UNITED STATES DISTRICT COURT DISMISSES RICO CLAIM
Jackson v. Sedgwick Claims Management Services, Inc., No. 09-11529 (E.D. Mich. 03/11/10):
A U.S. District Court (Eastern District of Michigan) recently determined that an alleged fraudulent scheme to deprive claimants of their workers’ compensation benefits, even if proven to be true, does not support a claim pursuant to the federal RICO (Racketeer Influenced and Corrupt Organizations) Act. In this class action of similarly situated individuals, the plaintiffs alleged injuries arising out of a series of allegedly improper denials of workers' compensation benefits and a scheme to defraud by the self-insured employer, its third party administrator, and a doctor who provided IMEs. In granting the defendants’ motion to dismiss, the court explained that RICO does not provide a remedy for the fraudulent denial of benefits because an injured worker may not use RICO as a way to thwart the exclusive remedy doctrine.
My Two Cents: This is the first case to be dismissed out of the several such cases filed in Michigan and Colorado. While this certainly appears to be an early victory for those involved in and/or responsible for administering workers’ compensation benefits, the ruling will almost certainly be appealed. We will continue to monitor this case and report on any future developments.