Michigan: U.S. Supreme Court won't consider WC racketeering lawsuit

The U.S. Supreme Court said it will not consider a lawsuit filed in Michigan that sought to determine whether employers, claims administrations, and workers' compensation carriers could be sued under federal racketeering laws for their questionable claims handling practices.

The High Court's refusal sent the case back to a lower court for trial.

In late 2008, the 6th U.S. Circuit Court of Appeals held that an employer who allegedly colluded with its doctors and claims administrator to deny workers' comp claims by six employees may be targeted under the Racketeer Influenced and Corrupt Organization Act. The case, Brown v. Cassens Transport Co., was filed in 2004 by a group of truck drivers who submitted workers' comp claims. The plaintiffs alleged that Cassens Transport Co. which was self-insured for purposes of paying benefits under the Michigan Workers' Disability Compensation Act, conspired with Crawford & Co., a claims administrator, and Dr. Saul Margules, a physician who conducted independent medical examinations, to deny their claims.

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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 workers' comp benefits, and that the defendants ignored other medical evidence in denying them benefits. The suit alleged that the defendants made fraudulent communications amongst themselves and to the plaintiffs by mail and wire in violation of the law, which served as the predicate acts for their RICO claims.

Read more at the WORKERSCOMP Forum^TM homepage.

January 11, 2010

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