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1 STATE OF MICHIGAN SIXTEENTH JUDICIAL CIRCUIT COURT YVETTE D. COTTON, Claimant-Appellant, vs. Case No AE EXPRESS EMPLOYMENT PROFESSIONALS, Employer-Appellee, And MICHIGAN UNEMPLOYMENT INSURANCE AGENCY, Agency-Appellee ~/ OPINION AND ORDER This matter is before the Court on claimant-appellant Yvette Cotton's claim of appeal from the order entered by the Michigan Compensation Appellate Commission on October 31, Claimant-appellant Yvette Cotton (Cotton) alleges that she began working for a temp agency, employer-appellee Express Employment Professionals (Express), in 2011, and she was placed with Burtek Enterprises (Burtek) in Cotton alleges that she was laid off by Burtek in December of 2012, and in June of 2013 she began receiving unemployment benefits. In June of 2014, Cotton alleges that agency-appellee Michigan Unemployment Insurance Agency (the Agency) reopened her case without explanation and reversed its determination that she was eligible for benefits.

2 On November 25, 2014, Cotton filed a late protest with the Agency. She alleges that she had good cause for filing late because the Agency issued its June 2014 determination in a confusing manner, which caused her to reasonably believe that she still qualified for benefits. But the Agency refused to consider the merits of her claim and denied her request for redetermination. Cotton appealed the denial to the administrative law judge (ALJ), who affirmed the Agency's decision on April 23, On March 18, 2016, the Agency received a letter from Burtek, dated March 16, 2014, which it treated as a request for rehearing. The Agency forwarded this request to the ALJ, who dismissed the matter. Cotton appealed this decision to the Michigan Compensation Appellate Conunission (MCAC), which treated the ALJ's decision as a denial of reopening. Finally, on October 31, 2016, the MCAC issued its decision finding that Burtek did not establish good cause to reopen the matter and affirming the ALJ' s decision. Cotton thus filed the pending appeal. Administrative decisions are subject to review as provided by law. Const 1963, art 6, 28. The Michigan Employment Security Act (MESA) allows a circuit court to review questions of fact and law on the record made before the ALJ and MCAC involved in a fmal order or decision of the MCAC. MCL (1). The circuit court "may reverse an order or decision only if it fmds that the order or decision is contrary to law or is not supported by competent, material, and substantial evidence on the whole record." Id Accordingly, "[a] reviewing court is not at liberty to substitute its own judgment for a decision of the MCAC that is supported with substantial evidence." Hodge v US Sec Assoc, Inc, 497 Mich 189, ; 859 NW2d 683 (2015). "Substantial evidence is that which a reasonable mind would accept as adequate to support a decision, being more than a mere scintilla, but less than a preponderance of the 2

3 evidence." Petrelius v Houghton-Portage Tp Sch, 281 Mich App 520, 521; 761 NW2d 395 (2008). Cotton argues that the Agency did not have jurisdiction to reopen 20 out of 22 benefit weeks because the June 25, 2014 determination was issued over 30 days after each check was issued, and the Agency did not provide good cause to reconsider those checks. Alternatively, if the Agency demonstrated good cause to issue a redetermination after the 30-day period, Cotton contends that the Agency still lacked jurisdiction to reopen 4 out of 22 benefit weeks more than 1 year after making the initial determination. Further, Cotton avers that her confusion, caused by the issuance of contradictory determinations on the same day, established good cause for her own late protest. Finally, she argues that Burtek also established good cause to reopen when it submitted new evidence that Cotton did not quit but was laid off. The Agency argues that, procedurally, the issue of jurisdiction and whether Cotton had good cause for her late protest of the June 2014 determination are not before the Court. But the Agency contends that MESA expressly grants the Agency three years to issue a redetermination when it finds that a claimant has improperly obtained benefits. The Agency avers that the sole issue before the Court is whether the MCAC's decision to deny Cotton's untimely request to reopen the case is consistent with law and supported by the record. Here, the Agency argues that Burtek failed to assert good cause to reopen the ALJ' s March 2015 decision, and in Cotton's appeal to the MCAC, she incorrectly characterized Burtek's letter as newly discovered evidence. The Agency contends that the material facts contained in the letter were known and available to Cotton at the time of the Agency's June 2014 determination. Initially, the Court must address whether the Agency had jurisdiction to issue the June 25, 2014 redeterminations. "A challenge to subject-matter jurisdiction may be raised at any time, 3

4 even if raised for the first time on appeal." Bank v Michigan Ed Ass 'n-nea, 315 Mich App 496, 499; 892 NW2d 1 (20 16) (quotation marks and brackets omitted). When interpreting the plain language of a statute to give effect to the Legislature's intent, courts must "examine the statute as a whole, reading individual words and phrases in the context of the entire legislative scheme." Madugula v Taub, 496 Mich 685, 696; 853 NW2d 75 (2014). "Statutory interpretation requires courts to consider the placement of the critical language in the statutory scheme.... In doing so, courts must give effect to every word, phrase, and clause in a statute and avoid an interpretation that would render any part of the statute surplusage or nugatory." Johnson v Recca, 492 Mich 169, 177; 821 NW2d 520 (2012) (citation and quotation marks omitted). The parties acknowledge that "[t]he issuance of each benefit check shall be considered a determination by the unemployment agency that the claimant receiving the check was covered during the compensable period, and eligible and qualified for benefits." MCL (f). But Cotton asserts that the Agency lacked jurisdiction to make the June 25, 2014 redeterminations that she was ineligible for benefits based on section 32a, which provides: (1) Upon application by an interested party for review of a determination, upon request for transfer to an administrative law judge for a hearing filed with the unemployment agency within 30 days after the mailing or personal service of a notice of determination, or upon the unemployment agency's own motion within that 30-day period, the unemployment agency shall review any determination. After review, the unemployment agency shall issue a redetermination affirming, modifying, or reversing the prior determination and stating the reasons for the redetermination, or may in its discretion transfer the matter to an administrative law judge for a hearing. If a redetermination is issued, the unemployment agency shall promptly notify the interested parties of the redetermination, the redetermination is final unless within 30 days after the mailing or personal service of a notice of the redetermination an appeal is filed with the unemployment agency for a hearing on the redetermination before an administrative law judge in accordance with section 33. (2) The unemployment agency may, for good cause, including any administrative clerical error, reconsider a prior determination or redetermination after the 30-day period has expired and after reconsideration issue a redetermination affirming, 4

5 modifying, or reversing the prior determination or redetermination, or transfer the matter to an administrative law judge for a hearing. A reconsideration shall not be made unless the request is filed with the unemployment agency, or recon~ideration is initiated by the unemployment agency with notice to the interested parties, within 1 year from the date of mailing or personal service of the original determination on the disputed issue. MCL a(l)-(2). The Agency, however, asserts that MESA grants jurisdiction to issue a redetermination on a claimant's eligibility for benefits within three years of the date the claimant first receives benefits under section 62(a). The Agency's Response at 16. This section provides, in pertinent part: If the unemployment agency determines that a person has obtained benefits to which that person is not entitled, or a subsequent determination by the agency or a decision of an appellate authority reverses a prior qualification for benefits, the agency may recover a sum equal to the amount received plus interest.... The unemployment agency shall issue a determination requiring restitution within 3 years after the date of finality of a determination, redetermination, or decision reversing a previous finding of benefit entitlement. Except in the case of benefits improperly paid because of suspected identity fraud, the unemployment agency shall not initiate administrative or court action to recover improperly paid benefits from an individual more than 3 years after the date that the last determination, redetermination, or decision establishing restitution is final. Except in the case of benefits improperly paid because of suspected identity fraud, the unemployment agency shall issue a determination on an issue within 3 years from the date the claimant first received benefits in the benefit year in which the issue arose... MCL (a). Reading MESA as a whole and giving effect to every word, phrase, and clause in the cited statutes, the Court concludes that MCL (a) does not provide the Agency blanket jurisdiction to redetermine a claimant's eligibility for benefits within three years of the date that the claimant first receives benefits. Section 62 addresses the Agency's ability to recover improperly paid benefits and discusses applicable methods and timelines to initiate recovery action against a claimant. Section 32a, meanwhile, discusses methods and timelines applicable to the Agency's ability to review, reconsider, and redetermine prior determinations on a 5

6 claimant's eligibility for benefits. Thus, the Court concludes that MESA provides jurisdiction the Agency to issue determinations or redeterminations through section 32a, not section 62. In the case at bar, Cotton was issued two documents titled "Notice of Determination" on June 25, Cotton's Brief, Attachments 1-2. Here, Cotton was disqualified for benefits under MCL (1)(a), but she was not disqualified for benefits under MCL (b). Id The Agency sent another document to Cotton on June 25, 2014 titled "Restitution (List of Overpayments)" listing 22 payments that the Agency made from the week ending June 1, 2013 through the week ending June 7, There is no evidence before the Court regarding whether the disputed redeterminations were issued based on the Agency's own motion to review determinations or the Agency's reconsideration of prior determinations. In either scenario, the Agency lacked jurisdiction to issue a redetermination of every determination it has made (i.e., every check it has issued) since Cotton first received benefits. See MCL (f). In light of the foregoing, it is unnecessary for the Court to address the timeliness of subsequent protests or requests for rehearing or reopening. Thus, this case is remanded to clarify the basis for issuing the June 25, 2014 notices of determination and to decide to what extent the Agency had jurisdiction to reverse its prior determinations. For the reasons set forth above, the final order entered by the Michigan Compensation Appellate Commission on October 31, 2016 is VACATED and this case is REMANDED for further proceedings consistent with this Opinion and Order. Pursuant to MCR 2.602(A)(3), this Opinio:;: ::~~;:::fue last pending claim i21=~r\e ca~ DATED: June 5, 2017 A. TRUE COPY J~S M. BIERNAT, Jk;"Circuit Judge 6

7 JMsz cc: v ~ve Gray, Attorney at Law ~ an Hofman and C~Nagel (MCR 8.120) Jessica Mullen, Attorney at Law 7