Opinion
SC: 163146 COA: 350866
01-14-2022
Dock FARISH, Kebeh Gibson, Millie Nichols, and All Others Similarly Situated, Plaintiffs-Appellants, v. DEPARTMENT OF TALENT AND ECONOMIC DEVELOPMENT, Talent Investment Agency, Unemployment Insurance Agency, Director of Department of Talent and Economic Development, Director of Talent Investment Agency, and Acting Director of Unemployment Insurance Agency, Defendants-Appellees.
Order
On order of the Court, the application for leave to appeal the March 18, 2021 judgment of the Court of Appeals is considered, and it is DENIED, because we are not persuaded that the questions presented should be reviewed by this Court.
Viviano, J. (concurring).
I agree with the Court's decision to deny leave in plaintiffs’ appeal. I write, however, because the Attorney General has decided not to appeal a separate issue of jurisprudential significance even though a strong argument was offered in the state's favor by Judge RIORDAN ’s partial dissent below. Plaintiffs here received overpayments of unemployment benefits. In seeking repayment, the defendant governmental agency imposed interest and penalties and recouped these sums by withholding portions of plaintiffs’ later unemployment benefits, which were partially funded by the federal government. Plaintiffs sued, alleging that the withholdings violated a host of state and federal statutes. See MCL 421.30, MCL 421.62, 42 USC 503, and 42 USC 1983.
The relevant statutory provision for present purposes is 42 USC 503(g)(1), which states:
A State shall deduct from unemployment benefits otherwise payable to an individual an amount equal to any overpayment made to such individual under an unemployment benefit program of the United States or of any other State, and not previously recovered. The amount so deducted shall be paid to the jurisdiction under whose program such overpayment was made. Any such deduction shall be made only in accordance with the same procedures relating to notice and opportunity for a hearing as apply to the recovery of overpayments of regular unemployment compensation paid by such State.
"Unemployment benefits" is defined as "unemployment compensation, trade adjustment allowances, Federal additional compensation, and other unemployment assistance." 42 USC 503(g)(3). "Overpayment" is not defined. State law allows for the collection of interest and penalties on overpayments to be deducted from future payments. See MCL 421.62.
The initial question addressed by the Court of Appeals below, but which has not been appealed here, is whether 42 USC 503(g)(1) precludes states from seeking interest and penalties. The Court of Appeals majority held that the statute was silent on this question and relied on a 1989 letter from the U.S. Department of Labor explaining that offsets from unemployment overpayments could "not be used to recover any additional interest or penalties due under State law ...." The Court of Appeals went on to find that plaintiffs could enforce this provision but that no monetary relief or remittances were available as a remedy for the statutory violation. In his partial dissent, Judge RIORDAN disagreed that 42 USC 503(g)(1) barred states from recouping penalties and interest. Nothing in the language of the statute purported to do so, he noted. Further, another subsection allows states to recover any "uncollected covered unemployment compensation debt," which is defined to include any contributions due to the unemployment fund and "any penalties and interest assessed on such debt." 42 USC 503(m) (relying on the definition in 26 USC 6402(f)(4) ).
Plaintiffs have appealed the Court of Appeals’ holding with regard to the lack of a monetary remedy, but the Attorney General, representing the government, has not appealed the decision that Michigan is barred from recouping penalties and interest in these circumstances. Because the federal statute represents the supreme law of the land, U.S. Const., art. VI, cl. 2, it trumps state statutes. Thus, the failure to seek review of this decision essentially renders unenforceable the statutory provisions authorizing the state to recoup interest and penalties from future benefit payments. Allowing statutes to be nullified in this manner is a questionable practice that I have criticized in a similar context. See League of Women Voters of Mich. v. Secretary of State , 506 Mich. 905, 909, 948 N.W.2d 70 (2020) ( VIVIANO , J., concurring) ("[T]he better course from our vantage is for the executive branch to enforce and defend statutes—even when it disagrees with them or thinks they are unconstitutional."). The Attorney General's failure to appeal here is all the more surprising given Judge RIORDAN ’s strong arguments in dissent, along with the jurisprudential and practical significance of the case.
According to recent reports, the state has improperly paid out billions of dollars of unemployment benefits in recent years. See DesOrmeau, Michigan Paid $8.5 Billion in Unemployment Fraud During Pandemic, Report Finds , MLive (December 29, 2021) < https://www.mlive.com/public-interest/2021/12/michigan-paid-85-billion-inunemployment-fraud-during-pandemic-report-finds.html> (accessed January 6, 2022) [https://perma.cc/4RY6-E9VL]; Martínez-Beltrán, Michigan Doled Out $3.9 Billion in Improper Unemployment Payments, Audit Says , Bridge (November 18, 2021) < https://www.bridgemi.com/michigan-government/michigan-doled-out-39-billionimproper-unemployment-payments-audit-says> (accessed January 6, 2022) [https://perma.cc/2SDR-B389].
As the issue has not been appealed, we cannot address it. Thus, while I believe the matter is worthy of this Court's attention and would address it in the future, I nevertheless concur in the Court's denial order.
Because the issue of whether the federal statute has been violated at all is not before the Court, I agree that we should not now hear the issue plaintiffs raise concerning the proper remedy for violation of that statute.