Budget Crisis Triggers NJ DWC Closing

The NJ Division of Workers' Compensation will be closed on May 22, 2009. This closing is the result of a State mandated furlough because of the lack of revenue in the NJ State Treasury.

Hyper Technical Procedure Rejected

The NJ Appellate Division, while ruling against an injured worker in a claim where the worker exhibited "egregious conduct" in failing to keep numerous medical exams, in dicta, declared that hyper technical rules should not be enforced in workers' compensation. The Appellate forum declared that even though a notice of motion was "less than perfect," that alone should not be the basis for an adverse ruling.

Williams v, Family Choice, at al., Docket No. A-4474-07T3 (Decided May 2008) 2009 WL 1286895

RICO Case Goes to the US Supreme Court

A Petition for Certiorari has been filed in Brown v. Cassens Transport Co., 546 F.3d 347 (6th Cir. Oct 23, 2008) (NO. 05-2089), following the rehearing and rehearing en banc denied (Jan 05, 2009). The Petition was filed on May 6, 2009. 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.

The application states:

"The Sixth Circuit's ruling that the WDCA does not involve the business of insurance is hardly a model of clarity, but it plainly rests on two central and essential elements. First, the court held that workers' compensation categorically is not insurance because, in the Sixth Circuit's view, workers' compensation does not involve a “contractual insurance relationship.” App., infra, 20a. Second, the court regarded as irrelevant Michigan's regulation of the nature of the workers' compensation benefits that must be provided by employers - including requirements imposed identically on employers who self-insure their workers' compensation risks and on those who purchase insurance of those risks - because Cassens self-insures and the court believed that self-insurance does not involve the business of insurance under the McCarran-Ferguson Act. Id. at 22a-24a. But both aspects of this analysis are wrong. They depart from this Court's precedent, will lead to inconsistent treatment of identically situated businesses, and will frustrate state policy regarding both insurance and workers' compensation."

"The issues presented here are ones of enormous practical importance: the court of appeals' holding reads significant limits into the McCarran-Ferguson Act, threatening to interfere with state insurance regulation and overturn the balance struck by States *31 in their workers' compensation systems. Most obviously, by categorically holding that state regulation of employers who self-insure their workers' compensation liability is outside the scope of the McCarran-Ferguson Act, the holding below invites a proliferation of RICO strike suits brought by aggrieved workers' compensation claimants. The attractiveness of RICO's remedies - including treble damages and attorney's fees, e.g., 18 U.S.C. § 1964(c) - and the extraordinarily burdensome nature of RICO discovery assures that an ever-increasing volume of workers' compensation litigation will find its way to federal court for decision under federal law. See, e.g., Cristin Schmitz, Employers Face RICO Claims For Workers Comp Denials, Inside Counsel (Feb. 1, 2009) (RICO permits “wide-open” discovery; plaintiffs' counsel states that if case goes to trial, “I am going to discover every single comp claim that ever existed in the past four years *** so it's going to open a real can of worms”). To the extent that settlements are not compelled in such suits, federal courts will have to pass on the merits of the underlying workers' compensation claims, creating the potential for overlapping (and possibly conflicting) adjudication of eligibility for workers' compensation benefits."

Citation:

2009 WL 1265298 (U.S.) (Appellate Petition, Motion and Filing)

Supreme Court of the United States.

CASSENS TRANSPORT COMPANY, Crawford & Company, and Dr. Saul Margules, Petitioners,

v.

Paul BROWN, William Fanaly, Charles Thomas, Gary Riggs, Robert Orlikowski, and Scott Way, Respondents.

No. 08-1375.

May 6, 2009.

NCCI Issues a “Guarded” Report of Health of Workers’ Compensation

A report that the short term was “guarded” and the long term “cautionary” was issued this week by NCCI Holdings, Inc. Medical care continues to lead the list of concerns as the costs continue to out pace wages. Medical continues to be problematic as CMS (The Centers for Medicare and Medicaid Services) continue to become more involved in the workers’ compensation process that the Sec. 111 Mandatory Registration process and the recovery efforts and monitoring of future care plans, ie. Workers’ compensation Medicare set aside arrangement.

Lead is Still Breaking the Learning Cycle

The book, "Lead Babies Breaking the Cycle of Learning Disabilities, Declining IQ, ADHD, Behavior Problems, and Autism" by Joanna Cerazy, MEd and Sandra Cottingham, PhD addresses this issue.

"This groundbreaking study reveals the continuing danger that lead contamination presents to health—particularly in the earliest stages of life. Disclosure about the lead content in house paint, gasoline, canned food, and tap water revolutionized the manufacturing of those products a generation ago, but lead-based products are still produced and pose a health hazard as lead remains in the environment years after its initial use."

Asbestos MDL Goal To Remand Cases To US District Courts

Asbestos cases pending in the Multi District Court Litigation (MDL 875) may be remanded to the US District Courts throughout the country. As of January 1, 2009, the inventory of cases pending amounted to 58,625 cases encompassing 3.3 milllion claims.

In an Order entered on April 30, 2009, Judge Eduardo C. Roberto stated that, "remanding cases to the transferor court at an early date remains as important administrative goal of the Court." The Court set up a procedure permitting the Plaintiffs to a file a motion requesting the entry of a "suggestion of remand." by the Court.

Construction Industry Independent Contractor Act

The misclassification of workers is a major problem in the workers' compensation market. Some legislatures, like New Jersey, have enacted laws prohibiting the misclassification of workers.

"The Legislature finds that employers in the construction industry who improperly classify employees as independent contractors deprive these workers of proper Social Security benefits and other benefits, while reducing the employers' State and federal tax withholdings and related obligations. Moreover, this practice puts businesses that bear higher costs for complying with the law at a competitive disadvantage." NJAC 12:65