12.29.2009

RICO Suave or No Way?

In a short decision released on December 7, 2009, the United States Supreme Court declined to hear a workers’ compensation case on appeal from the United States Court of Appeals for the Sixth Circuit in which the appeals court held that the plaintiffs could sue their employer and its workers’ compensation claims adjustor under the federal Racketeer Influenced and Corrupt Organizations Act (RICO).
The six plaintiffs involved in Paul Brown et al. vs. Cassens Transport Co. et al., current or former employees of the trucking company, Cassens Transport Co, alleged that the defendants - Cassens, Crawford & Company, and Dr. Saul Margules - had colluded to deny them workers’ compensation benefits under the Michigan Worker’s Disability Compensation Act in violation of RICO.The outline by the Court of Appeals noted that "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’ 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 the racketeering act."The decision by the Supreme Court now sends the matter back to the Eastern District of Michigan for trial. What remains to be seen is how the court will determine the question of what is and is not a permissible level of contact between and among the employer, adjustor, and doctor so as not to run afoul of the RICO statutes in the future.While this case arises out of Michigan, it should be a cautionary tale for self-insured employers, their workers’ compensation adjustors, and medical professionals who perform workers’ compensation medical evaluations in all states.  It is easy to give off-hand opinions as to the validity of a workers’ compensation claim to an adjustor or doctor’s office, but those off-hand opinions can carry weight.  It may be as the result of this action that the parties will need to find it necessary to adopt strict rules for dealing with each other at an arm’s length in the years ahead. 

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