Eleanor and the gang meet the judge at the IHOP, the crossroads of all dimensions, time and space to plead their case and Janet makes a re-connection.
Michael and the others meet with Judge Gen in a place outside of all dimensions, and she's not happy with how she's ignored her orders before, but she hears him out: The point system doesn't work because life on Earth is so complicated, you can't do something simple like buy a tomato without having lots of unintended consequences. She doesn't get it, she's never been to Earth, and says everyone should just do the research required to make perfect choices, but after a quick trip to Earth she comes back and realizes Michael's right: Earth is a mess, and as much as she tried, she couldn't make good decisions. And as Chidi says, he tried to obsess over every choice, and largely for that got sent to the Bad Place.
Judge Gen says they need to fix this, and summons Shawn. In the Neighborhood that Michael created, over many lives the four humans got better, and did so in ways they never did when they were alive. Shawn thinks that was a fluke, so Chidi suggests an experiment: allow Michael to create a new Neighborhood, where the complicating variables that make life on Earth so hard are gone, bring in four newly-dead humans, and see if they can be stimulated to improve, as the original four were. With some grumbling, Shawn and Judge Gen accept this.
This Neighborhood couldn't be in the Good Place, or the Bad Place, so they all visit Mindy and put it in her back yard in the Medium Place. Judge Gen tells them the rules: a new Neighborhood, the Bad Place will pick four new humans of the general level of badness as the original four (no dictators or serial killers), Michael will not get the files on them in advance, but can modify the Neighborhood as he wishes upon their arrival. Both Michael and Shawn have objections; Judge Gen says that's good, if they're both unhappy it means they have a compromise, so they should go do what she said. They've got a year, and she'll be watching.
As they visited Mindy, they also found Derek, and he's a lot more intelligent and capable than he used to be; he found a thing Mindy can push to reset him, and when he wakes he's smarter, and she did this lots of times.
To populate the place, Michael used demons, but now Janet thinks she can create the people they need herself. Michael and Janet create the new Neighborhood. As she starts to create people, Derek shows up, and they figure with his help they can have the place populated in no time. Jason is not thrilled by Derek's intrusion, but he goes along with it.
In Michael's new office, he gets a call from Shawn to taunt him for a bit: once this all fails, Shawn will have his four human friends tortured for all eternity, by demons wearing a "Michael" suit, so they will know that Michael is torturing them. At that point, Eleanor arrives, and so does the file for the first human (he seems like an ordinary enough person), and suddenly Michael can't cope with it all, and can't do it anymore.
- Kristen Bell as Eleanor Shellstrop
- William Jackson Harper as Chidi Anagonye
- Jameela Jamil as Tahani Al-Jamil
- D'Arcy Carden as Janet
- Manny Jacinto as Jason Mendoza
- and Ted Danson as Michael