U.S. Supreme Court Upholds 6th. Circuit Ruling that (RICO) Racketeering Suit May Proceed Against Employer and Worker’s Comp. Insurance Adjustor for conspiring to deny Benefits – It is claimed they sought fraudulent medical opinions and unqualified doctors to defeat worker claims
December 10, 2009
Court has declined to hear a workers’ compensation case from the U.S. Court of Appeals for the 6th Circuit in which the appeals court found that the plaintiffs could sue their employer and its workers’ compensation claims adjuster under federal racketeering laws.
In Paul Brown et al. vs. Cassens Transport Co. et al., the six plaintiffs alleged that the defendants – Cassens Transport Co., Crawford & Company, and Dr. Saul Margules - had schemed to deny them workers’ compensation benefits under the Michigan Worker’s Disability Compensation Act (WDCA) in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO).
The plaintiffs were current or former employees of the trucking company, Cassens, which was self-insured for workers’ compensation; Crawford was the company’s workers’ comp claims adjuster.
In their lawsuit filed June 22, 2004, the plaintiffs alleged that “Cassens, Crawford, and Margules, as well as other ‘cut-off’ doctors, engaged in a pattern of racketeering activity that denied the plaintiffs’ worker’s compensation claims,” the appeals court wrote.
“Specifically, the plaintiffs alleged that Cassens and Crawford deliberately selected and paid unqualified doctors, including Margules, to give fraudulent medical opinions that would support the denial of worker’s compensation benefits, and that 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” the racketeering act.
The 6th Circuit Court in October 2008 had reversed the decision of a lower court dismissing the plaintiffs’ RICO claims.
The defendants had argued that WDCA preempts the plaintiff’s RICO claims and the lower court agreed.
The appeals court found that was not the case, however, and determined that the plaintiffs had “sufficiently pleaded a pattern of racketeering activity,” according to court documents.
The plaintiffs also had claimed that the defendants’ actions had “constituted intentional infliction of emotional distress (IIED) under Michigan law,” but the appeals court affirmed the lower court’s decision to dismiss the IIED claims.
With the Supreme Court’s refusal to consider the case it was remanded back to a lower court for trial.