Engel v. Michigan Unemployment Insurance Agency

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
JASON W. ENGEL,
Plaintiff, 	Hon. Paul L. Maloney
v. 	Case No. 1:26-cv-00427
MICHIGAN UNEMPLOYMENT
INSURANCE AGENCY,
Defendant.
____________________________________/
REPORT AND RECOMMENDATION
This matter is before the Court on Defendant’s Motion to Dismiss. (ECF No. 22).
Pursuant to 28 U.S.C. § 636(b)(1)(B), the undersigned recommends that Defendant’s
motion be granted and that this action be terminated.
BACKGROUND
Plaintiff initiated this action on February 9, 2026, against the Michigan
Unemployment Insurance Agency (UIA) and the Michigan Office of Administrative
Hearings and Rules. (ECF No. 1, PageID.2). On March 12, 2026, Plaintiff submitted
his first amended complaint against Defendant UIA. (ECF No. 17). Plaintiff alleges
the following in his first amended complaint.
On November 27, 2025, Plaintiff applied for unemployment benefits, but
Defendant disqualified him because it received information from Plaintiff’s former
employer that he was terminated for misconduct. (ECF No. 17, PageID.138-140).
Plaintiff appealed the determination, and an Administrative Law Judge determined at
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an administrative hearing that Plaintiff’s former employer failed to establish that
Plaintiff was terminated due to misconduct. (ECF No. 17, PageID.141). Plaintiff’s
unemployment determination was reversed, but Plaintiff did not receive benefits “for
an extended period.” (ECF No. 17, PageID.142). On March 9, 2026, a UIA
representative contacted Plaintiff, stating that a benefit payment was processing.
(Id.). At the time of filing of his amended complaint, Plaintiff had not yet received the
funds. (Id.). Plaintiff asserts a 42 U.S.C. § 1983 violation of his due-process rights
under the Fourteenth Amendment. (ECF No. 17, PageID.143-46). Plaintiff requests
declaratory, injunctive, and monetary relief. (ECF No. 17, PageID.146).
Defendant UIA moved to dismiss Plaintiff’s first amended complaint under
Federal Rules of Civil Procedure 12(b)(1) and (6). (ECF No. 22). Plaintiff responded.
(ECF No. 26). Defendant replied. (ECF No. 30). The Court finds that oral argument
is unnecessary. See W.D. MICH. LCIVR 7.2(d).
ANALYSIS
I. Legal Standards
A. Rule 12(b)(1)
“A Rule 12(b)(1) motion for lack of subject matter jurisdiction can challenge the
sufficiency of the pleading itself (facial attack) or the factual existence of subject matter
jurisdiction (factual attack).” Cartwright v. Garner, 751 F.3d 752, 759 (6th Cir. 2014)
(citing United States v. Ritchie, 15 F.3d 592, 598 (6th Cir.1994)). As the Sixth Circuit
has instructed:
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A factual attack challenges the factual existence of subject matter
jurisdiction. In the case of a factual attack, a court has broad discretion with
respect to what evidence to consider in deciding whether subject matter
jurisdiction exists, including evidence outside of the pleadings, and has the
power to weigh the evidence and determine the effect of that evidence on
the court’s authority to hear the case.
Cartwright, 751 F.3d at 759-60 (citing Ritchie).
District courts have subject-matter jurisdiction in civil cases “arising under the
Constitution, laws, or treaties of the United States.” 28 U.S.C. § 1331. A claim arises
under federal law if “a federal question is presented on the face of [a] plaintiff's properly
pleaded complaint.” Matthews v. Centrus Energy Corp., 15 F.4th 714, 720 (6th Cir.
2021) (alteration in original) (quoting Caterpillar Inc. v. Williams, 482 U.S. 386, 392
(1987)). “The ‘arising under’ gateway into federal court . . . has two distinct paths: 1)
‘litigants whose causes of action are created by federal law,’ and 2) ‘state-law claims
that implicate significant federal issues.’ ” See Estate of Cornell v. Bayview Loan
Servicing, LLC, 908 F.3d 1008, 1012 (6th Cir. 2018) (quotation omitted). “Where
subject matter jurisdiction is challenged pursuant to Rule 12(b)(1), the plaintiff has the
burden of proving jurisdiction in order to survive the motion.” Moir v. Greater
Cleveland Reg'l Transit Auth., 895 F.2d 266, 269 (6th Cir. 1990).
B. Rule 12(b)(6)
A claim must be dismissed for failure to state a claim on which relief may be
granted unless the “[f]actual allegations [are] enough to raise a right for relief above the
speculative level on the assumption that all of the complaint’s allegations are true.”
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Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 545 (2007). As the Supreme Court has
held, to avoid dismissal, a complaint must contain “sufficient factual matter, accepted as
true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S.
662, 677-78 (2009). “The plausibility standard is not akin to a ‘probability requirement,’
but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id.
at 678. If the complaint simply pleads facts that are “merely consistent with” a
defendant’s liability, it “stops short of the line between possibility and plausibility of
‘entitlement to relief.’ ” Id. As the Court further observed:
Two working principles underlie our decision in Twombly. First, the tenet
that a court must accept as true all of the allegations contained in a
complaint is inapplicable to legal conclusions. Threadbare recitals of the
elements of a cause of action, supported by mere conclusory statements, do
not suffice . . . . Rule 8 marks a notable and generous departure from the
hyper-technical, code-pleading regime of a prior era, but it does not unlock
the doors of discovery for a plaintiff armed with nothing more than
conclusions. Second, only a complaint that states a plausible claim for
relief survives a motion to dismiss . . . . Determining whether a complaint
states a plausible claim for relief will, as the Court of Appeals observed, be
a context-specific task that requires the reviewing court to draw on its
judicial experience and common sense. But where the well pleaded facts
do not permit the court to infer more than the mere possibility of
misconduct, the complaint has alleged—but it has not “show[n]”—“that the
pleader is entitled to relief.”
Id. at 678-79 (citations omitted).
I. Immunity
Defendant argues that Plaintiff’s suit is barred by sovereign immunity. (ECF
No. 22, PageID.188-89). The undersigned agrees. The Eleventh Amendment bars
suits against a state agency “regardless of the nature of the relief sought,” in the
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absence of express consent to suit. Pennhurst State Sch. & Hosp. v. Halderman, 465
U.S. 89, 100-01 (1984); see Thiokol Corp. v. Dep’t of Treasury, 987 F.2d 376, 381 (6th
Cir. 1993). Michigan has not consented to this suit, and Plaintiff does not point to any
applicable federal statute that would have abrogated the State’s immunity. See Sims
v. Mich. Dep’t of Corr., 23 F. App’x 214, 215 (6th Cir. 2001) (“[T]he state of Michigan
has not consented to civil rights suits in the federal courts.”). Thus, Defendant is
immune from Plaintiff’s suit.
II. Failure to State a Claim
Even if the State’s immunity was abrogated, Plaintiff fails to state a claim upon
which relief may be granted. As a preliminary matter, Plaintiff brings his due-process
claim under Section 1983. Defendant argues that the UIA is not a “person” subject to
suit under Section 1983. (ECF No. 22, PageID.189-90). Defendant is correct that
“neither a State nor its officials acting in their official capacities are ‘persons’ under
§ 1983.” Will v. Mich. Dep’t of State Police, 491 U.S. 58, 71 (1989). Accordingly,
Plaintiff fails to state a claim upon which relief may be granted as his due-process claim
against the UIA fails as a matter of law.
CONCLUSION
For the reasons discussed herein, the undersigned recommends that Plaintiff’s
first amended complaint be dismissed without prejudice and that this action be
terminated. For the same reasons the undersigned makes these recommendations,
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the undersigned further recommends that an appeal of this matter by Plaintiff would
not be in good faith. Coppedge v. United States, 369 U.S. 438, 445 (1962).
OBJECTIONS to this Report and Recommendation must be filed with the Clerk
of Court within fourteen days of the date of service of this notice. 28 U.S.C.
§ 636(b)(1)(C). Failure to file objections within the specified time waives the right to
appeal the District Court’s order. See Thomas v. Arn, 474 U.S. 140 (1985); see also
States v. Walters, 638 F.2d 947 (6th Cir.1981).
Respectfully submitted,
Dated: June 8, 2026 	/s/ Phillip J. Green
PHILLIP J. GREEN
United States Magistrate Judge
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