Case name: Brown v. Cassens Transport Co., No. 10-2334 (6th Cir. 04/06/12).
Ruling: The 6th U.S. Circuit Court of Appeals reversed the dismissal of suit brought by a group of workers against their employer, its claims administrator, and their doctors under the Racketeer Influenced and Corrupt Organizations Act.
What it means: An expected entitlement to Michigan workers' compensation benefits qualifies as property, as does the claim for benefits, and the injury to such property can create a RICO violation.
Summary: A group of workers in Michigan alleged that they were injured on the job. They sought workers' compensation benefits. The workers claimed that their employer and its claim administrator solicited fraudulent medical reports from several doctors to deny them benefits. They sued, alleging violations of RICO. The 6th U.S. Circuit Court of Appeals reversed the dismissal of the workers' suit.
The court declined to hold that RICO preempts Michigan workers' compensation law but found that under the supremacy clause of the U.S. Constitution, Michigan did not have authority to declare a state remedy exclusive of federal remedies. The court explained that the resemblance of the federal RICO claim to the state workers' compensation claim did not undermine the RICO claim.
The court also held that the workers alleged an injury to property under RICO because they alleged the devaluation of either their expectancy of or claim for workers' compensation benefits. The court said that statutory entitlements are property, including those that accrue as a result of a personal injury. The court said it previously held that recovery for physical injury is not allowed under RICO because it is not an injury to business or property. The court explained that focusing on the injury that gave rise to the property interest was not a broad interpretation of RICO and would yield inconsistent results.
The court pointed out that the workers' RICO action could only succeed if they proved their workers' compensation claims had some likelihood of success. The fact that the workers lost or settled their claims in "tainted proceedings" was not evidence that they would have lost or settled if the proceedings were fair.
A dissenting judge opined that the workers did not allege an injury to property. The judge pointed out that the damages sought in workers' compensation cases derive from personal injuries.
Read more at the WorkersComp Forum homepage.
May 17, 2012
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