Supreme Court Refuses Michigan Workers’ Comp Racketeering Suit
Workers’ compensation litigation arising out of Michigan and involving claims of federal racketeering violations is headed back to lower courts for trial after the U.S. Supreme Court declined to consider it.
The U.S. 6th Circuit Court of Appeals had found in Paul Brown et al. vs. Cassens Transport Co. et al., the plaintiffs could sue their employer and its workers’ compensation claims adjuster under federal racketeering laws.
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 in October 2008 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.