More than 3,000 Michiganders are finally going to be compensated, a judge ruled Monday, after fighting for more than eight years against a faulty computer program that denied them unemployment benefits for “fraud” and clawed back their wages and tax benefits.
“Artificial Intelligence is not a substitute for human judgment, period,” class co-lead counsel Michael Pitt of Pitt, McGehee, Palmer, Bonanni & Rivers PC told Bloomberg Law after the hearing. “Algorithms can’t judge people properly—the machines are stupid when it comes to that.”
Court of Claims Judge Douglas B. Shapiro said he’d give final approval to a roughly $20 million deal through which a limited number of jobless claimants will get back more than 100% of what the Michigan Unemployment Insurance Agency wrongly took back around 2015. For two years the state relied on a computer program—rather than actual human analysis—to flag people as fraudsters, incorrectly taking millions of dollars from Michiganders out of a job.
The attorneys involved stand to receive about $6.6 million from the deal, which Shapiro and counsel praised for giving a claimants what was taken from them and more.
The average claim was nearly $2,000, and each of the class members would also get an extra “supplemental award” of roughly $1,100. A subset of those members —under 1,000 people—will receive “hardship awards” for the damage the clawbacks inflicted on their lives, with the average payment reaching over $4,000 and granting some people more than triple the amount the computer took.
‘Denied Everything’
Though thousands of people will be paid, tens of thousands of others were left out of the settlement.
One objector to the deal testified in court about how clawbacks turned her life upside down, illustrating the struggle imposed on more people than could fit into the Detroit Pistons’ Little Caesars Arena for two sold-out games.
After losing her job the state clawed back benefits from Nakeya Brown, straining her finances to the point she lost her apartment. She had to move in with relatives out of state and couldn’t take care of her ailing mother. The strain crescendoed and she suffered four mini-strokes, she told the court after traveling from Tallahassee, Fla., to attend the hearing.
“It was like a snowball effect,” she said. “I was denied everything.”
Brown didn’t qualify for the settlement because her benefits were denied by an administrative law judge, the court ruled. The class was meant only for those that had benefits stripped by the faulty computer program, and there were countless other Michiganders who didn’t get a chance to participate.
Claims against the state for benefits decisions have a very narrow time window, and Michigan refused to waive limits on claims unemployment recipients can levy against it, shrinking claims to roughly 8,000 of the 40,000 people impacted by the faulty computer system. From there, despite efforts by attorneys and claims administrators to sign up claimants, people wary of identity theft wouldn’t participate.
That means people wrongfully tagged as “fraudsters” by the state are now worried about scammers targeting them, Pitt said.
Bauserman v. Mich. Unemployment Ins. Agency, Mich. Ct. Cl., No. 15-000202-MM, final class settlement approved 1/29/24.