In a landmark decision of immense national significance, the US Sixth Circuit Court of Appeals ruled that a RICO claim brought by injured workers against their employer, insurance carrier and employer medical expert could proceed. Several injured workers brought the Federal Racketeer Influenced and Corrupt Organizations Act (RICO) against their employer, Crawford & Company and [cut-off treatment doctor] Dr. Saul Margules.
The allegations included 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 18 U.S.C. §§ 1341, 1343, which serve as the predicate acts for their RICO claims."
The decision authored by Judge Karen Nelson Moore held "...that plaintiffs’ RICO claims [may go forward] because the WDCA [Michigan Workers' Compensation Disability Act] does not preempt their RICO claims and because plaintiffs have sufficiently pleaded a pattern of racketeering activity given that reliance is not an element of a civil RICO fraud claim."
The Court concluded, "...Our conclusion that worker’s compensation benefits are not insurance and our conclusion that the WDCA was not "enacted . . . for the purpose of regulating the business of insurance," each independently foreclose the defendants’ argument that the WDCA reverse preempts RICO under the McCarran-Ferguson Act.
Of additional signifiance is that sitting by designation on the panel with Judge Moore and Judge Gibbons, was The Honorable Harold A. Ackerman, US District Court Judge for the District of NJ. Judge Ackerman has long and knowledge history of RICO actions was a former NJ Workers' Compensation Judge.
Brown, et al. v. Casses Transport Co., et al., 6th Cir. 2008, Decided October 23, 2008
The allegations included 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 18 U.S.C. §§ 1341, 1343, which serve as the predicate acts for their RICO claims."
The decision authored by Judge Karen Nelson Moore held "...that plaintiffs’ RICO claims [may go forward] because the WDCA [Michigan Workers' Compensation Disability Act] does not preempt their RICO claims and because plaintiffs have sufficiently pleaded a pattern of racketeering activity given that reliance is not an element of a civil RICO fraud claim."
The Court concluded, "...Our conclusion that worker’s compensation benefits are not insurance and our conclusion that the WDCA was not "enacted . . . for the purpose of regulating the business of insurance," each independently foreclose the defendants’ argument that the WDCA reverse preempts RICO under the McCarran-Ferguson Act.
Of additional signifiance is that sitting by designation on the panel with Judge Moore and Judge Gibbons, was The Honorable Harold A. Ackerman, US District Court Judge for the District of NJ. Judge Ackerman has long and knowledge history of RICO actions was a former NJ Workers' Compensation Judge.
Brown, et al. v. Casses Transport Co., et al., 6th Cir. 2008, Decided October 23, 2008
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