Court Allows Suit to Proceed Against Horrible State Program - Ep. 7.386

welcome once again to latos law here's steve leto interesting story of the detroit free press uh paul egan and adrian roberts wrote it judge says that companies can be sued over the michigan unemployment fraud fiasco and and you know there's been a lot of weird stuff going on lately but one of the longer running stories in michigan is that there's unemployment here available to people who lose their jobs and so if you apply for unemployment they'll pay you benefits and if they find out that you applied for benefits inappropriately and got paid when you should enough they can come take that money back but the weird thing about this is that they often chase the wrong people trying to get money back and it's gotten so bad that some lawsuits were filed against the state and the people who were involved in this saying that you know you guys sued the wrong people you can't come chasing people for unemployment benefits that they didn't receive for instance so michigan residents falsely accused of unemployment insurance fraud by the state of michigan and subjected to harsh financial penalties that forced some of them into bankruptcy can proceed with their lawsuit against not just the state officials but the private companies that designed and helped implement the state's badly flawed robo adjudication system a federal judge said thursday and so you should immediately spot two problems there the phrase robo adjudication i i for one welcome our new robot overlords but i'm not sure i want them adjudicating anything but also the problem that they have is private companies were contracted and the state actually said well you know we it's an important job but we're going to contract it out let someone else handle it and the companies have argued that they were only following orders we were only following orders and you know courts don't always buy that as a defense that defense will not fly u.s district judge david lawson wrote in a 68-page opinion since world war ii the just following orders defense has not occupied a respected position in our jurisprudence and government actors in such cases may be held liable if there's a reason why any of them should question the validity of that order and so if they tell you to do something wrong you can't just do it and go well they told me to do it meanwhile a lawyer for the plaintiff said the state has continued to use this system which is called the michigan integrated data automated system or midas to make fraud determinations amid record high filings for jobless claims during the coronavirus pandemic he believes the system continues to falsely accuse significant numbers of michigan claimants of fraud midas is intentionally programmed to make it difficult to get benefits said the lead attorney for the plaintiffs attorneys for the companies had no immediate comment in the ruling the michigan attorney general's office which represents the state is still reviewing the decision with their clients the spokesperson said officials at the unemployment insurance agency did not immediately respond to questions about the ruling and the assertion from the other attorneys the false fraud problem is likely to recur amid the coronavirus pandemic despite more human oversight oh hey wait maybe we should have humans overseeing the robo judges lawson ruled a lawsuit brought by attorneys from two detroit law firms can proceed against the two companies that were dealing with this and state officials he dismissed allegations against three other state officials and also removed one of the five plaintiffs from the lawsuit the attorney said it's good news following orders is not an excuse to violate constitutional rights the state has acknowledged that at least 20 000 michigan residents and possibly as many as 40 000 were wrongly accused of fraud between the years of 2013 and 2015 by a 47 million dollar computer system purchased from a company called fast and that the state operated without human supervision and with an error rate as high as 93 percent so you build a a computer system that costs 47 million dollars it's operated without human supervision and has an error rate of 93 percent um i'm thinking a couple seventh graders could slap together something on a laptop more accurate and for about half the 47 million price tag they would do a better job those wrongly accused people were subjected to highest in the nation quadruple penalties and many were subjected to aggressive collection techniques such as wage garnishment and seizure of income tax refunds in the same case the judge earlier denied a request to certify the lawsuit as a class action but he is soon expected to rule on a fresh class action certification request that is more carefully tailored around the plaintiffs who can show the state never properly notified them of the fraud allegations in a way that gave them a reasonable chance to defend themselves and we talked before about due process the idea that you have to know what the charges are against you and have an opportunity to be heard notice and an opportunity to be heard and so what would happen is these people would get unemployment like they're entitled to the robo adjudicator would determine with a 93 percent error rate that you had committed fraud and then just turn over all your information in such a way that they would now start coming after you garnishing wages and so on or or you know getting tax refunds or going after your bank accounts and you're like wait how'd this happen and it was all just a weird process that wasn't thought of very well the state replaced its older system which sent adequate notices and questions to jobless claim and suspected of fraud with midas which produced deficient notices and questionnaires with much less if any human oversight the judge wrote since when can't we trust robots you know though the unemployment insurance agency is ultimately responsible the record contains sufficient evidence that the company contributed to the alleged deprivation of the plaintiff's property interest without due process hey looks like the judge agrees with me as for the other company were it not for the consulting firms extensive research work advice and ongoing management the uia the unemployment people would have been unable to develop midas the judge said the judge said the suit can also proceed against the head of the agency at the time of the false fraud findings and another man who held a variety of top jobs at the agency relevant to midas project a similar case involving midas is now before the michigan supreme court a key different uh a key difference in that case only names state parties as defendants and not the private contractors who put together the robo adjudicator system with a 93 percent error rate nearly 3.2 million unemployment claims have been created since the start of the pandemic a year ago with nearly 400 000 claims in one week in early april in order to keep up with the influx of claims the agency relaxed certain fraud prevention policies and what it didn't know at the time was that an international crime ring was targeting state unemployment programs across the country including michigan so it's estimated that hundreds of millions of dollars were distributed to criminals as a result of these relaxed policies and in response the agency reinstated those fraud prevention policies now running claims through its fraud manager filter before they are paid out so you've got the robo adjudication system and i remember reading other articles about this in the past and it was simply a computer program that was set up to go through filings and it was rigged in such a way as well if it sees this it assumes it's fraud if it sees this it assume and so there's a bunch of things that would just cause it to throw up a flag and it would then determine that you committed fraud and start sending you notices going you've committed fraud returned the money that we sent you and by the way it's a quadruple penalty so if we paid you a thousand dollars and it was fraud you gotta pay us back four thousand dollars right now and if you don't pay it back wanna start doing things like garnishing your wages if you've got a job now because these can be years old claims or we can go after your bank accounts your tax returns or anything like that and they start hounding people and and people were stepping up going number one i got the benefits fair and square i deserved them and number two the notices being sent sometimes weren't clear as to what they were uh it was unclear if you got a hearing on this uh it was very very difficult to get anybody to talk to you and it's very clear that the people in lansing the the government okay lansing is a capital state of michigan and the people in lansing like every other thing look at this and go is it generating money for us and the system was generating money so as long as the system's generating money they don't question it and if you've got something that's creating a 93 error rate 93 error rate you have to ask yourself is that really doing what it's supposed to be doing because the presumption i'm guessing there is that of a hundred people it accuses a fraud seven of them actually had committed fraud and i think you'd get better odds throwing darts at a map or something i mean and they paid tens of millions of dollars 47 million for this computer system that's got a 93 error rate i mean that's you have to try for it to be that bad so you do wonder and i always when you look at these cases and somebody does something wrong in the government and they start naming people as defendants in a lawsuit and and you often look at this and go really is it is it all these people's fault is it really is there like one person there and if these people in this department in lansing knew that they were running a program that had a 93 percent error rate and they let it continue going yeah name them as defendants because if you came to me and said steve you have 47 million dollars you paid us we're done we got a program here it's got a computer program computer system it's going to evaluate claims kick out notices and take care of all this stuff it's going to generate tons of money for the state which is by the way it's all the politicians care about it's going to generate tons of money tons of money is going to come in as a result of this i'm going to go great how accurate is it 93 error rate like wait a second seven percent error rate no seven percent accurate 93 error who programmed it do you understand what the purpose of this is that's that's that's extremely unacceptable you you can't you can't go after people knowing that 93 out of 100 of them are innocent you can't do that and oh sure we'll do that because it generates money this is the kind of craziness that can only be created by politicians and government workers because in the private industry the private sector no company would ever build something that failed 93 of the time and say yeah that's a success i'd say try a little harder 47 million dollars for the robo adjudication system and it's such a horrible thing that a federal judge has now said yes yes companies can be sued over the michigan unemployment fraud fiasco as can people within the government who were overseeing it and their defense that we were simply following orders is not going to do it so paul egan and adrian roberts wrote it for the detroit free press questions or comments put them below let's talk to you later bye-bye thank you for watching leto's law if truth is beauty how come no one has their hair done in the library

Channel: Steve Lehto

Views: 51,980

Rating: 4.9634395 out of 5

Keywords: lemon law, michigan lemon law, lemon law attorney, lemon law lawyer, http://www.lehtoslaw.com, steve lehto

Id: hjzoVW_DPps

Length: 12min 31sec (751 seconds)

Published: Mon Mar 29 2021