Tuesday, April 17, 2012

RICO dismissal reversed against employer for comp claim

Claimants in a Michigan worker's compensation case sued their self-insured Illinois-based employer and its third-party administrator  for violations under RICO.   Plaintiffs allege that the third party administrator fraudulently  used mail or wire and filed a statutory notice of dispute, solicited medical opinions from the same medical expert who was "biased", and "ignored" contrary medical evidence.  The Court reversed the circuit court's dismissal of the suit in a divided opinion.  The case was originally filed nearly 8 years ago in 2004. 

The 6th circuit concluded the plaintiffs established a property interest, essential to RICO claims,  by alleged  "devaluation of either their expectancy of or claim for worker's compensation benefits."  The court indicated one issue on remand to be addressed was whether their expectancy or claim was harmed because the petition was ambiguous.  All of the cases except one had been decided on the merits. The dissent supports the dismissal of the case by the circuit court and  contends that plaintiffs lacked standing because they did not prove an injury to business or property under RICO and their damages of medical expenses, worker's compensation benefits, medical mileage and attorneys fees are wholly derivative of their comp claim. Three similar cases, all brought by one of the attorneys who represents the plaintiffs in this case, have been dismissed by various district judges.  The case is Brown, etal v Cassens Transport Co., No. 10-2334 (6th Cir. April 6, 2012) http://www.ca6.uscourts.gov/opinions.pdf/12a0095p-06.pdf.