Cahoo et al v. SAS Analytics Inc. et al

Filing 534

OPINION AND ORDER on motions for summary judgment. Signed by District Judge David M. Lawson. (DPer)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
PATTI JO CAHOO, KRISTEN MENDYK,
KHADIJA COLE, HYON PAK, and
MICHELLE DAVISON,
Plaintiffs,
v.

Case Number 17-10657
Honorable David M. Lawson

FAST ENTERPRISES LLC, CSG GOVERNMENT
SOLUTIONS, STEPHEN GESKEY,
SHEMIN BLUNDELL, DORIS MITCHELL,
DEBRA SINGLETON, and SHARON
MOFFET-MASSEY,
Defendants.
__________________________________________/
OPINION AND ORDER ON MOTIONS FOR SUMMARY JUDGMENT
In the remaining count of their amended complaint, the five named plaintiffs allege that the
defendants deprived them of their right to due process of law when the State of Michigan’s
Unemployment Insurance Agency (UIA) used its Michigan Integrated Data Automated System
(MiDAS) to make fraud determinations arising from their respective claims for unemployment
insurance. Defendants CSG Government Solutions and FAST Enterprises, Inc. played key roles
in the development and implementation of MiDAS, and the plaintiffs allege that they share
responsibility for the harm caused.
The plaintiffs also sued several individual employees of the Michigan Unemployment
Insurance Agency for their roles in the implementation of MiDAS and the adjudication of their
fraud cases. These defendants, Sharon Moffet-Massey, Stephen Geskey, Shemin Blundell, Doris
Mitchell, and Debra Singleton (the State defendants), also moved for summary judgment.

In their respective motions, CSG and FAST have moved for summary judgment arguing
that (1) the plaintiffs suffered no injuries, (2) the defendants did not cause any injuries, (3) they
are not state actors and cannot be sued for violating constitutional rights, and (4) three plaintiffs
are not the real parties in interest and should be judicially estopped from bringing their claims
because they failed to disclose in their respective bankruptcy schedules their property interests in
this litigation.
CSG and FAST raised these same arguments in motions to dismiss, which they filed after
the close of discovery. Those arguments, they asserted, supported their contention that the
plaintiffs lacked standing to sue them under Article III of the Constitution. The Court denied their
motions, Cahoo v. FAST Enterprises LLC, --- F. Supp. 3d ---, No. 17-10657, 2020 WL 7493103
(E.D. Mich. Dec. 21, 2020), and for the same reasons rejects those arguments in their respective
summary judgment motions, although two issues require additional discussion here. In the opinion
and order denying the motions to dismiss, the Court noted that although the facts supported a
conclusion that the plaintiffs’ injuries were fairly traceable to FAST’s and CSG’s conduct, the
Court did not determine the question of proximate cause. Id. at *10-12 (noting that “causation to
support standing is not synonymous with causation sufficient to support a claim”)
(quoting Parsons v. United States Dep’t of Justice, 801 F.3d 701, 715 (6th Cir. 2015)). In addition,
the Court determined that the factual record was not sufficient to address the effect of Cahoo’s,
Mendyk’s, and Cole’s bankruptcy filings on whether they should be estopped from asserting their
present claims, Cahoo, 2020 WL 7493103 at 12-13. Those issues are ready for determination now.
The State defendants argue that (1) the plaintiffs suffered no injuries, (2) the defendants
did not cause any injuries, (3) the defendants are entitled to qualified immunity, (4) the plaintiffs
are not entitled to injunctive relief, (5) the Court should preclude the plaintiffs from obtaining
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medical-related damages because they have not identified any expert witnesses, and (6) plaintiff
Kristen Mendyk’s claim is barred by the statute of limitations.
The plaintiffs also moved for partial summary judgment on liability, arguing that the
undisputed facts demonstrate that (1) the fraud questionnaires and determinations did not provide
adequate substantive notice, (2) the manner of notice — by traditional mail and email — was
constitutionally deficient, (3) they were denied a fair hearing through the inadequate notice in the
questionnaires and determinations, and (4) the plaintiffs’ interest in the vindication of their
constitutional rights outweighs the costs of imposing additional procedural safeguards on the State,
and (5) defendants CSG, FAST, Geskey, and Moffet-Massey are responsible for the due process
violations.
There is sufficient evidence of causation to preclude summary judgment for FAST and
CSG on that ground. The bankruptcy filings by plaintiffs Cahoo, Mendyk, and Cole will not
require dismissal of their claims at this time. The claim by plaintiff Pak against all defendants
must be dismissed because the undisputed facts show that he has not suffered a constitutional
injury. The record reviewed in the light most favorable to the other plaintiffs shows that defendants
Blundell, Mitchell, and Singleton did not implicitly authorize, approve, or knowingly acquiesce to
developing the UIA’s unconstitutional policies or forms, and therefore the amended complaint
against them will be dismissed. The record precludes summary judgment against defendants
Sharon Moffet-Massey and Stephen Geskey, and they are not protected by qualified immunity.
And although the forms MiDAS generated to notify claimants of possible redetermination of
benefits were insufficient to inform them of fraud accusations, fact questions exist in the record as
to the effects of the notice deficiencies on the plaintiffs that preclude partial summary judgment in
their favor.
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I.
The facts of the case have been discussed many times in the Court’s previous opinions and
need not be repeated here. The most recent and relevant discussion is found in the opinion and
order on the motions to dismiss for lack of standing, Cahoo, 2020 WL 7493103, at *1-8, and that
recitation is incorporated by reference in this opinion.
The roles of the individual State defendants were not the subject of the motion to dismiss,
and more needs to be said about them here. The adoption of MiDAS was a large, comprehensive
modernization project spearheaded by Clay Tierney, who was the Director of the Agency’s Office
of Technology and Modernization. He no longer is a defendant in this case. The UIA had two
separate teams dedicated to fraudulent unemployment claims: the first, “nonmonetary benefits”
team, headed by Susan Easton, investigated and adjudicated overpayments and fraud; the second,
“restitution and collection team,” headed by defendant Shemin Blundell, collected overpayments.
A. Sharon Moffet-Massey
Defendant Sharon Moffet-Massey was appointed the director of the UIA in April 2014 and
maintained that position until January 2017. As the director, she oversaw the UIA’s operations
and ensured that the Agency processed unemployment claims. She served as the director when
the Auditor General audited MiDAS and when the Department of Labor (DOL) reviewed the
UIA’s operations; she served as the DOL’s “point of contact” throughout its investigation. The
plaintiffs allege that as the head of the UIA, she pursued the allegedly defective and
unconstitutional policies.
By the time Moffet-Massey assumed her position, the “benefits side” of the UIA “pretty
much fully implemented” MiDAS. She had the ultimate responsibility of approving forms,

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processes, and any changes to MiDAS. Her name appears on the form 1713 fraud questionnaires
and form 1302 fraud determinations under the heading “authorized by.”
Moffet-Massey received weekly or biweekly updates on the MiDAS project and had the
authority to prioritize and approve any modifications or changes to the system, policies, and
procedures. However, she apparently disregarded several recommendations from defendant
Steven Geskey, an attorney, to modify the UIA’s practices. Geskey dep., ECF No. 473-20,
PageID.35299, 35317, 35315, 35327, 35332, (“I recommended against the fraud finding decision
trees” “which went unheeded;” “I began making that request earlier, and continued that request
even later when those were not changed pursuant to my recommendations”). However, the record
is unclear if Geskey made these recommendations to Moffet-Massey or her predecessor, Steve
Arwood, or both. Despite the negative press about MiDAS, Moffet-Massey said that she was
unaware of any “issues” with the system. Moffet-Massey dep., ECF No. 473-16, PageID.34979,
35135 (“There were times where we had a hiccup here or there, but it did what we thought it was
to do.”).
Moffet-Massey acknowledged that federal regulations currently prohibit the use of auto
adjudication for unemployment claims, but she maintained that the practice was unprecedented at
the time of MiDAS’s implementation, and the UIA staff had no reason to think it was prohibited.
However, she eventually directed the Agency to shut off the auto-adjudication feature around
August 2015 because staff members alerted her that the system had been determining too
frequently that people committed fraud.
Around 2015, the DOL began reviewing the UIA’s practices, and a DOL administrator
emailed Moffet-Massey in September 2015 warning that “[a]ll determinations of fraud . . . require
a complete investigation of the issue(s) involved, including the opportunity to rebut [allegations]
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prior to the issuance of a determination” and that “the determination may not be made by an
automated system.” DOL Letter dated 09/04/15, ECF No. 473-21, PageID.35404. But MoffetMassey doubled down, contending that “Agency staff spent countless hours combing through a
variety of regulatory and governance manuals, including the 301 Handbook” and determined that
the regulations “fail[ed] to reveal any [] substantive limitation concerning when auto-adjudication
is “not appropriate.” Moffet-Massey Email dated 09/11/15, ECF No. 473-21, PageID.35403. The
DOL administrator maintained that the system violated federal regulations. Shortly after the UIA
shut off MiDAS’s auto-adjudication functionalities in August 2015, the DOL produced its report
formally finding that the policy violated federal regulations in November 2015.
B. Stephen Geskey
Defendant Stephen Geskey served as the UIA’s director from 2008 to 2011 while the State
solicited bids for the MiDAS project and brought CSG on board as the project manager. After
directing the UIA, he performed miscellaneous legal jobs until he took over the policies and
procedures group, which was “imbedded within the UI project modernization team.” The record
is unclear on when that occurred. Geskey testified that he took the position sometime “between
2011 [and] 2012” (before MiDAS went live in October 2013) and that he had “some involvement”
“in the policies and procedures [team] up to the implementation” of MiDAS. But he also testified
that he became the head of the group after MiDAS’s implementation in 2013, and that when he
took the position, MiDAS’s functions had already been “imbedded.” As the director of the policy
unit, Geskey was responsible for making “major policy decisions” about MiDAS, and “had some
involvement” in developing the system’s procedures (i.e., how “individual staff do things”).
Geskey also played a role in developing, or at least approving, some of the language used
on UIA forms, although the Agency’s director had the ultimate say over form approval. Susan
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Easton, who worked on the non-monetary team that handled the determination and fact-finding
forms, testified that the non-monetary team developed the language of these forms. The team
would send a draft form to Easton, who would revise it, then send it to the legal department. Once
the legal department completed its review, the proposed form “went to [Geskey], the director of
the [policies and procedures] units,” then finally to the UIA’s director. Easton could not recall
whether team members, management, or Geskey ever discussed whether the forms afforded due
process, and she could not recall implementing any changes to the forms from 2013 to 2017.
However, Tierney testified that he and Geskey investigated an alleged “tendency to refer to all
overpayments as being fraudulently collected,” but they “did not find that to be the case.” Tierney
dep., ECF No. 473-2, PageID.33381.
Geskey confirmed that he “personally did not undertake a legal review to determine the
legal sufficiency” of certain forms. Nor did he review the legality of the UIA’s income spreading
practice. However, he says that he made “unheeded” recommendations to the UIA director not to
adopt, or at least modify, the logic trees as they related to fraud findings to ensure such
determinations were based on “competent material and substantial evidence.”
After the DOL reviewed MiDAS and issued its Monitoring Report, Geskey drafted the
UIA’s response for Moffet-Massey. The letter, which Moffet-Massey signed, stated that the UIA’s
“read of [federal regulations] does not reveal any substantive limitation” on the UIA’s use of autoadjudication.
From January 2016 to “maybe 2017,” Geskey oversaw the bankruptcy department staff,
who sent claimant files to the state attorney general’s office to oppose the discharge of claimant
debt and advised them on “the intersection between bankruptcy and [unemployment insurance]
law.” There was no policy requiring the UIA to file adversary complaints in every bankruptcy
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case; rather, staff would refer matters to the attorney general’s office for review and initiation of
an adversary proceeding when appropriate. Doris Mitchell, who worked in the unit, said that
Geskey never issued a directive regarding the referral of files to the attorney general’s office.
Rather, the UIA maintained a general policy that if a bankruptcy claimant owed a debt to the
Agency, the UIA would refer the claimant’s file to the attorney general.
C. Shemin Blundell
Defendant Shemin Blundell directed the restitution and collections team, the fraud
investigation unit, and managed the bankruptcy unit under Geskey for some time. Around 2012,
Blundell also served as a business analyst during the development of MiDAS and worked closely
with FAST; she was on the project floor every day during the development phase. In that role, she
worked on a team that focused on “the MiDAS screen development,” benefit overpayment
collection functionality, “benefit timeliness quality for fraud investigation cases,” and “benefit
payment control.”
After MiDAS went live, from about 2014 through 2016, Blundell directed the restitution
and collections team, which handled the collection of restitution, discussed current practices, and
made recommendations. Blundell’s work in the restitution and collection department, as the name
implies, revolved around collecting overpayments after the UIA issued a fraud determination.
Tierney explained that “[o]nce the adjudication had set a determination in place that there was
money owed” and “once the 30-day appeal period was past and went final,” the file “was scanned
over to [Blundell’s] team to come up with a method by which we would track those accounts [and]
make sure that we were” collecting overpayments. Tierney dep., ECF No. 473-2, PageID.3349293. However, Blundell was not in charge of any claim examiners.

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In February 2016, Blundell became the director of the Fraud Investigation Unit until she
was demoted to a local office manager in 2018. In their amended complaint, the plaintiffs allege
that, as the Fraud Unit’s director, she “direct[ed] subordinates to pursue the invalid and false fraud
claims against claimants despite the knowledge that the fraud claims were invalid and false.” Am.
Compl., ¶ ¶17, 164, ECF No. 43, PageID.757, 781. But during her deposition, Blundell testified
that her work had “absolutely nothing” to do with the plaintiffs’ claims, which pertain to
administrative fraud determinations. Instead, her work related to the investigation of fraud
(primarily identity theft) for criminal prosecution purposes. She explained that her employees
“would have occasional cases where there was actual fraud that occurred due to overpayment, say,
working while collecting. But [for] those cases, my regulation agents would actually meet with
the employer and claimant one on one, and there were cases we were taking to prosecution.”
Blundell dep., ECF No. 423-26, PageID.19239.
D. Doris Mitchell
The plaintiffs alleged that defendant Doris Mitchell was head of the UIA’s Friend of the
Court and Bankruptcy Unit, where she directed subordinates “to oppose discharge of claimants’
debt in bankruptcy proceedings” that were based on allegedly false fraud claims, despite knowing
that the claims were invalid. Am. Compl., ECF No. 43, PageID.757 at ¶ 18.
Mitchell managed the Friend of the Court unit since 2010. In 2014, the Friend of Court
unit “added the functionality of the bankruptcy process.” When that happened, Mitchell became
the manager of the Friend of the Court unit and bankruptcy unit. For bankruptcy matters, she
reported to Blundell, who, in turn, reported to Geskey.
Mitchell testified that when the bankruptcy unit received a bankruptcy notice, staff entered
the data to ensure that collection stops; if a bankruptcy case was dismissed, staff restarted
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collection; and if a discharge were obtained, staff wrote off the discharged debt. If they received
a Chapter 7 bankruptcy notice involving fraud, the department prepared a file to send to the
attorney general’s office, unless the claimant had already paid the standard settlement amount
acceptable to the Agency. If they received a Chapter 13 notice, and there was a balance on the
account, the matter was referred to the attorney general’s office irrespective of fraud. The file
preparation in this unit was largely clerical, as staff did not review documents when preparing a
file; instead, staff simply assembled files to send to the attorney general’s office.
Mitchell’s unit did not provide any recommendations to the attorney general’s office about
whether an adversary proceeding should be filed, since that decision fell within the attorney’s
discretion. Mitchell had no training in assessing fraud or making fraud determinations. The unit
had no procedures to review files to determine whether the fraud finding was invalid or false.
Moreover, Mitchell lacked knowledge of the auto-adjudication of fraud determinations or any
issues regarding them.
E. Debra Singleton
The plaintiffs allege that defendant Debra Singleton was the head of the Benefit
Overpayment Collection Unit at the UIA, where she directed subordinates to pursue aggressive
collection activities, despite knowing about “the over 93% margin of error rate for fraud
determinations.” Am. Compl., ECF No. 43, PageID.782, ¶¶ 167-68.
Singleton testified that she led the benefit overpayment collection department from 1999
until she retired in October 2018; she reported directly to Blundell from about 2014 to 2016. In
her role, she was never involved in determining whether claims were fraudulent. Nor was her unit
responsible for determining the propriety of final determinations or how much a claimant owed.
The department focused exclusively on collections.
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Once MiDAS was implemented, it automatically mailed monthly notices, set up payment
plans, and initiated tax intercepts — Singleton was not involved in establishing this process. Nor
was she involved in any meeting regarding collection efforts under MiDAS, and she never received
a booklet regarding MiDAS’s collections procedures or activities. Her post-MiDAS duties
primarily involved making phone calls to and receiving phone calls from claimants and verifying
whether they were paying. When claimants called the collection department with questions about
non-collection issues, like adjudication or appeals, Singleton’s unit directed claimants to hang up
and call customer service because it was the UIA’s policy not to transfer calls between 800
numbers.
When initiating garnishment proceedings, the unit assessed whether the claimant was
delinquent in making payments. The department then would send a letter informing the claimant
of the UIA’s intent to garnish their wages. Claimants then could negotiate with the department to
establish a payment plan, based on their respective payment histories.
Singleton said that she had no knowledge of the alleged 93% margin of error for fraud
determinations. She also lacked the power to stop collection proceedings.
II.
FAST and CSG move for summary judgment on the remaining count of the amended
complaint. They each assert that none of the plaintiffs have offered sufficient evidence that these
defendants caused any of their injuries, and Cahoo, Mendyk, and Cole cannot pursue their claims
because those claims belong to their respective bankruptcy estates.
Summary judgment is appropriate “if the movant shows that there is no genuine dispute as
to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). When reviewing the motion record, “[t]he court must view the evidence and draw all
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reasonable inferences in favor of the non-moving party, and determine ‘whether the evidence
presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that
one party must prevail as a matter of law.’” Alexander v. CareSource, 576 F.3d 551, 557-58 (6th
Cir. 2009) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986)). “The court
need consider only the cited materials, but it may consider other materials in the record.” Fed. R.
Civ. P. 56(c)(3).
The party bringing the summary judgment motion must inform the court of the basis for its
motion and identify portions of the record that demonstrate that no material facts are genuinely in
dispute. Id. at 558. (citing Mt. Lebanon Personal Care Home, Inc. v. Hoover Universal, Inc., 276
F.3d 845, 848 (6th Cir. 2002)). “Once that occurs, the party opposing the motion then may not
‘rely on the hope that the trier of fact will disbelieve the movant’s denial of a disputed fact’ but
must make an affirmative showing with proper evidence in order to defeat the motion.” Ibid.
(quoting Street v. J.C. Bradford & Co., 886 F.2d 1472, 1479 (6th Cir. 1989)).
“[T]he party opposing the summary judgment motion must do more than simply show that
there is some ‘metaphysical doubt as to the material facts.’” Highland Cap., Inc. v. Franklin Nat’l
Bank, 350 F.3d 558, 564 (6th Cir. 2003) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 586 (1986)) (internal quotation marks omitted). Instead, that party must
designate specific facts in affidavits, depositions, or other factual material showing “evidence on
which the jury could reasonably find for” that party. Anderson, 477 U.S. at 252. If the non-moving
party, after sufficient opportunity for discovery, is unable to meet her burden of proof, summary
judgment is clearly proper. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986).

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A. Causation
FAST and CSG contend that the plaintiffs have not offered sufficient evidence of causation
to withstand summary judgment.
Section 1983 imposes civil liability on an individual who “under color [of state law] . . .
subjects, or causes to be subjected, any citizen of the United States . . . to the deprivation of any
rights, privileges or immunities secured by the Constitution and laws.” 42 U.S.C. § 1983 (emphasis
added). Generally, “[c]ommon law tort principles govern causation in the § 1983 context.” Martin
v. Warren Cnty., Kentucky, 799 F. App’x 329, 337 (6th Cir. 2020) (citing Powers v. Hamilton
Cnty. Pub. Defender Comm’n, 501 F.3d 592, 608 (6th Cir. 2007); (McKinley v. City of Mansfield,
404 F.3d 418, 438 (6th Cir. 2005)). Thus, the plaintiffs must show that the defendants’ conduct
was both a cause in fact and a proximate cause of the alleged due process violations. Ibid.
“Factual causation ‘is typically assessed using the ‘but for’ test, which requires [courts] to
imagine whether the harm would have occurred if the defendant had behaved other than it did.”
Ibid. Proximate cause is “a kind of line-drawing exercise in which [courts] ask whether there are
any policy or practical reasons that militate against holding a defendant liable even though that
defendant is a but-for cause of the plaintiff’s injury.” Powers, 501 F.3d. at 609 (citing Dobbs on
Torts § 181). The proximate cause inquiry is “‘not about causation at all but about the appropriate
scope of liability.’” Ibid.
“‘A person ‘subjects’ another to the deprivation of a constitutional right, within the
meaning of § 1983, if he does an affirmative act, participates in another’s affirmative acts or omits
to perform an act which he is legally required to do that causes the deprivation of which complaint
is made.’” Williams v. City of Euclid, 2013 WL 2456373, at *2 (N.D. Ohio, Jun. 6, 2013) (quoting
Johnson v. Duffy, 588 F.2d 740, 743 (9th Cir. 1978)). The plaintiffs must prove causation as “to
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each defendant that the plaintiff seeks to hold liable.” White v. Bell, 656 F. App’x. 745, 747 (6th
Cir. 2016). “If [a defendant] is to be held liable, it must be based on the actions of that defendant
in the situation that the defendant faced, and not based on any problems caused by the errors of
others, either defendants or non-defendants.” Gibson v. Matthews, 926 F.2d 532, 535 (6th Cir.
1991). However, “the fact that a defendant was one of multiple contributors to a plaintiff’s injuries
does not defeat causation.” Parsons, 801 F.3d at 714; see also Libertarian Party of Virginia v.
Judd, 718 F.3d 308, 316 (4th Cir. 2013); Barnum Timber Co. v. EPA, 633 F.3d 894, 901 (9th Cir.
2011).
FAST and CSG each insists that for a private entity to be the proximate cause of
constitutional injuries, where state officials committed the ultimate acts that caused the injuries,
the private party must exercise “some control over state officials’ decision [to commit the
challenged act].” Franklin v. Fox, 312 F.3d 423, 446 (9th Cir. 2002) (quoting King v. Massarweh,
782 F.2d 825, 829 (9th Cir.1986); see Lucas v. Ulliance, Inc., 2016 WL 1259108, at *8 (E.D.
Mich. Mar. 31, 2016) (private contractors did not proximately cause due process violation where
it “exercised [no] influence over [State’s] decision to summarily suspend” plaintiffs’ medical
licenses even though the contractors reported that the plaintiffs failed to comply with applicable
regulations). And in the standing context, courts have found injuries not “fairly traceable” to the
State where a plaintiff’s injury results from a “third party’s voluntary and independent actions or
omissions.” Crawford v. United States Dep’t of Treasury, 868 F.3d 438, 455 (6th Cir. 2017)
(emphasis in original) (citing Bennett v. Spear, 520 U.S. 154, 169 (1997)); see Turaani v. Wray,
440 F. Supp. 3d 733, 738 (E.D. Mich. 2020) (holding that plaintiff could not trace injury to an FBI
agent where the agent convinced a gun seller to renege on his promise to sell a gun to the plaintiff

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because the FBI agent merely acted to “potentially influence the voluntary and independent
decisions of a third-party.”).
However, the Sixth Circuit explained that the proximate cause inquiry is ultimately about
foreseeability: “[e]ven if an intervening third party is the immediate trigger for the plaintiff’s
injury, the defendant may still be proximately liable, provided that the third party’s actions were
foreseeable.” Powers, 501 F.3d at 609 (holding that county public defender office proximately
caused a violation of the plaintiff’s Fifth, Sixth, and Fourteenth Amendment rights to be free from
court fees due to indigency when the public defender office failed to move for an indigency
hearing, even though municipal judge had final authority over the decision); see also Kerman v.
City of New York, 374 F.3d 93, 126-27 (2d Cir. 2004) (holding that even where it was a hospital’s
doctors who decided to admit the plaintiff for psychiatric observation, the police officer who took
the plaintiff to the hospital was nonetheless subject to liability under section 1983 because it was
foreseeable that the plaintiff would be detained at the hospital as a result of the officer’s taking
him there); Warner v. Orange Cnty. Dep’t of Probation, 115 F.3d 1068, 1072-74 (2d Cir.1996)
(holding that in recommending that the plaintiff be sentenced to an alcohol-treatment program that
incorporated religious elements, a probation department could be held liable under section 1983
for violating the plaintiff’s First Amendment rights, even though a judge made the sentencing
decision).
1. CSG
The plaintiffs point to five actions that they allege CSG took to cause their injuries: (1)
recommending income spreading, (2) encouraging the UIA to reverse its agency culture regarding
fraud, (3) suggesting changes to the fact-finding form that UIA sent to claimants, (4) establishing

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a Project Management Office (PMO) to oversee the MiDAS implementation process, and (5)
drafting the request for proposal (RFP) for the project.
a. Cause in Fact
The evidence against CSG satisfies the cause-in-fact inquiry. If it were not for CSG’s
extensive research, work, advice, and ongoing management, the UIA would have been unable to
develop MiDAS, the execution of which caused at least Cahoo and Cole “to be subjected . . . to
the deprivation of” their property without due process. 42 U.S.C. § 1983. The new system
replaced a legacy system that provided adequate questionnaires and determination notices that
provided specific facts and required human discretion with one that produced deficient notices and
questionnaires with much less (if any) human oversight. The record is clear that the State relied
on CSG’s expertise to develop the RFP, which required that MiDAS be able to “automatically
adjudicate all issue types without staff intervention” and “automatically issue a non-monetary
determination based on existing information when all or one party has not responded to the factfinding questionnaires.” RFP, ECF No. 474-7 at PageID.36492. An automatically issued fraud
determination based on a failure to respond is precisely the nature of the plaintiffs’ injuries.
Although CSG primarily provided administrative support after MiDAS rolled out, it
“mentored” the State’s staff and maintained “continuous liaison with . . . the State Senior Project
Managers.” CSG Contract, ECF No. 425-4, PageID.19664. And it supported FAST “in meeting
the timely delivery of quality information technology services” for MiDAS’s stakeholders. Ibid.
Some of its tasks also included conducting cost-benefit analyses, developing and managing project
schedules, facilitating team communications, and monitoring performance. Id., at PageID.1966566.

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These actions involve active management and supervision by CSG. Although CSG did not
run MiDAS, it monitored the system’s performance and conducted cost-benefit analyses. Doing
so should have alerted the defendant about the potentially unconstitutional adjudications and
collection practices, and CSG certainly learned about them in June 2015, when the Auditor General
published its report.
It is true that CSG recommended that the UIA clarify the wording on its questionnaire by
(1) changing the title to make clear that the inquiry related to fraud; (2) explaining in bold text that
the claimant’s employer provided sufficient information warranting a finding of overpayment, and
(3) including the potential amount of overpayment, penalties, and disqualifications based on the
information available.

CSG Fraud Audit Report, ECF No. 434-1, PageID.25327.

Those

recommendations were unheeded. But CSG also recommended that the UIA “prorate earnings”
to “establish any resulting overpayment” “[w]hen there is no employer response and [a] claimant
does not provide credible earnings information”— a recommendation that the UIA adopted. Id. at
PageID.25320. CSG further recommended that the UIA “emphasize” that “Agency policy
stipulates that an Intentional Misrepresentation decision can be rendered even if the claimant fails
to respond.” Id. at PageID.25325. Thus, although CSG may not have had the ultimate authority
over MiDAS’s functionalities, it certainly was a significant and necessary actor in the system’s
development. See Parsons, 801 F.3d at 714 (“the fact that a defendant was one of multiple
contributors to a plaintiff’s injuries does not defeat causation.”).
The record adequately demonstrates facts that can support CSG’s pivotal role in the
system’s development, including MiDAS’s flaws that allowed many of the plaintiffs’ fraud
determinations absent the protections required by the Due Process Clause.

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b. Proximate Cause
Relying on the district court decision in Lucas v. Ulliance, Inc., CSG insists that proximate
cause has not been established. In Lucas, the plaintiffs alleged that Michigan’s Department of
Licensing and Regulatory Affairs (LARA) suspended their licenses to practice medicine without
a hearing after receiving a report from a third-party private contractor that was contractually
obligated to report any circumstances indicating that impaired healthcare professionals may pose
a threat to public health. Lucas, 2016 WL 1259108, at *1. The plaintiffs brought section 1983
claims against the contractor, among others, alleging that the suspensions violated their due
process rights. Id. at *8. The court held that the plaintiffs adequately had alleged that the
contractor’s report constituted a cause-in-fact of their injuries, but nonetheless dismissed the claim
against Ulliance because the plaintiffs failed to allege proximate causation. Ibid. The court noted
that “Plaintiffs have not alleged that . . . the Ulliance Defendants exercised any influence over
Defendant Engle’s decision to summarily suspend their licenses.” Id. at *8. The court also held
that the plaintiffs “have not alleged that the Ulliance Defendants reported noncompliance except
as required to fulfill Ulliance’s contractual obligations to LARA.” Ibid.
Lucas is distinguishable on its facts. The relationship between the contractors and LARA
in that case is far more distant than the relationship between the UIA and CSG. Rather than simply
reporting data based on a contractual obligation, the UIA sought out CSG, an expert in
“government solutions,” to survey best practices among states and provide detailed,
comprehensive recommendations to build its system. Thus, unlike the contractor in Lucas, the
facts permit the inference that CSG “exercised [] influence over” the State’s decision to
“automatically adjudicate all issue types without staff intervention,” determine overpayment by
prorating earnings, encourage UIA employees to find fraud more frequently, and “automatically
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issue a non-monetary determination based on existing information when all or one party has not
responded to the fact-finding questionnaires.” ECF No. 474-7, PageID.36492.
This case more resembles the Second Circuit’s decision in Warner v. Orange County
Department of Probation. In that case, a probationer brought a section 1983 action against a
county probation department, alleging that its recommendation to require his attendance at
Alcoholics Anonymous meetings violated the Establishment Clause of the First Amendment due
to the religious content of the meetings. Warner, 115 F.3d at 1070. The probation department
raised a similar defense as CSG, contending that it did not proximately cause the plaintiff’s injuries
because the sentencing judge had the ultimate authority over the decision. Id. at 1073. The Second
Circuit rejected the argument, holding that “[g]iven the neutral advisory role of the probation
officer toward the court, it is an entirely ‘natural consequence[]’ for a judge to adopt the [probation
officer’s] recommendation as to the therapy provider without making an independent investigation
of the qualifications and procedures of the recommended provider. Such action by a judge is
neither ‘abnormal’ nor ‘unforeseen.’” Ibid. (quoting Gutierrez–Rodriguez v. Cartagena, 882 F.2d
553, 561 (1st Cir. 1989), and citing Malleyv. Briggs, 475 U.S. 335, 344 n.7 (1986), overruled on
other grounds by Monell v. Dep’t of Soc. Servs. v. City of New York, 436 U.S. 658 (2018)).
CSG builds its argument on the unpublished district court decision cited above and on an
out-of-circuit case that addressed a much more attenuated relationship between private conduct
and the State. See Franklin, 312 F.3d at 446 (9th Cir. 2002) (holding that the plaintiff’s daughter
was not the proximate cause for eliciting a murder confession from her father (the plaintiff)
because there was no showing that she had control over the investigation). Looking to published
Sixth Circuit authority, however, it is evident that although the State’s adjudications were “the
immediate trigger” for the plaintiffs’ injuries, the faulty adjudications “were foreseeable” in light
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of CSG’s recommendations to permit fully automatic adjudications, to encourage employees to
find fraud, and to utilize income spreading (i.e., falsified evidence) to determine overpayments.
Powers, 501 F.3d at 609; see Tierney dep., ECF No. 473-2, PageID.33225 (“we were worried
about the pitfalls [of the project], and . . . knew we needed professional help with the project . . .
management office.”). Considering CSG’s “neutral advisory role,” Warner, 115 F.3d at 1070,
toward the UIA, it was a “natural consequence” for the UIA to adopt its recommendations, Malley,
475 U.S. at 344 n.7.
2. FAST
The plaintiffs argue that FAST is responsible for their injuries because it developed the
UIA’s deficient forms and built the entire MiDAS system, including all of its deficiencies like
income spreading and adjudications based on nonresponses. Like CSG, FAST maintains that it is
neither the cause in fact nor the proximate cause of any injuries because the UIA is the true culprit.
In addition, FAST asserts that it simply followed the UIA’s directions in good faith, thereby
shielding it from liability.
a. Cause in Fact
Although the UIA unquestionably had the ultimate authority over MiDAS and the
plaintiffs’ fraud determinations, the record contains sufficient evidence that FAST contributed to
the alleged deprivation of the plaintiffs’ property interests without due process. See Parsons, 801
F.3d at 714.
As an initial matter, FAST argues that it cannot be liable under section 1983 because
MiDAS is not a “person” who acted under the color of state law. 42 U.S.C. § 1983. “But this
argument conveniently ignores the fact that [FAST] implemented and oversaw MiDAS . . . MiDAS
did not create itself.” Cahoo v. SAS Analytics Inc., 912 F.3d 887, 904-05 (6th Cir. 2019). This
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argument is simply an “attempt to evade responsibility for [FAST’s] actions by deflecting blame
away from [itself] and onto the computerized system that [it] implemented and oversaw,” id. at
905, which, in turn, “caus[ed the plaintiffs] to be subjected” to the deprivation of their property
without due process. 42 U.S.C. § 1983.
FAST contracted with the State specifically to “design, configure and implement its
GenTAX commercial-off-the-shelf” software for the UIA’s use in administering unemployment
insurance, including fraud investigation, overpayments, collections, and tax intercepts. FAST
Contract, ECF No. 399-65, PageID.17798, 17800, 17802-03. It configured “almost all aspects of”
MiDAS and trained UIA employees on how to use the system. Id. at PageID.1783. It also
developed the templates of all MiDAS correspondence, including questionnaires and
determination notices, which were constitutionally deficient. Id. at PageID.17803-04.
A question of fact remains about whether FAST helped develop the content of the
questionnaires and fraud determinations. Compare Easton dep., ECF No. 473-18, PageID.35226
(FAST employees were on the non-monetary team charged with developing the forms) and
Tierney dep., ECF No. 471-10, PageID.31311, 31529, 31705 (FAST employees worked under
Easton’s team to “design and program the system,” and “draft[] the language” of the UIA’s
forms.”) with Blundell dep., ECF No. 297-8, PageID.11186 (“no CSG, FAST, or SAS employees
were involved in determining the content or crafting the language of those notices or
questionnaires sent to claimants.”). That fact question must be resolved in favor of the plaintiffs
at this stage of the case. Moreover, once MiDAS went live, FAST’s role transitioned to “support
and maintenance;” that is, “making sure [the system] continues to function and do what it’s
expected to do,” per FAST’s contractual warranty. ECF No. 471-10, PageID.31362

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There is sufficient evidence in the record to preclude summary judgment on the cause-infact issue.
b. Proximate Cause
FAST raises a similar proximate causation argument as CSG. Its arguments are more
compelling, in that the record suggests that FAST may have exercised minimal control over the
UIA’s decision to implement the policies designed into the system. But questions of fact preclude
a finding that FAST is not the proximate cause of the injuries. The record shows that FAST played
an essential role in building the system, and its employees participated in the developmental
meetings with CSG and the UIA. Easton dep., ECF No. 473-18, PageID.35226 (FAST employees,
who were “subject matter experts” worked on the non-monetary team tasked with developing the
forms); Tierney dep., ECF No. 471-10, PageID.31311, 31529, 31705.
FAST argues that it cannot be the proximate cause because the UIA’s abdication of its duty
to ensure that the system comported with federal law constituted an intervening and superseding
cause, citing Lucas, 2016 WL 1259108, at *1. But again, Lucas is distinguishable from the facts
of this case. First, as discussed above, FAST and the UIA had a much closer working relationship
than Ulliance had with LARA, which simply reported potential doctors who did not comply with
pertinent regulations. Here, the UIA worked extensively with FAST to develop MiDAS and
update the UIA’s correspondence. Even more, the record shows that FAST agreed to share at least
some of the responsibilities of ensuring that the system complied with federal and state law. FAST
Contract, ECF No. 399-65, PageID.17803-04 (agreeing to develop the templates of all MiDAS
correspondence, including questionnaires and determination notices and ensuring that the
templates complied with “Federal and State law delivery requirements”); Tierney dep., ECF No.
471-10, PageID.31701 (FAST’s “solution is designed to function in compliance with all applicable
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law, rules, and regulations of our government clients, and will function in compliance with the
Michigan Employment Security Act, UI administrative rules, and federal laws and regulations.”);
see FAST Response to RFP, ECF No. 440, PageID.25524 (“the proposed solution and associated
hardware and software must comply with multiple State and federal policies, standards,
procedures, laws, and regulations.”).
FAST’s involvement suggests at least some influence in developing the fraud
questionnaires, determination notices, and email correspondence, and therefore the UIA’s faulty
adjudications certainly “were foreseeable” in light of FAST’s development of a streamlined,
automated system that provided little to no opportunities to be heard and intelligently respond
before stripping claimants of their property rights. See Powers, 501 F.3d at 609.
c. Good Faith Defense
Finally, FAST argues that even if it did factually and proximately cause the plaintiffs’
injuries, it is nevertheless protected by its good faith adherence to the UIA’s directives. The law
does not support the application of that defense to these facts.
“[W]hile a private party acting under color of state law does not enjoy qualified immunity
from suit, it is entitled to raise a good-faith defense to liability under section 1983.’” Lee v. Ohio
Educ. Ass’n, 951 F.3d 386, 390 (6th Cir. 2020). However, the cases on which FAST relies make
clear that the good faith defense is premised on a party relying on the law as it existed at the time
of its actions. Ibid. (union was entitled to rely on then-existing state law and United States
Supreme Court precedent when collecting mandatory “fair-share” fees from the plaintiff — a
practice later deemed unconstitutional); Duncan v. Peck, 844 F.2d 1261, 1267 (6th Cir. 1988)
(parties “who rely on the advice of their attorneys, and invoke presumptively reasonable statutes”
had a good faith defense); Clement v. City of Glendale, 518 F3d 1090, 1097 (9th Cir. 2008) (“The
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constitutional defect — a lack of notice to the car’s owner — could not have been observed by the
towing company at the time when the tow was conducted” and “[t]he responsibility to give notice
falls on the police.”); Ogle v. Ohio Civil Serv. Employees Ass’n, AFSCME, Local 11, 397 F. Supp.
3d 1076, 1091 (S.D. Ohio 2019) (“private entities that rely upon a presumptively valid state statute
have protection from liability should that statute later turn out to be unconstitutional.”).
Here, FAST argues that because the law at the time did not prohibit auto-adjudication of
unemployment claims, its conduct falls under the good faith exception. That argument does not
fit within the scope of that defense. First, Michigan law at the time actually required that “[t]he
unemployment agency shall designate representatives who shall promptly examine claims and
make a determination of the facts.” Mich. Comp. Laws § 421.32. That law was in effect during
MiDAS’s development. Tierney dep., ECF No. 471-10, PageID.31603. Clearly, MiDAS is not a
“designate[d] representative” charged with evaluating facts and adjudicating claims. Moreover,
federal law at the time clearly established that not only must unemployment beneficiaries be
provided with an opportunity for a hearing before their benefits are terminated, Goldberg v. Kelly,
397 U.S. 254, 267 (1970), but the notice of the hearing must “set forth the alleged misconduct with
particularity,” In re Gault, 387 U.S. 1, 33 (1967), and provide claimants with a “reasonable
opportunity to know the claims of the opposing party and [] meet them.” Morgan v. United States,
304 U.S. 1, 18 (1938). As discussed in this Court’s earlier decisions, the fraud questionnaires and
determination notices woefully fell short of that standard. See, e.g., Cahoo v. Fast Enters. LLC,
No. 17-10657, 2020 WL 7624613, at *11 (E.D. Mich. Dec. 22, 2020) (opinion on class
certification).
FAST, in essence, seeks to shield itself from liability not by alleging that it relied on old
law that has changed; rather it contends that it was not the one that caused these injuries because
-24-

the State told it what to do and how to do it. As the Court explained in its opinion on FAST’s
motion to dismiss, that argument is legally insufficient. “‘[S]ince World War II, the ‘just following
orders’ defense has not occupied a respected position in our jurisprudence, and [government
actors] in such cases may be held liable under § 1983 if there is a reason why any of them should
question the validity of that order.’” Kennedy v. City of Cincinnati, 595 F.3d 327, 337 (6th Cir.
2010) (quoting O’Rourke v. Hayes, 378 F.3d 1201, 1210 n.5 (11th Cir. 2004)); Grossman v. City
of Portland, 33 F. 3d 1200, 1209 (9th Cir. 1994) (“Section 1983 defendants are not ‘immune for
the results of their official conduct simply because they were enforcing policies or orders
promulgated by those with superior authority’”); Brent v. Ashley, 247 F.3d 1294, 1305 (11th Cir.
2001) (“following orders does not immunize government agents from civil rights liability”).
3. Plaintiff Hyon Pak
The causation arguments by CSG and FAST must be examined in a different light for
plaintiff Hyon Pak because, unlike the other plaintiffs, the record conclusively shows that he did
not suffer a constitutional injury that could have been caused by any of the defendants.
Pak received unemployment benefits from September 2011 through March 2012. When
the UIA began investigating Pak, it mailed him three pre-MiDAS questionnaires in September
2012, inquiring about two of his employers. In October 2012, Pak received two more pre-MiDAS
fraud questionnaires, one for each employer. He did not respond. About a year later (and after
MiDAS rolled out), Pak chose to “go green,” that is, he elected to receive his notices through email
messages, not through the United States Mail. He provided the UIA with his email address. About
one year after “going green,” the UIA posted four fraud determinations on Pak’s MiWAM account,
on December 29, 2014, all of which were generated by MiDAS. The UIA eventually intercepted
his tax refunds in 2016.
-25-

Pak cannot complain about the substantive adequacy of notice provided by the UIA’s
questionnaires. He never received the problematic MiDAS questionnaires. Instead, he received
and responded to the old forms, which provided him with an adequate explanation of the stakes
and grounds for suspicion against him. See, e.g., September 2012 Questionnaire, ECF No. 44538, PageID.26348 (warning Pak that his “employer has provided sufficient documentation to
prove an overpayment, which will result in misrepresentation (FRAUD),” and explaining that the
employer notified the UIA that Pak failed to report to work). Pak responded to the questionnaires
with his written explanation. MiDAS issued a second round of questionnaires the following
month, but Pak chose not to respond, apparently believing they were duplicates. The plaintiffs
emphasize that the UIA issued the fraud determinations in 2014 — about two years after the
questionnaires were sent. But State law at the time accorded the Agency six years to issue such a
determination. Mich. Comp. Laws § 421.62 (the period is now three years). Thus, there is no fact
question that nothing about MiDAS or the defendants’ involvement in its development or
implementation could have caused Pak any due process injury; he received and returned the
adequate questionnaires before MiDAS was even in the picture.
Pak alleges that he was unaware of the 2014 fraud determinations until 2016, when the
UIA intercepted his federal tax refund. But during his deposition, he conceded that the UIA posted
the correspondence on his MiWAM account, and that someone (possibly his wife) accessed his
account on December 29, 2014, and January 2, 2015 — right after the UIA emailed him
instructions to check his account. Pak dep., ECF No. 445-30, PageID.26130. Pak offered no
evidence that disputed that he received an email; he simply stated that he did not know if he did.
After drawing all reasonable inferences in Pak’s favor, there is no evidence to suggest that the
UIA’s manner of notice or any of the defendants’ actions violated Pak’s due process right. The
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evidence shows without contest that (1) the UIA had no reason to suspect that Pak did not receive
its correspondence (especially because he replied earlier), (2) the UIA sent an email as requested
and posted the correspondence on Pak’s MiWAM account, and (3) it is undisputed that either Pak
or his wife checked the correspondence because someone logged on Pak’s MiWAM account the
day the UIA issued the determinations. See Jones v. Flowers, 547 U.S. 220, 229 (2006) (stating
that the means of notice must be “such as one desirous of actually informing the absentee might
reasonably adopt to accomplish it”); Ming Kuo Yang v. City of Wyoming, Michigan, 793 F.3d 599,
602 (6th Cir. 2015).
Finally, unlike for the other plaintiffs, the record conclusively shows that humans were
involved in Pak’s adjudication process and had evidence to work from, as opposed to simply
relying on an employer’s account after a claimant failed to respond. A staff member had to enter
Pak’s responses into MiDAS and open the fraud investigation because the old questionnaires
prompted handwritten responses. Pak’s claim files also reflect significant human involvement.
Screenshots of Pak Cases, ECF No. 399-60 (showing that humans did everything (except stage the
case) from issuing the determination and closing the case). UIA employee Mandy Brickel testified
that she saw no evidence of auto-adjudication on Pak’s case, and Pamela Sagady swore that she
adjudicated Pak’s claims “based upon the information [she] would have had at the time . . . ,
including the fact that he had a prior 2012 determination of fraud.” Sagady Aff., ECF No. 42341. In response, Pak offers nothing but the presence of the “batch” term in his claim files to show
that he was deprived of a fair hearing. That, by itself, is not enough. Based on the evidence before
the Court, no reasonable juror could conclude that Pak’s right to “rudimentary” pre-deprivation
process was violated. Goldberg, 397 U.S. at 267.
Pak’s claim will be dismissed.
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B. Bankruptcy Filings
FAST and CSG each argue that because plaintiffs Cahoo, Mendyk, and Cole all filed
petitions in bankruptcy and did not list this cause of action in their asset schedules, they lack
standing to sue, they are not the real parties in interest in this case, and they should be judicially
estopped from bringing this action.
The plaintiffs argue that the defendants cannot raise this argument because they did not
raise it in a reasonably prompt manner. It is true that if an argument under Rule 17 is “not raised
in a timely or seasonable fashion, the general rule is that the objection is deemed waived.” United
Health Care Corp. v. Am. Trade Ins. Co., 88 F.3d 563, 569 (8th Cir. 1996); see also Whelan v.
Abell, 953 F.2d 663, 672 (D.C. Cir. 1992) (“where a Rule 17(a) defense is made, judges abuse
their discretion in allowing the plea as late as the start of the trial if the real party has been
prejudiced by the defendant’s laxness.”). However, CSG raised its real-property-in-interest
argument as its twelfth affirmative defense in its answer to the plaintiffs’ complaint. And FAST
asserted the defense within the time allowed in other cases. See United Health Care Corp., 88
F.3d at 569 (one week before trial); Whelan, 953 F.2d at 672 (D.C. Cir. 1992) (trial already
underway). There is no waiver of this defense.
It is well-understood that when a person files for bankruptcy, “all legal or equitable
interests of the debtor in property as of the commencement of the case” are considered property of
the bankruptcy estate. 11 U.S.C. § 541(a)(1).

Courts have stated, therefore, that only the

bankruptcy trustee has “standing” to pursue pre-petition causes of action. Tyler v. DH Cap. Mgmt.,
Inc., 736 F.3d 455, 461 (6th Cir. 2013) (citing Stevenson v. J.C. Bradford & Co. (In re Cannon),
277 F.3d 838, 853 (6th Cir. 2002)). That does not imply the absence of standing in a constitutional
sense; such a plaintiff plausibly may allege that she has suffered an injury in fact, that is traceable
-28-

to the defendant’s conduct, and a favorable decision would enhance the assets available to her
creditors, and the possibility of a recovery in excess of her debt finding a path into her own pocket
would be more than “merely speculative.” See Kardules v. City of Columbus, 95 F.3d 1335, 1346
(6th Cir. 1996) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992)).
Nonetheless, bankruptcy debtors who file lawsuits in their own names for pre-petition
claims face several obstacles. For one, because pre-petition causes of action belong to the
bankruptcy trustee, the trustee is the real party in interest to bring the claim. Auday v. Wet Seal
Retail, Inc., 698 F.3d 902, 905 (6th Cir. 2012). For another, if the cause of action was not listed
on the bankruptcy schedule of assets, the civil action may be subject to dismissal under the concept
of judicial estoppel. Javery v. Lucent Techs., Inc. Long Term Disability Plan for Mgmt. or LBA
Emps., 741 F.3d 686, 697-98 (6th Cir. 2014) (citing Kimberlin v. Dollar Gen. Corp., 520 F. App’x
312, 314 (6th Cir. 2013).
It is elementary that “[a]n action must be prosecuted in the name of the real party in
interest.” Fed. R. Civ. P. 17(a)(1). “Under the rule, the real party in interest is the person who is
entitled to enforce the right asserted under the governing substantive law.” Certain Interested
Underwriters at Lloyd’s, London, England v. Layne, 26 F.3d 39, 43 (6th Cir. 1994). However,
“[t]he court may not dismiss an action for failure to prosecute in the name of the real party in
interest until, after an objection, a reasonable time has been allowed for the real party in interest to
ratify, join, or be substituted into the action.” Fed. R. Civ. P. 17(a)(3). Rule 17(a)(3) is “intended
to prevent forfeiture when determination of the proper party to sue is difficult or when an
understandable mistake has been made.” Zurich Ins. Co. v. Logitrans, Inc., 297 F.3d 528, 532 (6th
Cir. 2002). Substitution under Rule 17 “should be liberally allowed when the change is merely
formal and in no way alters the original complaint’s factual allegations as to the events or
-29-

participants.” Id. at 534 (Gilman, J., concurring) (citing Advanced Magnetics, Inc. v. Bayfront
Partners, Inc., 106 F.3d 11, 20 (2d Cir. 1997)).
A cause of action is pre-petition if it is “‘sufficiently rooted in the pre-bankruptcy past’ of
the debtor.” Tyler, 736 F.3d at 461 (quoting Segal v. Rochelle, 382 U.S. 375, 380 (1966)). “Prepetition conduct or facts alone will not ‘root’ a claim in the past; there must be a pre-petition
violation.” Id. at 462. The Sixth Circuit made clear that although accrual analysis is generally
“helpful, accrual for the purposes of § 541 is different from accrual for statute-of-limitations
purposes” and that “the relevant bankruptcy-law question is when the claim is minimally
actionable, not whether the claim is fully mature.” Id. at 463, 464. Two competing points are at
play here. “First, mere conduct is insufficient to root a claim in the past; a pre-petition violation
is required. Second, all causes of action that could have been brought pre-petition are property of
the estate, whether or not the debtors knew of the cause of action when they filed the petition.” In
re Blasingame, 986 F.3d 633, 640 (6th Cir. 2021) (citations omitted).
A section 1983 claim accrues “‘when the plaintiff knows or has reason to know that the act
providing the basis of his or her injury has occurred.’” D’Ambrosio v. Marino, 747 F.3d 378, 384
(6th Cir. 2014) (quoting Cooey v. Strickland, 479 F.3d 412, 416 (6th Cir. 2007)). “Courts
determine the accrual date of a claim by asking ‘what event should have alerted the typical lay
person to protect his or her rights.’” Am. Premier Underwriters, Inc. v. Nat’l R.R. Passenger Corp.,
839 F.3d 458, 461 (6th Cir. 2016) (quoting Roberson v. Tennessee, 399 F.3d 792, 794 (6th Cir.
2005). “In procedural-due-process claims . . . , a plaintiff’s injury accrues at the time that process
was denied because ‘the allegedly infirm process is an injury in itself.’” Ibid. (quoting Nasierowski
Bros. Inv. Co. v. City of Sterling Heights, 949 F.2d 890, 894 (6th Cir. 1991) (finding that the
plaintiff’s claim accrued when a local zoning council convened a critical session that departed
-30-

from the required notice and comment procedures, even though the council had not yet reached a
final decision on the plaintiff’s development plans for his property)).
1. Cahoo
Patti Jo Cahoo contends that her due process claim in this case is post-petition because it
did not “root” until February 2017 when she spoke with her civil rights attorneys. But her own
deposition testimony reveals that her claim was minimally actionable before she filed for Chapter
7 bankruptcy protection on September 22, 2016. She included her UIA debt in her bankruptcy
petition, but not her interest in this action.
Cahoo argues that she was unaware of the UIA’s May 2015 fraud determinations, or at
least the extent of the assessed penalties, until “months” after they were issued, when she consulted
her attorney about filing for bankruptcy. However, her deposition testimony makes clear that she
was on notice of her alleged injuries — and therefore her due process claim became minimally
actionable — before filing for bankruptcy. Am. Premier Underwriters, Inc., 839 F.3d at 461;
Tyler, 736 F.3d at 464. It is uncontested that she did not disclose her interest on her bankruptcy
schedules.
Cahoo maintains nevertheless that her injuries were not rooted in her pre-bankruptcy past
because (1) she did not suffer emotional distress until she discovered the lack of pre-deprivation
process in 2017, and (2) she could not challenge the “wrongful deprivation component” of her due
process claim until it had been reversed in 2017 following the Zynda review.
Although Cahoo may have suffered two distinct types of damages — one from wrongful
deprivation and another from emotional distress, see Carey v. Piphus, 435 U.S. 247, 263 (1978)
— she does not have two independent due process claims. Although the “procedural due process
clause has the dual purpose of protecting persons from the mistaken or unjustified deprivation of
-31-

life, liberty or property, and of conveying to the individual a feeling that the government has dealt
with her fairly,” that dual purpose is relevant only for determining damages resulting from the due
process violation. Alston v. King, 231 F.3d 383, 386 (7th Cir. 2000). Cahoo cites no authority for
the proposition that those two concepts have different accrual or rooting analyses. Instead, they
both result from the same violation of due process. The discovery of the UIA’s actions in 2015
made her claim “minimally actionable.” Tyler, 736 F.3d at 463, 464 (“the relevant bankruptcylaw question is when the claim is minimally actionable, not whether the claim is fully mature.”)
(emphasis added).
Second, relying on Heck v. Humphrey, 512 U.S. 477, 484-485 (1994), and the RookerFeldman doctrine, Cahoo argues that the wrongful deprivation component of her due process claim
was not minimally actionable at the time she filed for bankruptcy because her fraud determination
had not been reversed. Heck has no application here. In that case, the Supreme Court delineated
the procedures that prisoners must follow when asserting constitutional violations — habeas
corpus or a civil rights action under 42 U.S.C. § 1983 — based on whether the claim challenges
the validity of a criminal conviction. There was no conviction in this case. And the RookerFeldman doctrine, which prohibits collateral attacks on state court decisions, “has no application
to judicial review of executive action, including determinations made by state administrative
agency.” Verizon Maryland, Inc. v. Pub. Serv. Comm’n of Maryland, 535 U.S. 635, 644 n.3
(2002); Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923); Dist. Of Columbia Ct. of Appeals v.
Feldman, 460 U.S. 462 (1983).
Cahoo, therefore, is not the real party in interest of her claim in this case. The fact that she
obtained a bankruptcy discharge on January 15, 2017 makes no difference. “Even after the case
is closed, the estate continues to retain its interest in unscheduled property.” Guar. Residential
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Lending v. Homestead Mortg. Co., LLC, 463 F. Supp. 2d 651, 661 (E.D. Mich. 2006) (quoting
Collier on Bankruptcy ¶ 554.03 (15th rev. ed. 2006)). There is no evidence that she has attempted
to reopen the bankruptcy or ask the trustee to assign this cause of action to her.
Similarly, judicial estoppel “prevents a party from prevailing in one phase of a case on an
argument and then relying on a contradictory argument to prevail in another phase.” New
Hampshire v. Maine, 532 U.S. 742, 749 (2001). This doctrine is used to “‘preserve[e] the integrity
of the courts by preventing a party from abusing the judicial process through cynical
gamesmanship, achieving success on one position, then arguing the opposite to suit an exigency
of the moment.’” Lorillard Tobacco Co. v. Chester, Willcox & Saxbe, 546 F.3d 752, 757 (6th Cir.
2008) (quoting Teledyne Indus., Inc. v. Nat’l Labor Rel. Bd., 911 F.2d 1214, 1217–18 (6th
Cir.1990)).
Bankruptcy debtors must disclose to the bankruptcy court any potential cause of action as
an asset in a schedule of assets and liabilities. See 11 U.S.C. § 521(a)(1)(B)(i). “This disclosure
obligation is ongoing, meaning a debtor has ‘an express, affirmative duty to disclose all assets,
including contingent and unliquidated claims’ that arise at any time during the bankruptcy
proceeding.” Davis v. Fiat Chrysler Autos. U.S., LLC, 747 F. App’x 309, 314 (6th Cir. 2018)
(quoting White v. Wyndham Vacation Ownership, Inc., 617 F.3d 472, 479 n.5 (6th Cir. 2010)).
“[T]he disclosure obligations of consumer debtors are at the very core of the bankruptcy process
and meeting these obligations is part of the price debtors pay for receiving the bankruptcy
discharge.” Lewis v. Weyerhaeuser Co., 141 F. App’x 420, 424 (6th Cir. 2005).
In the bankruptcy context, the Sixth Circuit noted that judicial estoppel will bar a claim
when “(1) a party ‘assumed a position that was contrary to the one that she asserted under oath in
the bankruptcy proceedings,’ (2) ‘the bankruptcy court adopted the contrary position either as a
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preliminary matter or as part of a final disposition,’ and (3) the omission ‘did not result from
mistake or inadvertence.’” Davis, 747 F. App’x at 313. (quoting White, 617 F.3d at 478). When
a debtor fails to disclose known, potential claims in a bankruptcy proceeding, that “omission [is]
equivalent to a statement that there were no such claims.” Stephenson v. Malloy, 700 F.3d 265,
274 (6th Cir. 2012). When the debtor brings a civil claim that was not listed on her bankruptcy
schedule of assets, the debtor will have “assumed a position that was contrary to the one that she
asserted under oath in the bankruptcy proceedings,” satisfying that element of judicial estoppel.
White, 617 F.3d at 478.
To determine whether a debtor’s failure to disclose a claim stemmed from mistake or
inadvertence, the Sixth Circuit looks at whether “(1) [the debtor] lacked knowledge of the factual
basis for the undisclosed claims; (2) [the debtor] had no motive for concealment; and (3) there is
an absence of evidence of bad faith.” Ibid.; see also Williamson v. USF Holland, LLC, 600 B.R.
606, 615-16 (E.D. Mich. 2019). To determine whether the debtor acted in bad faith, the Sixth
Circuit generally “will look . . . at [the debtor’s] attempts to advise the bankruptcy court of [the]
omitted claim.” Ibid.
The first factor weighs against Cahoo. She was aware of the factual basis for her
undisclosed claim, evidenced by the disclosure of her debt to the UIA; she knew that the UIA
accused her of fraud pre-bankruptcy. And the second factor weighs against her because “a debtor
always has a motive for concealing potential causes of action in order to minimize [disclosed]
income and assets.” Gaskins v. Thousand Trails, LP, 521 F. Supp. 2d 693, 697-98 (S.D. Ohio
2007).
However, the evidence indicates that Cahoo did not display bad faith by not listing this
claim in the bankruptcy court. Her relative lack of sophistication counsels against a finding that
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she has attempted to deceive anyone about her due process claim, and her bankruptcy proceedings
terminated two months before she filed this action, thereby preventing her from informing her
trustee. “Because the rule is intended to prevent improper use of judicial machinery, judicial
estoppel is an equitable doctrine invoked by a court at its discretion.” New Hampshire, 532 U.S.
at 750 (citations committed). Moreover, the doctrine “should be applied with caution to ‘avoid
impinging on the truth-seeking function of the court, because the doctrine precludes a
contradictory position without examining the truth of either statement.” Eubanks v. CBSK Fin.
Grp., Inc., 385 F.3d 894, 897 (6th Cir. 2004) (quoting Teledyne Indus., Inc., 911 F.2d at 1218).
Although Cahoo is not the real party in interest, she still may attempt to reopen her
bankruptcy to ask the trustee to assign this cause of action to her. See Brooks v. Cent. Irrigation
Supply, Inc., No. 10-13717, 2012 WL 6579582, at *6 (E.D. Mich. Dec. 17, 2012). If she fails to
do so before trial, however, the Court will dismiss the amended complaint as to her claims.
2. Mendyk
Kristen Mendyk’s due process claim also became minimally actionable before she filed for
bankruptcy on December 16, 2016. Tyler, 736 F.3d at 461. She contends that she had no notice
of her November 2013 and January 2014 fraud determinations, tax intercepts, or garnishments
until she tried to file another unemployment claim in 2017 because she lived at a different address
than the one to which the UIA sent correspondence.

Mendyk dep., ECF No. 399-35,

PageID.17661. The record does not support that argument. First, her claim files reflect that she
began checking her MiWAM account regularly since January 10, 2014, Mendyk Claim File, ECF
No. ECF No. 461-15, PageID.28556-66, and she included the UIA debts on her schedule of
liabilities. Mendyk dep., ECF No. 445-32, PageID.26178. Mendyk was clearly aware of the UIA’s

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actions against her before filing for bankruptcy, and her claim, therefore, was “minimally
actionable.” Tyler, 736 F.3d at 464.
However, Mendyk’s attorney sought ratification from her bankruptcy trustee under Rule
17(a)(3). See Mendyk Trustee Ratification Email, ECF No. 399-44. “For ratification to be an
option under Rule 17(a), the ratifying party usually must ‘(1) authorize continuation of the action
and (2) agree to be bound by its result.’” Auday v. Wetseal Retail, Inc., No. 10-260, 2013 WL
2457717, at *7 (E.D. Tenn. June 6, 2013) (quoting In re Leonard, 11–52028, 2012 WL 1565120,
at *4 (Bankr. E.D. Tenn. May 2, 2012); see also Icon Grp., Inc. v. Mahogany Run Dev. Corp., 829
F.2d 473, 478 (3d Cir. 1987).
The defendants maintain that the bankruptcy trustee did not effectively ratify the lawsuit
because he did not fulfill these two requirements. That argument is based on an extremely narrow
reading of the email exchange between Mendyk’s attorney and her bankruptcy trustee. The
communication states:
Plfs Counsel: You previously authorized my former officer . . . to bring a claim on
behalf of [Mendyk] . . . For the purposes of FRCP 17, the authorization must
mention the case name and number and state that you are authorizing the
continuation of the action and agree to be bound by the results. If you could respond
affirmatively via email that you agree to continuation of the action and agree to be
bound by the results, and type your name beneath the affirmation, that should
suffice.
Trustee: Yes, this reply will confirm our conversation. As [Mendyk’s] Chapter 13
Trustee I have no objection to you pursuing any unemployment claims in her case
against the State of Michigan. Periodic progress reports would be appreciated.
Also I would recommend that you contact [Mendyk’s] bankruptcy attorney [] to
keep him advised of any developments.
Mendyk Trustee Ratification Email, ECF No. 399-44. Although the Trustee did not explicitly
state that he agreed to be “bound the results of the action,” he clearly manifested assent in writing
to Mendyk’s counsel’s request that he both ratify the action and agree to be bound by it.
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Mendyk, therefore, is the real party to pursue this claim. Likewise, judicial estoppel will
not prevent her from prosecuting the action.
3. Cole
The evidence establishes that Khadija Cole’s due process claim became minimally
actionable before she filed for Chapter 13 bankruptcy on October 3, 2016. Cole insists that she
never received any emails, fraud questionnaires, fraud determinations, or notice of the October
2014 and February 2015 fraud determinations against her. However, she testified that she first
learned about the fraud determination when she received a statement of debt by mail from the UIA
around the summer of 2016. Cole dep., ECF No. 445-29, PageID.26089. Her testimony therefore
refutes her position that her claim accrued after the October 2016 bankruptcy petition. Moreover,
the record reflects that someone frequently logged into her MiWAM account both before the UIA
sent the first fraud questionnaire in October 2014 and after it issued the second determination
notice in February 2015. Cole Claim Files, ECF No. 461-22, PageID.28678-80. She also included
her UIA debts on her bankruptcy schedule of liabilities but did not list her cause of action in this
case as an asset. Cole Bankruptcy Petition, ECF No. 445-46, PageID.26530.
Unlike plaintiff Cahoo, Cole did not file her bankruptcy petition under Chapter 7, which
would have resulted in the bankruptcy trustee determining whether to file the present cause of
action. She invoked Chapter 13. And unlike Chapter 7, “‘[t]here is no specific section of Chapter
13 authorizing the debtor to commence or continue lawsuits by or against the debtor,’ and, as a
result, there is conflicting authority on the Chapter 13 debtor’s standing to pursue litigation.” Hon.
William H. Brown, Lundy Carpenter, & Donna T. Snow, Debtor’s Counsel Beware: Use of the
Doctrine of Judicial Estoppel in Non-bankruptcy Forums, 75 Am. Bankr. L. J. 197, 204 n.35
(2001). The Sixth Circuit has characterized this as a “thorny” issue, which it declined to address
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in Kimberlin v. Dollar General Corporation because the defendant in that case raised the issue in
a footnote and did not brief it thoroughly. 520 F. App’x 312, 314 (6th Cir. 2013). The court
explained that the issue has caused a circuit split and decided to address the issue on judicial
estoppel grounds:
To countenance [the defendant’s] two-sentence footnote as properly raising a
standing argument would require this panel to resolve several thorny issues of
bankruptcy law, including an apparent conflict between two code provisions, 11
U.S.C. §§ 1306 and 1327. That conflict has led courts down four different paths
(each with its own set of difficulties) for allocating property between the debtor and
the trustee. See In re Jones, 657 F.3d 921, 927–28 (9th Cir.2011); In re Waldron,
536 F.3d 1239, 1242–43 (11th Cir. 2008); In re Heath, 115 F.3d 521, 524 (7th Cir.
1997); Sec. Bank of Marshalltown, Iowa v. Neiman, 1 F.3d 687, 690 (8th Cir. 1993);
In re Petruccelli, 113 B.R. 5, 15 (Bankr. S.D. Cal. 1990); David Gray Carlson, The
Chapter 13 Estate and Its Discontents, 17 Am. Bankr. Inst. L. Rev. 233 (2009). We
decline to resolve, without briefing, these difficult bankruptcy issues. The better
approach, we think, is to bypass the Rule 17 aspect and resolve the judicial-estoppel
issue on the parties’ shared assumption that [the plaintiff] was obliged to disclose
her [] claim to the bankruptcy court.
Ibid. The parties have not briefed (or even identified) this issue in this case. Taking a cue from
the court of appeals, the Court will address Cole’s bankruptcy filing in the context of judicial
estoppel.
As with Cahoo, the first factor identified by the White court does not favor Cole. See White,
617 F.3d at 478. She was aware of the facts giving rise to her undisclosed claim before she filed
for Chapter 13 bankruptcy petition. Similarly, the second factor cuts against her because of the
generally described motive of a bankruptcy petitioner to conceal assets. Gaskins, 521 F. Supp. 2d
at 697-98. However, Cole’s Chapter 13 proceeding still is ongoing. According to the present state
of the record, Cole’s attorney contacted Cole’s bankruptcy trustee on July 2, 2020, requesting that
she ratify the action. Cole Email to Trustee, ECF No. 474-24. She did not reply. Cole’s attorney
followed up again on July 17, 2020, but as of August 6, 2020, he had not yet heard back. As with
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Cahoo, Cole has more work to do before trial to secure ratification by her trustee to pursue this
claim. However, the record does not support summary judgment against her at this time based on
her bankruptcy filing.
FAST also argues that Mendyk and Cole should be judicially estopped from pursuing their
due process claims because they entered into consent judgments with the UIA conceding that they
owed repayment for wrongfully obtained unemployment benefits. They entered into two nearly
identical consent judgments with the State, Cole admitting that she owed the State $21,569.83, and
Mendyk admitting that she owed $23,304.70. As part of the agreement, the State agreed to deem
the judgments “satisfied in full” upon the payment of $7,523.83 for Cole and $6,793.70 for
Mendyk.
Judicial estoppel is based in essence on a party advancing inconsistent positions in separate
litigation to take unfair advantage. For example, a plaintiff can be judicially estopped from
asserting a claim that contradicts a prior, court-approved plea or settlement agreement. See
Mirando v. U.S. Dep’t of Treasury, 766 F.3d 540,545-47 (6th Cir. 2014) (plaintiff was judicially
estopped from bringing a tax refund claim that contradicted his prior plea agreement for income
tax evasion); Watkins v. Bailey, 484 F. App’x 18, 21-24 (6th Cir. 2012) (judicial estoppel barred
legal malpractice claim that was inconsistent with position plaintiff took in accepting courtapproved settlement in underlying case).
The plaintiffs’ concession that they committed fraud by obtaining benefits to which they
were not entitled, however, is not inconsistent with their claim that they were denied due process
in the adjudicative process. Although a fraud admission undoubtedly would have an impact on
damages, it does not diminish the claim that the plaintiffs were denied due process in the

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adjudicative process. Cf. Bouchillon v. Collins, 907 F.2d 589, 595 n.20 (5th Cir. 1990). Their
claims are not barred by judicial estoppel.
III. State Defendants
In their motion for summary judgment, the State defendants argue that the evidence now
in the record demonstrates as a matter of law that none of the plaintiffs suffered any injuries, none
of the defendants caused any of the plaintiffs’ injuries, and each of these defendants are entitled to
qualified immunity on the remaining due process claim.
In the opinion denying the codefendants’ motion to dismiss for lack of standing, the Court
already found that there were sufficient facts in the record to support the plaintiffs’ allegations of
injury. Cahoo, 2020 WL 7493103, at *9. Although a second look at the record did not sustain
plaintiff Pak’s claim of injury (discussed above), there is no need to revisit here the findings as to
the other plaintiffs.
A. Wrongful Conduct and Causation
None of the plaintiffs allege that any of the State defendants were involved personally in
their fraud adjudications or subsequent collections. Instead, the plaintiffs allege that these
defendants were responsible for applying MiDAS’s system of defective notices, logic trees that
led to presumptive fraud determinations, and automated collection procedures that deprived them
of the right to be informed of the accusations against them and to present their side of the story.
When an automated system is alleged to be the culprit behind a constitutional deprivation like this,
the plaintiffs’ theory of liability is a viable one. After all, as the court of appeals pointedly
observed, “MiDAS did not create itself.” Cahoo, 912 F.3d at 904-905.
Courts have held that when a supervisor is one or more steps removed from the offending
conduct, “the law requires more than an attenuated connection between the injury and the
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supervisor’s alleged wrongful conduct.” Peatross v. City of Memphis, 818 F.3d 233, 241 (6th Cir.
2016) (citing Phillips v. Roane Cnty., 534 F.3d 531, 538 (6th Cir. 2008) (a plaintiff “must point to
a specific action of each individual supervisor.”).

Supervisors cannot be held liable on a

respondeat superior theory for claims brought under 42 U.S.C. § 1983. Troutman v. Louisville
Metro Dep’t of Corr., 979 F.3d 472, 487 (6th Cir. 2020). “[E]ach [g]overnment official, his or her
title notwithstanding, is only liable for his or her own misconduct.” Ashcroft v. Iqbal, 556 U.S.
662, 676 (2009). Proof of failure to act is not enough. Peatross, 818 F.3d at 241 (citing Gregory
v. City of Louisville, 444 F.3d 725, 751 (6th Cir. 2006)). “Supervisory liability requires some
‘active unconstitutional behavior’ on the part of the supervisor.” Ibid. (quoting Bass v. Robinson,
167 F.3d 1041, 1048 (6th Cir. 1999); Hays v. Jefferson Cnty., 668 F.2d 869, 873–74 (6th Cir.
1982).
However, “active behavior” does not mean that a supervisor must have actually committed
the misconduct “or even physically be present at the time of the constitutional violation.” Ibid.
(collecting cases). “The requisite causal connection is satisfied if the [official] sets in motion a
series of events that the [official] knew or should reasonably have known would cause others to
deprive the plaintiff of [his] constitutional rights.” Conner v. Reinhard, 847 F.2d 384, 396-397
(7th Cir. 1988).

The plaintiffs must demonstrate that the defendants “‘at least implicitly

authorized, approved, or knowingly acquiesced in the unconstitutional conduct.’” Heyerman v.
Cnty. of Calhoun, 680 F.3d 642, 647 (6th Cir. 2012) (quoting Hays, 668 F.2d at 872). The core of
the inquiry rests on whether the supervisor “either encouraged the specific incident of misconduct
or in some way directly participated in it.” Ibid.
“[A] supervisor may be liable under § 1983 if he ‘abandon[s] the specific duties of his
position . . . in the face of actual knowledge of a breakdown in the proper workings of the
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department.’” Winkler v. Madison Cnty., 893 F.3d 877, 898 (6th Cir. 2018) (quoting Hill v.
Marshall, 962 F.2d 1209, 1213 (6th Cir. 1992)). “This liability, however, exists only where some
‘execution of the supervisors’ job function result[s] in [the p]laintiff’s injury.” Ibid. (quoting
Gregory, 444 F.3d at 752). Put another way, the plaintiff must show that the supervisor abdicated
his or her specific job responsibility, with the “active performance of the [supervisor’s] individual
job function . . . directly result[ing] in the[ ] constitutional injury.” Gregory, 444 F.3d at 752
(emphasis in original). See Taylor v. Michigan Dep’t of Corr., 69 F.3d 76, 81 (6th Cir. 1995)
(prison warden can be held liable after abdicating responsibility to approve all inmate transfers to
secure inmate safety, which resulted in a prisoner’s rape); Hill, 962 F.2d at 1213 (holding a
supervisor liable under § 1983 where he personally referred inmates’ complaints of not getting
their medication to a head nurse who he knew was altering or destroying inmates’ prescriptions);
but see Winkler, 893 F.3d at 899 (county jailer held not liable because plaintiff “failed to show that
[the defendant] allowed the jail to operate with the knowledge that existing healthcare policies
were exposing inmates to a substantial risk of harm.”).
Under section 1983, “‘[e]ach defendant’s liability must be assessed individually based on
his own actions.’” Hart v. Hillsdale Cnty., Michigan, 973 F.3d 627, 639 (6th Cir. 2020) (quoting
Binay v. Bettendorf, 601 F.3d 640, 650 (6th Cir. 2010)).
1. Sharon Moffet-Massey
Sharon Moffet-Massey was not in charge of the UIA when it developed and implemented
MiDAS. That responsibility fell to her predecessor, Steve Arwood. It appears that the UIA
employee who had the greatest responsibility over the project was the director of the UIA’s
Technology and Modernization Project, Clayton Tierney. Tierney was dismissed from the case

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because the amended complaint “merely name[d] him in the caption and allege[d] no specifics
other than his role as the UIA’s project manager in paragraph 19.” Cahoo, 322 F. Supp. 3d at 797.
The Sixth Circuit found that the plaintiffs plausibly stated a due process violation claim
when they alleged in their amended complaint that “Moffet-Massey ‘continued to pursue the same
defective’ policies despite knowing about MiDAS’ problems and invalid fraud determinations.”
Cahoo, 912 F.3d at 901 n.6. (quoting Am. Compl. ECF No. 43, at PageID.782, ¶ 169). After a
generous discovery period, however, the plaintiffs have been unable to prove that contention in
full.
In the amended complaint, the plaintiffs focused heavily on an allegation that MiDAS had
a “margin of error over 93% when making the automated fraud determinations with no human
involvement.” Am. Compl. ¶¶ 4, 77, 121, 134, 136, 156, 159, 166, 168, ECF No. 43, at
PageID.749, 749, 776, 777, 778, 780, 782. The Sixth Circuit relied on that unreasonably high
error rate when finding that the plaintiffs pleaded a plausible procedural due process claim. Cahoo,
912 F.3d at 902 (“the current system poses a profound possibility of erroneous deprivations — the
Auditor General found that MiDAS’ error rate exceeded 93%.”). However, the State defendants
point to an email from plaintiffs’ counsel sent in November 2019 in which counsel conceded that
the State never produced an August 2015 Auditor General report revealing the results of a review
of over 20,000 fraud adjudications as identified in their complaint. Instead, the plaintiffs based
their figures on news articles from 2016 and 2017.
The plaintiffs maintain that Moffet-Massey was well aware of MiDAS’s failings and
continued to pursue its unconstitutional practices until explicitly told by the DOL to cease.
However, the record does not support that argument. Instead, Moffet-Massey shut down MiDAS’s
auto-adjudication functionalities in August 2015; the earliest correspondence between the UIA and
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the DOL about this issue is dated September 2015, two months before the DOL issued its
monitoring report. She explained that she shut the system down after employees reported that
MiDAS attached “fraud to eligibility issues [she] had not seen before, such as a registration or late
filing,” which generally pertain to overpayment determinations but not fraud. Moffet-Massey
dep., ECF No. 473-16, PageID.35103-04. And although Geskey testified that many of his
warnings about the UIA’s business rules went “unheeded,” Geskey dep., ECF No. 473-20,
PageID.35299, 35317, it appears that Moffet-Massey eventually listened and exercised her
authority to end auto-adjudications. The plaintiffs have not offered any evidence to contradict
these assertions.
The plaintiffs maintain that Moffet-Massey should have acted earlier due to negative press
about the system. However, they do not cite the sources on which they rely. The only relevant
news articles in the record are those in plaintiffs’ counsel’s email to defense counsel, which are
dated 2016 and 2017 — well after the relevant adjudications here. Emails Between Counsel, ECF
No. 473-21; see United States v. Washington, 887 F. Supp. 2d 1077, 1095 (D. Mont. 2012) (“it is
perilous and unreasonable for any person to rely on press accounts given the risk of inaccuracy
and overstatement.”).
When it comes to the plaintiffs’ claims based on auto-adjudication, the record shows that
Moffet-Massey assumed her role as the director of the UIA after MiDAS had already been
implemented and took action to stop its automated fraud determinations when the problems began
to resurface. That does not constitute the “active behavior” necessary to expose a supervisor to
liability under section 1983. Peatross, 818 F.3d at 241.
A fact question remains, however, about Moffet-Massey’s role approving the deficient
questionnaires, determinations letters, and logic trees (for example, determining fraud based on a
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lack of response). Geskey testified that he repeatedly recommended against the fraud finding
decision trees to no avail. Geskey dep., ECF No. 473-20, PageID.35299, 35317, 35315, 35327,
35332 (“I recommended against the fraud finding decision trees” “which went unheeded;” “I began
making that request earlier, and continued that request even later when those were not changed
pursuant to my recommendations”). He insisted that fraud determinations must be based on
“competent material and substantial evidence.” Id. at PageID.35332. The record does not show
that Moffet-Massey did anything to address this problem. Because she was aware of the policy
permitting the UIA commonly to adjudicate issues based on nothing but a failure to respond to
allegations, Moffet-Massey dep., ECF No. 473-16, PageID.35025, it is reasonable to infer that she
approved the policy and thereby abdicated her duty “with active performance” to ensure that the
UIA’s process conformed with federal and State law. Gregory, 444 F.3d at 752.
The record also permits an inference that she actively approved the substance of the fraud
determinations and questionnaires. Moffet-Massey testified that the UIA was aware as early as
2013 or 2014 that the forms might be deficient, before she became director in April 2014. MoffetMassey dep., ECF No. 473-16, PageID.34984-85. And once she became director, it does not
appear that she took any action to modify the content of those notices. Her name appears on the
form 1713 fraud questionnaires and form 1302 fraud determinations under the heading,
“authorized by.”
Thus, although Moffet-Massey apparently took steps to address the auto-adjudication
feature, the record allows an inference that she actively encouraged, authorized, or acquiesced to
the rote application of logic trees and use of substantively deficient questionnaires and fraud
determination notices. Those are the systemic faults that the plaintiffs allege trenched upon their

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procedural due process rights. Defendant Moffet-Massey is not entitled to a summary judgment
of dismissal as a matter of law.
2. Stephen Geskey
The court of appeals found that the plaintiffs stated a plausible claim against defendant
Geskey when they alleged that he was “a policy-making supervisor” who “‘ordered state attorneys
general . . . to conduct business as usual’ and to ‘continue to contest claimants’ protests and appeals
and continue with collection activities’ even though he knew the fraud claims were false.” Cahoo,
912 F.3d at 901 n.6. (quoting Am. Compl. ECF No. 43, at PageID.781, ¶ 162). Once again, though,
the plaintiffs have failed to prove this allegation. Instead, they now argue that Geskey, as a lawyer
with “penultimate authority to approve forms,” “never undertook any review of the legal
sufficiency of the forms. He was also aware of the practice of determining fraud based on no
response from the claimants but did nothing beyond making the above-referenced recommendation
to Ms. Moffet-Massey.” Plfs.’ Mot. Summ. J., ECF No. 433, PageID.24908. The plaintiffs believe
that argument leads to the conclusion that Geskey’s “dereliction of duty set in motion a series of
events that he knew or should reasonably have known would cause others to deprive claimants of
their constitutional rights.” Ibid. The plaintiffs also argue that Geskey drafted Moffet-Massey’s
September 2015 response to the DOL administrator’s warning about auto-adjudications, in which
she maintained that a review of pertinent regulations “fail[ed] to reveal any [] substantive limitation
concerning when auto-adjudication is ‘not appropriate.’” Plfs.’ Resp. to State Defs.’ Mot. Summ.
J., ECF No. 473, PageID.33192-93 (citing Moffet-Massey Email dated 09/11/15, ECF No. 47321, PageID.35403).
The law does not support the plaintiffs’ theory of Geskey’s liability for MiDAS’s logic tree
configuration. A supervisor cannot be found to have abdicated his duty when he exercised his
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limited, non-decision-making authority to try to ameliorate an ongoing problem. The plaintiffs
have not explained what else Geskey could have done — or was supposed to do under law —
besides making informed recommendations to the person in charge. Geskey cannot be held
responsible for the faulty logic trees when he was the one raising concerns about them. Nor can
the act of drafting an email on behalf of Moffet-Massey explaining the UIA’s reading of applicable
regulations constitute an abdication by Geskey of any duty, much less unlawful conduct that
caused the plaintiffs’ injuries. This is especially true where the email was dated September 2015,
after the plaintiffs had been accused of fraud.
Moreover, the record does not establish any unlawful conduct by Geskey in his oversight
role of the bankruptcy department. There is no proof of a policy requiring the UIA to file adversary
complaints in every bankruptcy case; rather, the record indicates that staff would refer matters to
the attorney general’s office for review and initiation of an adversary proceeding when appropriate.
Geskey dep., ECF No. 473-20, PageID.35329-30. Doris Mitchell, who worked in the unit, said
Geskey never issued a directive regarding the referral of files to the attorney general’s office.
Mitchell dep., ECF No. 473-22, PageID.3544. The plaintiffs have offered no contrary evidence
on that point. Instead, it appears that the UIA maintained a general policy that if a bankruptcy
claimant owed a debt to the Agency, the UIA would refer the claimant’s file to the attorney general
without any specific directives. Id. at PageID.35415.
However, there are fact questions about Geskey’s role in approving the deficient
questionnaires and fraud determination notices. Geskey testified that he became the director of
the policies and procedures group shortly after MiDAS rolled out. Geskey dep., ECF No. 473-20,
PageID.35263. But he also testified that he took the position sometime “between 2011 [and] 2012”
(before MiDAS went live in October 2013) and that he had “some involvement” “in the policies
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and procedures [group] up to the implementation” of MiDAS. Ibid. As the director of the policies
group, he played a role in developing, or at least approving, some language used on UIA forms,
although the Agency’s director had the ultimate say in form approval. Id. at PageID.35282.
Geskey confirmed that he “personally did not undertake a legal review to determine the legal
sufficiency” of certain forms. Id. at 35331.
Since Geskey was the director of the policies and procedures group “up to the
implementation” of MiDAS, it is fair to infer that he should have reviewed the forms and noticed
that they were almost completely devoid of substantive notice (particularly the questionnaire).
And even if he did not direct the policies group during MiDAS’s development, he nevertheless
directed the group for years after MiDAS’s implementation and apparently found no fault with the
notices that deprived claimants of their ability to confront the UIA’s suspicions intelligently.
Geskey’s involvement in creating or approving the defective forms precludes summary
judgment for him as a matter of law. Fact questions also exist on causation. Although the plaintiffs
contend for the most part that they did not receive some of the questionnaires and determination
notices, ironically the defendants have cited evidence that in fact the plaintiffs accessed their
MiWAM accounts and likely saw them. Defendant Geskey is not entitled to a summary judgment
of dismissal as a matter of law.
3. Shemin Blundell
The Sixth Circuit found that the plaintiffs adequately pleaded a viable claim against
defendant Blundell by alleging that she “continued to instruct her subordinates, including the
claims examiners, to pursue invalid fraud charges.” Cahoo, 912 F.3d at 901 n.6. (quoting Am.
Compl. ECF No. 43, at PageID.781, ¶ 164). However, it appears that the plaintiffs have abandoned
this argument. In their response to the motion for summary judgment, the plaintiffs allege only
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that (1) before MiDAS rolled out, Blundell directed a team “whose role was to discuss and make
recommendations regarding overpayment collections and restitution as it related to the MiDAS
system implementation by Defendant FAST,” and (2) that “she worked closely with FAST and
was on the project floor every day during the development phase.” ECF No. 473, PageID.33193.
However, the amended complaint is entirely devoid of any allegations that Blundell made
recommendations about overpayment collections and restitution. Moreover, the plaintiffs fail to
provide any proof of these alleged recommendations, and they do not state with any particularity
what those recommendations were. Moreover, Blundell’s testimony made clear that she was not
involved in the administrative fraud determinations handled by the benefit overpayment collection
group; rather, she was involved with the investigation of fraud for criminal prosecution purposes.
None of the plaintiffs were criminally prosecuted for their alleged fraud.
The plaintiffs’ allegations against Blundell are exclusively bound to her role as supervisor
of the fraud investigation unit. However, the plaintiffs have not offered any evidence that Blundell
personally took any action to develop or implement MiDAS despite its known defects, that she
developed its inadequate forms, or that she in any way “abandon[ed] the specific duties of [her]
position . . . in the face of actual knowledge of a breakdown in the proper workings of the
department.” Winkler, 893 F.3d at 898. Summary judgment will be granted for defendant
Blundell.
4. Doris Mitchell
The court of appeals also found sufficient the plaintiffs’ allegation that defendant Mitchell
“‘instructed various attorneys general to continue to oppose claimants’ attempts to discharge fraudbased debt in bankruptcy proceedings by filing adversary proceedings, even when it was obvious

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that the underlying judgment . . . was based on an invalid fraud determination.’” Cahoo, 912 F.3d
at 901 n.6. (quoting Am. Compl. ECF No. 43, at PageID.781, ¶ 163).
In their response to the State defendants’ motion for summary judgment, the plaintiffs
maintain that Mitchell, in her role as the manager of the Friend of Court and bankruptcy unit,
“directed subordinates to send files to the Attorney General’s office to discharge of claimants’ debt
[sic] in bankruptcy proceedings that were based on allegedly false fraud claims despite issues with
MiDAS fraud auto-adjudications coming to light, and knowing that the Attorney General’s office
would oppose the discharge of the claimants’ debts.” ECF No. 473, PageID.33193. However, the
plaintiffs cite no evidence in the record to support that argument.
Mitchell testified that file preparation in her unit was largely clerical, as staff did not review
documents when preparing a file. Instead, staff simply assembled files to be sent to the attorney
general’s office. Mitchell dep., ECF No. 473-22, PageID.35419. She testified that the unit did not
provide any recommendations to the attorney general’s office about whether an adversary
proceeding should be filed, since that decision falls within the attorney’s discretion. Id. at
PageID.35417. The plaintiffs have offered no evidence to contradict that testimony. Nor have the
plaintiffs cited any evidence indicating that Mitchell was aware of a system breakdown, see id. at
PageID.35429-34, 35439, or that she actively participated in developing the UIA’s forms or
building the system that deprived the plaintiffs of their property without adequate pre-deprivation
process. The plaintiffs’ claims against Mitchell fail as a matter of law and will be dismissed.
5. Debra Singleton
The court of appeals found that the plaintiffs stated a plausible claim against defendant
Singleton when they alleged that she “‘continued to direct subordinates to pursue aggressive
collection activities . . . includ[ing] tax refund intercepts and wage garnishments’ even though
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[s]he knew the ‘vast majority’ of fraud adjudications were invalid.” Cahoo, 912 F.3d at 901 n.6.
(quoting Am. Compl. ECF No. 43, at PageID.780-81, ¶ 167-68).
In their response to the State defendants’ motion for summary judgment, the plaintiffs
similarly allege that Singleton, as the manager of the benefit overpayment collection unit, “pursued
aggressive collection activities, even after problems with the MiDAS system became well known”
and that she directed claimants to hang up and call customer service when they called to ask about
non-collection matters. ECF No. 473, PageID.33192. Beyond the hang-up policy, however, they
have not pointed to any evidence in the record that supports that conclusory argument. For
instance, they cite no evidence establishing that Singleton knew about the widespread problems
with MiDAS and chose to ignore them. They have not contradicted her testimony that she had no
knowledge of the alleged 93% margin of error for fraud determinations and did not know about
the problems with MiDAS until 2017. See Singleton dep., ECF No. 473-23, PageID.35464, 35483.
Singleton’s admission in her deposition that her unit directed claimants to hang up and call
customer service because it was the UIA’s policy not to transfer calls between 1-800 numbers is
not relevant to this case. As inane and frustrating as that policy may have been, it does not play
into any of the core complaints lodged by the plaintiffs in support of their due process claim. None
of the plaintiffs complained of being hung-up on by the UIA. Nor is it clear how such a practice
would violate their procedural due process rights.
The plaintiffs have not met their burden of coming forth with evidence showing that
Singleton actively participated in the deprivation of their property without due process. Instead,
they improperly seek to hold her liable based on her supervisory title, which is not permissible
under section 1983. Peatross, 818 F.3d at 241; Iqbal, 556 U.S. at 676-77. Summary judgment
will be granted for defendant Singleton.
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B. Qualified Immunity
On interlocutory appeal, the court of appeals held that the plaintiffs pleaded around the
State defendants’ qualified immunity defense.

They renew that defense in their summary

judgment motion.
The doctrine of qualified immunity insulates state actors from liability so long “as their
conduct does not violate clearly established statutory or constitutional rights of which a reasonable
person would have known.” Harlow v. Fitzgerald, 457 U.S. 800, 818 (1982). Once the qualified
immunity defense is raised, “the plaintiff must show that (1) the defendant violated a constitutional
right and (2) that right was clearly established.” McDonald v. Flake, 814 F.3d 804, 812 (6th Cir.
2016) (citing Quigley v. Tuong Vinh Thai, 707 F.3d 675, 680 (6th Cir. 2013)).
“A right is ‘clearly established’ if ‘[t]he contours of the right [are] sufficiently clear that a
reasonable official would understand that what he is doing violates that right.’” Baynes v. Cleland,
799 F.3d 600, 610 (6th Cir. 2015) (quoting Anderson v. Creighton, 483 U.S. 635, 640 (1987)).
“[B]ecause ‘immunity protects all but the plainly incompetent or those who knowingly violate the
law,’ this court must not ‘define clearly established law at a high level of generality.’” Tlapanco
v. Elges, 969 F.3d 638, 649 (6th Cir. 2020) (quoting Kisela v. Hughes, --- U.S. ---, 138 S. Ct. 1148,
1152 (2018)). “Nonetheless, ‘an official can be on notice that his conduct violates established law
even in novel factual situations.’” Cahoo, 912 F.3d at 898 (quoting Littlejohn v. Myers, 684 F.
App’x 563, 569 (6th Cir. 2017) (quoting Hope v. Pelzer, 536 U.S. 730, 731 (2002))). The
touchstone of the “clearly established” inquiry is “fair warning.” Baynes, 799 F.3d at 612–13
(quoting Hope, 536 U.S. at 741). Accordingly, there need not “be ‘a case directly on point, but
existing precedent must have placed the constitutional question beyond debate.’” Morgan v.
Fairfield Cnty., Ohio, 903 F.3d 553, 564 (6th Cir. 2018) (quoting Ashcroft v. al-Kidd, 563 U.S.
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731, 741 (2011)). In other words, “[q]ualified immunity ordinarily applies unless it is obvious that
no reasonably competent official would have concluded that the actions taken were unlawful.”
Chappell v. City of Cleveland, 585 F.3d 901, 907 (6th Cir. 2009).
“To determine whether a constitutional right is clearly established, [courts] must look first
to decisions of the Supreme Court, then to decisions of [the Sixth Circuit] and other courts within
[the] circuit, and finally to decisions of other circuits.” Cahoo, 912 F.3d 887 (quoting Crawford v.
Geiger, 656 F. App’x 190, 198 (6th Cir. 2016), and Brown v. Lewis, 779 F.3d 401, 418-19 (6th
Cir. 2015)). “[A]n action’s unlawfulness can be apparent from direct holdings, from specific
examples described as prohibited, or from the general reasoning that a court employs.” Ibid.
(quoting Seales v. City of Detroit, Mich., 724 F. App’x 356, 359 (6th Cir. 2018), and Feathers v.
Aey, 319 F.3d 843, 848 (6th Cir. 2003)).
The State defendants resurrect their argument that they did not violate any clearly
established rights because the plaintiffs “have cited no statutory support or authority that existed
prior to the State’s implementation of the MiDAS system that would have alerted the State
Defendants that auto-adjudication would violate a clearly established right.” State Defs.’ Mot.
Summ. J., ECF No. 423, PageID.18349. This argument ignores that the due process violations
alleged by the plaintiffs include more than “auto-adjudications.” The plaintiffs attack the defective
notices that MiDAS generated — notices that defendants Moffet-Massey and Geskey were
responsible for crafting — the presumptive logic tree fraud determinations, and the automatic fraud
findings that resulted from a failure to respond to the questionnaires. Those functionalities were
administered by these defendants.
The right to notice and an opportunity to be heard before the state deprives a person of
property is so clearly established as to be beyond debate. And it is equally clear that those
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fundaments of procedural due process are required where the state seeks to terminate benefits.
Goldberg, 397 U.S. at 267. As discussed in the earlier opinions in this case, the Due Process
Clause protects “‘certain substantive rights — life, liberty, and property’” from loss “‘except
pursuant to constitutionally adequate procedures.’” Chandler v. Vill. of Chagrin Falls, 296 F.
App’x 463, 468 (6th Cir. 2008) (quoting Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 541
(1985)). The core guarantees of due process are notice and the opportunity to be heard. Goldberg,
397 U.S. at 267. “The hearing must be ‘at a meaningful time and in a meaningful manner.’” Ibid.
(quoting Armstrong v. Manzo, 380 U.S. 545, 552 (1965)). The “recipient [must] have timely and
adequate notice detailing the reasons for a proposed termination, and an effective opportunity to
defend by confronting any adverse witnesses and by presenting his own arguments and evidence
orally.” Id. at 267-68. “‘[T]he root requirement’ of the Due Process Clause [is] ‘that an individual
be given an opportunity for a hearing before he is deprived of any significant property interest.’”
Cleveland Bd. of Educ., 470 U.S. at 541 (quoting Boddie v. Connecticut, 401 U.S. 371, 379
(1971)).
Those basics are replicated in the applicable federal statutes governing unemployment
compensation systems administered by the states with federal funds. Like other state agencies that
administer unemployment benefits, the UIA receives federal funds through the DOL in support of
its program. Those federal grants are conditioned on Michigan providing minimum due process
requirements to its beneficiaries, including the “[o]pportunity for a fair hearing, before an impartial
tribunal, for all individuals whose claims for unemployment compensation are denied.” 42 U.S.C.
§ 503(a)(3).
Courts balance three factors when determining whether an individual received sufficient
process:
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First, the private interest that will be affected by the official action; second, the risk
of an erroneous deprivation of such interest through the procedures used, and the
probable value, if any, of additional or substitute procedural safeguards; and finally,
the Government’s interest, including the function involved and the fiscal and
administrative burdens that the additional or substitute procedural requirement
would entail.
Mathews v. Eldridge, 424 U.S. 319, 335 (1976) (citing Goldberg, 397 U.S. at 263-71). Usually,
the “‘Constitution requires some kind of a hearing before the State deprives a person of liberty or
property.’” Cahoo, 912 F.3d at 902 (quoting Zinermon v. Burch, 494 U.S. 113, 127 (1990)).
The notice must be “reasonably calculated, under all of the circumstances, to apprise
interested parties of the pendency of the action and afford them an opportunity to present their
objections,” and “must afford a reasonable time for those interested to make their appearance.”
Mullane v. Central Hanover Bank and Trust Co., 339 U.S. 306, 314 (1950). “Notice, to comply
with due process requirements, . . . must set forth the alleged misconduct with particularity.” In
re Gault, 387 U.S. at 33. “The need for more specific notice is particularly critical when the
regulations provide in lieu of an adversary hearing the opportunity to submit information in
opposition to suspension.” Transco Sec. Inc. v. Freeman, 639 F.2d 318, 323-324 (6th Cir. 1981).
The government’s notice must be “through means that ‘one desirous of actually informing the
absentee might reasonably adopt.’” Ming Kuo Yang, 793 F.3d at 602 (quoting Mullane, 339 U.S.
at 315).
In Carey v. Piphus, the Supreme Court recognized that “the procedural due process clause
has the dual purpose of protecting persons from the mistaken or unjustified deprivation of life,
liberty, or property, and of conveying to the individual a feeling that the government has dealt with
her fairly.” Alston v. King, 231 F.3d 383, 386 (7th Cir. 2000) (citing Carey, 435 U.S. at 261-62).
It follows that there are two types of injuries cognizable under the procedural component of the
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Due Process Clause: one occurs from the wrongful taking of property; the other occurs from being
denied fair treatment by the government, even if the deprivation was not wrongful, as individuals
can suffer emotional distress due to their unfair treatment. Carey, 435 U.S. at 262-64; Wright v.
O’Day, 706 F.3d 769, 771-72 (6th Cir. 2013); Sutton v. Cleveland Bd. of Educ., 958 F.2d 1339,
1352 (6th Cir. 1992).
The plaintiffs in this case challenge not only the manner that the UIA officials chose to
deliver the notices to claimants, but also the adequacy of the notice’s contents. They contend that
the fraud questionnaires and the determination letters did not explain why the UIA suspected them
of committing fraud, and that deficiency deprived them of their ability to make an informed
response.
1. Fraud Questionnaires
Once MiDAS flagged a claim for overpayment, it automatically issued questionnaires to
employers and claimants. A claimant’s failure to respond timely to a questionnaire resulted in a
default determination that the claimant committed fraud.
Although a suspicion of fraud triggered the questionnaires, the basis for that suspicion was
not communicated to the claimant. The questionnaire provided almost no notice whatsoever of
the alleged misconduct, or that the failure to respond would result in a fraud determination. The
typical questionnaire stated:
A question of eligibility and/or qualification has been raised on this claim. Please
respond to the questions on the reverse side of this form . . . Failure to respond to
this request for information will result in issuance of a determination based on
available information . . . if it is determined that you intentionally made a false
statement, misrepresented the facts, or concealed material information to obtain
benefits, then the penalty provisions of Sections 54 and 62(b) of the Michigan
Unemployment Security Act will be applied and you would be subject to [various
penalties, including the seizure of benefits, fines of two-to-four times the amount
of overpayment, or potential criminal prosecution].
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Fraud Questionnaire, ECF No. 399-29, PageID.17634.
There is no question that this questionnaire woefully falls short of “sett[ing] forth the
alleged misconduct with particularity,” In re Gault, 387 U.S. at 33, or providing claimants a
“reasonable opportunity to know the claims of the opposing party and [] meet them,” Morgan, 304
U.S. at 18. The notice refers generally to a “question of eligibility” and mentions that UIA may
determine that a claimant committed fraud based on its “available information.”

But the

questionnaire does not state what that information is, thereby limiting the “opportunity to present
[] objections” intelligently. Mullane, 339 U.S. at 314; see Transco Sec., Inc., 639 F.2d at 323-24
(conclusory allegations like “billing irregularities,” “misrepresented the caliber of employees,” and
“lack of integrity” held insufficient to notify plaintiff of grounds for loss of government contract
for alleged malfeasance).
This omission is an obvious flaw in this context because, for many of these claimants, the
stakes are enormous. See Mathews, 424 U.S. at 335. Qualified recipients — who by definition
are unemployed — often experience a “brutal need” for benefits, which “provide[] the means to
obtain essential food, clothing, housing, and medical care.” Goldberg, 397 U.S. at 261, 264.
“[T]he termination of aid . . . may deprive an eligible recipient of the very means by which to live.”
Id. at 264. On the other hand, the UIA gains little, if anything, from excluding its grounds for
suspicion on its fraud questionnaires. “The state cannot be said to have an interest in depriving
unwitting claimants of benefits to which they may be entitled,” Cosby v. Ward, 843 F.2d 967, 984
(7th Cir. 1988), or falsely accusing honest people of fraud.
Moreover, the costs of providing constitutionally adequate notice of the claimants’ alleged
misconduct is low. The State simply would have to modify its pre-written questionnaires to

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indicate a basic reason for the UIA’s suspicion. See Easton dep., ECF No. 473-18, PageID.3522426 (describing the process of modifying forms).
The State defendants argue that the UIA’s forms must have provided adequate notice
because each plaintiff testified that “there was nothing confusing about the Agency forms,” State
Defs.’ Mot. Summ. J., ECF No. 423, PageID.18335, and the April 2016 Michigan Auditor
General’s report stated that “[m]ost UIA form letters sent to claimants were clear and
comprehensive.” 2016 Auditor General Report, ECF No. 423-24, PageID.19176. This argument
misrepresents the record. The plaintiffs’ testimony stands for the unremarkable proposition that
they understood what the forms said — not that they understood why the UIA suspected that they
committed fraud before they received their fraud determination. And the State defendants took
the Auditor General’s statement out of context. The Auditor General found that most of the UIA’s
forms were clear when considering all communications between the UIA and claimants. 2016
Auditor General Report, ECF No. 423-24, PageID.19176. But the report identified a “material
condition related to obtaining the necessary information for accurately adjudicating select claims
and providing claimants with the reasons supporting UIA’s (re)determinations.” Ibid. A “material
condition” is a “matter that, in the auditor’s judgment, is more severe than a reportable condition
and could impair the ability of management to operate a program in an effective and efficient
manner.” Id. at PageID.19213. In stark contrast to what the State defendants allege, the report
makes clear that the “UIA needs to provide claimants with the facts and rationale for claims
identified as including potentially false or misleading information.” Id. at PageID.19178; see also
2015 DOL report (Finding 5: the “UIA’s Notices of Determinations/Redeterminations and
Information Request sent to claimants/employers do not always provide a clear statement of the

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issue(s), which is not a method of administration to ensure payment when due in accordance with
[the SSA, 42 U.S.C. § 503(a)(1)].”
The questionnaires did not provide adequate notice of the plaintiffs’ alleged misconduct
and prevented them from intelligently objecting to the possibility of losing their benefits and fraud
accusations. The right to such notice was clearly established at the time.
2. Fraud Determination Notices
The fraud determination notices likewise failed to notify the plaintiffs adequately of the
grounds for the adverse proceedings against them. Once a default fraud determination was made,
MiDAS automatically issued three notices together: (1) a Primary Notice of Determination (stating
why the UIA believed it overpaid); (2) a Secondary Notice of Determination (informing the
claimant of the UIA’s fraud determination); and (3) a List of Overpayments, which demanded
payment of actual benefits as well as a statutory penalty for committing fraud.
The UIA’s explanations for fraud findings in the Secondary Determination Notices were
just as opaque as the questionnaires:
Your actions indicate you intentionally misled and/or concealed information to
obtain benefits you were not entitled to receive.
Secondary Determination Notice, id. at PageID.28593. The fraud determination forms merely list
the UIA’s conclusion without any allegations for a claimant to intelligently dispute; that was
insufficient notice. Mullane, 339 U.S. at 314; see Transco Sec., Inc., 639 F.2d at 323-24. The
Primary Determination Notices provided an adequate description for why the UIA believed it
overpaid claimants. E.g., Primary Determination Notice, ECF No. 461-18, PageID.28597 (“You
quit your job with RANDSTAND EMPLOYMENT SOLUTIONS LP on January 11, 2013 due to
other personal reasons. Your leaving was voluntary and not attributable to the employer. You are
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disqualified for benefits under the MES Act, Sec. 201(a) . . . Claimant is disqualified until
completion of a $ 4,344.00 earnings rework requirement which has been satisfied.”). But that
communication came too late. By the time the UIA issued the determination notices, it had already
terminated the claimants’ rights to benefits, demanded repayment, and determined that the
claimants were subject to penalties. The State defendants cannot rely on post-deprivation process
to remedy the lack of pre-deprivation notice.
The State defendants insist that each plaintiff nevertheless had the opportunity to
participate in a full evidentiary hearing before the UIA deprived any of them of property, which,
they say, cured any deficiency in earlier notices. But the Sixth Circuit rejected this exact argument
by the same defendants:
The Individual Agency Defendants argue that Plaintiffs failed to allege a plausible
due process claim because Agency procedures provided for a pre-deprivation
hearing if claimants elected to appeal a fraud determination. The Court is
unpersuaded by this argument. Plaintiffs allege that the Agency terminated a
claimant's right to benefits before any appeal hearing took place; they allege the
Agency terminated a claimant’s right to benefits immediately once MiDAS made a
positive fraud determination. While claimants had the opportunity to appeal a fraud
determination, “postdeprivation remedies alone will not satisfy due process if the
deprivation resulted from conduct pursuant to an ‘established state procedure,’
rather than random and unauthorized conduct.”
Cahoo, 912 F.3d at 902 (citing Valentino, 756 F.3d at 905 (quoting Logan, 455 U.S. at 435–36,
(1982)); see also Cosby, 843 F.2d at 984.
The State defendants also contend that the Michigan Court of Appeals already determined
that MiDAS’s forms comported with due process in Department of Licensing & Regulatory Affairs
v. Lucente, ---N.W.2d --- (Mich. Ct. App. Oct. 15, 2019). But the main focus of the court’s
decision in that case was an administrative law ruling about the statutory time limits for recouping
benefits under two different sections of the MESA. And the notice forms the court reviewed for
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constitutional adequacy were the pre-MiDAS forms (dated 2010), not the ones challenged in this
lawsuit.
* * * * *
The plaintiffs’ right to adequate notice was clearly established, and the notices for which
defendants Moffet-Massey and Geskey were responsible were clearly inadequate. In the earlier
appeal of this case, the court of appeals rejected the State defendants’ argument that the plaintiffs
must point to a case that applies these fundamental and well-established principles to a state
adjudicative system that employs some level of technology.
The Court rejects the Individual Agency Defendants’ assertion that Plaintiffs’ due
process rights were not clearly established. The Individual Agency Defendants
contend that Plaintiffs’ due process rights were not clearly established because
Plaintiffs failed to locate a case holding that a governmental official violates
individuals’ due process rights by “not ceasing to use the computerized system that
its employing agency contracted for, based on reports of performance issues of the
system. . . .” (Defs.’ Br. At 38.) The Individual Agency Defendants’ argument is
based on a fundamental misunderstanding of the doctrine of qualified immunity.
Contrary to the Individual Agency Defendants’ contention, “an official can be on
notice that his conduct violates established law even in novel factual situations.”
Littlejohn, 684 F. App’x at 569 (citing Hope, 536 U.S. at 731). The operative
inquiry is not whether a previous court faced perfectly analogous facts — it is
“whether it would be clear to a reasonable officer that his conduct was unlawful in
the situation he confronted.” Baynes, 799 F.3d at 610 (quoting Saucier, 533 U.S.
at 202). In this case, any reasonable official would have known that depriving
Plaintiffs of their protected property interests in the manner alleged violated their
due process rights.
If this Court accepted the Individual Agency Defendants’ argument that Plaintiffs
must identify cases with virtually identical facts to defeat a qualified immunity
defense, this Court would enable state actors to violate citizens’ constitutional
rights with impunity simply by employing new technologies. This would give state
actors a roadmap for evasion and effectively insulate them from any liability —
they would use new technologies to carry out unconstitutional conduct, and avoid
liability based on qualified immunity, even when the underlying conduct is clearly
unconstitutional. The Court rejects the Individual Agency Defendants’ invitation
to allow state actors to evade liability by utilizing new technologies to effectuate
unconstitutional conduct.
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The Individual Agency Defendants attempt to hide behind MiDAS. They claim
that MiDAS — not the Individual Agency Defendants — caused the
unconstitutional deprivations that Plaintiffs allege. On one level, this argument
superficially appears to be correct — MiDAS rendered the false fraud
determinations, not the Individual Agency Defendants. But this argument
conveniently ignores the fact that the Individual Agency Defendants implemented
and oversaw MiDAS, and prescribed its operation. MiDAS did not create itself.
And it did not enforce the false fraud determinations that it automatically rendered
— the Individual Agency Defendants did. The Court rejects the Individual Agency
Defendants’ attempt to evade responsibility for their actions by deflecting blame
away from themselves and onto the computerized system that they implemented
and oversaw, and whose invalid fraud determinations they knowingly enforced.
Cahoo, 912 F.3d at 904-905. That reasoning still applies. Qualified immunity will not shield
defendants Moffet-Massey and Geskey from liability.
C. Statute of Limitations
The State defendants also argue that Krysten Mendyk’s claims are barred by the statute of
limitations.
Section 1983 does not provide a statute of limitations. Instead, the appropriate statute of
limitations to be applied in all section 1983 actions is the state statute of limitations governing
actions for personal injury in the forum state. McCune v. City of Grand Rapids, 842 F.2d 903,
905-06 (6th Cir. 1988) (citing Wilson v. Garcia, 471 U.S. 261, 276-280 (1985)). Michigan’s threeyear statute of limitations for personal injury claims, Mich. Comp. Laws Ann. § 600.5805(8),
“governs section 1983 actions when the cause of action arises in Michigan,” McCune, 842 F.2d at
905-06.
The statute of limitations begins to run when the cause of action accrues, which, in a section
1983 action, “is a question of federal law.” Eidson v. State of Tenn. Dep’t of Children’s Servs.,
510 F.3d 631, 635 (2007) (citing Kuhnle Bros., Inc. v. Cnty. of Geauga, 103 F.3d 516, 519 (6th
Cir. 1997)). “[I]t is the standard rule that accrual occurs when the plaintiff has a complete and
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present cause of action . . . that is, when the plaintiff can file suit and obtain relief.” Wallace v.
Kato, 549 U.S. 384, 388 (2007) (citing Bay Area Laundry & Dry Cleaning Pension Trust Fund v.
Ferbar Corp. of California, 522 U.S. 192, 201 (1997) (quotation marks and citations omitted)).
The Sixth Circuit recognizes the “discovery rule,” which states that a cause of action
accrues when the “plaintiffs knew of or should have known of the injury which forms the basis of
their claims.” Ruff v. Runyon, 258 F.3d 498, 500 (6th Cir. 2001) (citing Friedman v. Estate of
Presser, 929 F.2d 1151, 1159 (6th Cir. 1991)). “This inquiry focuses on the harm incurred, rather
than the plaintiff’s knowledge of the underlying facts which gave rise to the harm.” Ibid.
The State defendants argue that Mendyk had reason to know about her claim between
November and January 2014. They contend that her claim is barred because she did not file suit
until over three years later, on March 2, 2017. The UIA issued three fraud determinations against
Mendyk, two in November 2013 and one in January 2014. They were mailed to the residence
address on file, where Mendyk’s ex-husband lived. Mendyk testified that she was not living with
him at that address; she moved out in 2011. However, she returned to the address from March to
June 2014, then left again. Mendyk’s claim files reflect that she began checking her MiWAM
account regularly since January 10, 2014. That evidence supports an inference that Mendyk
learned about the fraud determinations sometime before March 2014. Mendyk even acknowledged
that it is “fair to say [she] could have received” the fraud determinations. Mendyk dep., ECF No.
423-3, PageID.18424. However, that inference is not conclusive, and the Court must draw such
inferences at this stage of the case in favor of the non-moving party. Alexander, 576 F.3d at 557.
Although the defendants’ statute-of-limitations argument remains a viable trial defense, it does not
compel dismissal at the summary judgment stage of the case.

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D. Emotional Distress Damages
Lastly, the State defendants argue that the Court should bar the plaintiffs from asserting
medically related damages at trial because they have not identified any expert witnesses that could
support such claims. Plaintiff Cahoo alleges increased depression and weight gain. Cole testified
that she suffered depression and breakdowns, and that her fibromyalgia was exacerbated. Davison
testified that she experienced depression, anxiety, and exacerbated sarcoidosis. And Mendyk
alleges that she experienced stress and depression. Plaintiffs’ counsel apparently identified expert
witnesses who could support those damage claims but later withdrew them.
Neither the Supreme Court nor the Sixth Circuit require expert testimony to demonstrate
emotional distress injuries. Carey, 435 U.S. at 264 n.20 (stating that emotional distress injuries,
which “include mental suffering or emotional anguish,” although “essentially subjective,” “may
be evidenced by one’s conduct and observed by others. Juries must be guided by appropriate
instructions, and an award of damages must be supported by competent evidence concerning the
injury.”); Turic v. Holland Hosp. Inc., 85 F.3d 1211, 1215 (6th Cir. 1996) (“A plaintiff’s own
testimony, along with the circumstances of a particular case, can suffice to sustain the plaintiff’s
burden [to prove that a defendant’s unconstitutional actions caused emotional distress].”); Moorer
v. Baptist Health Care Sys., 398 F.3d 469, 485 (6th Cir.2005) (“emotional injury may be proved
without medical support”). “Although medical evidence is not necessary in order for a plaintiff to
be compensated for emotional distress, ‘damages for mental and emotional distress will not be
presumed and must be proven by competent evidence.’” Betts v. Costco Wholesale Corp., 558
F.3d 461, 472 (6th Cir. 2009) (quoting Turic, 85 F.3d at 1215). Competent evidence, however,
may come from lay witnesses.

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IV. Plaintiffs’ Motion for Partial Summary Judgment
The plaintiffs contend that they are entitled to partial summary judgment on liability
because the undisputed facts demonstrate that the fraud questionnaires and determinations were so
deficient that they failed to convey the constitutionally required notice and opportunity for the
plaintiffs to contest the fraud accusations made against them. They also contend that the record
shows without question that defendants CSG, FAST, Geskey, and Moffet-Massey are responsible
for the due process violations. As discussed above, the plaintiffs make some compelling points
about the deficiencies in the notices that the UIA furnished through MiDAS. But fact questions
abound as to how those faults affected the individual plaintiffs.
Plaintiff Cahoo collected unemployment benefits from January through June 2013. After
her employer protested her unemployment eligibility, the UIA began investigating her for fraud in
May 2014. More than one year later, the UIA determined that Cahoo committed fraud based on
her failure to respond to a questionnaire, and the UIA issued two notices of determination, both
dated May 27, 2015. However, the evidence is equivocal on the effect the notices had on her.
Cahoo’s claim file reflects that someone checked her MiWAM account 22 times between the day
the first questionnaire was sent in May 2014 and when the fraud determinations were issued in
May 2015. When asked, she testified that she likely saw the documents. Cahoo dep., ECF No.
445-28, PageID.26070-71. But Cahoo never stated explicitly that she read the questionnaire or
the determination letters or that she was misled by them. Id. at PageID.26071 (“I may not have
read it. I honestly don’t know.”). Although the fraud questionnaires and determination notices
inherently lacked adequate grounds to accord pre-deprivation process, questions of fact remain
about whether Cahoo’s due process right was violated on this ground.

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Kristen Mendyk received unemployment benefits from July 2011 to March 2012. After
her employer protested her unemployment eligibility, the UIA determined that Mendyk committed
fraud based on her failure to respond to its questionnaires, and it mailed three fraud determinations
against her: two in November 2013 and one in January 2014. As with plaintiff Cahoo, questions
of fact remain about if and when Mendyk received the UIA’s deficient questionnaires and
determinations.

She maintains that she does not know if she ever received any of the

questionnaires but believes that she likely did not because she had moved from the address she
provided the UIA. However, her claim files reflect that she began checking her MiWAM account
regularly since January 10, 2014, just before the UIA issued her third determination notice.
Although the record supports an inference that Mendyk saw the questionnaires and determinations
on MiDAS, a contrary inference also is justified, which must be drawn in favor of the non-moving
party. Alexander, 576 F.3d at 557.
Plaintiff Cole received unemployment benefits from March through June 2014 and opted
for email correspondence with the UIA. The UIA investigated her for two activities. The first
involved vacation pay earned in March 2014; the second involved earning discrepancies from
April to June 2014.

The UIA issued questionnaires in October 2014 and February 2015,

respectively. Cole never responded, and the UIA determined that she committed fraud in both
cases. However, she cannot say unequivocally that she received the UIA’s deficient questionnaires
and determinations. The record reflects only that someone frequently logged into her MiWAM
account, including before the UIA sent the first fraud questionnaire in October 2014 and after it
issued the second determination notice in February 2015.
Michelle Davison, who opted for mail correspondence, received unemployment benefits
from May 2013 through November 2013, and from March 2014 through July 2014. Davison’s
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former employer protested her eligibility around March 2014. In October 2014, the UIA mailed
Davison a questionnaire to her stated address, to which she never responded. The UIA issued a
primary overpayment determination shortly after, but that was returned as undeliverable in
November 2014. Davison then called the UIA in December 2014 and updated her address to
reflect that she was working with a homeless shelter. About two weeks later, the UIA issued a
fraud determination to Davison’s updated address in January 2015. As with the other plaintiffs,
questions of fact remain about when Davison received the UIA’s deficient questionnaires and
determinations. She did not testify that she read and was confused by the notices. However, her
claim files indicate that someone frequently checked her MiWAM account before and after
MiDAS posted the October 2014 questionnaire and January 2015 fraud determinations.
These fact questions preclude partial summary judgment on liability in favor of the
plaintiffs against any of the defendants.
V. Conclusion
Fact questions preclude summary judgment in favor of defendants CSG Government
Solutions, FAST Enterprises, Inc., Sharon Moffet-Massey, and Stephen Geskey against plaintiffs
Patti Jo Cahoo, Kristen Mendyk, Khadija Cola, or Michelle Davison. Plaintiff Hyon Pak has not
presented sufficient evidence to establish that he suffered a constitutional injury caused by any of
the defendants, and the amended complaint will be dismissed as to him against all defendants. The
plaintiffs have not offered sufficient evidence to establish the liability of defendants Shemin
Blundell, Doris Mitchell, and Debra Singleton. Fact questions preclude partial summary judgment
in favor of the remaining plaintiffs.
Accordingly, it is ORDERED that the motions by defendants CSG and FAST for summary
judgment (ECF No. 425, 429, 445) are GRANTED IN PART AND DENIED IN PART. The
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amended complaint is DISMISSED WITH PREJUDICE as to plaintiff Hyon Pak, only. The
motions are DENIED in all other respects.
It is further ORDERED that the motions for summary judgment by defendants Sharon
Moffet-Massey, Stephen Geskey, Shemin Blundell, Doris Mitchell, and Debra Singleton (ECF No.
423, 430) are GRANTED IN PART AND DENIED IN PART. The amended complaint is
DISMISSED WITH PREJUDICE as to plaintiff Hyon Pak, only, against all defendants, and as
to defendants Shemin Blundell, Doris Mitchell, and Debra Singleton as to all plaintiffs. The
motions are DENIED in all other respects.
It is further ORDERED that the plaintiffs’ motion for partial summary judgment (ECF
No. 433) is DENIED.
s/David M. Lawson
DAVID M. LAWSON
United States District Judge
Date: March 25, 2021

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