40,000 Michigan residents wrongfully accused of unemployment fraud can sue state for redress: '350 people pled guilty to a crime they didn’t commit'

Over the course of a two-year period, a supposedly faulty computer program at the Michigan Unemployment Benefits Office prompted authorities to erroneously accuse 40,000 residents of unemployment fraud. Now, the state supreme court has determined that those residents affected by the accusations can sue the state for redress.

“The state is prohibited from violating the rights the Constitution guarantees. If it does so, it is liable for the harm it causes,” Justice Megan Cavanagh wrote.

“If our Constitution is to function, then the fundamental rights it guarantees must be enforceable. Our basic rights cannot be mere ethereal hopes if they are to serve as the bedrock of our government,” she continued.

For attorney Jennifer Lord, this decision from the state supreme court is just the first step in finding justice for those wrongfully accused.

"I think there’s got to be some recognition that it’s not just the dollars that were taken that need to be recognized as harm," Lord said. "This was really unbelievably stressful for a lot of people."

It was likely more than stressful, as Lord also noted, "Three hundred and fifty people pled guilty to a crime they didn’t commit," just to make the problem go away.

According to reports, an additional 1,100 Michigan families eventually declared bankruptcy after hiring attorneys and paying other court fees to fight the false charges. Others had difficulty finding employment or securing a home loan. There were also likely untold social costs.

The faulty computer program operated while Governor Rick Snyder, a Republican and the predecessor to current Governor Gretchen Whitmer, was still in office, though the exact years are unclear. According to Lord, this computer program cost state taxpayers $46 million to purchase and yet "was wrong 93 percent of the time."

The Unemployment Benefit Office has since admitted the error, but Lord said that her goal is to have the state admit the error on the record. Because of the Michigan Supreme Court ruling, the case will now go to the trial level. Class-action lawsuits are expected to be filed against the state soon.

The Michigan Supreme Court decision was 4-3. Per the AP, all three dissenting justices were nominated by a Republican.