomplete data.

But the Court of Appeals decision in Lawrence's favor unspools a more damning tale of human apathy and bureaucratic incompetence. 

Lawrence was working for the Bloomfield Hills Country Club when she was laid off on Jan. 19, 2013. She received vacation pay for the following two weeks, after which she became eligible for unemployment benefits.She received her first unemployment check — $158 for the weeks ending Feb. 9 and Feb. 16 — on Feb. 20.

In April 2015, more than two years later, Lawrence received a computer-generated letter asserting that she had illegally collected job benefits for the two weeks in which she also received vacation pay. The letter demanded that she return the first $158 MUIA had mailed her.

An appeal denied

What happened when Lawrence contested the state's claim in a 2015 hearing before Administrative Law Judge Jonathan Zadoff is not in dispute:

Lawrence and her Bloomfield Hills Country Club supervisor appeared as witnesses. Both agreed that Lawrence was ineligible to collect jobless benefits and vacation pay for the same two weeks, but they disputed the state's allegation that she had ever done so.

MUIA sent no one to the hearing and submitted no canceled checks, ledger sheets or other exhibits to support its allegation that Lawrence had been overpaid.

Even so, Zadoff rejected Lawrence's appeal, ruling that it was her burden to prove she hadn't received benefits she was ineligible to collect.

Still acting as her own attorney, Lawrence, appealed Zadoff's decision to the Michigan Compensation Appellate Commission, offering her own bank deposit records and again challenging the state to produce any evidence she'd been paid benefits for the two weeks in dispute. 

Although no such evidence emerged, commissioners Lester Owczarski, Danielle Brown and George Wyatt upheld Zadoff's ruling in a one page order.

So did Oakland County Circuit Judge Leo Bowman. Brushing aside Lawrence's request to plead her case in person. Bowman insisted the state's unsupported assertion that it had paid her the disputed funds was "competent, material and substantial evidence" that it had, and that it was incumbent on Lawrence to prove otherwise.

Frustrated, but still offended by the state's unsupported allegation that she had bilked the unemployment insurance fund, Lawrence finally hired a lawyer. In an appeal filed with the state's second highest court, attorney Dennis Dubuc emphasized that his client had never argued that she was entitled to unemployment before her vacation pay ran out, but merely that she had never received, nor even sought, benefits for the period in question.

Justice for one

Last week, in a unanimous opinion striking down Bowman's ruling for the state, Court of Appeals judges Kathleen Jansen, Colleen O'Brien and Cynthia Stephens called the trial judge's reasoning "inexplicable,"  noting that "(t)here is simply no evidence in the record to prove that the MUIA issued two benefit payments of $79, or any other amount, to Lawrence for the weeks of her conceded ineligibility."

The judges also ridiculed the state's assertion — which the administrative law judge, three compensation appeal board commissioners, and Bowman had all embraced uncritically — that it was Lawrence's burden to prove the state hadn't paid her.

"Requiring Lawrence to prove that she never received payments would be requiring her to prove a negative — a near impossibility," the appellate panel wrote.

Lawrence's case exposes the hollowness of MUIA's error-prone computer defense. Administrative Law Judge Zadoff is not a computer. Neither are the three state compensation appellate commissioners, nor the county circuit judge who rubber-stamped their decision, nor the four — four! — assistant attorneys general who defended the state's evidence-free case against Lawrence to the death.  

All nine of these public servants had the opportunity to set things right long before the Court of Appeals read them the riot act. But not one of them expressed any interest in what justice and common sense demanded. 

MUIA says it's still reviewing the files of 40,000 jobless claimants from whom it may have erroneously sought to recover legitimate unemployment payments, and that it will continue to make refunds — the agency has returned more than $5 million so far — on a case-by-case basis.

But Lawrence's case casts serious doubt on the agency's commitment to do right by the workers it hounded until someone puts a gun to its head.

Snyder and his Republican colleagues in the Legislature have such a gun — and it's time they took some initiative and cocked the hammer.

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