IG’s report injected into lawsuit over unemployment system

March 8, 2021

Jim Saunders

TALLAHASSEE --- Plaintiffs in a potential class-action lawsuit about Florida’s troubled unemployment-compensation system are trying to use a new report by the state’s chief inspector general to bolster their case.

Just hours after Gov. Ron DeSantis’ office released the draft report Thursday by Chief Inspector General Melinda Miguel, attorneys for the plaintiffs filed a copy of the report in their lawsuit against the Florida Department of Economic Opportunity and Deloitte Consulting, a contractor that helped put in place the state’s CONNECT online unemployment system in 2013.

Leon County Circuit Judge John Cooper last month held a hearing on motions by the department and Deloitte to dismiss the case, which stems from the system becoming overwhelmed last year when economic fallout from the COVID-19 pandemic caused massive job losses.

The inspector general’s report pointed to longstanding problems with the system that had gone unaddressed, echoing an argument that the plaintiffs have made in the lawsuit.

In filing the copy of the report Thursday, plaintiffs’ attorneys Marie Mattox and Gautier Kitchen wrote that the report “supports virtually every, or almost every, argument plaintiffs have made in this case. This document is critically important for the court’s consideration of the pending motions to dismiss.”

The lawsuit, which includes named plaintiffs who experienced problems getting unemployment benefits, seeks damages and raises several arguments, including that the department and Deloitte were negligent and breached a fiduciary duty.

Cooper in September dismissed an earlier version of the lawsuit but gave the plaintiffs an opportunity to file a revised complaint. After the revised case was filed, attorneys for the department and Deloitte filed motions to dismiss on several grounds.

Those grounds include the constitutional separation of powers between courts and the executive branch of government; sovereign immunity, which helps shield government agencies from lawsuits; and a lack of a legal basis for showing a fiduciary duty.

Cooper held the hearing on the motions Feb. 16 but had not ruled as of Friday, according to an online docket on the Leon County clerk of courts website.

During the hearing, department attorney Daniel Nordby argued that Cooper should dismiss the revised complaint for the same reasons he dismissed the earlier version, including that judges can’t intrude on the powers of the executive branch of government.

“The plaintiffs have argued no manageable standard to avoid a judicial intrusion into the powers of the other branches of government based on the allegations in their complaint and the remedies sought by their complaint,” Nordby said, according to a transcript of the hearing. “The (revised complaint) asks this court to impose tort liability on the department based on decisions by the department that are infused with policy-making considerations, both in the initial design of the system and in the department’s decisions in how best to respond to the unprecedented challenges imposed by the COVID-19 pandemic early last year.”

But Kitchen, representing the plaintiffs, said people in Florida “deserve their day in court” and quoted comments from last year by DeSantis, who called the unemployment system a “jalopy.”

“The chief executive officer of the state of Florida saying publicly the system is a jalopy, a clunker, it is in tatters, it was designed to fail and that it could not even handle a mild recession,” Kitchen said, according to the transcript. “The emperor has no clothes and hasn’t since 2013. This pandemic just helped rip those clothes off.”

It is unclear what --- if any --- role the new inspector general’s report could play in Cooper’s decision. But the 95-page report described a system that was incapable of handling the crush of unemployment claims last year.

“The contract mandated system capacity for a minimum of 200,000 concurrent external users,” Miguel wrote. “We could not find evidence where DEO (the Department of Economic Opportunity) enforced this contract requirement. Deloitte’s stress testing documentation shows testing was for approximately 4,200 concurrent users (internal and external).”

Miguel wrote the independent verifications of the system as set by the department “were neither fully independent nor adequately rigorous.”

Deloitte has argued it has not been involved with the system since 2015. The company is slated late Monday afternoon to go before the Senate Select Committee on Pandemic Preparedness & Response.

--- News Service staff writer Jim Turner contributed to this report.