Pitt Files Complaint Charging Use of Unmanned Machines Deprives Countless Workers Millions in Income Tax Refunds

September 14, 2015, Royal Oak, Mich. – Pitt McGehee Palmer & Rivers has participated in the filing of a class-action civil lawsuit against the State of Michigan Unemployment Insurance Agency (UIA). The lawsuit, filed with the State of Michigan Court of Claims, has been brought on behalf of hundreds of workers who have had their federal and state tax refunds illegally seized by the State. This was a result of the state’s UIA computers, which utilize a highly suspect automated fraud detection program, erroneously flagging a large number of claims as improper. According to the complaint, the use of unmanned machines to illegally seize tax refunds owed to workers is a widespread problem with disastrous consequences. The practice is causing hardships for hundreds, if not thousands, of individuals who depend on receiving their income tax refunds. The lawsuit asks that the plaintiff and all class members be awarded economic damages in the amount equal to their seized tax returns. It also seeks an order declaring the UIA’s practice of automated decision-making illegal and another permanently enjoining UIA from intercepting and seizing income tax refunds. The complaint lays out the illegal nature of these seizures. Without providing notices to claimants stating the grounds for its allegations that they fraudulently received unemployment benefits or of the required 60 days to present evidence to the contrary, the UIA arbitrarily seizes their tax refunds directly from state and federal treasury departments. “In its ongoing efforts to operate more like a for-profit business, the State of Michigan has laid-off scores of UIA workers and installed machines. The State claims the automated processing is superior to actual people in detecting fraudulent claims” said Jennifer Lord, of Royal Oak-based Pitt McGehee Palmer & Rivers, one of the attorneys representing the plaintiff. According to Lord, UIA’s machines are actually programmed to do the opposite of what a human claims reviewer would do. Upon discovery of a discrepancy in an unemployment claim, the machines automatically determine it to be fraudulent and immediately authorize seizure of any federal and state tax refunds the claimant is owed without providing the required advance notice. Based on public documents and recent media reports of this growing problem, Lord says this is a high-tech nightmare scenario which has already resulted in tens of millions of dollars in tax refunds being improperly seized from thousands of people who’ve done nothing  wrong or illegal. The case has been assigned to the Honorable Cynthia Stephens of the Michigan Court of Appeals serving as trial judge for the Court of Claims.  No hearing date on this case has been set. The full complaint can be viewed here.  

M. Pitt Cited in MLive Report on Midland Area Couple's Claim Filed Against the Federal Energy Resource Commission in Edenville Dam Collapse

Michael Pitt was quoted in MLive coverage of the claim filed against the Federal Energy Commission by a Midland Couple for property and personal damages caused by flooding after the collapse of the Edenville Dam in May 2020. The firm is representing Dan and Cathy Miller and filed a $1.25 million claim under the Federal Tort Claims Act. Read entire article here.

Midland Daily News -- "Lawsuit Blames State Agencies for Dam Failures"

Mike Pitt, Ted Leopold and Paul Stephen were referenced as plaintiffs' attorneys in a Midland Daily News report on the lawsuit filed June 25 in the Michigan Court of Claims. The coverage notes that the suit's 15 plaintiffs owned property and homes which were damaged or destroyed in the May 19 Midland area flooding caused by the collapse of the Edenville Dam. Read full article here.