Case name: Lewis, et al. v. Drouillard, et al., No. 09-11059 (E.D. Mich. 03/04/11).
Ruling: The U.S. District Court, Eastern District of Michigan dismissed workers' claims that an employer, its carrier, and their doctor participated in a scheme to fraudulently terminate or deny workers' compensation benefits in violation of the federal Racketeer Influenced Corrupt Organizations Act.
What it means: Workers do not have standing to sue under RICO based on a claim that the employer, the carrier, and the employer's examining doctor participated in a scheme to fraudulently terminate or deny workers' compensation benefits.
Ten workers alleged that their employer, its carrier, and a doctor participated in a scheme to fraudulently terminate or deny workers' compensation benefits in violation of the RICO Act. Specifically, the workers contended that the employer and carrier sent them to a benefits "cut-off" doctor to conduct fraudulent independent medical examinations and write false medical reports for the purpose of wrongfully denying them benefits. The U.S. District Court, Eastern District of Michigan dismissed the case for lack of standing.
A threshold requirement for standing to sue under RICO is that the party sustained an injury to his business or property. The 6th U.S. Circuit Court of Appeals has held that this language in RICO excludes recovery for personal injuries. The court explained that injuries suffered by workers while on the job are characterized as personal injuries. Because the workers' alleged damages, including lost earnings, medical expenses, and attorney's fees, were intimately related to their personal injuries, they did not have standing to sue under RICO.
Furthermore, the court explained that even if the workers could establish an injury to property based on their claim that they were wrongfully denied workers' compensation benefits, the complaint would still be dismissed for lack of standing under RICO. Under Michigan law, workers do not have a property interest in workers' compensation benefits without a final administrative determination that such benefits are due. There was no such determination here.
The court said that at most, the workers could establish an injury to a "mere expectancy interest" that is not recognized under RICO.
Read more at the WorkersComp Forum homepage.
May 16, 2011
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