Jackson v. Sedgwick Claims Management Services, Inc., No. 09-11529 (E.D. Mich. 03/11/10):

Last Friday, the Supreme Court of the United States reviewed the case of Cassens Transport Co., et al., Petitioners v, Paul Brown, et al., No. 08-1375 on its conference agenda. This was a Michigan case that claimed that the state workers’ compensation law did not preempt a cause of action for alleged Racketeer Influenced and Corrupt Organization Act (RICO) violations. While this claim was denied by the District Court, the 6th circuit Court of Appeals overturned the District Court and held that the plaintiffs adequately pleaded a pattern of racketeering activity. The Supreme Court of the United States has denied a writ of certiorari in this matter, upholding the ruling of the 6th Circuit Court of Appeals.

Now the matter will move back down to the District Court level where the allegation will be re-examined. This holds serious implications for Workers’ Compensation practitioners. What had previously been solely a state matter now has the potential to be transferred into the Federal court system. It will also introduce the possibility of criminal charges (conspiracy to commit fraud) into Workers’ Compensation matters. This could mean an increase in litigation costs in the years to come.

Practice Pointer:  The basis of the above RICO claim is that the Insurer, TPA, and Employer conspired with certain doctors to deprive the plaintiff employees from their workers' compensation benefits.  The best way to avoid such an implication is to refrain from using the same doctors in every case and to make sure that you not use doctors or other vendors with reputations which reflect obvious bias.  

Warning to Plaintiff's Attorneys:  This door swings both ways.  If you keep using the same biased chiropractors or 100% voc experts you may have a RICO claim filed against you too!   

Brown v. Cassens Transport Co., et al., 546 F.3d 347 (6^th Cir. 2008)(NO. 05-2089):

A short summary of this case was previously provided in this blawg on October 29^th. At that time, the 6^th Circuit Court of Appeals had reversed the District Court’s decision to dismiss RICO claims against the employer, third party administrator, and alleged "cut off" doctors. Specifically, the plaintiffs alleged that the defendants deliberately selected and paid unqualified doctors to give fraudulent medical opinions that would support the denial of workers’ compensation benefits, and that the defendants ignored other medical evidence in denying them benefits. The plaintiffs claimed that the defendants made fraudulent communications amongst themselves and to the plaintiffs by mail and wire in violation of 18 U.S.C. §§ 1341, 1343.

Since the time of my last blawg report, the 6^th Circuit, on January 5, 2009, denied a Rehearing and a Rehearing En Banc request made by the defendants. As a result, a Petition for Certiorari to the U.S. Supreme Court was filed on May 6, 2009. Of interest, the application makes the following points:

I will continue to monitor the progress of this Petition and keep you posted.

Brown v. Cassens Transport Co., et al., 6th Cir. 2008:

On October 23, 2008, the 6^th Circuit Court of Appeals released its decision in Brown v. Cassens Transport Co., et al., 6th Cir. 2008. In Brown, several injured workers brought a Federal Racketeer Influenced and Corrupt Organizations Act (RICO) claim against their employer, Crawford & Company and one of many alleged "cut off" doctors. The plaintiffs alleged that the defendants deliberately selected and paid unqualified doctors to give fraudulent medical opinions that would support the denial of workers’ compensation benefits, and that the defendants ignored other medical evidence in denying them benefits. The plaintiffs claimed that the defendants made fraudulent communications amongst themselves and to the plaintiffs by mail and wire in violation of 18 U.S.C. §§ 1341, 1343. The district court dismissed the RICO claim and the claim for intentional infliction of emotional distress (IIED). On appeal, the 6^th Circuit Court of Appeals reversed the district court decision to dismiss the RICO claim. The Court affirmed the dismissal of the IIED claim, however, because the defendants’ conduct could not be deemed outrageous under Michigan law. Nationally speaking, this case will likely lead to more RICO claims being filed. In Alabama, however, plaintiffs will likely choose to forego their rights under RICO in order to pursue their claims in state court where their odds of victory are generally perceived to be better.