Judge approves $20M deal for people wrongly accused of unemployment fraud

DETROIT (AP) — A judge has approved a $20 million class-action settlement covering thousands of people who were wrongly accused of fraud by the State of Michigan when seeking unemployment benefits.

Court of Claims Judge Douglas Shapiro signed off on the deal last week, saying it was superior to other ways to compensate people who were victims of an automated computer system in 2013-15.

People were accused of cheating to get jobless aid. They were forced to repay money, along with substantial penalties, before the Unemployment Insurance Agency finally acknowledged widespread errors that affected more than 40,000 people.

Although refunds were issued, the state still was sued by people who argued that their due-process rights — a right to be heard — were violated while they tried to untangle themselves.

The Michigan Supreme Court last summer said people can seek financial relief when the state violates their rights — a groundbreaking opinion.

More than 8,000 people have been identified as possible beneficiaries of the settlement so far, Shapiro said.

“While this settlement cannot undo the hardships these residents faced, it does secure the long overdue relief that they deserve," Attorney General Dana Nessel said.

About $6.5 million of the settlement will go to attorneys who have worked on the case.

Notices soon will be mailed to members of the class. Anyone seeking more information can check the websites of the attorney general, the unemployment agency and lawyers in the litigation.