State of Michigan officials have been sued on October 1, 2002 in Wayne county Circuit Court by workers compensation claimants who allege they have been denied the right to a hearing as required by state workers compensation laws.

State of Michigan officials have been sued to prevent them from denying several hundred workers compensation claimants their right to an informal mediation hearing before a state mediator. The suit, filed in response to a budgetary move by outgoing Governor Engler administration official, seeks to enjoin state officials from carrying out their plan before state mediators are fired on November 1, 2002.

On October 1 , 2002 a lawsuit was filed in Wayne County Circuit Court in Detroit, Michigan by workers compensation claimants who have been denied their right to a mediation hearing by state officials charged with administering the workers compensation law in Michigan. Named in the complaint are Craig Petersen, Deputy Director of the Bureau of Workers & Unemployment Compensation; Jack Wheatley, Director of the BWUC; Kalmin Smith, Deputy Director of the Michigan Department of Consumer & Industry Services and Noelle Clark, Director of CIS.

The complaint alleges that these state officials have denied several hundred injured workers, their employers, and insurance carriers, their right to an informal mediation hearing as mandated by state workers compensation laws.

The suit seeks to enjoin the state officials from carrying out their plan which became effective on August 21, 2002. Seven of eleven state mediators are losing their jobs as part of this plan. Several thousand cases are being transferred from the mediation divison to the Board of Magistrates for a formal hearing---a much costlier and slower process, as part of the plan. No public comment was solicited by state officials prior to announcement of the plan.

Michigans mediation program has been cited nationally as a model of efficiency and fairness.

Attorney Barry Adler of Farmington Hills, Michigan filed the suit on behalf of clients denied a mediation hearing request. Mr. Adler, a prominent workers compensation attorney, has secured an Order to Show Cause directing the state officials to appear In Wayne County Circuit Court on October 10, 2002 to show cause why an Injunction or Writ of Mandamus should not issue to stop the plan. The case is assigned to Judge John Gillis.
The state officials, without public comment, hatched the plan in response to demands from outgoing administration officials to find ways to cut costs. In 2001, the last annual report prepared by state officials, reveals that mediators disposed of thousands of cases in an informal setting. Employers and insurance carriers used the process as a means of avoiding costly legal fees and getting a prompt hearing. The alternative, a formal hearing before a magistrate, can take years to dispose of a case and requires the parties to appear every few months for status reviews of the claim.
The lawsuit charges that state officials, warned by attorneys that their actions were contrary to the state law, steadfastly refused to acknowledge the claim. More troubling is the fact that no public comment was solicited and the change caught many in the system by suprise.
The decision in the case will affect several hundred cases in the system currently and thousands over the course of a year. In 2001, over 14000 cases were assigned to mediators. A high percentage of the cases were resolved without the necessity of a formal hearing.